Qr Codes: What Are They?

• Subject Code: MKT203
• Subject Name:   Services Marketing
• Assessment 1: Individual Case Study

QR CODES: WHAT ARE THEY?

Introduced in 1994 by Denso Wave Incorporated from Japan, QR code fulfilled the lack of two – dimensional codes with high capacity of storing information and high speed reading. The bar code was popular at the time, yet could only be read in one direction and had low capacity of holding 20 alphanumeric characters. The innovation of QR code has changed marketing approaches for both product and service providers. As technology becomes more and more popular and advanced, marketers necessarily utilize its power in order to have effective marketing campaigns to consumers.

1. Consumers theoretically experience six primary and distinguishable stages in the decision – making process which includes pre – purchase stage, information search, evaluation of alternatives, purchase, the service counter, and post – purchase evaluation. Pre – purchase or problem recognition stage is when a consumer starts to realize a specific need for a particular product/ service. For example, a person suffering from chronic back pain will have an urgent need for a chiropractic session. Sometimes, consumers do not even acknowledge a specific need until they see advertisements on TV, or magazines. This is where QR plays an essential role to attract customers and helps them realize unconscious needs. QR code can be displayed along with advertisements in a complimentary manner, which contains information about a product/service. While using core service, the main reason for purchasing decision such as airline transportation, customers may scan QR code at the airport and realize needs for in – flight services such as food and drinks, gifts, etc which are categorized as peripheral service. After acknowledging a particular need, consumers conduct information search by internal searching through memories and experiences, by word – of – mouth through friends and relatives, and by advertising through magazines, newspapers, and QR codes. With the capability of storing high volume of information, the two – dimensional code is able to provide consumers with detailed descriptions, promotions, and benefits of a product or service. Consumers start to evaluate and assess alternatives after gathering enough information about necessary services from QR codes in the third phase, evaluation of alternatives. Afterward, they make the final decision for which product/service best serves their needs based on own criteria. QR code users can scan chosen products and be taken to payment websites where they input their credit card information or PayPal account (Vahl, Haydon, & Zimmerman). The service encounter phase is when consumers actually use the service they just purchased in the previous stage. For example, in Tesco Home Plus, a grocery chain in Korea, shoppers scan QR code for products on a shopping list and have them delivered to their home address (Bergen 2011). QR code eliminates any contact between buyers and sellers, thus, will not be used in high – contact service. The process does not end when consumers make their purchases. Either they feel satisfied or dissatisfied with their decisions. Thus, feedbacks from customers are valuable for every company. Scanning the QR code can take customers to the feedback site where they can input their opinions.
2. As QR code potentially can be used in every stage of the decision – making process, there are ample rooms for QR code to be utilized in the marketing of service providers. Mobile advertising such as Quick Response code mainly relies on pull marketing strategy, which is a strategy used to generate demand for a product, rather than push strategy (Atkinson 2013). QR code, acting as a medium to connect consumers with the digital domain, innovates how marketers interact with customers and entice them in new ways. For example, retailers have recently adopted QR code to help consumers interact with their brands through websites, promotions, product description, and other mobile – available content (Ryu 2013). Target, one of the major US –based retailers, has integrated QR code in print advertising. By scanning the two – dimensional barcode, consumers are taken to a how – to video of stylish expert Sabrina Soto on designing and organizing Target’s furniture and products (Santos 2011). As mentioned above, a QR code is capable of helping customers pay for their purchase which support financial service providers such as banks, credit institutions, etc. Furthermore, QR code can be included in a brochure which informs patients about specific diseases and treatments. Embedding QR code in Android smartphones by the Water and Sanitation Program of the World Bank has assisted sludge truck management and prevent illegal dumping in Indonesia (Nique&Smertnik 2015). For the transportation industry, passengers can scan QR code to board a bus instead of showing actual tickets to bus drivers in Ottawa, Canada (BeQRious)
3. First of all, due to increasing in smartphone users and various applications on mobile phones, QR code is easily scanned from anywhere with the access to the internet. Thus, it will be available to a wide range of users. In U.S.,6.2% of 14 million mobile users scanned QR code with their mobile phones. Specifically, 49.40% of QR code users scanned on printed magazine or newspaper (Chaffey 2012). Since QR code is trackable and measurable, it potentially provides valuable data about marketing campaigns and customers. QR code, thus, helps enrich customer database, improve data analytics, and deepen customer understanding which is favorable for market segmentation, a process of dividing customers into similar customer segments based on demographic, geographic, and needs.QR code is considered eco – friendly as it can replace brochures, printed coupons, vouchers, and printed newspapers. Scanning the code is able to take customers directly to the company website, promotion, product/service description which demonstrates effectiveness in marketing. QR code is also known for its versatility since it can be used for any marketing purposes, including printed ads, outdoor displays, etc. With free – of – charge design of the QR code, service providers are able to cut costs and minimize sales and marketing expenses leading to greater profitability. QR code becomes a competitive advantage for first adopters of the technology.
4. In the evaluation of alternatives stage in the decision – making process, risk perception plays an important role in how consumer values the needed service. Defined as a negative consequence that may occur as a part of transaction in Lecture 2, perceived risk is categorized into 6 groups: functional risk, physical risk, financial risk, social risk, psychological risk, and time risk. In general, the higher the value of a product is, the riskier it is considered to be. (Woodside 1974). Derbaix (1983) found out that financial risk is the most important factor among perceived risks for durable and experienced products; meanwhile, physical risk is the most important for non – durable products. A 1976 study showed services are considered to be riskier than products due to the characteristic of possibly undermining consumer confidence of service (Lewis 1976). In order to decrease perceived risk level, service providers have to establish relationships and trust with customers (Mitchell 1999). As mentioned, QR code assists in data analytic which helps deepen relationship and understanding, thus, results in enhancing trust and loyalty of customers, and decreasing risk perception. From customer view, QR code provides a glance at services through reviews and feedbacks from previous customers leading to appropriate expectation.
5. Recently, the future of shopping has been approaching e – commerce strategy (Rigby 2011). It is urgent that marketers need to develop and implement any kinds of interactive contents in order to satisfy revolving needs of customers. As Service Recovery Paradox points out that service provider can achieve higher satisfaction if it has an excellent service recovery after failure, a system or software that allows customers input their feedbacks/ complaints right after the service is performed will be adopted in order to analyze customer’s satisfaction and dissatisfaction. The more tailored and customized a service is, the higher probability it will meet customers’ needs, the higher satisfaction will be. Thus, before introducing new service offerings, with the help of the Internet, a type of interactive content enables customers to input their expectations towards future services.  

References

Atkinson, L., 2013. Smart shoppers? Using QR codes and ‘green’smartphone apps to mobilize sustainable consumption in the retail environment. International Journal of Consumer Studies, 37(4), pp.387-393.

BeQRious. QR Codes Used in Ottawas Transit System. BeQRious. Available at: http://beqrioustracker.com/qr-codes-used-in-ottawas-transit-system/ [Accessed April 14, 2017].

Bergen, J., 2011. Korea’s Tesco reinvents grocery shopping with QR-code “stores”. Geek. Available at: https://www.geek.com/geek-cetera/koreas-tesco-reinvents-grocery-shopping-with-qr-code-stores-1396025/ [Accessed April 14, 2017].

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