Determinants of adoption of third generation mobile multimedia services

DETERMINANTS OF ADOPTION OF THIRD GENERATION MOBILE MULTIMEDIA SERVICES MARGHERITA PAGANI

MARGHERITA PAGANI is adjunct professor of management in Bocconi University in Milan, Italy,

I

n this article, we review user information technology acceptance litera-

ture, formulate a model of consumer adoption of third generation mobile multimedia services, validate it through a qualitative exploratory study com-

and head researcher for New Media

prising 24 focus groups in six markets, and empirically test the proposed & TV-Lab inside I-LAB, Centre for

model on the Italian market. The results show that perceived usefulness, ease Research on the Digital Economy of

of use, price, and speed of use are the most important determinants of adopBocconi University, Italy; e-mail: [email protected]

tion of multimedia mobile services, in that order. They also show that the importance of determinants differs by age groups or segments. The results can help managers proactively design interventions (such as training and

The author wishes to acknowledge the input of participants at IRMA

marketing activities) targeted at populations of users that may be less inclined to adopt and use new multimedia mobile services.

2003 (International Resource Management Conference) in Philadelphia, PA, May 2003, where an

© 2004 Wiley Periodicals, Inc. and Direct Marketing Educational Foundation, Inc.

earlier version of part of this article

JOURNAL OF INTERACTIVE MARKETING VOLUME 18 / NUMBER 3 / SUMMER 2004

was presented.

Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/dir.20011

46

INTRODUCTION

CONCEPTUAL BACKGROUND

As telecommunications move into an era where the distinction between voice, video, and data will be blurred, convergence of communications, information, entertainment, commerce, and computing will lay the foundation for the development of the information society. Over the last five years, there have been a number of significant developments in multimedia computing power, CD-ROM technology, digital television, the Internet/Intranet, IP-based services, and terrestrial and satellite mobile communications, which could have a profound impact on our society.

Information systems (IS) researchers have made significant efforts in building theories to examine and predict the determinants of information technology (IT) acceptance (Agarwal & Prasad, 1998, 1999). Existing models of IT acceptance have their foundations in several diverse theories, most noticeably innovation diffusion theory, where individuals’ perceptions about using an innovation are considered to affect their adoption behavior (Agarwal & Prasad, 1997, 1998; Moore & Benbasat, 1991; Rogers, 1995). Other theoretical models that attempt to explain the relationship between user beliefs, attitudes, intentions, and actual system use include the theory of reasoned action (TRA) (Ajzen & Fishbein, 1980), the theory of planned behavior (TPB) (Ajzen, 1991), and the technology acceptance model (TAM) (Davis, 1989; Davis, Begossi, & Warshaw, 1989). Although there are numerous studies in the field of adoption and diffusion of marketing-enabling technology (Daghfous, Petrof, & Pons, 1999; Holak & Lehman, 1990; Labay & Kinnear, 1981; Plouffe, Vandenbosch, & Hulland, 2001; Rogers, 1995), previous work has focused mainly on the adoption of products and technology (Au & Enderwick, 2000; Davis, 1989; Eastlick & Lotz, 1999; Verhoef & Langerak, 2001). In contrast, the perspective on services and service-enabling technologies is considerably less pronounced.

Many organizations within the computing, entertainment, and communications industries are now looking to identify and capitalize on the promise of new market opportunities in multimedia created by these developments. However, demand for multimedia services, should they be successful, is unlikely to be restricted to the fixed network. Greater pressure on time, and the need for flexibility and responsiveness in business, will lead to a growing demand for access to these services anytime, anywhere. To meet the evolving needs of customers and to capture the opportunity which this evolution represents, the mobile industry is looking to better understand and develop a third generation of mobile technology by delivering voice, graphics, video, and other broadband information directly to the user, regardless of location, network, or terminal. The purpose of this article is to better understand consumer adoption of mobile multimedia services that are likely to emerge with the roll out of third generation mobile services. The remainder of this article is organized as follows. The next section provides the conceptual background including a brief review of the literature on the information technology acceptance model. In the third section, we present our model validated through a qualitative exploratory study comprising 24 focus groups in six markets. We test the proposed model on the Italian market and present the analysis and results of our study, including user profiles. In the final section, we present our conclusions, discussing the managerial implications of our study, and outline future research directions.

Despite the fact that several trend studies have been conducted regarding the potential of wireless technology and third generation mobile services (Durlacher, 2001; Shankar, O’Driscoll, & Reibstein 2003), there exists a need for more substantive, theory-based research and a deeper understanding of consumer behavior with regard to m-commerce. In the information system literature on IT adoption, researchers have conducted several studies to examine the relationship between perceived ease of use, perceived usefulness, and the use of other information technologies (Adams, Nelson, & Todd, 1992; Davis, 1989; Davis et al., 1989; Hendrickson & Collins, 1996; Mathieson, 1991; Szajna, 1996). Their research has supported the technology acceptance model (TAM) proposed by Davis (1989), which posits that perceived ease of use and perceived usefulness can predict the usage of technology.

ADOPTION OF THIRD GENERATION MOBILE MULTIMEDIA SERVICES

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Perceived usefulness is defined as “the degree to which a person believes that using a particular system would enhance his or her job performance” and perceived ease of use is defined as “the degree to which a person believes that using a particular system would be free of effort” (Davis, 1989). Davis and his colleagues (Davis, 1989; Davis et al., 1989) demonstrated that perceived ease of use affected usage intention indirectly vs. perceived usefulness. In an extension to TAM, Davis and his colleagues examined the impact of enjoyment on usage intention (Davis et al., 1989). They reported two studies concerning the relative effects of usefulness and enjoyment on intention to use and usage of computers. As expected, they found enjoyment had a significant effect on intention. A positive interaction between usefulness and enjoyment was also observed. Several recent empirical studies have validated adoption theory in relation to a wide range of products (Holak & Lehman, 1990; Labay & Kinnear, 1981; Ostlund, 1973; Rogers, 1995) and technology (Beatty, Shim, & Jones, 2001; Plouffe et al., 2001). A large number of studies have investigated the use of electronic commerce, but the field of mobile commerce has been left virtually unexplored. In this research, our goal is to extend the TAM model to study motivations and barriers to the adoption of 3G mobile multimedia services. In the following sections, we present two stages of analysis: an exploratory qualitative stage and a quantitative stage focused on the Italian market.

RESEARCH FRAMEWORK

tions of the stimuli (Green, Helsen, & Shandler, 1988). A number of (hypothetical) combinations of service elements can be formulated that will be presented to a sample of customers. The methodology adopted comprises three stages of analysis. The first stage is concerned with the design of the study where the attributes and levels relevant to the service category are selected. The variables are derived from two preliminary pilot studies drawing on a sample of young people in Italy and the United States, followed by an exploratory qualitative study conducted by Nokia (Nokia, 2002) in 24 focus groups in six markets (Brazil, Germany, Italy, Singapore, United Kingdom, United States). The second stage of the analysis concentrates specifically on quantitative marketing research conducted in Italy on a population of 1,000 mobile users. Italy was selected because it is one of the European countries with high penetration of mobile phones and one of the first countries in which a network provider is already offering 3G services. Data were gathered by means of a telephone questionnaire. Respondents were asked to rate the attractiveness of a number of possible combinations of customer service elements to describe behaviors, roles, and test variables influencing adoption of mobile computing. In the final stage, the ratings are used to estimate part-worth utilities, that is, the utility attached to the individual levels of each service element included in the research design. In this manner, an accurate estimate of customer trade-offs between service elements can be obtained.

Methodology Many factors may positively or negatively influence user’s adoption of multimedia mobile services. The main goal of this research is to identify a hierarchy of importance of the critical factors influencing the adoption of mobile services. To realize this research objective, conjoint analysis was seen as the appropriate statistical tool. Conjoint analysis is a technique that allows a set of overall responses to factorially designed stimuli to be decomposed so that the utility of each stimulus attribute can be inferred from the respondent’s overall evalua-

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JOURNAL OF INTERACTIVE MARKETING

Preliminary Pilot Studies In the first stage of analysis, we conducted two preliminary pilot studies on two homogeneous samples of young mobile users in Italy and the United States. To understand which factors and/or conditions enable/ inhibit the adoption of third generation mobile services, a random sample of 56 young mobile users, aged 21–28, were interviewed (28 in Italy and 28 in the United States). Respondents were asked if they were familiar with mobile services (mobile, PDA, i-pocket) before they

were invited to state the most critical factors that influence their adoption of a mobile device. The findings in Figure 1 and Figure 2 are derived from faceto-face interviews where respondents spontaneously indicated enablers and obstacles.

The main perceived obstacles (shown in Figure 2) include: • Ease of use and navigation: “micro design” based on user needs and mobility • Limitation in bandwidth (coverage area)

As indicated in Figure 1, the perceived main advantages of multimedia mobile services in Italy and the United States can be summarized by the following four categories:

• Cost

• Mobility: to have access in real time to information and communications (i.e., need for work, emergency, communication, and contact)

• Privacy issues

• Availability: possibility to be contacted in any time and place • Functions provided: availability of personalized information or functions (i.e., MS Office compatibility, download facilities, organizer functions, games, identification) • Accessibility

• Hardware and software functionalities (dimension of the device, battery life, display, speed, and functions provided)

These advantages and disadvantages are consistent with Shankar et al. (2003). They were carried forward in subsequent stages of the research as the stimuli presented to respondents in the focus groups (qualitative stage) and tested in the quantitative exploratory survey.

Exploratory Qualitative Stage The qualitative analysis was supported by fieldwork carried out face-to-face in the first and second quarters

36% 36%

Communication and keep in contact

29% 29%

Accessibility

25%

Availability MS Office compatibility

25%

4%

25%

Emergency Need for work

21%

7%

Download facilities

32%

14%

18%

Italy USA

18% 18%

Organizer functions Unlimited access/minutes

4%

Games

4% 4%

Identification

4%

14%

FIGURE 1 Factors Enabling the Adoption of Mobile Devices (Pilot Study) Sample: 56 young mobile users (21–28)—28 in Italy and 28 in USA


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71% 71%

Reasonable cost 50%

Dimension

11% 50%

Functions offered

18% 39%

Life battery

14% 39%

Usability and ease of use

18% 36% 39% 32%

Coverage area Speed

18%

To be always available

14% 11% 14%

Quality of display Electromagnetic waves Privacy Reserve

Italy USA

9%

11% 7% 4%

Service plan

21%

FIGURE 2 Obstacles to the Adoption of Mobile Devices (Pilot Study) Sample: 56 young mobile device users (21–28)—28 in Italy and 28 in USA

of 2001. Nokia Networks conducted 24 focus groups in six markets (Brazil, Germany, Italy, Singapore, United Kingdom, United States). The interviews focused on the core target for the third generation offering, namely, teenagers, young adults, and family

TABLE 1

adults, all currently using mobile phones for personal use. The sample was segmented by age (16–19, 20–29, and 30–45). Group interviews made it possible to compare the views of a number of individuals at one time and to achieve synergy of expression.

Motivation Segmentation

MOTIVATION

TYPICAL COMMENTS

1. Business 2. Formality 3. Urgency

For business purposes When I want to send a formal message When I need to know the message has arrived

4. Function

When I want to send urgent communication As a rapid way to stay in touch To send a long piece of text

MOTIVATION

To contact people I don’t see very often As a personalized way to send a message To increase the feeling of contact To share an experience Nice for people to see me if they haven’t done so for a while For longer greetings

To send an attachment When I don’t feel like talking Practical reason (like to show something 5. Price 6. Discretion

I want to buy) When I want to communicate cheaply Need to be discrete and quiet

7. Personal contact

When talking would disturb people around me Might disturb the person I’m trying to contact To keep in touch with friends/family abroad To send an intimate message

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TYPICAL COMMENTS

8. Fun

When I don’t want to talk, but need to communicate Joke or chit-chat with friends As a novel way to message To share an experience As it is just great fun To send pictures from my holiday To show something like a view To express creativity

The research looked primarily at the following mobile multimedia services: photo messaging, mobile e-mail, video messaging, and postcard messaging. However, the research also briefly touched on rich text messaging and on video calling. Ensuring that respondents concentrated on the messaging format and did not allow previous misconceptions about service or service delivery was of utmost importance in the study. Therefore, participants were told not to concentrate on pricing and to imagine that there would be no network problems. The prompted statements formed on the basis of discussion by participants in the focus group indicate motivations for the use of future multimedia mobile services (see Table 1). The statements can be classified into eight broad segments of usage: business, formality, urgency, function, price, discretion, personal contact, and fun. We tested the model in the Italian market as shown in Figure 3. The structural model—a set of constructs,

Input device Output device Software facilities

corresponding measures, and hypothesized relationships—is derived from the adoption literature and the conceptual frameworks described earlier. The relationship shown in the model also has support from prior theoretical and empirical work in the exploratory qualitative stage (pilot studies and focus groups). The following factors are hypothesized to influence users’ perceived ease of use. • Input device: the different types of input methods • Output device: different screen size will affect the ease of use of a mobile device • Software facilities: few and clear steps, graphic layout, clear commands and symbols, help functions • Bandwidth: directly affects system response time, which in turn, affects perceived ease of use. The following factors are hypothesized to influence users’ perceived usefulness. • Service offerings: the quality and variety of services offered will affect users’ perceived usefulness of mobile computing.

Perceived innovation

Knowledge Perceived Ease of Use (PEU)

Bandwidth Atttitude toward using (A)

Service offerings

Perceived Usefulness (PU)

Behavioral Intention to Use (B)

Enjoyment

Degree of mobility Compatibility

Interactivity

Fun

Price

FIGURE 3 Adapted TAM Model of Adoption of Multimedia Mobile Services


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• Degree of mobility: we hypothesize that the more mobile the user, the more valuable mobile computing is to the user. • Compatibility: mobile devices have to work well with users’ existing computing devices such as their PC’s if they need to synchronize data or transfer information. In addition, based on the literature review (Zhu & Fui-Hoon, 2002), we propose that price and enjoyment are two other key constructs that will affect users’ intention to use a mobile device. We also propose two new constructs represented by knowledge and perceived innovation. Previous empirical research (I-LAB—Bocconi University 2002, 2003) showed that awareness, familiarity, and involvement influence attitude toward using a new service. Further, participants in the pilot studies and focus groups indicated that knowledge was an important variable that influenced perceived usefulness and ease of use, with a positive or negative effect on attitude towards using a new service. We measured the constructs and tested the hypotheses using the quantitative exploratory survey conducted in Italy.

Exploratory Quantitative Stage This stage of the analysis concentrated specifically on quantitative marketing research conducted in the second quarter of 2002 through phone questionnaires on a sample of 1,000 Italian mobile users. The main goal of this stage of analysis was to identify a hierarchy of importance of factors influencing adoption of mobile services and to describe the key descriptive elements of homogeneous segments of the population. This is relevant to define the correct strategies for offering the new services in a proper and differentiated way. To realize this research objective, conjoint analysis was seen as the appropriate statistical tool. We used Adaptive Conjoint Analysis (ACA) to conduct our conjoint study. ACA is a PC-based system for conjoint analysis. The term “adaptive” refers to the fact that the computer-administered interview is customized for each respondent. At each step, previous answers are used to decide which question should be asked next to obtain most of the information about the respondent’s preferences. The program allows the

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researcher to design a computer-interactive interview and administer the interview to respondents. The interview can consider many factors and levels, paying special attention to those the respondent considers most important. Questioning is done in an “intelligent” way, the respondent’s utilities are continually re-estimated as the interview progresses, and each question is chosen to provide the greatest amount of additional information, given what is already known about the respondent’s preferences. The key items in the questionnaire are as follows: 1. Degree of service innovation perceived by consumers. For each service category the degree of service innovation is measured through a one to nine scale. 2. Interest for the service categories under scrutiny. 3. Preference for means/platforms through which selected services can be accessed (portables, phone, and/or TV). 4. Analysis of critical factors influencing adoption of mobile services emerged in the TAM—Technology Adoption Model (ease of use, speed, cost and usefulness). 5. Ranking of service features. The services considered in the questionnaire are the following: • Portfolio and personal funds management. • Data exchange among people and among people and various electronic devices. • Remote control of place objects and people. • Contextual and real-time shopping. • Play in real time. • Location-based services (i.e., maps).

Sample A random sample of 1,000 Italian mobile users was interviewed by phone in Italy in the second quarter of 2002. The demographics of the sample can be summarized as follows: gender (female, 52%; male, 48%); age

Portfolio and personal funds management

28.9%

Data exchange among people and among people and electronic devices

20.7%

Remote control of place objects and people

20.3%

Contextual and real time shopping

17.5%

Play in real time

10.6%

Location based services (i.e., maps)

10.5%

Any service

49.1%

FIGURE 4 Interest Expressed Toward Multimedia Mobile Services (% multiple answers, Total respondents 1000) Source: Adapted from VVA, 2002.

(18–24 years, 11 or 26%; 25–34 years, 19 or 7%; 35– 44 years, 17 or 3%; 45–54 years, 15 or 7%; 55–64 years, 14 or 5%; beyond 65 years, 21 or 2%), and level of education (at least primary level, 9.5%; at least secondary level, 22.5%; higher level education, 49.2%; degree, 18.8%). One thousand interviews provide a sampling error (at 50%) of 3.1% (for a 95% confidence interval).

Analysis and Results All the services were considered rather innovative (the average is 7.1 on a nine-point scale). The ser-

TABLE 2

vice considered less innovative is the possibility to play in real time (6.6). In terms of the interest expressed towards these services, the respondents were asked to indicate the specific services they were interested in (each respondent could indicate more than one service). The interest expressed towards multimedia mobile services distributes as follows (see Figure 4). Each respondent was then asked to indicate the most important feature influencing his/her adoption of multimedia mobile service, selecting just one choice

Importance Rankings of Preferred Features

IMPORTANCE VARIABLE

18–24

25–34

35–44

45–54

55–64

OVER 65

AVERAGE

RANK

Usefulness

34.5%

39.6%

37.6%

37.6%

26.9%

15.1%

31.3%

1

Ease of use Price

19.0% 27.6%

19.3% 26.9%

23.7% 20.2%

22.3% 21.0%

27.6% 26.9%

42.9% 21.7%

26.7% 23.8%

2 3

Speed of use

19.0%

14.2%

18.5%

19.1%

18.6%

20.3%

18.2%

4

Source: Elaboration from data in VVA, 2002. Note. Total respondents 1000.


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among four features derived from the TAM model (usefulness, price, ease of use, speed of use). As mentioned earlier, conjoint analysis allows us to define a hierarchy of importance concerning the critical factors influencing adoption of mobile services (see Table 2). Based on the importance ratings, usefulness emerges as the most important factor in adopting mobile services (31.3%). Ease of use is second in importance (26.7%). Price ranks third (23.8%), followed by speed of use (18.2%).

Rankings of Preferred Features (Ages 18–34)

TABLE 3

IMPORTANCE RANK

18–24

25–34

AVERAGE

Usefulness (*)

1

34.5%

39.6%

37.7%

Price Ease of use

2 3

27.6% 19.0%

26.9% 19.3%

27.2% 19.2%

Speed of use (*)

4

19.0%

14.2%

16.0%

(*) Differences statistically significant Base: 18–34 years old (313)

If we compare preferences expressed by people aged 18–24 and people aged 25–34, we can see that usefulness is considered more important by people aged 25–34 and speed of use is more appreciated by young people (see Table 3). These differences are statistically significant. “Usefulness” and “ease of use” are considered the most important variables to access segments of the population. Each respondent was asked to state his/her most important definition of the terms “usefulness” and “ease of use” and as shown in Figures 5 and 6, there

The variable with the greatest influence on people’s behavior is degree of interest toward the innovative services. Based on the conceptual framework (Davis, 1989) and results that emerged in the pilot study and focus groups, we distinguish the following important components of the value proposition: perceived innovation, usefulness, ease of use, speed of use, and price.

Simple lifetime organization 17.2% 35.5% Simple lifetime organisation 35.2%

Money savings 22.5%

Time saving 23.9%

Differences statistically significant

FIGURE 5 The Meaning of Usefulness (Total respondents 1000) Source: Elaboration from data VVA, 2002.

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are statistically significant different meanings assigned to these words by different age segments.

Age Age 18-24 25-34

Greater personal or family safety 8.9% Enjoy 9.5%

Source: Elaboration from data in VVA, 2002.


Enjoy

38.8% 15.7%

Time saving

18.1% 25.4%

Money savings

25.9% 19.8%

Greater personal or family security

0%

3.6%

Help functions 16.8% Clear symbols and function keys 36.5% Graphic display 17.4%

Few and simple steps 29.3%

FIGURE 6 The Meaning of Ease of Use Source: Elaboration from data VVA, 2002.

Let’s consider a single example of a single service: data exchange among people and among people and various electronic devices. As shown in Figure 7, each group segmented by age perceives a different relative value for each component of the value proposition. We can distinguish specific value curves.

Based on the relative value perceived by users for each component, messaging services are considered highly innovative by all segments; perceived interest is higher for 18–24 years old; and the 55–64 segment rates usefulness higher than do the other segments. Identifying the variables that network operators can use to access the identified clusters is an essential piece of information for crafting the correct strategies to target the segments. An interesting relationship emerges from the entire sample: the degree of interest is directly related to the degree of knowledge of the service. Specifically, people who declare a low level of interest in these services are those who actually know the least about the main features and potential outcomes of these services, even though the interviewer offered an in-depth explanation of the meaning of each service. Table 4 summarizes the average results of all service categories (portfolio and personal funds management, data exchange among people and among people and devices; remote control of place objects and people;

8 18-24 25-34 35-44 45-54 55-64

7 6 5

Relative value perceived by users (scale 1-9)

4 3 2 1 0 Perceived innovation

Perceived interest

Usefulness

Ease of use

Speed of use

Price

Components of value proposition

FIGURE 7 The Value Curve for Each Segment (Data Exchange Among People and Among People and Various Electronic Devices)


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TABLE 4

Average Results By Age Segments (All Service Categories)

18–24

25–34

35–44

45–54

55–65

OVER 65

Perceived innovation Perceived interest (%) Usefulness (*)

7.3 40.4% 34.5%

7.2 39.3% 39.6%

7.0 35.6% 37.6%

6.8 35.6% 37.6%

7.0 29.8% 26.9%

6.8 28.3% 15.1%

Price (*) Ease of use (*)

27.6% 19.0%

26.9% 19.3%

20.2% 23.7%

21.0% 22.3%

26.9% 27.6%

21.7% 42.9%

Speed of use (*)

19.0%

14.2%

18.5%

19.1%

18.6%

20.3%

(*) First choice

contextual and real-time shopping; play in real time; location-based services) by age segment. In particular, it details average degree of service innovation perceived by consumers, average interest for the service categories under scrutiny, analysis of critical factors influencing adoption of mobile services emerged in the TAM Technology Adoption Model (ease of use, speed, cost and usefulness). Perceived interest is highly influenced by perceived degree of service innovation (correlation index 0.79) and perceived usefulness (correlation index 0.83).

TABLE 5

Correlation Between Perceived Degree of Service Innovation and Ability to Pay

BASE RESPONDENTS TOTAL RESPONDENTS

INTERESTED TO THE SERVICE

Data exchange among people and among people and various electronic devices

0.60

0.32

Portfolio and personal funds management

0.52

NS

Contextual and real-time shopping

0.63

0.55

Location-based services (i.e., maps)

0.59

0.30

Remote control of place objects and people

0.60

0.50

Play in real time

0.58

NS

VARIABLE

Note. Total respondents 1000; NS not statistically significant.

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For the entire sample and, in particular, for those interested in the specific service, there is an inverse correlation between perceived degree of service innovation and ability to pay for the service (see Table 5). The ratings can be used to estimate the part-worth of attribute levels per segment, that is, the utility which is attached to the individual levels of each service element included in the research design (see Figure 8). The most important determinant of user adoption of multimedia mobile services for all segments (18–54) is “usefulness” or the degree to which a user believes that using a service will provide gains in performance. Next in importance for the segments over 45 is “ease of use.”

USER PROFILES/SEGMENTS Based on the results illustrated earlier, from a user perspective, there are three key attributes that describe a successful service: • Perceived usefulness means that a service satisfies a concrete need or requirement. Usefulness can have different interpretations depending on different user perspectives. It can relate to saving money, saving time, or how much “fun” a service is to use. • Ease of use for both terminals and services demands a user-friendly, intuitive Man Machine Interface (MMI). Ease of use also refers to effective navigation tools that encourage service usage and the full exploitation of enhanced features by avoiding steep learning curves.

FIGURE 8 Part-Worths of Attribute Levels per Segment (All Services)

• Cost benefits are closely related to perceived value. Cost-effectiveness is based upon what the user concludes when evaluating benefits against costs. The following aspects will drive evaluation of the benefits of third generation wireless services. To fulfil user expectations in the long term, applications and services must be able to take advantage of all third generation capabilities such as quality of service, bandwidth-on-demand, security, and privacy. If we cluster the sample using the degree of interest towards the innovative services, and analyze it with the socio-demo data, it turns out that the kind of activities of the consumers is the strong predictor of their future use of the new services. The results from the quantitative survey confirm previous studies in the field of adoption and diffusion of marketing-enabling technology (Rogers, 1995). Users can be segmented into five main groups according to their propensity to adopt new technologies. 1. Innovators: From the results of the quantitative survey, this cluster is mainly composed of “students” (18–24) who look mainly for low cost

and convenience. They account for 13% of the sample. They are fundamentally committed to new technology and are typically the first customers for anything that is truly brand-new. They are mainly interested in games in real time, multimedia messaging services, mobile shopping and location based services. 2. Early adopters: This cluster is composed of the “professionals,” that is people who mainly are managers or entrepreneurs in life. They account for 38% of the sample. They look for usefulness as the almost exclusive variable in order to access and pay for the service. They are interested in remote control, portfolio and personal funds management. 3. Early majority: These people make the bulk of all technology infrastructure purchases. They do not love technology for its own sake. They believe in evolutionary, not revolutionary, products and innovations. 4. Late majority: These customers are pessimistic about their ability to gain any value from technology investments. They are price sensitive, highly skeptical, and very demanding.


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TABLE 6

Motivation Drivers and Inhibitors

DRIVERS

INHIBITORS

STAGE

OPTIMISM

INNOVATIVE

DISCOMFORT

INSECURITY

Innovators Early Adopters

High High

High High

Low High

Low High

Early Majority Late Majority

Low High

Low Low

Low High

Low High

Laggards

Low

Low

High

High

Source: Adapted from Parasuraman, A., & Colby, C. (2001). Techno-Ready Marketing: How and Why Your Customers Adopt Technology. New York: Free Press.

5. Laggards: These customers are not as much of potential customers as they are critics. Typically, new technologies succeed when the early majority begins to adopt it, passing from the early adopters to the early majority and “crossing the chasm” in the technology adoption life cycle model (Moore, 1991). The chasm is the area on the product life cycle between the innovator and the early majority segments. Visionary early adopters and the pragmatist early majority have different perspectives on technology (see Table 6) and because of these incompatibilities, early adopter surveys don’t help to really understand or predict accurately how consumer behavior might change as a response to the introduction of the new technology.

CONCLUSION, MANAGERIAL IMPLICATIONS, AND FUTURE RESEARCH In this article, we identify the factors that predict a user’s adoption of third generation mobile multimedia services. The results show that perceived usefulness, ease of use, price, and speed of use are the most important determinants of adoption of multimedia mobile services, in that order. They also show that the importance of determinants differ by age groups or segments. The findings have several implications for managers needing to assess the likelihood of success for new technology introductions. They also indicate the drivers of acceptance enabling proactive interventions (such as training and marketing activities) to be

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designed and targeted at populations of users who may be less inclined to adopt and use new systems. The results provide further evidence on the appropriateness of using the TAM model to measure the different dimensions of actual multimedia mobile usage and they illustrate the importance of usefulness related to the adoption of third generation mobile services. Although conjoint analysis revealed “usefulness” as the most significant factor in the adoption process, other factors should not be ignored by marketers. “Ease of use” was the second most important adoption factor. This illustrates a need for information about m-services usage that marketers can fulfill via alternative channels such as television or magazines. Moreover, the use of relatively uncomplicated services such as information services similar to SMS services should be encouraged. Customer acquaintance with this category of m-service will lower the barrier toward other m-service as well. Consumers need to be educated about the possibilities of m-commerce and the convenience it can bring about by incorporating it into their daily routines. Advertising should also focus on the unique advantages of mobile services, thereby not only stressing ubiquity of m-commerce, but also pointing out the opportunities of localization and personalization (Kleijnen, Ruyter, & Wetzels, 2003). The introduction of third generation technologies will provide numerous opportunities in this area. An additional factor that will become more prevalent with the introduction of new technologies is price and payment options. With the introduction of new third generation technologies, constant connectivity to the Internet will be offered. Payment will more likely be based on the amount of data-download, than on the duration of time spent online. Future research needs to develop a deeper understanding of the dynamic influences studied here, refining measurement of the core constructs used in the model, and understanding the organizational outcomes associated with new technology use.

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