Converting e-Commerce into M-Commerce in Bangladesh: An Analysis

Course Code: MBA 700 Course Title: Research Project

By:Munshi Arif Rashid ID: - 09535008 IMBA Program, Summer-2013 MBA-700, Research Project

For:School of Business

[A Research paper Submitted in Partial Fulfillment of the IMBA Program in the University of Information Technology and Sciences (UITS)]

School Of Business, University Of Information Technology & Sciences,

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Dhaka, Bangladesh, 2013. Research Project

On

Converting e-Commerce into M-Commerce in Bangladesh: An Analysis

By:
Munshi Arif Rashid ID: - 09535008 IMBA Program, Summer-2013 MBA-700, Research Project

Under the Guidance of: Md. Nazmul Hasan 2|Page

Assistant Professor of Finance & Head of IMBA Program School of Business University of Information Technology and Sciences (UITS), Dhaka.

Executive Summary
The mobile commerce (M-Commerce) marketplace is growing and new products and services are constantl becoming available! "martphone technolog is one important #actor driving growth! This is because as phone so#tware becomes more sophisticated$ M-Commerce transactions are #aster and easier to engage in! %s well with the times securit are becoming more comple& to break! 'evelopments in new mobile devices and services have raised the interest o# corporations to implement mobile applications in their own businesses! (arious new technologies are broadening the possibilities #or corporations to deplo new applications which also raise the re)uirements #or the manageabilit ! %s companies implement new mobile services and applications it is important to notice the re)uirements #or data securit and its manageabilit ! 'i##erent t pes o# e-Commerce based compan converting their plat#orm to M-Commerce based plat#orm! Trans#ormation rate is ver rapid! These trans#ormations enable them to connect with more consumers$ even not onl urban but also rural where broadband is not available et! M-Commerce is opening a new door #or marketer #or marketing! *ow it+s not re)uired to be in a #i&ed place! Mobile is enabling them to reach almost ever where to the consumer! %mong lots o# technolog "M" is being widel used b the marketer! Mobile banking is becoming popular da b da ! ,ots o# banking related services is supported b most pioneer bank in -angladesh through mobile banking! Technologies like .(/$ "M"$ and 0%P enabling the user to access their bank account using mobile banking! This is not onl enabling the user #or ease o# access but also it drasticall cuts down the costs o# providing service to the customers!

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The stud de#ines the concept o# M-Commerce and the incentives #or companies to adopt MCommerce! The stud consists o# the #ramework o# M-Commerce technologies and services toda $ and the securit and management issues companies have to con#ront! The compan used in the case Cellba2aar is one o# the pioneers in -angladesh among its kind! .t develops the concept 3M-Commerce4 to the consumer o# -angladesh! The conclusions o# the stud contain the current situation o# the related issues with anal ses #or tomorrow!

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LETTER OF TRANSMITTAL
Md. Nazmul Hasan Assistant Professor of Finance & Head of IMBA Program School of Business UITS, Dhaka.

Sub: Submission of the Research Project report.

Dear Sir,

With due respect, I, Munshi Arif Rashid, bearing ID: 09535008 would like to inform you that, it is a great pleasure for me to submit the research project report on Converting e-Commerce into M-Commerce in Bangladesh.

In this report, I have tried to implement my academic experiences in the practical field with due sincerity and would like to thank you for your cooperation. Despite many limitations I have tried my level best to address the major and in depth issues in making this paper accurate and reliable. If you have any further enquiry concerning any additional information I would be very pleased to clarify that.

I, therefore, hope that you will be kind enough to accept this report as partial 6|Page

fulfillment of the IMBA Program in the University of Information Technology and Sciences (UITS)]

Sincerely yours, Munshi Arif Rashid Id: 09535008

ACKNOWLEDGMENT
This Project report has been possible through the direct and indirect cooperation of various persons bears the imprint of their efforts for my work.

I take up this opportunity to acknowledge the invaluable assistance of various people who helped me in successful completion of this Project Report.

I would like to thank project supervisor Md. Nazmul Hasan Sir for this great opportunity and for his audience and views during the project.

Last but not the least I express my thanks to all the customers to show a keen interest in my Project, relatives, friends and neighbors to provide me the necessary resources to complete the Project & the help provided to me at every step.

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Munshi Arif Rashid ID: - 09535008

Table of Contents
Introduction Purpose of the Study Scope of the Study Objective of the Study Limitation of the Study Commerce e-Commerce Strength Of e-Commerce Weakness Of e-Commerce Product Marketing Strategies in e-Commerce Matrix Of e-Commerce Collaborative Commerce How Web Services Redefine Collaborative Commerce Mobile Commerce Why Mobile SMS/Text Messaging? Retail Marketing In Bangladesh Goes Cellular The Big Challenge The Business Users Forms And Convergence Entry Barriers To Mobile Applications Exploring Mobile Applications Technology SMSMAP - Technology For Mobile Advertising SWOT Analysis Of Cellular Mobile Industry SMS Users Are Open to Brand Marketing 8|Page 9 10 11 11 11 12 13 14 16 18 20 23 23 25 28 31 32 34 36 38 40 41 43

Comparison of e-Commerce to M-Commerce What Is Driving M-Commerce? Products, Services & Applications Suited For M-Commerce Marketing For The New Economy Mobile Banking Mobile Banking Services Technologies Enabling Mobile Banking Advantages of Mobile Banking Marketing for Mobile Banking SMS Short Messaging Service Real life Case: Cellbazaar Introduction History Objective of the study Impact on Bangladeshi Economy Marketing mix Politics Target Market Influence on consumer Perception User Survey Questionnaire Survey Analysis Recommendation Conclusion Bibliography Webliography

48 50 50 52 53 54 56 57 57 58 60 60 61 62 62 63 65 66 66 67 67 68 72 72 74 75 75

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Introduction
The Internet has created a new economic ecosystem, the e-commerce marketplace, and it has become the virtual main street of the world. Providing a quick and convenient way of exchanging goods and services both regionally and globally, e-commerce has boomed. The richest man in the world, Bill Gates, once said In every one or two decades there comes a technology which changes the way humans carry out their daily lives forever. 1950s witnessed the advent of television that changed human entertainment forever, 1960s saw the computer that stream-lined work structure and late 1970s Internet changed the way humans communicated, learnt, advertised, conducted business and so on. As a result of this, an :|Page

important human chore was digitalized, like a number of others. Thus, ecommerce came into the picture with a wide horizon.

Mobile is transforming our lives in almost every way; we use it for so many different things to stay updated with all that happens at work, with our friends, family and the world in general. We wake up to our Smartphones and we go to bed with them. Researches show that mobile surfers spend most of their time surfing social networks and content websites. Nevertheless mobile online shopping is a fast growing trend. M-Commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as cellular telephone and personal digital assistants (PDAs). Known as next-generation e-commerce, M-Commerce enables users to access the Internet without needing to find a place to plug in. The emerging technology behind M-Commerce, which is based on the Wireless Application Protocol (WAP), has made far greater strides in Europe, where mobile devices equipped with Web-ready microbrowsers are much more common than in the United States. In order to exploit the M-Commerce market potential, handset

manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAPenabled smart phones, the industry's answer to the Swiss Army Knife, and ways to reach them. Using Bluetooth technology, smart phones offer fax, email, and phone capabilities all in one, paving the way for M-Commerce to be accepted by an increasingly mobile workforce. 1; | P a g e

As content delivery over wireless devices becomes faster, more secure, and scalable, there is wide speculation that M-Commerce will surpass wire line ecommerce as the method of choice for digital commerce transactions.

Purpose of the Study

Mobile commerce has become the latest topic for today. Business organizations have been restlessly evaluating the revenue potential of the MCommerce market and developing business models to exploit the huge profit potential of this new market. So the main purpose of this Study is to:

Provide an overview of the fundamentals about M-Commerce and e commerce.

Understand the relationship between M-Commerce and e-commerce. Help businesses to define what benefits they could derive from mobile commerce.

Show what are the categories of mobile commerce applications Understand the situation of the Bangladeshi mobile telephony market and m- commerce.

Scope of the Study

The scope of the study as the project it defines: Business sectors: business-to-business (b2b), business-to-consumers (b2c), consumer to consumer (c2c) and consumer to business (c2b) Business functions: mobile professional personnel (sales, service, and maintenance personnel)

Objective of the Study

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This paper aims to Understand e-Commerce & M-Commerce How e-commerce is transforming to M-Commerce in Bangladesh. Help businesses to define what benefits they could derive from MCommerce. What are the barriers of M-Commerce to enter? Uses of M-Commerce in mobile banking. Uses of M-Commerce in regular life using a Case.

Limitation of the Study

This is not a technical or implementation document. It does not seek to define new standards or to give detailed advice about the financial benefits of using mobile commerce. It also does not address how a future mobile commerce infrastructure might be funded. Other particular limitations are This study didnt cover mobile security part in details. Network technology is not described. Market size is not shown for M-Commerce.

Commerce
Commerce is the whole system of an economy that constitutes an environment for business. This is in contrast with business, the valuecreating activities of an organization for profit. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any country. Thus, commerce is a system or an environment that 12 | P a g e

affects the business prospects of an economy or a nation-state. We can also define it as a second component of business which includes all activities, functions and institutions involved in transferring goods from producers to consumer. Some commentators trace the origins of commerce to the very start of communication in prehistoric times. Apart from traditional self-sufficiency, trading became a principal facility of prehistoric people, who bartered what they had for goods and services from each other. Historian Peter Watson dates the history of long-distance commerce from circa 150,000 years ago. In historic times, the a introduction wider exchange of currency as of goods a and

standardized money facilitated

services. Numismatists have collections of these monetary tokens, which include coins from some Ancient World large-scale societies, although initial usage involved unmarked lumps of precious metal. The circulation of a standardized currency provides the method of overcoming the major disadvantage to commerce through use of a barter system, the "double coincidence of wants" necessary for barter trades to occur. For example, if a man who makes pots for a living needs a new house; he may wish to hire someone to build it for him. But he cannot make an equivalent number of pots to equal this service done for him, because even if the builder could build the house, the builder might not want the pots. Currency solved this problem by allowing a society as a whole to assign values and thus to collect goods and services effectively and to store them for later use, or to split them among several providers.

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Today commerce includes a complex system of companies that try to maximize their profits by offering products and services to the market (which consists both of individuals and other companies) at the lowest production cost. A system of international trade has helped to develop the world economy but, in combination with bilateral or multilateral agreements to

lower tariffs or to achieve free trade, has sometimes harmed third-world markets for local products.

E-commerce
Electronic commerce or e-commerce consist primarily of the distributing, buying salving marketing, and servicing of products or services over electronic systems such as the internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply change management; e-marketing, on line marketing, online transaction processing, electronic data interchanged, automated inventory management systems and automated data collection systems. It typically uses electronic communications technology such as the internet, extranets, email, e-books, data bases and mobile phones.

Electronic business or e-business is any business process that is empowered by an information system. Today this is mostly done with the web-based technologies, the term e-business was coined by Lou Gerstner, CEO of IBM.

Electronic business methods enables companies to link their internal and external processes more efficiently and flexibly, work more closely with 15 | P a g e

suppliers and partners to better satisfy the needs and expectations of their costumers.

In practice, this involves the introduction of new revenue streams through the use of e-commerce, the enhancement of relationships between clients and partners and improving efficiency from using knowledge management system. E-business can be conducted over the public internet, through internal internets and over secure private extranets.

It is more than just e-commerce. It covers business processes along the whole value chain: electronic purchasing (e-procurement) & supply chain management, processing orders electronically, Customer service &

corporation with business partners. This applies to traditional & virtual organization. Special technical standards e-business facilitates the exchange of data between companies.

Strength of E-commerce
In many cases, an e-commerce company will survive not only based on its product, but by having a well-organized business structure and a secure, well designed website. Such factors include:

1. Providing an easy and secure way for customers to order. Credit cards are the most popular means of sending payments on the Internet, accounting for 90%of online purchases. Card numbers are transferred securely between the customer and merchant through independent payment gateways, such as authorize.net. 16 | P a g e

2. Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.

3. Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partakers have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.

4. Constructing a commercially sound business model. If this key success factor had appeared in the textbook in 2000, many of the dots COM might not have gone bust.

5. Engineering an electronic value chain in which one focuses on a limited number of core competencies the opposite of a one stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)

6. Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology.)

7. Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.

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Weakness of E-commerce
Even if a provider of e-commerce goods and services rigorously follows these ten key factors to device an exemplary e-commerce strategy, problems can still arise. Sources of such problems include:

1. Failure to understand customers, why they buy and how they buy. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations and motivations. Ecommerce could potentially mitigate this potentially problem with proactive and focused marketing research, just as traditional retailers may do. 2. Failure to consider the competitive situation. One may have the capability to construct a viable book e-tailing business model, but lack the will to compete with Amazon.com.

3. Inability to predict environmental reaction. What will competitors do? Will they introduce competitive brands or competitive Webster? Will they supplement their service offerings? Will they try to sabotage a competitor site? Will price wars break out? What will the government do? Research into competitors, industries and markets may mitigate some consequences here, just as in non-electronic commerce.

4. Over-estimation of resources competence. Can staff, hardware, software, and process handle the proposed strategy? Have e-tailers failed to develop employee and management skills? These issues may call for thorough resources planning and employee training. 18 | P a g e

5. Failure to coordinate. If existing reporting and control relationship do not suffice, one can move towards a flat, accountable, and flexible organizational structure, which may or may not aid coordination.

6. Failure to obtain senior management commitment. This often results in a failure to gain sufficient corporate resources to accomplish agreement commitment. This often results in a failure to gain sufficient corporate resources to accomplish a task. It may help to get top management involved right from the start.

7 Failure to obtain employee commitment .If planners do not explain their strategy well to employees, or fail to give employees the whole picture then training and setting up the incentives for worker to embrace the strategy may assist

8 Under estimation of time requirements. Setting up an e-commerce venture can take considerable tome and money, and failure to understand the timing and sequencing of tasks can lead to significant cost overruns. Basic project planning, critical path, critical chain, or pert analysis may mitigate such failings. Profitability may have to wait for the achievement of market share.

9 Failure to follow a plan. Poor follow through after the initial planning and sufficient tracking of progress against a plan can result in problems. One may mitigate such problems with standards tools benchmarking, milestones, variance tracking and penalties and rewards for variances. 19 | P a g e

10. Becoming the victim of organized crime. Many syndicates have caught on to the potential of the internet as a new revenue stream. Two main

methods are as follows:

Using identity theft techniques like pishing to order expensive goods and bill them to some innocent person, then liquidating the goods for quick cash;

Extortion by using a network of compromised zombie computers to engage in distributed denial of service attacks against the target website until it starts paying protection money.

Product marketing strategies in E-commerce

The key parameters to be considered when coming up with our own product or services are; What are we interested in? What are we passionate about? What subject or topic do we have a lot of knowledge about? What are people always coming to us for advice about?

Product marketing strategies involved in E-commerce

1. Develop a new product or services by researching potential competitors in the relevant area of interest to find out what their best selling product is and figure out a way to improve on it. 1: | P a g e

2. Check out the newsgroups, discussion boards, and chat rooms where the target market hangs out. And accordingly ask their opinion about their expectation from a particular product or services

3 If there is already existing customer base, e-mail survey should be done. Surveys are not only a great way to improve on any existing product or service we may offer; they are also a great way to discover fresh product or services idea.

4 Check out consumer review web sites to find out what people like and dislike about the competitors product. Some of the web sites are: http://www.consumerreview.com http://www.consumersearch.com

5. fee.

Join an affiliate program and promote someone else product for a referral

. Collecting the money . Packaging the product . Shipping the product . Customer service We just do the promotion and collect our referral fee from the resulting sales. 6. Compile a certain type of information and then package it as an e book.

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7. Another really powerful product idea is to locate a problem and then develop a product or service to solve it or in other words conducting NICHE MARKETING ON THE NET

8. A newsletter is a great way to earn a large income very quickly. In fact, if our newsletter covers an in demand topic and we build up a large subscriber base, we could potentially take advantage of numerous streams of revenue including: . Paid subscriptions . Advertising . Product promotion . Selling our customer database 9. Sell unique or hard to find products on auction web sites. We can sell some of the antiques, which are available easily in our area but are hard to find elsewhere and command a good price. 10. Create an online community and sell memberships and advertising.

Matrix of E- commerce

Consumer Consumer C2C EBay Auction Business B2C C2B

Business

Price line You name the price B2B

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Amazon ( books, etc) Travelocity ( travel )

Ford, GM, DC Mfg. To Suppliers

Internet domains C2C (consumer to consumer)

There is a considerable consumer-to-consumer communication on the web on a whole range of subject. Parentsoap.com is an online community of more than 200000 parents who spend time online gathering information, chatting with other parents, and linking to related sites. On agriculture.com, farmers can find commodity prices, recent farms news, and chat rooms of all types. The site is attractive as many five million hits per month. C2C means that online visitors increasingly create product information, not just consume it. They join internet interest groups to share information, so that word of web is joining word of mouth as an important buying influence. Words about good companies travel fast; and word about bad companies travel even faster. For example EBay is a person to person trading community with more than 23 million registered users.

Internet domains C2B (consumer to business)

Consumer is also findings are easier to communicate with the companies. Companies often encourage communication by inviting prospects and 22 | P a g e

customer to send in questions, suggestion, and even complaints via e mail. Some sites even include a call me button the consumer click on its and his or her phone rings with a customer representative ready to answer a question. Smart online marketers will answer quickly, by sending out newsletter, special product or promotion offers based on purchase histories, reminders of service requirements or warranty, or announcements of special events.

Internet domains B2C (business to consumers)

The popular press has paid the most attention to consumer to consumer web sites. In 2000 more that 106 million Americans went online with the 80 percent looking for information, 73 percent researching a product or a service before buying it 68 percent looking for travel information and 65 percent looking for information on movies, books, and leisure activity. The most frequent online consumer purchase ( in terms of the percentages online buyers saying they have purchase in the category ) have been books (58%), music (50%), software (44%), air tickets (29%), pc peripherals ( 28%) clothing (26%), videos (24%), hotel reservation (20%), toys (20%), flowers (17%) and consumers electronic (12%). Individual are also using the internet to search for others to meet or date on such sites as match.com, Americansingles.com, or virtuallydating.com. Companies must set up and operate their ecommerce shows.

Internet domains B2B (business to business)

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Although the popular press has given the most attention to business to consumers web sites, even more activity is being conducted on business to business sites. The b2b sites changing the supplier customers relationships in profound ways. Forester and Gartner, major research firms on online commerce, estimates that B2B commerce is 10 to 15 times greater than B2C commerce. Gartner estimated that by 2005 more than 500000 enterprises will participate in e-markets as buyer, sellers or both. These firms are using B2B auction sites, spot exchange online product categories barter sites and other online resources to obtain better prices. Many major enterprises, including Chevron, Ford motor Company, GE and Merck, have invested millions in web procurement system. The results invoices that used to cost $100 to process now cost as little as $20.

Collaborative Commerce
Collaborative Commerce (C-Commerce) is the name given to commercial relationships carried out over a collaborative framework to integrate enterprises business processes, share customer relationships and manage knowledge across enterprise boundaries. The ultimate aims of C-Commerce initiatives are to maximize return on intellectual capital investment, business agility and the quality of the customer experience. C-Commerce is far more crucial than basic B2B e-commerce that is designed to construct a virtual link for a pre-defined community of trading partners to buy or sell goods and services. Even after the fall of the dot-com era, corporate strategists and venture capitalists are embracing C-Commerce as the next generation of e-commerce and an evolution of the traditional supply chain process. 25 | P a g e

How Web Services Redefine Collaborative Commerce

So far, we are in a very early stage in the evolution of web business. We have been able to overcome the issue of the standardization of enterprise application programming interfaces around the web, and have managed to undertake tremendous business-to-business exchange transactions over the web, albeit with high integration costs. Web Services promise to revolutionize this process.

In the figure above, we can see the three stages of c-commerce, from bottomleft to top-right:

First stage of C-Commerce - web enabled c-commerce, a one dimensional, single e-enabled business process that allows certain internal data to be visible to external trading partners, and vice versa. Typically, this meant implementing a web presentation of the data, and allowing partners access to it. This is a limited form of ccommerce, with very limited value, saving only labor cost. Typical 26 | P a g e

applications would be displaying demand for production materials, showing sales forecasts to suppliers, or presenting bills electronically.

Second stage of C-Commerce - B2B exchanges in markets such as steel, auto parts, chemicals or airline equipment. Buyers, sellers and suppliers are integrated through a web portal. In this stage, each enterprise can reconfigure its supply chain through the marketplace to leverage aggregated buying power and eliminate brokerage fees and middlemen. The first two stages of C-Commerce have never reached the critical mass required for mass adoption by all industries, because of the cost of integration.

Third stage of C-Commerce - will be built on Web Service as a core integration engine to deliver seamless process integration, seamless customer satisfaction integration and seamless product design integration. It is a plug and play sort of C-Commerce rather than a hard-wired, integration driven effort.

Mobile Commerce
What is Mobile Commerce (M-Commerce)? E-commerce will coming soon become Mobile Commerce ( M-Commerce) because mobile devices are more user friendly than computer. Peoples checking movies details and much other useful information on their mobile devices. Many companies accepting payment by SMS payment system. In future Mobile Commerce (M-Commerce) will be sales and marketing showcase, educational application for companies. 27 | P a g e

Why Mobile Commerce (M-Commerce)? Companies can use Mobile Commerce (M-Commerce) to increase sales of their products and services. Mobile commerce can bring huge buyers for companies. Benefits of Mobile Commerce (M-Commerce)

Buyers can access products catalog on their mobile devices. Companies can do promotions Companies can show products. Customers can price details from any place.

How Mobile Commerce (M-Commerce) can help Companies? Companies can make websites for mobile devices, which is popularly known as WAP or Wireless Application Protocol. Companies can make online catalogs of products and services so that mobile users can access that catalog from their mobile devices. Does the technology have any limitations? Mobile commerce is still in its early stages. It can potentially provide customer satisfaction, help generate business opportunities, facilitate greater profits, build good relationships with customers and provide quick access to anywhere. There are limitations such as small screen, lesser processing power vis-a-vis PCs, circuit switching technology on older cellular networks that increases the cost and causes inconvenience for the subscribers to obtain 28 | P a g e

data on a mobile phone. This will change, as GPRS and 3G have started to move into the mainstream. Have any industries been affected by M-Commerce? Using M-Commerce is an efficient method to reach the customer. It is used for various services like financial servicemobile banking or m-banking to access accounts, bill payment and remitting money, brokerage through the phone or mobile brokerage etc. Access to stock quotes and trading is possible through phone. In telecommunication services, users can make bill payments and review accounts. Services or retail consumers have the facility to place and pay for orders on-the-fly. Users can also have the access to information like delivery of financial news, sports figures etc. IBM and few other companies are developing speech recognition software to ensure secure MCommerce transactions. What are the kinds of transactions that commonly take place via MCommerce? In M-Commerce there are three types of transactions. The first is carrierbased service. Users can use carrier billing to purchase something through their wireless device. They bill their purchases to their monthly carrier bill or its deducted from their pre-paid deposit. The second option is to use a credit card over a wireless network connection. Users have the facility to store their credit card data on a mobile phone using their cell phone as a surrogate or a card. Thirdly, financial services can transfer money between accounts and pay bills through wireless transactions. Whats the technology used in M-Commerce? 29 | P a g e

Numerous technologies are used in M-Commerce like GSM (Global System for Mobile Communication) and HSCD High Speed Circuit Switcheddata protocol based on GSM uses four channels to provide four times the radio transmission rates or 57.6 kbps. This technology is outdated due to the introduction of GPRS (General packet Radio Service). GPRSwireless service based on GSM, EDGE (Enhanced Data rate for Global Evolution), UMTS (Universal Mobile Television System), microbrowsers, Mobile Commerce, or M-Commerce, is about the explosion of applications and services that are becoming accessible from Internet-enabled mobile devices. It involves new technologies, services and business models. It is quite different from traditional e-Commerce. Mobile phones or PDAs impose very different constraints than desktop computers. But they also open the door to a slew of new applications and services. They follow you wherever you go, making it possible to access the Internet while walking down the street with friends and family or while driving, looking for a nearby restaurant or gas station. As the Internet finds its way into our purses or shirt pockets, the devices we use to access it are becoming more personal too. Already today, mobile phones and PDAs know the phone numbers of our friends and colleagues. They are starting to track our location. Tomorrow, they will replace our wallets and credit cards. One day, they may very well turn into intelligent assistants capable of anticipating many of our wishes and needs, such as automatically arranging for taxis to come and pick us up after business meetings or providing us with summaries of relevant news and messages left by colleagues. But, for all these changes to happen, key issues of interoperability, usability, security, and privacy still need to be addressed. 2: | P a g e

Why Mobile SMS/Text Messaging?

Mobile text Messaging, or Short Message Service (SMS), as we all know it, is the ability to send and receive text messages to and from mobile telephones. The text can comprise words or numbers or an alphanumeric combination. SMS was created as part of the GSM Phase 1 standard. The first short message is believed to have been sent in December 1992 from a Personal Computer (PC) to a mobile phone on the Vodafone GSM network in the UK. Each short message can be up to 160 characters is length when Latin alphabets are used. Customer Usage and Market Growth There is no doubting the success of the Short Message Service - the market in Bangladesh alone has reached over one billion messages despite little proactive marketing by network operators and phone manufacturers. Key market drivers over the next two years such as the access of cheaper mobile technology to the masses will continue this growth path.

Mobile Messaging: How can your business benefit? Enterprise Messaging Enterprise uptake of mobile applications is set for phenomenal growth. By 2005, Gartner anticipates that 65 percent of enterprises will be harnessing the power of wireless applications to efficiently automate the existing business processes and use wireless connectivity for one or more user groups. 1; | P a g e

Statistics are already showing a considerable growth in the enterprise messaging, within the last seven quarters. Where does enterprise messaging fit into your business No matter what the nature or model of your business is, you can effectively exploit the potential of Mobile Messaging. Following are some examples of the application areas where Mobile Messaging is excelling: 1. B2B Messaging Mobile terminated and mobile originated SMS and MMS via UCP, XML and PHP interface Benefits: Using industry standard protocols provide easy integration with existing systems as well as a robust and scalable model for future technologies. 2. B2B Campaigns and list processing Permission-based mobile marketing campaign of consumer goods,

advertisement campaign, promotions etc. Benefits: Mobile marketing provides unparallel advantage of effectively targeting specific audience level. 3. B2B Applications Customized mobile applications conforming to a business rule and addressing a specific target audience. Example: MIS reports to mobile sales force, critical

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data to mobile technical work force. The possibilities are unlimited and the flexibility is enormous! How to choose a high quality and reliable service provider for SMS/Text Messaging for your enterprise messaging needs? The first option that comes to one's mind is mobile operators. However, though they have complete control over network infrastructure, they are generally not too keen to service customer for meeting their messaging needs. The prime reasons for this are:

Enterprise messaging involves complex integration with backend database/applications

The volume of messages is typically not high (except in large B2C companies)

The criticality of message delivery is extremely high Operators largely cross subsidies 'voice' with 'data' services. It a specific network is down, and then the service suffers. The service need extra attention in terms of providing high service levels

There are many independent providers of mobile data services focused in the domain of enterprise messaging that provide end-to-end SMS/text messaging service. There are several advantages of working with an operator neutral service provider:

Easy and quick integration with back-end application/databases Connections with multiple operators ensure better service quality (i.e. service is continued even if the network of a specific operator fails) 12 | P a g e

Single entry point into the mobile networks. Uniform application access? no duplicate efforts required Reliability and timeliness - Acknowledged mobile messaging with guaranteed message delivery information available

Integrated payment? one stop shop for all billing aspects and Seamless and secure messaging environment.

Retail Marketing in Bangladesh Goes Cellular

Marketers are waking up to the power of the mobile handset like never before. With SMS and short codes becoming pass , the ubiquitous handset is offering new opportunities for brands to make inroads into the consumer's mind space. Mobile coupons, location specific services, mobile portals and advertising on the mobile are just few of the tools being deployed by marketers to reach the 30 million strong mobile subscribers base in Bangladesh. In what could be termed as the second generation of mobile marketing, subscribers can look forward to an array of segmented marketing and advertising initiatives on their mobile screens.

Location-Based Services
Location-based services are another marketing tool being explored by content providers such as cellbazar. This service will enable marketers to reach out to the prospective customer while he is in the vicinity of the outlet by giving various incentives and offers. 11 | P a g e

With forecasts of mobile marketing revenues reaching US$3 billion globally, according to RBC Capital markets, Bangladeshi mobile operators are also upping their ante to latch on to this revenue generating stream. Airtel recently appointed Enpocket, a global mobile marketing solutions provider, to provide ad serving technology for mobile Internet via the Enpocket marketing engine. The Enpocket solution will enable Airtel to offer mobile advertising opportunities to brands and companies. Worldwide, Enpocket provides mobile marketing technology to Vodafone, Sprint, Alltel, Singtel, Nokia, Samsung, Panasonic, BenQ-Siemens, Trinity Mirror, TNT, Pepsi and Nike.

The big challenge the business users

Surprisingly, businesses have often failed to create centralized purchasing for mobile devices and operator contracts. This has led to individual departments buying mobile services, rather than this coming under the remit of the IT or telecommunications department. It has also led to the perception of mobile devices as a 'nice-to-have' rather than business-critical tool. The hyping of mobile business solutions has not helped. Enthusiasts have attached a 'M' to existing IT solutions, and foresee a world of M-CRM, MSCM and so on. However, CIOs need to be clearly convinced of the benefits. Their view of mobile applications is usually based on the current limitations of mobile devices and networks. Hence, they are extremely wary of such offerings. They are also unwilling to pay high premiums as early-adopters -- a Gartner study of European CIOs found that only 24% would pay extra for 3G.

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However, the same study found that 82% of CIOs see mobile devices as very important to their businesses, and expect their company's usage to grow substantially in the next three years. The three main benefits were seen as improved customer satisfaction, cost savings and new business opportunities. Thus, the pent-up demand is there if businesses can be convinced of the benefits. They also need to be reassured on implementation issues with security typically being the main worry. They need support in integrating mobile applications into existing business systems, managing new devices and infrastructure, and developing and deploying business applications over wireless links. Their concerns also include softer issues such as training and management issues, asset allocations, virus scanning, and application updates. These issues are now being addressed by the operators, consultancies, systems integrators and outsourcers in supporting enterprise usage of mobile applications. The business community is now perceived as vital to their success. We will start to see far more enterprise-wide agreements to support this. For example, Vodafone and KPMG signed a deal in August for Vodafone to provide mobile services to the 30,000 employees of the KPMG European Anchor Practice. This will provide such benefits as centralized management and billing, short code dialing and using the same access codes regardless of location. Some businesses will be surprisingly innovative in using mobile solutions. Such examples of less obvious early adopting vertical markets will include: Retailers -- particularly supermarkets or those dealing with the youth market. The supermarkets have been closely involved in the success of mobile 16 | P a g e

in Europe, as aggressive distributors. A number have already become virtual operators, and others have been assessing the establishment of WLANs in their stores. Internally, mobile scanning devices and workforce management will become widespread. Banks -- are not renowned for their innovation, but they have reacted to the competitive interest shown by mobile operators who have implied they will apply for banking licenses. Despite its problems, they have been among the early adopters of WAP in offering banking services, and using mobile services as an enhanced package to their customers. Utilities -- see clear advantages in reduced costs and improved services in mobile data offerings. For example, in using mobile links for remote monitoring of meters and remote diagnostics. They are also often involved as investors in mobile consortia in Europe. Auto -- with 70% of US mobile calls believed to be made in cars, there has always been a strong relationship between the two industries. NTT DoCoMo believe more than 100 million Japanese cars will be equipped with mobile multimedia devices by 2010. Car journeys also provide a lot of the 'idle time' which is perfect for many mobile applications.

Forms and convergence

Internet, mobile telephony and events constitute the bulk of interactive marketing action. With more than 0.2 million cyber cafes spread across the country, it is no wonder that nearly two-thirds of Bangladesh's internet users access the web through cyber cafs. But the spread of broadband into

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households through cable is also well under way, and at affordable monthly charges of about 10 US dollars. There is no dearth of portals dedicated to online games and contests. Interactive advertisements in rich media, with hyperlinked clicks leading to audio-visual commercial messages, are quite common on popular websites. Most of the leading Bangladeshi media portals have their hands full in keeping up with the demand for ad space on their web pages. More than two-thirds of the mobile subscriber base is youth, with a strong penchant for SMS. Marketers of financial services were among the first in using cell phones to serve their customers. Many banks facilitate balance checks of customers' accounts through SMS messages. To further exploit the full potential of SMS in a country with 18 officially recognized languages, Nokia launched many handsets at affordable prices that enable SMS in the most spoken language, Bangla. Both automated and real-time voice calls are also extensively used, in varied contexts of CRM. Media convergence is in full swing, with mobile, TV and internet being complementarily used by marketers. Reality shows on leading TV channels in Bangladesh thrive on interactive responses from viewers through SMS messages. These either enable participation on the shows or decide the winners on the reality programs telecast. Closeup1 elicited 150 million SMS in its last final episode. Sometimes even print and radio media are used in tandem with other media, for cross-promotion. Direct marketing, sales promotion and events are also a regular part of leading Bangladeshi marketers' strategies, across different product

categories. Almost all of the major advertising agencies have exclusive units 18 | P a g e

to cater to the interactive communication needs of their clients. Ogilvy & Mather and Euro RSCG, for example, have their wings O&M Interactive and Euro RSCG Interactive.

Entry Barriers to Mobile Applications

While the mobile market is progressing at a rapid stride, the major components - devices, wireless networks and applications - are constantly evolving at varying speeds. Devices The wireless market is developing with a myriad of pervasive devices and it becomes a Herculean task to deploy mobile applications that allow communication between multiple devices. This calls for the development of user-profiles performing intelligent routing capabilities, which help in determining the device configurations and communicate accordingly. The following characteristics are to be determined while designing mobile applications: Form factor or giving area size Browser capabilities, languages supported. Available input methods. Text coverage graphics support etc. Expandability, option and slot 19 | P a g e

Push technology support. Ruggedness. Information storage capability. Device performance calculation and logic.

Networks Wireless networks have their own standards in terms of connectivity and functionality aspects. These include gateways, towers and access links that are dependent on an organization's use of network protocols, application logic and device access. The characteristics for wireless networks are defined in terms of: Support to open internet standers and protocol Extent of wireless network coverage. Cost factor. Uniform/forty coverage. Data transmission, speed security concern Time taken to service request.

Applications While the wireless device market is constantly evolving in areas of field service and sales force automation, vendors are extending their applications to support these new devices. In this scenario, mobile application architecture confined to a single standard or device will experience difficulty in adapting to new technology advancements.

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Essentially, the mobile application architecture should be robust and flexible in providing user-friendly mobile solutions that are secure, reliable, scalable and manageable. The different characteristics to be considered for mobile applications are: Support interoperable standards; adapt to new technology advances Address bandwidth constraints. Coverage fluctuations, also known as spotty coverage Rapid development of mobile applications Extent of separation between presentation and business logic in delivering wireless data access continues growth. Demanding agility in the applications space, the market is maturing from generic middleware into a new generation of multi-channel middleware paradigm. Application vendors are finding means to diversify access to multiple devices and networks with intermittent connectivity.

Exploring Mobile Applications Technology

The first wave of Mobile Application Framework surfaced mainly to support Web applications. The framework handled only a Web browser-processing HTML through a thin-client device. Realizing the need for multi-channel access with rich user-interface capabilities, the current wave extends into product architectures to support multi-client devices. Presently, most application framework vendors are turning to provide wireless application gateways (WAGs) and other mobile-enabling features such as synchronization, event notification etc.

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A typical mobile environment scenario, wherein, middleware plays a key role involves: * Optimized Communication: Operates through a common set of APIs making it easy to develop and deploy mobile applications that optimize

communication over IP-based networks. * Security: Encryption/decryption functionalities using PKI technologies guarantee secure data exchange over wireless networks. * Bandwidth: Features such as compression and transport optimization help in effective data transmission. * Industry-standard protocols: Optimal utilization of TCP/IP protocol to reduce airtime expenses, and to support wireless communications. * Compatibility: Offers compatibility between industry-standard TCP/IP protocols and all wireless networks through its common set of APIs. * Spotty coverage: Automatically adjusts to spotty/fluctuating coverage by minimizing connection loss (possible by slowing down and speeding up), as and when required. * Offline capability: One of the key features of middleware is its ability to support offline functions. Here, the middleware assigns some of the processing capabilities on the wireless device so that the user can be connected for a shorter amount of time and manipulate the data on the wireless device while offline. * "Push" Technology: The core functionality to mobile applications is its ability to "Push" data to mobile users' devices as they operate in disconnected 51 | P a g e

and out of coverage modes. This is possible in different ways such as connected, disconnected and prior filtering process capabilities. * Device agnosticism: Allows multiple devices to communicate without the need to know device-specific coding. * Network Connectivity: Facilitates increased geographic coverage across multiple mobile devices that are independent of network providers and carrier technologies. * Personalization: Middleware solutions offer personalization through scripting, markup language, user-interface etc. This includes message alerts, the look-and-feel aspect, historical usage patterns etc. * Application systems integration: Tight integration of traditional databases, legacy systems and voice systems with mobile applications. XML is proven to be the widely accepted choice to operate across multiple systems. * Manageability: As part of the middleware suite, the management software handles clients (i.e., devices) via multiple networks, by updating and synchronizing information from enterprise back-end systems. * Session management: Maintains session integrity across multiple devices and channels by embracing the concept of mobility, transporting a session from one device to another etc. * Database Synchronization: Offers connectivity from any back-end system / database to any device that executes only those specified data transfers. Connectivity is also extended within existing enterprise applications like SCM, ERP etc. Apart from this, the wireless communication component in 52 | P a g e

middleware provides access to other peripheral devices like camera, POS, GPS, barcode scanners, fax etc. * Business Rules: Applying business logic and rules, middleware leverages the existing work and code that simplifies workflow, eliminates duplication effort, and saves time and money.

SMSMAP - Technology for Mobile Advertising

SMS Mobile Advertising Platform(SMSMAP) is a carrier grade

advertisement server. With SMSMAP network operators and service providers can offer a new mobile media to advertisers creating substantial new revenue from their subscriber base and increasing messaging traffic. SMSMAP makes possible to provide service to customer companys mobile campaigns to send advertisements, information and sponsored content to mobile handsets. With SMSMAP, it is quick and easy to create customizable services from off-the-shelf campaigns. Several different campaigns of several customers can be run and managed simultaneously on SMSMAP. The solution incorporates permission marketing support, mobile user profiling and personalization, precise targeting mechanism, push and pulls mobile messaging, advanced reporting, and billing. The advanced SW technology used in SMSMAP enables functionality expansion to quickly respond to the evolving needs of mobile advertising business.

SMSMAP key benefits: Enabler for a new revenue stream 51 | P a g e

 Fast campaign Expandable library of mobile campaigns Mobile e-commerce and secure payment solutions integration Numerous mechanisms for high-precision advertisement targeting Spamming prevention through personal bandwidth management Advanced campaign monitoring and statistics Comprehensive set of platform management features Permission marketing support

SWOT analysis of cellular mobile industry

Strengths Huge wireless subscriber potential. Fastest growing mobile market in the world. Consumers are ready to pay for cutting edge services. Bangladesh possesses cheap labor to attract foreign investments. Telecom software, telecom professionals, telecom infrastructure and telecom services are the key players in shaping todays economy. Revenue sharing strategies are leading to to mergers new and

acquisitions,

helping

companies

enter

business

opportunities, and generate employment, boosting the countries economy. Government has started relaxing rules for foreign participants 55 | P a g e

Lowest tariff rates in the world

Weakness Market strongly regulated by government body the Bangladesh Telecom Regulatory Commission. Existence of entry barriers for private companies. High cost of service provision. Low income countries like Bangladesh cant afford to replicate expensive telecom infrastructure.

Opportunities Bangladesh is adding at least 0.10 million new mobile phone users every month Mobile phone users base hitting a saturation point in big cities. Income levels in the rural areas rising due to robust agricultural output. Share of the rural market in the countrys mobile population is, however, less than 15% Cellular phone now being viewed as a common mans phone Rapid growth expected in the telecom and related services Foreign investment in form of equity or technology Increased availability of bandwidth has open doors to new schemes making efficient usage, providing value added services and generating profits.

Threats

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High level of risk uncertainty and cost associated with the cellular sector

Weak intellectual property right protection Software and digital content piracy Political instability Cost of handset also deters a lot of buyers from opting for the service

Threat from WLL service providers and also from satellite phones

SMS users are open to brand marketing

From conveying simple need-based messages to friends and loved ones to going all the way to downloading pictures and tunes and mails we all have seen the role of SMS evolve to reach a dynamic position. Today as consumers, we experience the emerging usage of SMS for brand communication, in the most personalized manner possible. As an advertiser, I am posed with a sea of questions Where does SMS stand in the consumer's perspective as a medium of brand communication? What is the profile of those consumers who are ready to learn about my product by means of a single message on their phone? How do I, as an advertiser, reach out to them using SMS? Intellect, the Research and Technologies Unit of Lintas Media Services in association with Interactions, Lintas Media Services, has conducted an extensive research that probes the psyche and the demographics of the SMS marketing consumers. "We continuously need to explore the relationships of the consumers with these emerging media. We also need to develop aids for the advertisers to target and reach these consumers."

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The aim remains to provide the advertiser with a constructive understanding of his consumer's thought process, experiences, expectations and acceptance of SMS as a medium of brand communication. From here on, we shall see the answers shaping up an insight into the mind of the consumer. To what extent is my consumer exposed to Brand Marketing SMS? A huge potential exists as far as communicating consumers via marketing is concerned and this is evident from the fact that only 14% of the respondents have been exposed to advertising through SMS. An untouched 86% have yet to experience a brand communication on their cell phones. Of the ones that have been exposed to such a communication, about 97% have read the actual message before deleting it, A favorable 36% also acted on the message after reading it. This depicts the readiness of the respondents to be a part of the entire communication process. How open is my consumer to the idea of receiving Brand Marketing SMS on her cell phone? Probing their openness to the idea of accepting brand communication on their cell phones, the respondents portrayed a very positive picture. 66% are willing to accept advertising through SMS on their cell phones. The willingness is more amongst students and the younger age group i. e 1524 years than that amongst working executives and those in the higher age group. Males are more willing to receive marketing SMS than females. Avoidance of SMS (termed as deleting the SMS without reading it carefully) is much lower for this medium compared to the conventional media. 32% are in the habit of reading every SMS that they receive; another 53% hardly ever 58 | P a g e

or only sometimes delete the SMS without reading carefully. In a scenario where television, print, cinema, etc all have high ad-avoidance, this is a very critical media. One more noteworthy fact stays that apart from E-mail, SMS is the only medium that allows Permission Marketing. While the students are open to receiving advertisements through SMS anytime there is a promotion; male working executives/ businessmen between the group 35-44 are open to receiving advertising through SMS but only with prior permission being given. Will the consumer of my product be ready to accept communication by me via SMS? While it is quite exciting to know that today's consumer is welcome to the idea of being exposed to brand communication via SMS, we still need to advertise only certain categories using the SMS medium. We need to know the product categories that interest the consumer through SMS. The most preferred categories by the consumers were found to be Music/Entertainment/Gifting/Toys, Personal Products, Publications/ Books, and Local Hotels/Cinemas/Discs/Events. Not only the product category, but also the nature of information demanded by the respondents regarding a particular category holds considerable importance. Students are more inclined towards being informed on 'offers and promotions' for Music/ Gifting (60%), Cars, (56%), Utilities (56%), Stationary (55%), Book & Publications (53%) and Impulse Foods (50%). Working Executives/ 59 | P a g e

Businessmen show a higher affinity towards 'offer and promotion' information for Household FMCGs (83%), Kitchen Foods (83%), House Fittings (78%), Durables (73%), Pharma (63%), Personal Products (54%), Local Entertainment (51%) and Impulse Foods (50%) While most students prefer 'detailed information' on Music/ Gifts/ Toys; Working Executives demand detailed information on Personal Products Of the information seekers, the male skew is more towards Durables (85%), Impulse foods (80%), Cars (79%), Stationary (68%), Household FMCGs (67%), Utilities (67%), Local Entertainment (66%), Pharma (63%), Books & Publications (62%), Music and Gifting (60%), Personal Products (58%), and House Fittings (50%). Females are keener to know about offers and promotions on Kitchen Foods (58%) and House Fittings (50%). When do I reach my consumer? The timing and frequency of reaching a consumer is very important for any communication planning and the study has explored these areas. About 30% are open to receiving advertisements through SMS anytime there's a promotion. 34% prefer being asked before they are sent advertisements through SMS while 34% prefer it not very frequently. While, 17% are open to receiving advertisements through SMS more than 3-4 times a week, on the whole, 86% are open to the idea of receiving brand marketing SMS once a month and more.

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There is no specific pattern to the timing desired by the consumers. Anytime between mornings to evening is acceptable. This is so since finally, the choice of opening the actual message lies with the consumer. Over 66% feel that they do not have to see or answer an SMS immediately when it is received. In a nutshell SMS comes across as a medium which makes the consumer reachable at all times, is personal, allows permission marketing and is interactive. Most importantly it is acceptable to the consumer as a means to communicate information on various products and services. Besides this the study also uncovers the cell phone usage behavior of the segments. The study also covers information on the services used by cell users, billing information; share of SMS in the monthly cell phone spends. It has also established the affinity of consumers to using SMS and the reasons for this affinity. Overall, the study is a wealth of data available for targeting consumers using SMS. When marketers at BTV decide that it is time to embrace this technology, you know it has already made its impact on marketers everywhere else. The magic four digits, which are changing the way brands talk to their audiences have forced BTV out of its slumber and into relationship building exercise with their viewers. You see them everywhere in print advertisements, on hoardings, on your TV screen, on truck backs. The 4-digit numbers that you call from your mobile phone, sometimes, forming a word on your key pad; and sometimes, 6; | P a g e

just easy to. These short code numbers are now the rage; allowing companies to easily build relationships with consumers in a super-cluttered media environment Marketers have never had it so good. As understanding of the medium increases and as consumers embraces this new form of targeting, the ubiquitous mobile phone has emerged as the super salesman, the savior. SMS marketing is hardworking, efficient, measurable and unobtrusive. SMS is now a source of un-projected revenue for a number of services and businesses, especially media and telecom companies. For media companies, SMS is a new distribution channel and a consequent revenue source. For telecom companies, SMS Value Added Services yield higher margins than simple voice and data products. As mobile phone instrument and usage costs plummet resulting in higher penetration and acceptance SMS, as a primary component of marketing and sales strategies, will continue to grow. These low costs are aided by the fact that technology is freely available and the entry barriers low.

Comparison of e-commerce to M-Commerce

M-Commerce versus E-Commerce Frequently M-Commerce is represented as a "subset of all e-commerce" thus implying that any e-commerce site could and should be made available from a wireless device. We believe that such conclusions are missing leading. MCommerce should be recognized as a unique business opportunity with its own unique characteristics and functions, not just an extension of an organizations Internet-based e-commerce channel. Of course there are similarities between e-commerce and M-Commerce from being able to 61 | P a g e

purchase a product or service in a "virtual" vs. a build and mortar environment.

Technology Device Operating System Presentation Standards

E-Commerce PC Windows, Linux HTML

M-Commerce Smart phones, pagers, PDAs, Unix, Symbian (EPOC), PalmOS, Pocket PC, proprietary platforms. HTML, WML, HDML, i-Mode Phone.com UP Browser, Nokia

Browser

Microsoft Explorer, Netscape TCP/IP &

browser, MS Mobile Explorer and other micro browsers

Bearer Networks

Fixed GSM,

GSM/GPRS,

TDMA,

CDMA,

Wire line Internet

CDPD, paging networks

Key Issues

Evolution: Technology and Business models are constantly evolving which will demand flexibility and patience on part of all players.

Customer loyalty: Who will own the customer? Partnerships among players from various industries will be necessary for most, if not all, MCommerce initiatives, and, in turn, will alter the nature of any one company to own their own customers. 62 | P a g e

Cross-sector knowledge gulf, where the different parties will need to learn about the functions and limitations of the services provided by the other players, for example, operators will need to know about content and applications.

Moving up the value chain: To respond to market opportunities some companies have develop subsidiaries in order to react more rapidly to market challenges. For example, Cellbazar has developed Cellbazar, to provide portal and application management services such as location based mobile solution for M-Commerce transactions.

What is Driving M-Commerce?

Exponential growth of consumer interest and adoption of the Internet and e-commerce.

Tremendous growth in mobile telephony; however, voice has become a commodity and will no longer fuel revenue growth for operators.

Development of real-time transfer of data over 2.5G and 3G networks will enable faster data transmission and always-on connectivity.

The evolution of the handheld devices incorporating WAP and now GPRS.

Cost of entry into mobile e-commerce is low for most entrants; for example, a bank can implement a sophisticated m-banking solution in under six months for around $1 million.

The unique features of the mobile device such as its compactness for convenience and personalized functions; subsequently, people have become quite attached to their devices.

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Attracting players from all economic sectors from technology, finance, retail, media, all anticipating that M-Commerce will increase customer acquisition and retention and generate new revenue opportunities.

Products, Services & Applications Suited for M-Commerce

The criteria for M-Commerce services or products

Limited but precise choice Predictable availability Does not require lengthy and in-depth decision making (appeal to impulsive buying behavior)

Convenience

Examples:

The New York Times bestseller list meets all three criteria. It would be easy to purchase any of the listed books via a wireless device.

Tickets to popular entertainment events, such as concerts, live theatre, movies, sports events, trade shows, public forums

Mircro-transactions: purchasing a fast food items, such as a soda pop from a vending machine;

Payment of bills, banking, restaurant bill

Applications According to Ovums research, there is a lot of uncertainty about which mobile commerce applications will be successful and make money. The research/consulting firm classified M-Commerce applications into three

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categories.

Marketing for the new economy

M-Commerce opens up new opportunities for marketers Consumers and businesspeople no longer need to be near a computer to send and receive information all they need is cellular phone or PDA such as palm while they are on move they can connect with the internet to check stock price the weather sports scores or send or receive email message they can place an online order by simply using a phone or PDA a whole field called telemetric involves placing a wireless internet connected computers in the dashboards of cars and trucks, and making more home appliances (such as computer) wireless so that they can be used anywhere in or near the home. Many see a big future in what is now called M-Commerce.

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 Getting a coke by pointing and clicking the phone at a vending machine .The bottle drops down and an appropriate amt. is deducted from the owners bank a/c. Using the phone to search for the nearby restaurant that meets the customer entered criteria. Watching stock prices while sitting in the restaurant and deciding to place a purchase order. Clicking the phone to pay the bill for the meal; the cellular phones replaces the credit card. Coming home and clicking a combination of keys on the phones to open the door.

Some see positive benefits such as locating people making emergency 911 calls or checking on the whereabouts of ones children late at night. Others worry about privacy issues. What if an employer learns that an employee is being treated for AIDS at a local clinic or a wife finds out her husband is out clubbing? Like so many new technologies, location based services have potential for good or harm and ultimately they will warrant public scrutiny and regulation.

Mobile Banking
The last time that technology had a major impact in helping banks service their customers was with the introduction of the Internet banking. Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. 67 | P a g e

However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like China, India & Bangladesh. Mobile banking addresses this fundamental limitation of Internet Banking, as it reduces the customer requirement to just a mobile phone. Mobile usage has seen an explosive growth in most of the Asian economies like Bangladesh, India, China and Korea. In fact Korea boasts about a 70% mobile penetration rate and with its tech-savvy populace has seen one of the most aggressive rollouts of mobile banking services. Still, the main reason that Mobile Banking scores over Internet Banking is that it enables Anywhere Banking'. Customers now don't need access to a computer terminal to access their banks, they can now do so on the go when they are waiting for their bus to work, when they are traveling or when they are waiting for their orders to come through in a restaurant.

Mobile Banking Services

Banks offering mobile access are mostly supporting some or all of the following services: 1. Account Balance Enquiry 2. Account Statement Enquiries. 3. Cheque Status Enquiry. 4. Cheque Book Requests. 5. Fund Transfer between Accounts. 6. Credit/Debit Alerts. 68 | P a g e

7. Minimum Balance Alerts. 8. Bill Payment Alerts. 9. Bill Payment. 10. Recent Transaction History Requests. 11. Information Requests like Interest Rates/Exchange Rates. One way to classify these services depending on the originator of a service session is the Push/Pull' nature. Push' is when the bank sends out information based upon an agreed set of rules, for example your banks sends out an alert when your account balance goes below a threshold level. Pull' is when the customer explicitly requests a service or information from the bank, so a request for your last five transactions statement is a Pull based offering. The other way to categorize the mobile banking services, by the nature of the service, gives us two kind of services Transaction based and Enquiry Based. So a request for your bank statement is an enquiry based service and a request for your fund's transfer to some other account is a transaction-based service. Transaction based services are also differentiated from enquiry based services in the sense that they require additional security across the channel from the mobile phone to the banks data servers. Based upon the above classifications, we arrive at the following taxonomy of the services listed before.

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Push Based Transaction Based

Pull Based

Fund Transfer Bill Payment Other financial services like share trading.

Enquiry Based

Credit/Debit Alerts. Minimum Alerts Balance

Account Enquiry

Balance

Account Enquiry.

Statement

Bill Payment Alerts

Cheque Status Enquiry. Cheque Book Requests. Recent History. Transaction

Technologies enabling Mobile Banking

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Technically speaking most of these services can be deployed using more than one channel. Presently, Mobile Banking is being deployed using mobile applications developed on one of the following four channels. 1. IVR (Interactive Voice Response) 2. SMS (Short Messaging Service) 3. WAP (Wireless Access Protocol) 4. Standalone Mobile Application Clients

Advantages of Mobile Banking

The biggest advantage that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. For example an average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10 each. Additionally, this new channel gives the bank ability to cross-sell up-sell their other complex banking products and services such as vehicle loans, credit cards etc. For service providers, Mobile banking offers the next surest way to achieve growth. Countries like Korea where mobile penetration is nearing saturation, mobile banking is helping service providers increase revenues from the now static subscriber base. Also service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones.

Marketing for Mobile Banking

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Mobile banking is poised to become the big killer mobile application arena. However, Banks going mobile the first time need to tread the path cautiously. The biggest decision that Banks need to make is the channel that they will support their services on. Mobile banking through an SMS based service would require the lowest amount of effort, in terms of cost and time, but will not be able to support the full breath of transaction-based services. However, in markets like Bangladesh where a bulk of the mobile population users' phones can only support SMS based services, this might be the only option left. On the other hand a market heavily segmented by the type and complexity of mobile phone usage might be good place to roll of WAP based mobile applications. A WAP based service can let go of the need to customize usability to the profile of each mobile phone, the trade-off being that it cannot take advantage of the full breadth of features that a mobile phone might offer. Mobile application standalone clients bring along the burden of supporting multiple mobile device profiles. According to the Gartner Group, a leading wireless computing consulting organization, mobile banking services will have to support a minimum of 50 different device profiles in the near future. However, currently the best user experience, depending on the capabilities of a mobile phone, is possible only by using a Standalone client. Mobile banking has the potential to do to the mobile phone what E-mail did to the Internet. Mobile Application based banking is poised to be a big MCommerce feature, and if South Korea's foray into mass mobile banking is any indication, mobile banking could well be the driving factor to increase 71 | P a g e

sales of high-end mobile phones. Nevertheless, Bank's need to take a hard and deep look into the mobile usage patterns among their target customers and enable their mobile services on a technology with reaches out to the majority of their customers.

SMS Short Messaging Service

SMS uses the popular text-messaging standard to enable mobile application based banking. The way this works is that the customer requests for information by sending an SMS containing a service command to a prespecified number. The bank responds with a reply SMS containing the specific information. For example, customers of the BRAC Bank in Bangladesh can get their account balance details by sending the SMS. Most of the services rolled out by major banks using SMS have been limited to the Enquiry based ones. The main advantage of deploying mobile applications over SMS is that almost all mobile phones, including the low end, cheaper one's, which are most popular in countries like Bangladesh, India and China are SMS enabled. An SMS based service is hosted on a SMS gateway that further connects to the Mobile service providers SMS Centre. There are a couple of hosted IP based SMS gateways available in the market and also some open source ones like Kannel .

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Real life Case: Cellbazaar Introduction

Imagine a person in a remote village of Bangladesh want to sell a cow, so what should he do? From common sense we can say that he should go to the nearest bazaar or market where he can sell his cow. But rather than going to the bazaar that person takes out a mobile phone from his pocket and starts sending SMS to 3838. Within hours he starts getting calls asking for information about the cow and to negotiate the price. After negotiating with some customer he sells the cow to the highest bidder. And that price is quite 71 | P a g e

higher than what he could get in his local market. You may wonder how this was possible. It was possible because that person took the service of Cellbazaar. Cellbazaar is the largest mobile market place in Bangladesh. 3838 is the short code for Cellbazaar. In the recent years few Bangladeshi business ideas that has been successful and hailed by the whole world, Cellbazaar is certainly one of those. It is the brainchild of Kamal Quadir a MIT graduate. CellBazaar connects buyers and sellers in an electronic marketplace over their cell phones. It addresses one of the most significant challenges to everyday life in developing economies buying and selling basic goods with limited access to computers, internet, or viable substitutes. With CellBazaar, the seller and buyer can use their personal or community cell phones to check market prices, buy or sell their products, and see information that can be used to attain favorable prices. CellBazaar's value proposition lies in its ability to facilitate transactions and thereby overcome market failures.

History
In the late 1990s, there was much prognostication about the sub-computer future. It would put leapfrog theory into action, allowing developing economies to catch up with industrialized nations in one generation. But despite all the publicity and investment, usable sub-computers have not become the Holy Grail. Only the educated Middle class has adopted them. The mass of people, especially in the rural and suburban regions of developing economies have not. The issues extend beyond expense and availability, because no usable technology has been developed for these 75 | P a g e

potential users. We often hear media-friendly examples, like the fisherman who checks the weather forecast on the web? While these stories amuse people at conferences and NGO forums, the truth is such users are rare. Most of the Applications on computers have little utility for a sub-literate mass population. Cellbazaar began with a classroom observation that looked at this weakness and the corollary of opportunity. Simply put, the mobile phone has become the Ubiquitous computing device in developing countries. The meteoric growth of Mobile phone users in emerging economies has superseded all analyst predictions and future scenarios. The mobile phone has replaced the computer as the fastest growing Technology. Allowing people almost everywhere to stay in touch with family, Friends, and customers, and fulfilling myriad other needs, the mobile has become the essential technology. In countries like Bangladesh, the adoption curves have been astonishingly rapid, displaying classic hockey stick patterns. To take full advantage of this opportunity, we launched the mobile-phone-based market called Cellbazaar in Bangladesh.

Objective of the study

Primary Objective: Primary objective of our report is that it is required for the course MKT 401 (Sales). As per the requirement of this course we have to prepare and submit a term paper to our honorable course instructor. Secondary objective: Secondary objective of our report is to collect information about marketing strategy of CellBazaar in light of the services it provides. We have to understand how internal factors (Self concept, personality, lifestyle, perception, learning and attitude) and external factors

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(Culture, Group influence, Family Influence, Role influence) affects the use and thought of consumers about Cellbazaar.

Impact on Bangladeshi Economy

For a country like Bangladesh where low labor cost is the main power generation source, IT sector can be one of the major help to improve our competitiveness in the world market. Cell Bazaar is doing the exact thing by smoothening the process of e-marketing much more rapid. Because there is now cell Bazaar people now a day can think about getting their daily necessities at affordable prices as brand new products or second hand. So basically what cellbazaar doing is widening the market place for the business and consumers. Thats how new investments are coming much more rapidly as well as employment opportunities are also increasing. By the end of year 2013 Cell bazaar is supposed to be one of the major e-marketing sites in Bangladesh. And by the end of year 2015 it will become the worlds largest marketplace.

Marketing Mix
Product The product for Cellbazaar is basically the service that they are providing. And this service is that it is providing people an online marketplace to sell their goods. It is basically a virtual storefront type of service. The difference with virtual storefront is that the virtual storefront sells product through a virtual shop but Cellbazaar dont have any product of itself. It just provides a 77 | P a g e

place for both buyer and seller to meet virtually or through net and can sell and buy products they prefer. So, the product for Cellbazaar is just the service of providing a place for buyers and sellers to buy and sell products.

Price We can use the service of Cellbazaar in mainly two ways. First we can use it through Phone service and second we can use it through the internet service. In phone service we can get it in two ways, by making call and also through SMS service. For using it through voice service the charge will be on per minute basis. And for SMS base service the charge will on per SMS basis. And to use it through internet (if we use Grameenphone network) the cost will be only the browsing charge and no other additional cost is applicable. Place Cellbazaar can be used from anywhere in Bangladesh. We just need an active Grameenphone number for registration and use of this service. With the help of the Grameenphone network we can use it from anywhere in Bangladesh. Also in the website of Cellbazaar the products are categorized in two ways, based on the type of the products and also based on the location of the seller. So, a person can easily browse the products that are available in his area. The easy availability of the service from anywhere in Bangladesh is one of the key factors behind the success of Cellbazaar. Voice service SMS service : 2.30tk per minute : 2.30tk per SMS

Internet service: 0.02tk per kilobyte

Promotion

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Cellbazaar has a lot of promotional activities to attract its target customers. It uses different types of promotional media or tools for this purpose. Cellbazaar uses Media advertisement, Place advertisement and Transit advertisement among the IMC promotion options. Under media

advertisement they use Television advertisement, Radio advertisement, and newspaper advertisement. Under place advertisement they use Billboard advertisements. And under transit advertisement they use stickers. CellBazaar's grassroots marketing has created a place in the mind share of people all over Bangladesh, using the ubiquitous car, taxi and microbus. These stickers are now the most visible piece of marketing in the cities. Their main focus the promotional campaign is: Publicity CellBazaars have a very well known publicity. They have received a lots of international award, Cellbazaar received "Asian Innovation of the Year" award at 11th Telecom Asia 2008. This is the first year that Telecom Asia presented an award for Innovation. The other nominees in this new category were mChek from Bharti AirTel (India), M-Money from Maxis (Malaysia) and Globe Telecom (Philippines), Mobile MiniPC from SK Telecom (Korea), Recall from Idea Cellular (India), and X-Series from Hutchison 3 (Hong Kong). Cellbazaar has also won a variety of awards, including a 3GSMA Global Mobile Award in the "Best Use of Mobile for Social & Economic Development" category, a Tech Museum Award. National and international news paper has also covered their story. 79 | P a g e To facilitate intentional exposure. To maximize accidental exposure. To maintain accidental exposure.

Wall Street Journal: Interview Founder of Cellbazaar sees Mobile technology as a force for change... Economist: Dream of the Personal Computer. All kinds of firms, from giants such as Google to startups such as Cellbazaar... AP: Shop with your thumbs available to Bangladesh's growing number of cell phone users, thanks to a project spearheaded by a Bangladeshi MIT grad. CNN: Pallavi Paul Cellbazaar CEO interviewed by Pallavi Paul of CNN India ATN: Munni Saha Munni Saha profiles Cellbazaar for the nightly news.

Politics
Though Cellbazaar is a service portal its have business perspective, cellbazaar wants to expand their service throughout the world. Currently East Africa, Eastern Europe, and South Asia are all possibilities. But there are some barriers; one problem with the service is that it is operator-specific. Unlike a website such as Craigslist, where anyone can access information for free, Cellbazaar is dependent on relationships with mobile carriers. "The Internet belongs to everybody -- like highways and like fresh air,. Mobile networks are privately owned. However, CellBazaars interactions with carriers had been generally positive. "So far the operators cellbazaar have worked with have been very good; cellbazaar is very selective in terms of 7: | P a g e

what operator we work with." As Cellbazaar looks to expand, is focusing efforts on places that have high mobile penetration rates and low web penetration. They are looking at any place that has fewer Internets. No matter how good the application is, having Internet and high computer penetration doesn't help cellbazaar to expand.

Target Market
Basically our target market is everybody who has access to mobile phone or internet service and wants to buy and sell products. Cellbazaar is actually a mobile based marketplace. So, those people who have mobile phone and a Grameenphone connection is the target market for us because at some point of life everybody wants to buy and sell something.

Influence on consumer
Cellbazaar influence consumers through culture. Cell bazaar mostly influence to young generation. Cell bazaar based on internet & it is technology related. Young generation is very much interested about technology & internet. They search in website for various purposes. So they can easily contact to seller or buyer through Cell bazaar. Besides Cell bazaar can also influence to aged person. People who follow the latest system for everything, they can be influenced by Cell bazaar. People who are not interested to go to market for buying & selling; they can meet the demand by Cell bazaar. All people are not aware about Cell bazaar. Suppose one person want to buy something through

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internet, then he/she may go to reference group & reference group can suggest about Cell bazaar because its service is good compare to others. Cell bazaar influence to family and it depends on the nature of the product. If a family member want to buy or sale personal commodities, then it does not influence family. But if a family wants to buy or sale collective commodities (TV set, Refrigerator, Sofa-set etc) then it influence to family.

Cell bazaar gives available information about various commodities to family. It really helps the family to get reliable information easily & buy or sale products.

Perception
As cellbazaar is a concern of Grameenphone, it already caught by lot of people. Its total selling and buying concept is very unique in our countrys market. When it started its operation, it became the leading position. Its frequent TVC, billboard, and other advertisements already got the attention. Some press releases about cellbazaar have also reached in various types of people.

User Survey
We have used Facebook as the primary tool for the survey, along with it telephone call is used as the secondary tool. By using the web survey, subjects were limited to people who are comfortable using the Internet. A random number of current mobile phone users were obtained. A pretest was conducted with ten current mobile users from this list. Based on the results of the pretest and comments from participants, necessary corrections in the 81 | P a g e

questionnaires were made before the sample data collection commenced. A total 42 users attended in the survey.

Questionnaire
Q#1: How you access CellBazar? Ans: a: Website (e-Commerce) 78% b:Mobile (M-Commerce) 22% Graph:

Q#2: Can you use Cellbazaar from anywhere? Ans: a: Yes 30% b: No 70% Graph:

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Q#3: Do you feel it secure using your own mobile? Ans: a: Yes 92% b: No Graph: 8%

Q#4: Do Cellbazaar meet your all requirement? Ans: a: Yes 39% b: No 61% Graph: 81 | P a g e

Q#5: Is it easy to use cellbazaar from mobile? Ans: a: Yes 4%

b: No 96% Graph:

Q#6: How frequently you visit to Cellbazaar? Ans: a: Weekly 17%

b: Monthly 83% Graph: 85 | P a g e

Q#7: do you like Cellbazaar as an M-Commerce site? Ans: a: Yes b: No Graph: 90% 10%

Q#8: Will you tell your friend about Cellbazaar? Ans: a: Yes b: No Graph: 86 | P a g e 100% 0%

Survey Analysis
From the survey we can easily see that People fell comfort to access Cellbazaar from website rather than mobile, though Cellbazaar launched to serve via mobile. That is because there is no application developed specifically for Cellbazaar, so mostly people use SMS for Buy/Sell from/in Cellbazaar which is lengthy procedure & access is not easy. Another issue is mobile internet is still costly than broadband so people unable to access Cellbazaar from anywhere. But there is plus point for mobile is, people rely on their own mobile for any kind of transaction.

Though Cellbazaar still unable to meet the entire requirement but it is developing with the time & frequency of use from the user end is increasing day by day, as well people are willingly informing their family/friends about Cellbazaar which are great advantage for Cellbazaar.

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Recommendation
During my study I have seen the way in which consumers are increasingly incorporating the use of their smartphone into their shopping attitudes. By undertaking an in-depth ethnographic study, we can understand not just what is happening in mCommerce but also why. Utilizing this information, mobile touch points can be better designed to deliver something of value to their intended audiences, businesses are more likely to gain from successful innovation, and brands will deliver higher levels of customer experience.

By looking at the natural times and places that users engage in mCommerce, the drivers that encourage mobile engagement and the barriers that prevent it, we have a number of recommendations that brands and business should utilize when looking at their mobile propositions:

Consider the scenario Cellbazaar should make app or website accessible during down periods, whether thats on the way to work or at home. A user might be on the train to get to work and not really concentrating on booking a holiday, they might come back to it later and complete their booking if they have found what they are looking for.

Eliminate issues They should reassure their users that engaging in mobile activities are safe and secure.

Developing apps apps should be developed specifically for Cellbazaar, which will be used in mobile phone.

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Make it really useful Whether people use SMS/WAP/apps to access CellBazar it should be useful.

Look to the future Along with present development Cellbazaar should consider future technology & adaptability with it.

Think social the key target demographic of tomorrow will be demanding more socially enabled shopping experiences, and view retail as a whole in a completely different manner. Brands need to really understand and incorporate social into their mobile strategies to make the most of this trend.

Conclusion
The rapidly changing technology has revolutionized many aspects of modern life. Mobile commerce is witnessing phenomenal growth as new wireless technologies offering improved bandwidth, rapid transmission and cost effective mobile devices hit the market place. It is no longer the voice telephonic that appeals the consumer features like SMS, mobile banking, mobile commerce, astrology, news, live cricket scores, internet and email access through mobile telephones.

As competitions in the telecom arena intensify service providers took new initiatives to attract customers. The most important consumer segments 89 | P a g e

in the mobile industry are the youth segments and the business class segments. Business are using technology to provide their employee with more mobility because makes them more productive. Internet service providers are on a price war and the manifold increase in internet usage is a certainty that can work wonders for cellular operators.

Bibliography
Philip Kotler, Kevin Lane Keller: Marketing Management, Pearson, 14th Edition, Page 438-442, Page 48-50, Page 543-545 (2012)

Charles W L Hill, Steven L McShane: Principles of Management, Tata McGraw-Hill Special Indian Edition, Page 38-47 (2008)

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Webliography
About: Cellbazaar.com (n.d.) retrieved from http://www.cellbazaar.com/about

E-Commerce (January, 2013) retrieved from http://en.wikipedia.org/wiki/Ecommerce Mobile commerce (n.d.) retrieved from http://en.wikipedia.org/wiki/Mobile_commerce E-Commerce & M-Commerce (n.d.) retrieved from http://www.ecommercetimes.com

Mobile Banking (September, 2010) retrieved from http://en.wikipedia.org/wiki/Mobile_banking

Paul A. Greenberg (22/12/00) E-Banking, Where Art Thou? retrieved from http://www.ecommercetimes.com/story/6266.html

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