Location-based marketing services allow consumers to access product and service information irrespective of their locations. These services are primarily accessible via mobile device networks. Location-based advertising uses the geographical position of a mobile device to enable the user to quickly locate the nearest service or business ( Hokse, 2016 ). The widespread adoption of location-based marketing presents marketers with new ways and opportunities to reach their target audience. Through the combination of location-based services and mobile applications, companies can reach their customers based on their needs and their geographical contexts. As a result, the number of customers using mobile devices for the purposes outside communication has increased influencing today's on-demand economy mobile e-commerce.
The burgeoning need and economic demand for location-based marketing have a remarkable impact on businesses' advertising strategy and their client relationship management. This is because organizations can now network with their customers through advertisements, coupons and other offerings personalized to consumer preferences and location. As a result, organizations have to offer products based on consumer preferences to attract customers and create a good relationship with them. Also, by creating a strong customer relationship, new strategies to enhance customer satisfaction and value have to be implemented since customer satisfaction builds loyal customers ( Lin, Paragas & Bautista, 2016 ). However, the identification of customers’ value presents marketers with a significant challenge to identify and predict customer’s behavior.
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On the other hand, location-based marketing has changed companies’ consumer interaction. Also, consumers' options have been widened due to increased information search, data availability, and accessibility. As a result, users’ flexibility has been enhanced, and it is upon them to determine when to receive and respond to location-based promotions ( Lin, Paragas & Bautista, 2016 ). For instance, when Apple Company introduced the first iPhone, the communication technology industry was revolutionized with a new generation of customer service applications and other companies such as Microsoft followed by adding new application stores ( Hokse, 2016 ). The competition among the companies increased consumers’ choice impacting their decision-making process. Therefore, location-based marketing has influenced consumers’ involvement, which in return has affected their decision-making process.
Despite the numerous benefits of location-based marketing, there are shortcomings such as consumers’ worry about their personal information and geographical location confidentiality. Location-based marketing through personalized advertising messages may be useful for consumers, but at the same time, may raise concerns about organizations using their personal information ( Lin, Paragas & Bautista, 2016 ). This may result in negative responses that may push the customer way. Therefore, to prevent such incidences, two different location-based marketing strategies may be employed.
First, the advertisement delivery method (push or pull approach). In the pull approach method, the customer requests the information and then receives the advertisement message. In the push approach method, the marketer delivers the message to the customer without their request based on their location. Second, the content of the advertisement method may be tailored based on information sensitivity ( Hokse, 2016 ). Therefore, customers’ responses on each location-based marketing strategy may differ depending on the level of perceived risk, intrusiveness, and benefits associated with the messages.
In conclusion, the widespread adoption of technological innovations have transformed business operations in terms of service delivery and provision of goods. Location-based marketing is one of the important marketing innovations that enables companies and businesses to deliver their services and products to consumers regardless of their geographical locations. This has been facilitated by the increased use of mobile devices and applications. However, there are concerns of the confidentiality of the consumers’ data. These concerns can be mitigated by providing on request services and making the safety of consumers’ data a top priority.
References
Hokse, E. (2016). Mobile Location-Based Advertising: The effects of Delivery-Method, Information Sensitivity, and Promotions on Advertisement Evaluations (Master's thesis, University of Twente).
Lin, T. T. C., Paragas, F., & Bautista, J. R. (2016). Determinants of mobile consumers' perceived value of location-based advertising and user responses.
