Relationship between two different business mobile applications models – freemium and premium - and consumer buying habits in mobile app industry Background
This research proposal focuses on different e-business models and their relationship with the consumer buying behaviour. This research is part of digital marketing strategy field as it specifically examines e-business models in mobile industry. As the research will be examined from the consumer point-of-view, it is also to do with consumer behaviour. With the rise of the new business models emerging due to technological innovations, various ways to monetize digital content created by firms emerge. The link between different business models and the purchasing behaviour in mobile app industry is the focus of attention of this research project. There is a certain relationship suggested by some primary literature resources, however this relationship is applicable only to very specific types of mobile apps. The rationale behind the project is that as business models for e-businesses are vaguely analysed in the current academic literature and therefore this research aims to explore this field in more detail.
Research Aims & Objectives
The overall aim of this project is to examine the relationship between two business models –freemium and premium - and consumer purchasing habits in mobile application (app) industry. Objectives
To identify whether people are more likely to spend on in-app purchases or on access to an app. To investigate whether the relationship in two distinct software markets – iOS and Android - is the same. To identify whether particular purchasing choice is associated with any other variable such as age, gender, type of an app, etc. To formulate conclusions on the relationships found and develop a theory. Hypothesis
As the relationship between two variables (business models and purchasing habits) is not established by academic theory, the direction of the relationship between these variables will not be speculated and therefore non-directional hypothesis (McElroy et al., 1995; Moore and Brylinski, 1993) will be chosen. Literature review
The purpose of this section is to outline the literature that was consulted when formulating the research topic, question, overall aim and objectives. The business model concept in academic literature is quite new as it gained prominence only in the late 1990s in the internet boom years (Casadesus-Masanell and Ricart, 2010; Teece, 2010; Osterwalder, 2004). This is because emerging e-businesses require new business models as a number of them are offering digital goods (i.e. information) that consumers expect to be free (Teece, 2010). Therefore, it became more challenging for e-businesses to capitalize their activities. Because the concept of business model has emerged quite recently, its definition is highly disputed (Leung, 2007; Osterwalder, 2004). Lots of different descriptions are offered by numerous academics and practitioners. Although some descriptions refer to business model as an abstract representation of a firm’s strategy (Seddon and Lewis, 2003 cited in Leung, 2007), quite the opposite opinion is expressed by Teece (2010), Zott and Amit (2010) and Osterwalder (2004). They all have found a strong relationship between strategy and business model, but they are believed to work in different way: business model outlines the architecture and money earning logic whereas strategy is used for planning, goal and vision setting. Because businesses are operating in a constantly changing environment, they have to adapt their business models according to these changes in order to maintain competitive advantage. One of the most important factors influencing business models is technology as emerging digital technology has created opportunities for new business models (Sako, 2012, Osterwalder, 2004; Kalakota and Robinson, 1999; Chaffey, 2008; Reynolds, 2000). One of the examples that will be examined in...
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