Economic Basics II. Practical Exercise 4. Mobile Business I (WS 2014/15) Shuzhe Yang, M.Sc.
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1 Practical Exercise 4 Economic Basics II Mobile Business I (WS 2014/15) Shuzhe Yang, M.Sc. Chair of Mobile Business & Multilateral Security Goethe University Frankfurt a. M. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 1
2 Overview Practical Exercise No. 4 Exercise 1: Consumer Acceptance Exercise 2: Customer Trust in Mobile Business Exercise 3: General Model of Technology Acceptance Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 2
3 Exercise 1 Consumer Acceptance a) Explain six issues which influence the consumer acceptance for mobile services. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 3
4 Exercise 1 Consumer Acceptance Which factors are important for acceptance and success in M-Business? Building customer trust Acceptance of technologies in a market Diffusion of M-Business applications and services and why it is important to understand these factors? Need for understanding the customers choices for using/not using M-Business applications and services and to tailor such services to their actual needs. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 4
5 Exercise 1 Consumer Acceptance Mobile applications and services in M-Business can increase the connectedness of their users. However, there are several issues related to consumers acceptance for mobile services and applications, which need to be considered: Willingness to pay for services Network effects Ease of Use Quality of service Product limitations Trust in service provider Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 5
6 Exercise 1 Consumer Acceptance b) Identify at least one example for each Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 6
7 Exercise 1 Consumer Acceptance Willingness to pay for services Apps, Text Messages, Internet Access, Spotify Network effects imessage, Google Hangout, Skype, WhatsApp Ease of Use Mobile Website vs. Desktop Website Quality of service Bandwidth of Internet Access Product limitations Limited features of Microsoft Office on mobile devices Trust in service provider WhatsApp vs. Threema Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 7
8 Overview Practical Exercise No. 4 Exercise 1: Consumer Acceptance Exercise 2: Customer Trust in Mobile Business Exercise 3: General Model of Technology Acceptance Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 8
9 Exercise 2 Customer Trust in Mobile Business a) Name the two components which influence customer Trust in Mobile Business. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 9
10 Components of Customer Trust in M- Business Mobile Technology Customer Trust in Mobile Business Mobile Service Provider Reliability and security of mobile technology are equally important, since failures in the early stages of the usage of M-Business reduce the customers trust significantly. As mobile technology evolves, the trust focus shifts from technology to the mobile service provider. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 10
11 Initial Trust Formation In order to build an initial trust formation, service providers must disseminate information, cultivate interest, etc. Enhance customer familiarity, as people tend to trust the familiar, e.g. by general publicity or advertisements. Build vendor reputation, as a good reputation suggests certainty and less risk in conducting business. Deliver high-quality information, as the information posted on a company has a high impact on the customers perception. Elicit third-party recognition and certification, as the independent nature of third-party certification helps customers to feel more secure in doing business with the M-Business provider. Provide attractive rewards, such as free trials or gift cards helping to attract new customers. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 11
12 Continuous Trust Building Overview It is important to maintain a trust relationship, as creating trust is time-consuming and trust can easily be destroyed. There are several successful methods derived from E-Business that can be adopted by M-Business companies to overcome trust barriers. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 12
13 Continuous Trust Building Details 1 Improve site quality: User-friendly design of web-sites accessed by mobile devices (e.g. giving customers sufficient information for purchases) helps to convey the vendor s competence. Sharpen business competence: Refers to the skills, technical knowledge, and expertise in operating M-Business applications. Maintain company integrity: Providers need to be congruent with regard to the actions and the promises given to their customers. Post privacy policy: Similar to E-Business providers, M-Business providers should post their privacy policy online, so customers are informed about the information being processed Ü Helps to build transparency. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 13
14 Continuous Trust Building Details 2 Strengthen security controls: In order to have secure M-Business transactions, technologies need to be in place that help to allow Multilateral Security for all involved parties. Foster a Virtual Community: By building virtual communities, mobile service providers can replicate the success of web-based online communities and create positive evaluations by their users. Encourage communication and increase accessibility: In order to build synergies, the users should be brought into close communication with the M-Business provider, reducing information asymmetries and fostering the provider s credibility and trustworthiness. Use external auditing to monitor operations: External auditing helps to maintain the customers trust by keeping the provider to behave fair and legally. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 14
15 Exercise 2 Customer Trust in Mobile Business b) Identify one Best Practice for each attribute of the lectures Framework for building trust in Mobile Business. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 15
16 A Framework for Building Trust in M-Business Mobile Service Providers Mobile Technology Familiarity Reputation Information Quality 3 rd -Party Recognition Attractive Rewards Feasibility Initial Trust Formation Site Quality Competence Integrity Privacy Policy Security Controls Open Communication Community Building External Auditing Reliability Consistency Continuous Trust Development [SiauShen2003] 16 Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 16
17 Exercise 3 General Model of Technology Acceptance a) Make a draft of the General Model of Technology Acceptance introduced in the lecture and describe the interrelation of the single components. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 17
18 General Model of Technology Acceptance based on TRA and DOI Behavioural beliefs about adopting/using the technology - relative advantage - compatibility - complexity - trialability - observability - image - trust Normative beliefs about adopting/using the technology - friends - work group - family - other opinion leaders Attitude towards adopting/using the technology Subjective norm towards adopting/using the technology Behavioural intention to adopt/use technology Actual adoption/ use of technology Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 18
19 Exercise 3 General Model of Technology Acceptance b) Describe the key innovation characteristics. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 19
20 Diffusion of Innovations Key Innovation Characteristics Relative Advantage: The degree to which the innovation is perceived as being better than the practice it supersedes Compatibility: The extent to which adopting the innovation is compatible with what people do Complexity: The degree to which an innovation is perceived as relatively difficult to understand and use Trialability: The degree to which an innovation may be experimented with on a limited basis before making an adoption (or rejection) decision Observability: The degree to which the results of an innovation are visible to others Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 20
21 Exercise 3 General Model of Technology Acceptance c) What might be normative beliefs about using smartphones? Name two positive and two negative examples. Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 21
22 Exercise 3 General Model of Technology Acceptance Positive Simple and better communication with friends (e.g. Group Chats) Enhanced reachability via s for working mobile Negative Addictive usage of smartphones Being transparent for services provider/companies (privacy issues) Mobile Business 1 (MB 1), WS 2014 /2015, Professur für Mobile Business & Multilateral Security 22
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