As the increased demand of mobile communication, there has been an increasing research stream in the current literature addressing various issues related to mobile communication (m-communication) and mobile commerce (m-commerce) (Barnes and Corbitt, 2003; Siau and Shen, 2003; Scornavacca and Barnes, 2004; Laukkanen and Lauronen, 2005). Some recent examples include: an overview of the mobile communication industry for its global trend in the 21st Century by addressing all related hot topics such as mobile market, mobile applications and m-commerce (Kumar, 2004).
Specifically, Kumar (2004) explored the competitive landscape of the mobile phone market based on competing protocols or standards, airtime carriers and handset providers, and the key characteristics of US mobile market with both European and Asian markets. Massoud and Gupta (2003) investigate the consumer perception and attitude toward mobile communication through a consumer survey. Arguing that successful solutions to e-commerce may not simply translate into successful solutions to m-commerce, this paper is an attempt to identify key factors for successful m-commerce solutions.
Following the trend, Wen and Mahatanankoon (2004) describe a study on m-commerce operation modes and applications for both consumers and industries; while Chan and Chen (2003) focus on the usage pattern of web-based support system for mobile phone purchasing and reveal five important factors for mobile phone purchasing decision: the quality of signal transmission, product shape and colour choice, the size and weight, price along with associated service fees, and ease of use.
They conclude that a good we-based support system can enhance the quality of phone service to customers and thus become an attractive lure in mobile phone purchasing selection.
Regarding the consumer purchasing behaviour of a mobile phone, in addition to traditional marketing claim that a consumer’s purchasing motivation will be influenced directly by the phone and service related factors including: new technology, phone design and appearance, the relative price, and the associated calling plan, consumer behaviour research on consumers’ social and interpersonal environment has indicated that the mobile phone consumer’s final purchasing decision will also be influenced by reference groups (such as friends, family, work associates and etc. on whether to buy a specific product and which brand or model to choose among competing alternatives (Moschis, 1976)
Mobile phone has been pricy with the market dominated by business users (Kendall, 1997). It has been considered a status symbol for the rich and famous during the early 1990s all over the world. In China, people still could remember a common scenario that those mobile phone owners talked anywhere and everywhere with such a proud to send a message that the ownership of a mobile phone representing rich, power, prestige, and success.
In contrast, American mobile phone consumers used to believe that when they sign up with a mobile phone service, a free phone was included. At that time, it was the ownership of a mobile phone, not its technology or its appearance, that distinguished the owner from others. It was predicted in 1994 that the demand for mobile communication would make a continuing growth of US mobile phone market and reaching a penetration of 50% in 2005 (Scouras, 1995).
The real market growth was in fact better than the expected with 74% of Americans were viewed as mobile phone users in 2003 (Palenchar, 2004). In comparison, the time that mobile phone being viewed as an expensive luxury only affordable to the power and rich in China has long gone. Today, not only in all urban areas, also in smaller towns and remote rural farms, the mobile phone has become a common, affordable, and convenient communication device.
It has been contributed to a simple marketing strategy: for users in China’s income–constrained agricultural sector, the promotion of ‘frugal’ handset phone that eliminate features such as displays and reduce service fees by offering prepaid pay-per-call phone cards (Robertson, 2001). Currently, one can easily find many advanced new emerging generations of mobile phones, smaller, lighter, better designed, multi-functional, and with a much affordable price.
The purchase decision of products such as mobile phone, which are used publicly, is strongly influenced by the consumer’s reference groups (Bearden and Etzel, 1982; Bourne, 1957). Mobile phone manufacturers have been applying such interpersonal influence in their advertising and marketing practice. For example, an advertisement focused on personalisation through colour faceplates was used when Siemens launched its series of GSM phones in USA during 2002, while a mobile phone looking like a compact case complete with a mirror inside was promoted by Samsung (Luna, 2002).
This study investigating the influence of different reference groups on consumer purchasing behaviour between the mobile phone users of USA and China. The motivation for this study is to investigate the strength of those social reference group influences on the mobile phone buyers in both USA and China, and reveal any significant differences between the mobile phone buyers of two nations in terms of the actual influences of those social reference groups on the mobile phone purchase behaviour – due to the different cultural and societal traditions and norms.
For example, the stereotyped collectivism of Chinese culture emphasising conformity to group norms, social acceptance and hierarchical interpersonal relationships are expected to indicate higher reference group influence about the same product compared to those consumers in USA (Zhou and Hui, 2003).