Consumer Attitudes and Mobile Travel Portal

Transcription

1 SPECIAL SECTION: M-COMMERCE Copyright 2002 Electronic Markets Volume 12 (1): Keywords: consumer behaviour, m-commerce, travel portal A b s t r a c t This paper presents the results of a survey study carried out in Oulu, Finland between spring and autumn 2000 as a part of the VRFLow2 research project in the University of Oulu. The survey investigates Finnish and other European travellers attitudes about mobile services of a local travel portal developed in the Oulu region in Northern Finland. The results showed that the most valuable mobile interface features were the possibility to make hotel and event ticket reservations. The ability to make purchases with a mobile phone was considered to be the least important feature. Younger age groups seemed to value the suggested features more than the older ones. Results also showed that the high cost of mobile data services was the most significant reason that keeps consumers from using them. The respondents are more likely to use the developed travel portal with a PC than with a mobile phone. This implies that mobile offerings should not be developed independently, but as a part of a total multi-channel service package. A u t h o r Dr Timo Koivumäki is a senior researcher at the Department of Economics, University of Oulu. He acts as the project manager of the VRFlow2 e-commerce research project. His research interests lie in digital economy, e-commerce, Internet marketing, consumer behaviour and the economics of sports. Consumer Attitudes and Mobile Travel Portal TIMO KOIVUMÄKI INTRODUCTION Since the introduction of GSM technology in Europe, the market for mobile services has grown extremely quickly. By the end of 2000, over 250 million people in Europe used a mobile phone (Durlacher 2001). In terms of penetration rate this equals over 60%. Despite the rapid growth rate during the past ten years there are clear signs that the markets are changing. The growth rate of GSM users has started to decline as the markets are reaching the saturation point. This point is estimated to be somewhere between 80 and 90%, and will be reached during the next ve years. The unclear future of UMTS adds to the doubts about the future growth of mobile services markets. The creation of advanced mobile applications and UMTS infrastructure are still very much in their infancy, and hence it is very dif cult to make any robust predictions about the markets. As the future of 3G is unclear, m-commerce players should not focus solely on broadband mobile services, but also concentrate on enhancing their current m-commerce applications in order to be able to add more value to attract new customers. Most of the European mobile phone users use only voice services and SMSs, while data features such as WAP are still very rarely used. The poor quality of content and the clumsiness of the usage of WAP services over the GSM have been suggested to be the main reasons for lack of data service usage. The inability of the mobile service providers to offer consumers suf cient added value has held back the popularity of mobile data services. Travel industry companies have been among the rst ones to embrace the possibilities of new technologies. Travel companies have also been on the forefront of companies introducing mobile data services. For example, several airlines have portals that offer wireless services, such as ight reservations and information about ight schedules. Some hotels provide their customers the access to wireless Internet by WLAN. Despite the relative success of travel industry online services, there are some problems that have to be addressed. Also in the travel industry the most popular online services are still traditional Web services that are accessed with desktops. Companies have struggled in nding suitable m-commerce business models and offerings that provide potential customers enough value to become actual customers. The ability to meet the exact needs of consumers is especially important when entering into new markets (Weiber and Kollman 1998). To gure out what consumers really consider as added value with respect to mobile data services is a challenging

2 problem. As suggested by Woodruff (1997), consumers values are inherent and cannot be fully determined by the seller or producer. According to Tapscott (1999), the nature of added value changes, as information itself is regarded as valuable instead of just thinking of it as an element that supports the value creation process. What is considered valuable also changes from one individual to another. This notion supports the view of Parasumaran (1997), who suggests that values should be studied in different segments separately. What adds to the dif culty of nding out what the really valuable mobile services and offerings are in different consumer groups is the fact that for the majority of consumers mobile Internet services are new and hence they do not really know their needs. As noted by Bagozzi and Dholakia (1999), consumers values are related to their goals and objectives and their decision-making and thereby the evaluation of new services and offerings is dif cult. In this paper we focus on the attitudes and expectations of Finnish and other European travellers about mobile Internet services that have been developed for the Oulu region travel portal. The paper is based on a survey study conducted in Oulu, Finland between spring and autumn The survey has been carried out within the VRFlow2 research project at the University of Oulu (vr ow.oulu. ) as part of a broader investigation into consumer responses to the development of network services in the travel industry. The paper is organized as follows: following this introductory section, the collection and the composition of the data are introduced. The results are presented and discussed in the following section. Finally, we present some concluding remarks and suggestions for further research. SURVEY AND THE DATA The survey study is a part of VRFlow2 e-commerce research project, in which one of the main research areas is consumer behaviour in e-commerce and m-commerce environments. The case studies include the development of the travel portal and its mobile interface to Oulu region in Northern Finland. The survey was conducted in Oulu, Finland between spring and autumn Before the actual survey, respondents were given a short description of the developed portal for Oulu region and its mobile interface. The mobile terminal to be used was de ned as a mobile phone, so the results of the survey do not necessarily apply for other mobile terminals such as palm computers or PDAs. The survey was conducted using three alternative methods; online survey, paper survey and face-to-face interviews. The same questionnaire was used in all three cases. The total number of respondents was 158. s were posted on Finnish and English versions of the City of Oulu tourist services Web pages ( /matkailu). The survey was not mentioned on any other pages of the city of Oulu and could only be accessed from the main tourist services page. Therefore, we can quite safely assume that the respondents of the online survey were planning to visit, or at least were interested in visiting Oulu. The paper forms of the survey were collected in different locations in Oulu. The surveys were conducted in the Council of European Municipalities and Regions (CEMR) conference held in Oulu. The CEMR conference was held in Oulu between 14 and 17 June The participants of the conference were various types of civil servants of different cities and municipalities around Europe. Survey forms were lled out by 30 conference visitors. The paper surveys were also collected in Nallikari Beach Vacation Centre, in the tourist information centre of the City of Oulu and in Tietomaa Science Park. The majority of the paper survey responses, in total 50, were lled out in these locations. Nallikari Beach and Tietomaa Science Park are perhaps the most popular tourist attractions in Oulu. Although Tietomaa is very popular among business travellers, the majority of the visitors are ordinary tourists, especially families with children. The interviews were also made in Tietomaa Science Park. The interviews were conducted during the rst week of June The respondents were chosen randomly and based on their willingness to participate in the survey. One of the motivations for conducting the survey by personal interview in addition to the other methods was to nd out whether the face-to-face response situation has any effect on the responses given. The reason for using three alternative methods was that we wanted to reach as wide a variety of travellers and people interested in travelling to Oulu as possible. The second reason was that we wanted to nd whether the survey method affects the results of the survey. The respondents of the online survey may be more familiar with the Internet and various online services and more willing to make use of new technologies such as mobile data services than people in the average, and therefore their views about online travel services may be different. Also, there may be differences between the responses given in the interviews and the online and paper surveys, simply due to the fact that in the two latter survey situations the respondent can think more thoroughly about the questions being asked. Also, Timo Koivumäki Mobile Travel Portal 48

3 respondents may be more willing to reveal their true feelings and attitudes in impersonal survey situations than in a face-to-face interview. The respondent groups in the different surveys are described in Figures 1 to 3. The sizes of the respondent groups in different surveys are presented in Figure 1. The numbers in the bars represent the number of respondents for each survey method. The majority of the respondents, 80, lled out the paper form of the survey, while only 22 people were willing to participate in the personal interview. The age distributions are shown in Figure 2. The age distributions of the respondents in different surveys are quite different. All respondents of the online survey were under 40 years of age, while all interviewed respondents were aged 25 or older. Only in the paper survey were there respondents from all three age groups considered in the analysis. Originally, the questionnaire form included a fourth age group, 60 and over, but because we got only four responses that belonged to this age group, we combined it with the group covering years between 40 to 59. Figure 1. Survey Method and the Number of Respondents Figure 3 describes the respondent groups based on their nationality. The group Other Europeans consists of travellers from Sweden, Germany, Austria, The Netherlands, Belgium and Ireland. The grouping of respondents on the basis of nationality show that there are further differences in the composition of the respondent groups between different survey methods. Although the share of Finnish respondents is higher than the share of other Europeans in all three respondent groups, the difference is notably bigger in the online survey respondent group than in the other two groups. RESULTS As noted earlier, it can be assumed that the survey method may have some effect on the responses given. Also, as shown in Figures 2 and 3 the respondent groups are quite heterogeneous. For this reason we tested for the possible differences in the responses of the alternative surveys. The Electronic Markets Vol. 12 No 1 49 Figure 2. Age of the Respondents

4 Figure 3. Nationality of The Respondents results of this analysis are shown in Tables 1 to 3. The results concerning the attitudes about the functionality of the mobile travel portal interface in different surveys are presented in Table 1. Respondents were asked to evaluate each feature on a scale from 1 (not at all signi cant) to 7 (very signi cant). The table includes the means and standard deviations and percentages of the respondents considering the corresponding feature as a signi cant one by giving it either a value of 7 or 6, and the p-values of the Kruskall-Wallis test for the equality of means of the responses in different surveys. The results show that there are no statistically signi cant differences in average responses in different surveys. However, the differences in the attitudes with respect to a possibility of making restaurant reservations are almost statistically signi cant, as indicated by the p-value of Interviewed respondents value this feature notably less than the respondents of the online and the paper surveys. Also the percentage share of the respondents that consider this feature an important one was by far the lowest. It is also notable that the standard deviations of the interview responses are somewhat lower than in the surveys, indicating that the attitudes of the interviewed respondents do not vary as much as the attitudes in the other respondent groups. In general, the presented functionality features were not very highly valued. The highest average values were just over 5. Interestingly, the least valued feature in all surveys was considered to be the possibility to make purchases with the mobile phone. It must be noted that this feature is quite different from the reservation features, because it involves making actual payments by a mobile phone. The percentage shares of respondents that consider the possibility of making purchases show another difference Table 1. Mobile Interface Functionality by Different Survey Methods Survey Method Mean Standard % of Respondents that Consider the Feature a Signi cant One Timo Koivumäki Mobile Travel Portal * p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p <

5 between the surveys. Only 9.6% of the interview respondents consider it as an important feature, while the corresponding percentage share in the other two surveys was over 25. In Table 2 we present the results of how important the respondents considered the different reasons for not using mobile travel portal interface. The respondents were asked to evaluate each reason on a scale from 1 (fully disagree) to 7 (fully agree). As before, the table includes the means and standard deviations, Kruskall-Wallis test p-values and percentage of the respondents considering the corresponding reason as an important for not using the mobile interface by giving it either a value of 7 or 6. Although there are no statistically signi cant differences in the responses in different surveys, the p-values show that the differences in the importance of the lack of Internet access and the cost of usage are very close to statistical signi cance. The interviewed respondents consider these as notably smaller problems than the others. Furthermore, the Table 2. The Reasons for not Using a Mobile Interface by Different Survey Methods Survey Method Mean percentage share of the Interview respondents considering the lack of Internet access a major obstacle is less than half of the corresponding share in the other respondent groups. In all surveys high usage costs seems to be the most signi cant reason that keeps consumers from using mobile data services. In the online survey almost 80%, and in the other surveys more than half, of the respondents regarded the high price as the biggest obstacle. The respondents were also asked how likely they were to use the developed travel portal either by a PC or by a mobile phone. The likelihood of usage was determined on a scale from 1 (very unlikely) to 7 (very likely). The likelihood of using either of the two interfaces was determined separately. The results are presented in Table 3. The results show that in all surveys the traditional xed line connection with a PC terminal is clearly the more preferred way to access the travel portal than a wireless connection with a mobile phone. The mean values of the responses are in favour of a PC connection by more than Standard % of Respondents that Consider the Reason a Signi cant One * p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p < 0.05 Electronic Markets Vol. 12 No 1 51 Table 3. Likelihood of Portal Use with Alternative Interfaces by Different Survey Methods Would use travel portal with a PC Would use travel portal with a mobile phone Survey Method Mean * p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p < 0.05 Standard % of Respondents that Would use the Interface De nitely or Very Likely

6 3 in the online survey and in the interviews and by almost 2 in the paper survey. Over 70% of the respondents were quite certain that they would use the described travel portal by PC, and only just over 15% of online and interview respondents and 23.5% of the paper survey respondents would use it by a mobile phone. The likelihood of mobile phone use is statistically signi cantly higher among the paper survey respondents than in the other two surveys. As suggested by Parasumaran (1997) consumer attitudes should be studied in different segments separately. In the following we study our survey data on two alternative settings. First, we look at the results in different age groups. Younger generations have traditionally been the most eager to try new things and to adapt to new technologies. This has also been true with Internet and mobile phones. It can thus be expected that their views on mobile Internet services differ from those of the older generations. The second segmentation is based on the respondents views about their own Internet usage skills. It can be assumed that people who consider themselves skilful Internet users have been using the Internet for a relatively long time, and thus can be regarded as early adopters of new technologies. Their views about mobile Internet can be assumed to be different from the views of people who do not regard themselves as skilful Internet users. For example, the lack of Internet skills could be due to the fact that they are reluctant to use new technologies. This might cause their views to be more negative than the views of the skilful early adopters. On the other hand, even if the lack of Internet skills is not due to negative feelings towards new technologies, the simple fact that the Internet (and mobile data services) is an unfamiliar concept might affect the attitudes and views about mobile Internet. The fact that consumers have a hard time evaluating unfamiliar concepts has been suggested for example by Bagozzi and Dholakia (1999). Results by age groups and by Internet skills The results of the three surveys are reported separately. As shown in Figure 2, all respondents of the online survey belonged to the two youngest age groups, and none of the interviewed respondents were 25 or younger. Only in the paper survey were there respondents from all three age groups considered in the analysis. Furthermore, as there were only ve respondents in the oldest age group in the interviews, the results regarding that segment, and therefore also the age group comparisons of the interviewed respondents, are not robust. The results by age groups are presented in Tables 4 to 6. The tables include the means, standard deviations and the p-values of Kruskall-Wallis and t-tests for the equality of means. The results about mobile travel portal interface functionality are shown in Table 4. There are no major differences in the results between different survey methods. The results show that the attitudes of the two youngest age groups are relatively similar, and that the oldest age group seems to value the presented functionality features less than the others. The differences in the average responses are statistically signi cant in the paper survey, where there are a suf cient amount of respondents from all age groups considered. The youngest respondents valued all of the features the most and the oldest the least. The biggest gap in the attitudes is between the intermediate and the oldest age group. There are also some signi cant differences between the age groups about the reasons for not using mobile Internet services. The results in Table 5 show that in the online survey the youngest respondents consider the high price of mobile data services as more important than the intermediate age group. Also the difference in average importance of the lack of security is close to the statistical signi cance level. In the paper survey there is also a statistically signi cant difference in the importance of the cost of usage. For the intermediate age group the high cost of mobile data services is a notably bigger obstacle than for the oldest respondents. Interestingly, for the youngest respondents in the paper survey the cost of usage seemed to be less important than for the intermediate age group. This contradicts the result of the online survey, and indicates that the results are sensitive to the survey method. The results concerning the likelihood of the portal use with alternative terminals show that there are no statistically signi cant differences between the age groups. All groups appear to be much more likely to use the travel portal with a PC. An interesting, although not statistically signi cant, detail in the results is the fact that the youngest age group appears to be the least likely to use the mobile interface. This result is somewhat puzzling, especially since the youngest respondents seemed to value the different suggested mobile portal features more than did the older groups. The results about mobile travel portal interface functionality, about the reasons for not using mobile portal and about the likelihood of alternative interface use by Internet use skills are shown in Tables 7 to 9. The statistics shown in the tables are the means, standard deviations and the p-values of t-tests for the equality of means. Contrary to our ex ante beliefs there are only few differences between the views of skilled and unskilled Internet users. The views about the interface functionality are shown in Table 7. In the online survey unskilled respondents value the reservation possibilities more than skilled ones, while in the other surveys the case is the opposite. The reason could be that unskilled people are in general disappointed in the dif culty of online ordering and this feeling is more active in online situation, and the mobile alternative is seen as a promising alternative. In the reasons for not using mobile data services shown in Table 8, there are no statistically signi cant differences. The lack of Internet access seems to be a somewhat bigger problem for the skilled Internet users. This result could be due to the fact that unskilled Internet users are not too familiar with technology and simply do not realize that not all mobile phones are suitable for Internet use, however, as Timo Koivumäki Mobile Travel Portal 52

7 Table 4. Mobile Interface Functionality by Age Groups Online Survey Age Group Mean Standard ** p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p < 0.05 Electronic Markets Vol. 12 No 1 53 the differences are not statistically signi cant the result may be incidential. As shown in Table 9, unskilled respondents seem more likely to use a mobile interface than the skilled ones. This result is statistically signi cant in the online survey. As in the case of the functionality features, one possible reason for this result is that unskilled people are in general disappointed in the dif culty of using the Web, especially in an online situation, and hence mobile phone is seen as a more promising usage terminal. DISCUSSION AND FURTHER RESEARCH This paper presents the results of a survey studying Finnish and other European travellers attitudes about mobile Internet services developed for the travel portal in Oulu Region in Northern Finland. The survey is a part of VRFlow2 research project, which investigates consumer responses to the development of e-commerce and m- commerce services in the travel industry. The survey was conducted using three alternative methods. First, the paper forms of the survey were handed out in the Council of European Municipalities and Regions (CEMR), in Nallikari Beach Vacation Centre, in the tourist information centre of the City of Oulu and in Tietomaa Science Park. Second, an online survey was set up in the English and Finnish tourist services Web pages of the City of Oulu. Finally, we made face-to-face interviews in Tietomaa Science Park. Alternative methods were applied to reach as wide variety of travellers and people interested in traveling to Oulu area as possible. Also, we wanted to nd whether the results are

8 Table 5. The Reasons for not Using a Mobile Interface by Age Groups Online Survey Age Group Mean Standard ** p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p < sensitive to the survey method. The same questionnaire was used in all three cases. The total number of respondents was 158. There were no statistically signi cant differences in average responses about the functionality features in different surveys. However, interviewed respondents valued the possibility of making restaurant reservations less than the respondents of the online and the paper surveys, and this difference in opinions was close to statistical signi cance. None of the presented features were considered to be very valuable. Interestingly, the least valued feature in all surveys was considered to be the possibility to make purchases with a mobile phone. The interviewed respondents seemed to regard the lack of Internet access and the high cost of mobile data services as a lesser problem than the respondents in the other surveys. In all surveys the high cost was regarded as the biggest obstacle for mobile Internet usage. Timo Koivumäki Mobile Travel Portal 54

9 Table 6. Likelihood of Portal Use with Alternative Interfaces by Age Groups Electronic Markets Vol. 12 No 1 55 Online Survey Age Group Mean Standard Would use travel portal with a PC Would use travel portal with a mobile phone Would use travel portal with a PC Would use travel portal with a mobile phone Would use travel portal with a PC Would use travel portal with a mobile phone ** p-values of Kruskal-Wallis c 2 -test. H 0 : Means are equal. H 0 is rejected if p < 0.05 Table 7. Mobile Interface Functionality by Internet Skills Online Survey Internet Skills Mean Standard

10 Table 8. The Reasons for not Using a Mobile Interface by Internet Skills Online Survey Internet Skills Mean Standard The likelihood of portal usage by a PC was signi cantly higher than by a mobile phone. The likelihood of mobile phone use was signi cantly higher among the paper survey respondents than in the other two surveys. The views about mobile services appeared to vary between different age groups. The youngest respondents valued all of the features the most and the oldest the least. The biggest difference in the attitudes was between the intermediate and the oldest age group. There were also some differences between different age groups with respect to the reasons for not using mobile services. In the online survey the youngest respondents consider the high price and the lack of security as more important reasons than the older age groups. In the paper survey the intermediate age group valued the high cost of mobile data services as a notably bigger obstacle than the other age groups. The difference in the responses about the importance of high cost between the youngest and the intermediate age groups were exactly the opposite in the online and paper surveys. This indicates that the results are sensitive to the survey method. We also studied the data based on the respondents Internet use skills. Contrary to our ex ante beliefs there are only few differences between the views of skilled and unskilled Internet users. In the online survey the unskilled respondents seemed to value the reservation possibilities more than skilled users. The results in the other surveys were the opposite. Furthermore, in the online survey the Timo Koivumäki Mobile Travel Portal 56

11 Table 9. Likelihood of Portal Use by Alternative Interfaces by Internet Skills Online Survey Internet Skills Mean Standard Would use travel portal by a PC Would use travel portal by a mobile phone Would use travel portal by a PC Would use travel portal by a mobile phone Electronic Markets Vol. 12 No 1 57 Would use travel portal by a PC Would use travel portal by a mobile phone unskilled Internet users were more likely to use the portal with a mobile phone than the skilled. This could be due to the fact that for the unskilled respondents the frustration about the dif culty of Web usage is especially strong in an online situation, and they see the mobile Internet services as a promising alternative. All in all, it appears that travellers do not nd mobile Internet services very valuable, and they are much more likely to use Internet travel services with the traditional PC interface. This result implies that it will be extremely dif cult to nd pure mobile data services that would be valuable enough to become killer applications on their own and generate revenue for the service and content providers and the other players in the m-commerce value network. Indeed, it seems that mobile services and m- commerce solutions should not be developed as separate stand alone services, but as a part of complete multichannel total service package, which is able to answer the needs of consumers in different situations ef ciently and easily. As noted in Tapscott et al. (2000), to capture and retain peoples attention in the modern information lled environment, m- and e-commerce companies must be able to provide an attractive and convenient total experience. This calls for comprehensive research effort to be put on business models that are suitable for the multichannel, or mc-, business. Issues that have to be tackled include logistics and earnings logic and revenue sharing between the players. Our results also imply that another important issue that has to be addressed is pricing. This implication is supported by the results of Marcussen (2001), where he listed content and pricing among the key elements of m-commerce. Only when the content and the price are right we can start to see consumers interest to pick up. References Bagozzi, R.P. and Dholakia, U. (1999) Goal Setting and Goal Striving in Consumer Behavior, Journal of Marketing 63 (special issue), Durlacher Research (2001) UMTS Report An Investment Perspective, [accessed 26 June 2001]. Marcussen, C.H. (2001) Mobile Phones, Wap and the Internet The European Market and Usage rates in a Global Perpective , [accessed 12 October 2001]. Parasuraman, A. (1997) Re ections on Gaining Competitive Advantage Through Customer Value, Journal of the Academy of Marketing Science 25(2), Tapscott, D. (ed.) (1999) Creating value in the network economy, Harvard Business Review Book, USA: Harvard Business School Publishing. Tapscott, D., Ticoll, D. and Lowy, A. (2000) Digital Capital: Harnessing the Power of Business Webs, Harvard Business School Press. Weiber, R. and Kollmann, T. (1998) Competitive Advantages in Virtual Markets Perspectives of Information-based Marketing in Cyberspace, European Journal of Marketing 32(7/8), Woodruff, R.B. (1997) Customer Value: The Next Source for Competitive Advantage, Journal of the Academy of Marketing Science 25(2),