The Effectiveness of Product Codes in Marketing - Science Direct

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ScienceDirect Procedia - Social and Behavioral Sciences 175 (2015) 12 – 15

International Conference on Strategic Innovative Marketing, IC-SIM 2014, September 1-4, 2014, Madrid, Spain

The effectiveness of Product Codes in Marketing Ahmad Adel Mostafaa,* a

American University of Kuwait, Salmiya, Kuwait City, P.O. Box 3323 Safat 13034, Kuwait

Abstract This paper points out the effectiveness of product codes specifically quick response (QR) codes and barcodes in the marketing field. With all the knowledge and technological developments that the 21st century reached, the research explores new concepts that can be considered in order to have an efficient marketing strategy. This research is divided into five parts; the first section contains a brief introduction to the product code system and how it works. In the following section, literature review points out how popular and familiar QR codes and barcodes became nowadays. Then, interviews and questionnaires are considered in the paper's methodology. Next, some analytical benefits are introduced to notify how useful product codes are in the marketing area. Finally, the conclusion reassures why this paper should be taken into consideration. © 2015 2015The TheAuthors. Authors.Published Published Elsevier © by by Elsevier Ltd.Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of I-DAS- Institute for the Dissemination of Arts and Science. Peer-review under responsibility of I-DAS- Institute for the Dissemination of Arts and Science. Keywords: QR Codes; Product Codes; Service Marketing; Cost Effective

1.

Introduction

Product codes take a variety of forms, the most popular form being the barcode. Barcodes have been the least expensive form of data carriers. Since their introduction in the 1970s they have become ubiquitous in retail for facilitating inventory control, stock reordering, and checkout (Manthou and Vlachopoulou 2001). The quick response (QR) code is “a two-dimensional, black-and-white square barcode that links directly to a URL of one’s choice” (Cunningham and Dull, 2011, p. 42) and can also contain text or other data. They have greater storage capability than standard barcodes, are free to make and use, and can be read quickly with most Smartphones (Ashford, 2010; Jackson, 2011; Rouillard, 2008). The contribution of this research is to explore a new concept in service marketing; that is the use of a “Market Station Machine” and “Market Station Web” which can be used at

* Corresponding author. Tel.: +965 22248399. E-mail address: [email protected]; [email protected]

1877-0428 © 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of I-DAS- Institute for the Dissemination of Arts and Science. doi:10.1016/j.sbspro.2015.01.1168

Ahmad Adel Mostafa / Procedia - Social and Behavioral Sciences 175 (2015) 12 – 15

home or installed in various locations and allow customers to order products by scanning a barcode or QR code into their Smartphone, paying with an application on that Smartphone, and then get delivery. 2.

Literature Review

Product codes have strong implications for marketing in general, and service marketing in specific. From a marketing perspective, QR codes, for example, can be used to promote brands and attract customers in new ways and thus their use in advertising is experiencing exponential growth across the world (Walsh, 2009). In Japan where QR codes are ubiquitous; they use them in store windows and magazines and even on McDonald’s wrappers with information on ingredients/nutritional content (Ashford, 2010). They are likely to become mainstream with the rapidly increasing number of Smartphones and Internet-enabled cell phones, mobile site creation by many businesses, easy social network access, and the increasing number of popular mobile apps (Ashford, 2010; Rouillard, 2008). This indicates that product codes can be a very effective tool in service marketing; and not only in inventory as ones use to think. Thus, and since they are becoming a main stream, I am presenting here two new ideas of service marketing that can have major implications on the company, customers, and economy as a whole. 3.

The concept of the ideas: how it works and how it can be used

The two new ideas are similar in concept, but different usage: 3.1 “Market Station Machine” This machine is a simple machine but it’s thin in size and can be made into many different shapes. It consists of mainly a large touch screen that can be placed anywhere (e.g. Metro stations, Bus stations, Airport, Streets, companies, Malls, etc), and takes any desired shape (e.g. Cylinder shape if around pillars in metro stations, rectangular shape if installed in bus stations, flat thin screen if in malls, cubical or vending machine shape if in gas stations, etc). Below is the simple description of how the machine can be used: Customer uses the screen of the machine to purchase products online from hyper markets. The customer goes to the machine while waiting in metro or bus stations, touch the screen and select the product type he wants (e.g. Beverages); then selects another category in the product type (e.g. Soda drinks); then selects the product he wants (e.g. PEPSI), then finally selects the size he wants. A product code will be displayed to him (bar or QR code), so he can then scan it with his smart phone using product code application installed in it, enter the quantity needed in the application in the smart phone, pay online automatically via credit cards, debit cards, or the telecommunication company he is subscribed with (added on his phone bill), then finally gets his product delivered to his destination or any selected distention (e.g. house). 3.2 “Market Station Web” It is exactly the same as above; but can be used from any computer while sitting at home, work, or anywhere. the customer enters the Hypermarket’s website and do the same steps mentioned in the above idea with the “Market Station Machine”, and then scan the product code with his smart phone, pay online automatically via credit cards, Debit cards, or the telecommunication company he is subscribed with (added on his phone bill), then finally gets his product delivered to his destination or any selected distention (e.g. house). The development of competitive advantage is based on technology (Sakas, Vlachos, Nasiopoulos, 2014). Almost everyone nowadays owns or has access to a smart phone. There will be an application developed specifically & especially for those hypermarkets (sponsored by them) where customers can use it for scanning, purchasing, and delivering the product to the destination he appoints (i.e. he will be able to scan the product, enter the quantity in the application, enter the destination he wants the product to be delivered to, enter the credit or debit card number, or use the telecommunication provider he is subscribed with). It is needless to mention that ethical issues need to be taken into consideration for online marketing (Kavoura, 2014a) as is the case with ethical decisions in business and marketing (Tsalikis and Peralta, 2014).

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4.

Research design & methodology

As an exploratory study interested in developing new theory on this topic, this research primarily used qualitative and quantitative methods. Specifically, a concurrent research design was used in which qualitative and quantitative data were used simultaneously (Miller and Crabtree, 1994). Data was collected using open-ended interview questions on a randomly-selected population of 2000 marketers and users of mobile technology, in order to evaluate the usefulness of implementing the new concept introduced in this research. Also, a 3-question questionnaire was used to determine how many people currently owned Smartphones. 5.

Results & implications

From the data collected, it is obvious that almost everyone in the pool of participants owned a Smartphone, and all of them use internet-related services on their phones. Over 80% of these Smartphone users favoured using the two new shopping concepts introduced in this research. By analyzing the collected data about the acceptance and agreeableness of customers to these two new concepts and how they are considered very useful and beneficial to them, applying the new concepts to a company's marketing strategy would benefit the company (by lowering its storage costs and increasing its profit), its customers (by saving up consumption time) and the economy itself (by lowering unemployment rate, increasing consumption and purchase power, and investment). The following scenarios and hypothesis notify how stakeholders are better off using these two service marketing concepts, and their implications, including how cost effective they are: Increase distribution coverage: Hypermarkets can install the “Market Station Machine” anywhere and at any place where they are unable to open branches because of cost, lack of space, or legalities. Opening new branches in places that have a lack of space: Placing new branches of their hypermarkets (the Machine is considered a branch as it consists of all the items in the hypermarket) in places they couldn’t open in because a lack of space. Eliminate Operational Cost for these new branches/stores: Rather than opening new branches with a high operational cost for each branch; the “Market Station Machine” is not involving any operational cost at all, compared to operating a branch. Eliminate Location Cost: The new concepts introduced in this research provide new ways to cut costs of having a physical inventory and storage. Reduce Operational Cost for existing branches/stores: Traffic at cashiers in existing stores will be less since many people will purchase using the scan code application; thus no need for many cashier and customer service personnel. Increase sales: People who do not like traffic at cashiers and/or feeling inertia to travel for a certain distance to buy grocery, will use the “Market Station Web” to purchase via product code scanning from wherever they are. Tracking customers’ buying patterns: “Database Marketing involves tracking consumers’ buying habits very closely and crafting products tailored precisely to people’s wants and needs based on this information” (Solomon, 2011). Explore Societal and economical implications: i. Reducing unemployment rate: Helps people who are jobless to work in the delivery service provided by these hypermarkets; since there will be many openings for it. ii. Supporting economy: By increasing the purchase power of customers with the easiness of purchasing. Companies (hypermarkets), of course, need to create websites (if they don’t have) and maintain updating the data on the website for new items, quantity, and sold out items. 6.

Conclusion

This research is of theoretical importance because it is a growing trend and we need to know more about how to deal with it; and this area is under-researched within the marketing literature, although there is some research within the library studies and tourism literatures. It will benefit practitioners and will increase our understanding on how product codes work in marketing contexts and the various opportunities available for using these within a company’s


marketing strategy. Tremendous capabilities exist from the use and implementation of new technologies and social media in order to communicate and advertise these opportunities on offer by companies and organizations in different sectors (Kavoura, 2014b; Vlachvei and Notta, 2014; Chatzithomas et al., 2014; Stavrianea and Kavoura, 2014; Yasa Özeltürkay and Mucan, 2014; Kiráľová, and Malachovský, 2014; Kavoura and Stavrianea, 2014; Amaral, Tiago and Tiago, 2014 ). References Amaral, F., Tiago, T. and Tiago, F. (2014) User-generated content: tourists’ profiles on Tripadvisor, International Journal of Strategic Innovative Marketing, Vol 1, Iss: 3. Ashford, R. (2010). QR codes and academic libraries: Reaching mobile users. College & Research Libraries News, 71 (10): 526-530. Canadi, M., Höpken, W., and Fuchs, M. (2010). Application of QR codes in online travel distribution. In Information and Communication Technologies in Tourism 2010 (p. 137-148). Springer Vienna. Chatzithomas, N., Boutsouki, N., Chatzithomas, L. and Zotos, Y. (2014). Social media advertising platforms: a cross-cultural study, International Journal of Strategic Innovative Marketing, Vol 1, Iss: 2. Cunningham, C. and Dull, C. (2011),Use them... or lose them? The case for and against using QR codes. Currents, 37 (8): 42-45. Jackson, D. (2011). Standard bar codes beware - Smartphone users may prefer QR codes. Law Library Journal, 103 (1): 153. Kavoura, A. (2014a). Advertising activities in social media and the creation of a community belonging in the digital era. The Małopolska School of Economics in Tarnów Research Papers Collection, 24 (2): 97-106. Kavoura, A. (2014b). Social Media, online imagined communities and communication research, Library Review, 63(6/7): 490-504. Kavoura, A. and Stavrianea, A. (2014). Economic and social aspects from social media’s implementation as a strategic innovative marketing tool in the tourism industry. Procedia, Economics and Finance, 14, 303-312. Kiráľová, A. and Malachovský, A. (2014). Developing destination marketing strategy for success, the case of the Cz Republic. International Journal of Strategic Innovative Marketing, Vol 1, Iss: 2. Manthou, V. and Vlachopoulou, M. (2001). Bar-code technology for inventory and marketing management systems: A model for its development and implementation. International Journal of Production Economics, 71 (1): 157-164. Miller, W. and Crabtree, B. (1994). Qualitative analysis: How to begin making sense. The Family Practice Research Journal, 14 (3): 289-297. Rouillard, J. (2008). Contextual QR codes. In The Third International Multi-Conference on Computing in the Global Information Technology, 2008. ICCGI ’08 (p. 50-55). IEEE. Sakas, D., Vlachos, D., Nasiopoulos, D. (2014). Modelling strategic management for the development of competitive advantage, based on technology, Journal of Systems and Information Technology, (pp. 187 - 209). Solomon, M.R. (2011). Consumer Behavior: BUYING, HAVING, AND BEING (9th ed.). Global Edition: Pearson Stalidis, G. and Karapistolis, D. (2014). Knowledge discovery and computerized reasoning to assist tourist destination marketing. International Journal of Strategic Innovative Marketing, Vol 1, Iss: 2. Stavrianea, A. and Kavoura, A. (2014). Social Media’s and Online User-Generated Content’s Role in Services Advertising. AIP (in press). Tsalikis, J. and Peralta A. (2014). Priming effects on business ethical decision making. International Journal of Strategic Innovative Marketing, Vol 1, Iss:1. Vlachvei, A. and Notta, O. (2014). Social media adoption and managers’ perceptions. International Journal of Strategic Innovative Marketing, Vol 1, Iss: 2. Walsh, A. (2009). Quick response codes and libraries. Library Hi Tech News, 26 (5/6): 7-9. Yam, K., Takhistov, P., and Miltz, J. (2005). Intelligent packaging: Concepts and applications. Journal of Food Science, 70 (1): R1-R10. Yaşa Özeltürkay, E. and Mucan, B. (2014). How Turkish Banks Benefit From Social Media: Analyzing Banks Formal Links. International Journal of Strategic Innovative Marketing, Vol 1, Iss:2.

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