MBA dissertation

1. HENLEY MANAGEMENT COLLEGE
THE EMERGENCE OF M-COMMERCE:
EXPLORING THE BUSINESS POTENTIAL OF VIRTUAL
COMMUNITIES FOR THE WIRELESS INTERNET
By
- Thierry Busset -
2002

2. Abstract
The idea for this research originated from a variety of sources. An important influence
has been the author’s growing interest in marketing and mobile commerce. Considering
the extent to which mobile telecommunication and the Internet have independently
revolutionised modern methods of communication and trade, their combined effect in
the wireless Internet constitutes the next wave of change and is expected to have an
even greater impact on social interaction and commerce.
On-line virtual communities, which gather around Internet forums and chat rooms, have
attracted considerable interest from marketers in recent years. Wireless virtual
communities are now appearing on the current wireless networks, but have received
little attention within the academic literature to date. Consequently, this project sets out
to explore the potential for virtual communities to generate revenue and growth when
used as the basis for business on the forthcoming mobile Internet. This is achieved by
means of in-depth qualitative interviews with managers from five on-line and five
wireless virtual communities. Findings pertaining to the areas of community
development, marketing intelligence, segmentation and revenue generation are
presented.
The findings strongly support the business case for wireless virtual communities, due to
their ability to shorten the developmental cycle and enhance the portfolio of revenue
streams. However, the technical limitations of current wireless networks are identified
as the key barrier to the development of exclusively wireless communities at present.
Consequently, a mixed model is put forward, in which the meeting ground of the
community remains on-line, but the interaction takes place primarily via wireless

3. telecommunication. In addition, the integration of wireless communication within on-
line communities is strongly advocated due to the high demand for mobile
communication and its potential to increase traffic and revenue. The relevance of the
research for virtual community managers and ‘m-marketers’ is highlighted and possible
implications for future practice discussed.

4. Table of Contents
1. INTRODUCTION..............................................................................................1
1.1 The Origins of the Study 1
1.2 The Aim of the Study 2
2. LITERATURE REVIEW....................................................................................4
2.1 Virtual Communities 4
2.1.1 A Definition......................................................................................................................................4
2.1.2 The Business Case for Virtual Communities...................................................................................6
2.1.3 Segmentation in Virtual Communities...........................................................................................15
2.1.4 Building and Managing a Community...........................................................................................23
2.1.5 Drawing Revenue from the Community........................................................................................30
2.2 Virtual Communities on the Wireless Web 33
3. FIELD WORK ................................................................................................38
3.1 Research Design 38
3.2 Data Collection: The Choice of In-depth Interviewing 39
3.3 Reliability and Validity 40
3.4 Data Analysis 41
4. FINDINGS.......................................................................................................43
4.1 Comparison between the Management of On-Line Virtual Communities and Wireless
Virtual Communities 43
4.2 Marketing Intelligence Within Virtual Communities 62
4.3 Segmentation and Targeting 69
4.4 Revenue Generation 74
5. DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS.....................84
5.1 Comparison between the Management of On-Line Virtual Communities and Wireless
Virtual Communities 84
5.2 Marketing Intelligence Within Virtual Communities 89
5.3 Segmentation and Targeting 92
5.4 Revenue Generation 94
REFERENCES..................................................................................................99

5. 1.Introduction
1.1The Origins of the Study
The idea for this research project has come from two different sources. Firstly, the
majority of the author’s professional background has been in the mobile
telecommunication industry. In particular, he has been involved in the development of
new technology to enable wireless data transfer and connection with the Internet via
wireless telephones. Such technology enables people to access the Internet via their
mobile telephone free of any time or geographical constraints, thereby giving birth to
the wireless Internet. The ubiquity offered by this mobile connection to the web will
revolutionise methods of communication and trade in the next decade. People will have
more flexible access to information and be able to select products and services as well
as carry out commercial transactions without any geographical or time limitations.
Secondly, over the past decade, developments on-line have led to the birth of e-
commerce and to the creation of new applications for social and commercial interaction.
Amongst these, virtual communities have become familiar features of the Internet
landscape. People with common interest are gathering around meeting grounds in
cyberspace in order to fulfil their need for social interaction. As these shared interests
relate directly to consumption activities, on-line virtual communities have attracted
considerable interest in recent years. Their ability to engender strong relationships based
on trust between members has led to the prediction that virtual communities could
become powerful intermediaries creating reverse markets. Gathered around corporate
web sites, they could also be a powerful tool to build or re-inforce a brand by creating
virtual ‘product fan clubs’. Consequently, on-line forums and chat rooms, which foster
1

6. these communities, are increasingly being used as the basis of new business models for
e-commerce.
Over the past three years, virtual communities have emerged on wireless networks
following the development of technology, such as the Short-Text Messages Service
(SMS) or the Wireless Application Protocol (WAP). Contrary to their on-line
counterparts, very little has been written about these wireless forms of virtual
community as they are still in their infancy.
1.2The Aim of the Study
This project aims to explore the potential for virtual communities to generate revenue
and growth when used as the basis for business on the forthcoming wireless Internet. In
order to achieve this objective, it focuses specifically on the areas of community
development, marketing research, segmentation and revenue generation. It investigates
how virtual communities function on the Internet as compared to those emerging on
wireless networks by means of in-depth qualitative interviews with managers from five
on-line and five wireless virtual communities.
This paper begins with a review of the academic literature that has been published over
the last decade on the subject of virtual communities in marketing for e-commerce. It
defines virtual communities prior to describing their potential use as a new
intermediary, a brand management tool and a marketing intelligence system. This is
followed by a review of the alternative perspectives on how to build and manage
communities, to profile their members and finally draw revenue from them. It also
2

7. includes a review of articles exploring the potential impact of future wireless
technology on virtual communities.
The literature review is followed by a description of the qualitative research methods
chosen for data collection and data analysis. The rationale for using personal in-depth
interviewing as the means of data collection is outlined prior to describing the
‘Framework’ method to qualitative data analysis. The findings are then presented and
discussed for both on-line and wireless communities in relation to community
development, marketing research, segmentation and revenue generation.
3

8. 2.Literature Review
2.1Virtual Communities
2.1.1A Definition
Whilst the term community is well-used, it is evident that people attach a range of
different meanings to the concept. Hamman (2001) offers the following sociological
definition:
“A community should be understood as meaning (1) a group of people (2)
who share social interaction (3) and some common ties between themselves
and the other members of the group (4) and who share an area for at least
some of the time” (Hamman, 2001).
This definition serves to demonstrate that a community is more than just a group of
people. The sharing of social interaction, common interests and a place, be it physical or
virtual as in the cyberspace, is integral to a community. Rheingold (1993), who was the
first to coin the term ‘virtual communities’, hence defines them as:
“Social aggregations that emerge from the Net when enough people carry on
those public discussions long enough, with sufficient human feeling, to form
webs of personal relationships in cyberspace” (Rheingold, 1993).
Sociological research has highlighted the loss of sense of community that modernisation
has brought about (Hamman, 2001) and identified the loss of the ‘third place’ as the
main reason for this. The ‘third place’ is the place outside of home and work that is
4

9. important to us in our everyday life. Third places, like the pub and the church for
example, are the arenas where people can interact with other members of the
community and come to know the ties they have in common. Third places are,
therefore, essential to the establishment of a community (Hamman, 2001). TV, longer
working hours and commuting times are now eating into the time people previously
allocated to social interaction in their local pub, corner shop or church etc. As a direct
result of the disappearance of these traditional third places, people have been attracted
to virtual third places to fulfil their need for social interaction and acceptance.
Virtual communities offer a unique form of social interaction in that it is free from the
constraints that exist in a physical encounter. For example, you can remain anonymous,
there are no geographical or time limitations, you are free to engage or end the
conversation at any moment, body language is no longer important and cannot betray
shyness and there are no race or religious prejudices at first sight. Consequently, virtual
communities have steadily grown over the past 10 years in conjunction with the growth
of computer networks and the Internet. However, virtual communities have gone
beyond being purely a means to satisfy the need for social interaction and have become
the primary feature of new business models for e-commerce:
“Internet and networked computers have empowered people to disregard the
limitations of geography and time and find one another and gather in groups
based on a wide range of cultural and social affiliations. Because many of
these affiliations are based upon consumption activities, virtual communities
are of substantial importance to marketing and business strategists”
(Kozinets, 1999).
5

10. 2.1.2The Business Case for Virtual Communities
Barnatt (1998) has identified a clear rationale regarding the benefits for organisations to
develop on-line virtual communities. In his view, communities can be used as:
1. An intermediary, which would replace the middleman, saving cost and time and
expanding the range of products and services, but still maintaining a human
element.
2. A tool to enhance a company’s market position. Virtual communities may serve
to establish an organisation as a brand leader on-line. Innovative companies
might be able to use virtual communities to build customer loyalty by allowing
people to cultivate on-line human relationships with peer opinion leaders,
industry experts and early adopters.
3. An ideal environment for cultivating customer relationships.
4. A vehicle for on-line customer service providing constantly updated policy
documentation, advice and information.
5. A market research instrument providing a means of collecting rich customer data
in a cost-effective manner to a level that no other tool can match.
Essentially, two distinct strategic uses of virtual communities emerge from this list. On
the one hand, virtual communities have the potential to become intermediaries
sufficiently powerful to lead to the creation of reverse markets by aggregating the
purchasing power of all its members and, therefore, shifting the bargaining power
towards the customer (Hagel and Armstrong, 1997). On the other hand, virtual
communities gathered around corporate web sites could also be a powerful tool to build
up brands in addition to creating and nurturing customer relationships and loyalty by
creating virtual ‘product fan clubs’. Underlying these two strategic uses of virtual
6

11. communities is their ability to provide rapid access to extremely rich information about
community members. Knowledge of customer’s needs and tastes can be increased
through precise member profiling, allowing marketers to define their future products
and services better, as well as their customers’ segmentation and targeting.
Virtual Communities as a New Intermediary
According to Hagel and Armstrong (1997), virtual communities draw together people
who have the same distinctive focus, which means that they are likely to have the same
consumption needs and interest in relation to that focus. They argue that members are
initially attracted to a community by their passion and interest. After having established
relationships with the other members, they can access unmatched levels of information
and also benefit from other members’ experience and feedback. Interesting content
attracts new community members and an adequate means of communication allows
them to exchange ideas with one another, bond and develop strong relationships via
frequent social interaction. Information is, therefore, provided by trusted friends, via
two-way conversations with no limit in time. This information is consequently much
richer than the ‘published’ material that can be found in corporate catalogues, web sites
or is provided by a company’s sales force. This is illustrated by Barnatt (1998), who
highlights that:
“In some industries, other customers are already critical in determining
competitive advantage and it is on the recognition of that fact that business
value creation within virtual communities will depend: go into your high
street bank and every other customer in front of you in the queue is a
nuisance, go into your financial on-line bank and the fellow members that
7

12. you trust all become a real, valued and trusted independent financial
advisor” (Barnatt, 1998).
As access to information is a key determinant of the bargaining power in any
commercial transaction, Hagel and Armstrong (1997) argue that virtual communities
have the power to greatly alter the relationship between companies and their customers
as they use networks, like the Internet, to enable customers to take control of their own
purchasing power. Virtual communities, therefore, have the potential to become a new
form of intermediary, enabling the creation of ‘reverse markets’, where the power
belongs to the customer and where consumers seek out vendors and deal with them on a
more level playing field in terms of information access (Hagel and Armstrong, 1997).
This view is shared by Kozinets (1999), who hypothesises that the existence of united
groups of on-line consumers will shift the power away from marketers towards
consumers. This power shift would also have the effect of reducing the vendor profit
surplus similar to that of the auction model (Hagel and Armstrong, 1997).
By definition, virtual communities are groups of people who share common interests,
norms of behaviours and modes of social interaction. These groups are themselves
composed of a multitude of smaller gatherings:
“Although organised at one level of interest, community members endlessly
re-organise themselves into increasingly identity-specific ‘factions’”
(Kozinets, 1999).
From the vendor’s perspective, a community, therefore, acts as a segmentation tool
and provides marketers with a pool of customers that are easier to target, in addition to
8

13. enabling them to tailor and add value to the existing products and services. As
community members represent customers with similar needs, they form a pool of buyers
for whom demand is easier to forecast and where economies of scales can be achieved
(Schubert & Ginsburg, 2000).
Hagel and Armstrong (1997) believe that demand is also boosted by customers’
propensity to buy as they have a high level of trust within the community and hence a
lower perceived risk of purchase. In addition, they argue that once the community has
reached a critical mass of members, the ‘reverse market’ effect is re-inforced by the
aggregation of purchasing power of all members and by giving their members access to
competing publishers and vendors. Hagel and Armstrong (1997), therefore, conclude
that:
“Virtual communities will become cyber shopping malls and end up
attracting people more by the aggregation of power than the access to
common interest” (Hagel and Armstrong, 1997).
It is worthy of note that the common focus and need for social interaction that Hagel
and Armstrong (1997) claim are central to community existence paradoxically
disappear in their vision of future virtual communities, where attraction is no longer
generated by content and relationships, but by deals and savings. Cyberspace
communities, whose members only join for the deals, would cease to be a community
due to their limited desire for social interaction. Their long-term sustainability would,
therefore, be questionable. As Barnatt (1998) concludes:
“The most important aspect of on-line virtual communities is arguably their
9

14. ability to integrate information, trading and social interaction. They can
humanise the on-line high streets” (Barnatt, 1998).
Consequently, if the focus is exclusively placed on trading to the detriment of social
interaction, the community will cease to exist.
Virtual Communities as a Brand- and Loyalty-Building Marketing Tool
McWilliam (2000) offers a different perspective on virtual communities and explores
the opportunities they represent for consumer-goods’ companies to build their brands
and strengthen their relationships with customers. McWilliam (2000) argues that
organisations can build upon existing brand relationships established with their loyal
customers to create ‘brand communities’ (i.e. brand-based on-line communities). Brand
communities give customers a unique opportunity to position themselves as partners in
the organisation loyalty ladder, leading to the creation of ‘virtual product fan clubs’.
Hoey (1999) shares this view and suggests that virtual communities are best used purely
as a new interface with existing loyal customers.
In traditional brand relationships communication flows between the vendor and the
consumer. In brand communities, however, the dialogue occurring between consumers
enables members to form genuine relationships with like-minded people. Both the
content and the possibility of forming relationships with other buyers and with the
brand’s managers then act as a magnet, drawing consumers back to the site on a
frequent and regular basis (McWilliam, 2000). Hagel and Armstrong (1997) agree with
this view that the ability to form relationships creates loyalty to the community. They
argue that this is driven by a self-reinforcing cycle: ‘the loyalty’ loop, which contributes
directly to revenue growth (See fig. 1).
10

15. Members in Contributions to
community member-
generated content
Member
Hours of
relationships
usage
Member
Loyalty
Member churn Customised
rate interaction
Fig. 1 - The Member Loyalty Dynamic Loop (Hagel & Armstrong, 1997)
As described in figure 1, the self re-inforcing dynamics of this loop mean that the more
the members participate in discussion forums, the more they create personal
relationships with other participants. Members then become increasingly loyal to the
community as the strength of these relationships grows through more participation in
public discussions in either forums or chat rooms. However, as Hagel and Armstrong
(1997) typically focus on commercial returns, they prefer defining loyalty in terms of
repeat purchasing and, therefore, believe that the creation of loyalty within communities
will be based on product performance and not the brand. They merely regard brand and
established customer relationships as useful resources. This is likely to stem from their
strong belief in the reverse market effect within virtual communities, which annihilates
the power of the brand and is, therefore, not compatible with the concept of a brand-
based community. It is, however, worthy of note that Hagel and Armstrong (1997) use
many examples of unique vendor’s corporate web sites, such as AOL, Disney, Heineken
or Bosch, to describe successful virtual communities. One could argue that these
companies’ web sites fit McWilliam’s definition of brand communities better than they
11

16. fit Hagel and Armstrong’s view of the virtual community as an intermediary.
McWilliam (2000), acknowledges the existence of the reverse market effect in virtual
communities and considers that it represents an important difference between brand
building in the real and the virtual world:
“The power is in the members, and when managing communities, marketers
require a truly bottom-up view of brand building, whereby the customers
build the content, and are in a sense responsible for it. This contrasts
markedly with the top-down view of business where products and services
are created by organisations and sold to customers” (McWilliam, 2000).
Kozinets (1999) agrees that the reverse effect is a feature of communities of
consumption, but suggests that it could also have a negative impact on brand
communities:
“The power is not just shifting in terms of bargaining power, but also in
terms of influence on the products they have adopted. As virtual
communities of consumption build ties between devoted, loyal consumers
of products, scrutiny of and wariness towards the marketers of those
products heightens” (Kozinets, 1999).
It is, however, difficult to imagine that wary customers would sustain their membership
to a brand community they no longer trusted.
The concept of brand communities in cyberspace mirrors meeting places that already
exist in the real world, such as traditional business-to-business user groups, conferences
12

17. and exhibitions between vendors and consumers, where people meet and exchange
ideas, comments and gossip (McWilliam, 2000). These events tend to be occasional,
whereas the brand community seeks to establish a quasi-permanent dialogue with its
customers/partners. As Rheingold’s (1993) definition of virtual communities describes
the need for “enough people to carry on public discussions long enough” in order to
create a community, not all brands will be able to gather enough enthusiasts for a
sufficient amount of time to support a brand community.
Hagel and Armstrong (1997) measure the community’s success according to its direct
financial returns and only believe in a community as an intermediary. Used as a brand
building/re-inforcing tool, as suggested by McWilliam (2000), the success of the
community cannot be easily measured in terms of direct financial returns. The case for
brand communities is, therefore, more difficult to justify. Evans et al. (2001), however,
conclude from their research that:
“There appears to be commercial benefits for organisations providing virtual
communities on their web sites. Many of the respondents taking part in the
research fieldwork claim to have a more positive opinion about the owner of
the sites that they use and with many also wanting to use virtual
communities to communicate with the company itself” (Evans et al., 2001).
Virtual Communities as a Marketing Research Tool
Whether one considers virtual communities as powerful independent intermediaries or
as effective means of building brands, they are unanimously recognised as an extremely
efficient marketing intelligence system. Communities create an environment where
members feel safe to exchange information about their needs, tastes and behaviours
13

18. with other members that they have come to trust. In this environment “opportunities
abound, not only to broadcast one’s own private information, but also to partake
publicly in the private information of others” (Kozinets, 1999). This makes virtual
communities a ‘public-private hybrid’ (Kozinets, 1999), allowing marketers unique
public access to private and, therefore, richer information about consumers for the first
time. This interactive media enables marketers to sense market forces with
unprecedented accuracy and efficiency, overcoming the limitations of today’s one-way
research methods by providing a faster and more naturalistic research process
(McWilliam, 2000). By allowing and promoting member-to-member communication in
chat rooms or bulletin boards, where consumers can interact freely with each other,
marketers can follows consumers’ perceptions of and feelings about the brand in real
time (McWilliam, 2000).
However, as for any research in the cyberspace, maintaining the highest standards of
ethics must be of prime concern to community managers, not only for legal reasons, but
also to protect and strengthen the relationship with their members. Members exchange
information with each other in an environment that they have come to trust and despite
the fact that this environment can be defined as ‘public’, members potentially release
information about themselves that they wish to stay private. It is extremely difficult to
establish guidelines for ethical research on-line as there is a seemingly unavoidable
confusion over ‘public’ versus ‘private’ spaces on the Internet (Jones, 1994). However,
respect for the individual must prevail and always needs to be considered before using
information collected within the community.
14

19. 2.1.3Segmentation in Virtual Communities
As seen in the previous section, virtual communities gather together people with similar
interests, needs and behaviours. It is, therefore, important for marketers wanting to
extract value from these on-line gatherings to understand how they are organised. This
section reviews different attempts to classify virtual communities and within them, sub-
groups of members with homogeneous profiles.
Community Profiling
According to Hagel and Armstrong (1997), there are four different types of virtual
communities and each of them fulfil one basic need of their users:
TYPES OF COMMUNITY COMMON FOCUS
The common focus in these communities is the
sharing of a personal interest. This is where people
Communities of Interest
with the same passion, hobbies, professional interests
etc. come to meet together.
The common focus is the sharing of personal life
experiences. Senior citizens, people with cancer or
Communities of Relationships
aids, new parents etc. are good examples of these
communities.
The common focus shared in these communities is
entertainment and fantasy. Multi-User Dungeons are
Communities of Fantasy
virtual playgrounds for people engaging in role-play
and are a popular form of communities of fantasy.
Information about products and services as well as
Communities of Transaction the purchase and sale of products constitute the
common focus of these communities.
Hagel and Armstrong’s communities of transaction bear some similarity with
McWilliam’s brand communities, although they only envisage the building of
15

20. relationships between members and exclude the building of relationships between
members and vendors.
This classification system correlates with a study carried out by Evans et al. (2001)
which showed that individuals using virtual communities primarily communicate with
friends and work colleagues, in addition to people who share the same interests. The
former demonstrates a need for relationships, whilst the latter illustrates a need for
interest and transaction. Whereas Hagel and Armstrong (1997) argue that all
communities have the capacity to address all of these needs and that all communities
which succeed in doing so will generate revenue, Barnatt (1998) highlights that it is
unlikely that all companies will be able to build up their own community and satisfy all
four of these needs. For example, in the financial services sector, it seems unlikely that
many people would want to regularly visit a financial service virtual community as its
capacity to meet the need for relationships, interest and fantasy will prove somewhat
limited. Attempting to classify virtual communities is the first step towards
understanding their internal dynamics in order to design marketing strategies
appropriate for each of them. This is, however, extremely difficult. For example,
Kozinets (1999) focuses on what he calls ‘communities of consumption’, which he
defines as:
“A specific subgroup of virtual communities that explicitly centre upon
consumption-related interests. They can be defined as affiliative groups
whose on-line interactions are based upon shared enthusiasm for, and
knowledge of, a specific consumption activity or related group of activities”
(Kozinets, 1999).
16

21. This definition shows a close correlation between Kozinets’ communities of
consumption and Hagel and Armstrong’s communities of transaction. Kozinets (1999),
however, subsequently divides his communities of consumption into four distinct types,
‘bulletin boards’, ‘chat rooms’, ‘lists’ and finally ‘dungeons’ as described in figure 2
below. The latter are clearly what Hagel and Armstrong (1997) refer to as communities
of fantasy. Bulletin boards and chat rooms are the most popular meeting places for on-
line communities. One could view them as structural elements featuring in all types of
communities rather than types of communities per se. Kozinets (1999) puts forward an
interesting point, however, when he argues that boards, rooms, dungeons and lists each
define a type of community because they are the home of a predominant mode of
interaction (i.e. recreational, relational, informational or transformational). One can note
the correlation between Kozinets’ modes of interaction and Hagel and Armstrong’s
classification of communities (i.e. recreational mode for communities of fantasy;
informational mode for communities of interest; relational mode for communities of
relationships) which further highlights the importance of interest, relationships and
fantasy in the making of communities.
Social Structure
Loose Tight
Information
Exchange Boards Rings and Lists
Group
Focus
Social Rooms Dungeons
Interaction
Fig. 2 - Types of Virtual Communities of Consumption (Kozinets, 1999)
Member Profiling
According to Kozinets (1999), boards, rooms, dungeons and lists host four different
types of members depending on the intensity of their interest in the consumption
17

22. activity and the intensity of their ties with the community; the tourists, the minglers, the
devotees and the insiders (See figure 3).
• Tourists maintain only passing interest in the community and its consumption
activity.
• Minglers maintain strong social ties, but are only marginally interested in the
consumption activities.
• Devotees maintain strong interest and enthusiasm for the consumption
activity, but low social ties to the community.
• Insiders maintain strong social ties to the community and interest in the
consumption activity.
High Self-Centrality of Consumption Activity
Devotee Insider
Weak Social Strong Social
Ties to Ties to
Community Community
Tourist Mingler
Low Self-Centrality of Consumption Activity
Fig. 3 - Types of Member in Virtual Communities of Consumption
(Kozinets, 1999)
Unlike Kozinets (1999), McWilliam (2000) does not consider tourists to be community
members as they do not contribute to the life of the community. Their passive behaviour
does not indeed contribute to the social interaction that generates a sense of community.
18

23. Evans et al. (2001), however, argue that the role played by lurkers should not be
disregarded. They consider lurking to be a major activity within communities, to
facilitate ‘word of mouth’ and thus the impact of the message generated by the
participants, especially by community influencers. Besides, all influencers are likely to
have been tourists themselves at the beginning of their involvement in the community.
Indeed, Kozinets (1999) suggests that tourists attracted by salient content relating to
their particular interest become insiders and minglers when they develop their
knowledge in parallel with their social relations. According to Kozinets (1999), studies
show that virtual community members follow a similar pattern of behaviour. They start
by merely browsing for information to learn more about a particular consumption
interest; a car, for example, that they are thinking of buying. Consumers eventually find
sites with content and feedback from other consumers sharing the same consumption
interest. Finally, they make contact, exchange questions and ideas about the products,
bond and involve themselves in the community.
This view of the members’ stages of development is shared by Hagel and Armstrong
(1997), although they typically apply a more commercial perspective to it and classify
the member stages as follows:
• Browsers surf, come in and check out the community.
• Users or Lurkers, like Kozinets’ tourists, visit the community
occasionally, benefit from it, but do not contribute to the member-
generated content and do not purchase products.
• Builders are more passionate about the community and spend a lot of
time in it, actively contributing to the member-generated content. They
bind the community together.
• Buyers actively purchase products and services from the community.
19

24. Hagel and Armstrong (1997).
From a marketing perspective, it is the insiders (or builders) and the devotees (or
buyers) who tend to represent the most important targets for marketing:
“In virtual communities, insiders and devotees are the opinion leaders, they
set the standards and constantly assess and critic the corporations whose
products are important to them. Identify the insiders and devotees and target
them, share important information with them. Concentrate your efforts on
these people as you cannot reach everybody in the whole of the community”
(Kozinets, 1999).
This relates directly to the pareto rule that 80% of profits are made by 20% of customers
(Kozinets, 1999). It is, consequently, extremely important to study patterns of behaviour
in the community in order to identify the insiders and devotees. Kenny and Marshall
(2000) believe that for a destination or corporate web-site to make economic sense, it
must attract repeat visits from customers, with each visit adding ever-greater increments
of information to a customer profile. As described in figure 4, this is precisely what the
self re-inforcing dynamics of the ‘member profile’ loop provide (Hagel and Armstrong,
1997).
20

25. Data- Targeted
gathering transaction
capabilities offerings
Advertising Member Transaction
revenue Profiles volume
Advertising Targeted
click through advertising
Fig. 4 - The Member Profile Dynamic Loop (Hagel & Armstrong, 1997)
The better the members are studied, profiled and understood, the more successful the
segmentation and commercial targeting can be, thereby attracting more vendors and
advertisers resulting in greater member transaction. The customer database becomes
richer, thereby enabling members to be studied in more depth, profiled and better
understood:
“If communities are successful – as a measure of numbers of participants,
amount of time spent in the community and transaction activity – the
profiles they create on individual customers will yield rich data sets about
both individuals and customer segments. These data sets will create detailed
transaction histories, at the level of the individual customer, that can be used
to predict future opportunities to transact with a given customer” (Hagel and
Armstrong, 1997).
21

26. Hagel and Armstrong (1997), therefore, describe on-line communities as a mechanism
that will enable individually tailored marketing and lead to ‘the segment of one’. Whilst
agreeing that virtual communities provide a wealth of valuable information about their
members, Kozinets (1999) believes that, as a group of consumers, virtual communities
are less accessible to one-on-one processes. He, therefore, disagrees with Hagel and
Armstrong’s view that this information could be used for one-to-one marketing (Hagel
and Armstrong, 1997):
“Marketing must move beyond the individualistic to more cultural and collective
types of understandings” (Kozinets, 1999).
Kozinets (1999) emphasises that virtual communities, however united they appear, in
fact comprise a multitude of niches and micro-segments. He, therefore, advocates
fragmentation-based segmentation as the means to understanding the bases of customer
loyalty within communities. Fragmentation-based segmentation involves analysing a
community’s different ‘tasteworlds’ in order to identify the different ‘factions of
members’ that operate within it. According to Kozinets (1999) fragmentation-based
segmentation not only leads to the creation of new customer segments, but leads
marketers to new product enhancements and ideas.
The same argument is put forward by Hagel and Armstrong (1997), but this time as a
means to control the growth of the community. The notion of growing to a critical mass
before introducing commercial activities means that, operationally, community
managers run the risk of aggregating too many members. One member can only
communicate with a limited number of other members if meaningful relationships are to
emerge from this social interaction. With too many other members to share time with,
22

27. relationships become weak and the sense of community is lost. The organisers must,
therefore, allow membership to grow without losing the community spirit (Hagel and
Armstrong, 1997).
According to Hagel and Armstrong (1997), communities must have fractal depth, which
they describe as the degree to which a community can be segmented. In the same way
special interest groups are sub-entities of user groups in the real world, a community
should be segmented into smaller sub-communities centred on specific topics of interest
(McWilliam, 2000). Community managers can then maintain the focus and strong
member ties whilst allowing the community to grow. The risk attached to creating sub-
groups within a community is that the sense of belonging to a sub-faction leads to a
sense of clique. Insiders can, therefore, prevent newcomers from joining in and thus halt
the growth of the community. Hagel and Armstrong (1997) consequently introduce the
notion of fractal breadth, as opposed to depth, as a means of growth management and
an indicator of long-term expansion. They define fractal breadth as the ability to
expand beyond the community’s original focus by incorporating new sub-communities
with distinct but related topics in order to expand the reach of the community.
2.1.4Building and Managing a Community
Communities need to reach a critical mass of members before any commercial activities
can take place with success (Hagel and Armstrong, 1997). Indeed, Evans et al.’s (2001)
research shows that many members do not like participating in communities that are
perceived as overly-commercial. It is, therefore, important to focus on establishing
effective social interaction prior to introducing commercial activities. The volume of
communication and interaction generated between consumers is indeed where the value
of the community lies. The more communication and interaction, the stronger the
23

28. community (McWilliam, 2000). As the value of a community resides in the
relationships and ties between members more than in the members themselves, a
fundamental feature of virtual communities is that their value increases exponentially
even as they grow incrementally (Plant & Willcocks, 1999). In order to establish a
critical mass of members, marketers need to consider ‘community before commerce’
(Hagel and Armstrong, 1997) and meet the three challenges represented in figure 5:
The defining features of each of the above developmental stages, as described by Hagel
and Armstrong (1997), are outlined below. Additional contributions by other authors in
the literature are also included:
Lock in Traffic
(i.e make it difficult for
members to want to
leave once they have
joined)
Concentrate Traffic
(i.e. make members
stay longer on the site)
Generate Traffic
(i.e. get people to
pass through their
site)
Successful entry
(i.e. path to build a
critical mass of
members)
Fig. 5 - The Three Stages of Entry (Hagel & Armstrong, 1997)
24

29. 1. To generate traffic by:
• Using member-generated content to attract new members. Hagel and Armstrong
(1997) argue that the greater the member-generated content, the bigger the
attraction. This results in a greater number of members and, thus, more member-
generated content etc. (See figure 6). The self re-inforcing dynamics created by
member-generated content rely on the assumptions that content attractiveness is
the key source of member attraction and that the key source of content
attractiveness is member-generated content.
• Keeping the registration process simple in order to enable members to join in
more easily.
• Generating awareness by identifying real-world opinion and community leaders
who have a connection with the central focus of a specific virtual community
(i.e. magazine, head of association etc.). Awareness could also be generated in
the virtual world by having a presence on web sites that potential members are
likely to visit on a regular basis.
• Establishing partnerships with vendors with strong brands, existing customer
relationships and strong distribution capability.
25

30. Hours on-line Member-to-
member
interaction
Content Member-
Attractiveness generated
content
Marketing
effectiveness Members
Member churn
Fig. 6 - The Content Attractiveness Dynamic Loop (Hagel & Armstrong, 1997)
2. To concentrate the traffic by:
• Injecting an element of fantasy and relationships (i.e. the two needs which
generate the most traffic) by creating on-line games and competitions, bulletin
boards and chat rooms.
• Increasing the incentive for people to return by:
- Understanding members’ interests and needs through the tracking of usage
patterns. Watching clusters of conversations on bulletin boards and chat
rooms and creating sub-communities around more focused interests in
order to enhance members’ focus and deepen their interest.
- Making it easy for vendors to join the community. Members can then
access a broad range of competing and complementary vendors and can
26

31. quickly compare products and services. Members consequently realise the
benefits and savings that they can obtain from the aggregation of their
individual purchasing power.
- Establishing a calendar of special events to encourage repeat visits at
regular intervals. McWilliam (2000) also advocates using well-known
guests to take part in chat rooms and answer questions.
- Encouraging participation and making sure people are not ignored
(McWilliam, 2000). McWilliam (2000) emphasises the importance of
codes of behaviour. She suggests supervising volunteer managers, who
remove empty chat rooms, delete obscene content and repetitive questions
as well as answer, motivate and reward members. She views the ability to
do this successfully as one of the key skills required for community
managers. The challenge here is very similar to any organiser of events,
charity events, discussion groups and leaders of communities, such as
religious groups (McWilliam, 2000).
3. To lock the traffic in by:
• Fostering personal relationships between members via bulletin boards and chat
rooms. These personal relationships constitute strong barriers of exit, which
increase in strength with time. For a member to switch from his home
community to a new one, the other members he trusts and has bonded with in his
home community would need to switch too.
27

32. • Accumulating and organising member-generated content. This gives members a
sense of ownership and belonging which lay the foundation for loyalty.
• McWilliam (2000) also suggests devising a means of communication that
rewards individual members for their continued support and interest and also
recognises the passage of time and the strengthening of relationships.
Managing a community is a subtle balancing act. The organiser requires the ability to
allow the community to grow organically without being ‘overplanned’ or
‘overmanaged’ (Hagel and Armstrong, 1997). Ownership has to be given to the
members for the community to exist, therefore policing becomes a delicate matter as
much of the power is given to the members to police the community themselves. This
can, consequently lead to abuse. The Internet, as a medium, has revolutionised
communication because it has offered total freedom of speech and anonymity. These
two characteristics affect community management greatly (McWilliam, 2000). The
level of control that needs to be exercised is often difficult to gauge for community
owners.
Barnatt (1998) suggests that in some industries, building up a community from scratch
is not necessarily the most appropriate way in for marketers who want to reap the
benefits of hosting virtual communities. He believes that the number of regular visitors
in financial service virtual communities, for example, is unlikely to be sufficient to
justify the investment in establishing and managing a virtual community from scratch.
Instead, Barnatt (1999) proposes two alternative options. The first, ‘virtual community
almagation’, is for organisations with limited hope of gaining a critical mass of regular
members. An intermediary is created where various providers of related services can
28

33. gather in a community which then becomes a ‘shared industry interface’. Virtual
community almagation is similar to Hagel and Armstrong’s (1997) notion of fractal
breadth. They do not, however, consider this as a valid starting point, but rather as the
indication of the community’s potential for growth beyond its original critical mass of
members.
The second option put forward by Barnatt (1999) is ‘virtual community inhabitation’.
This involves offering your product or services to an existing community which has
achieved long-term members’ affiliation.
“Consider J&J’s campaign for Clean and Clear, a skin care product line for
teenage girls. Resisting the temptation to create yet another ill-fated destination
web site, J&J establishes a presence within pre-existing on-line teen communities.
The company gives teenage girls, many of whom spend their free time chatting
on-line, the chance to send one another talking electronic postcards that offer free
skin analysis and a sample of Clean and Clear” (Kenny & Marshall, 2000).
Barratt (1999), hence, argues that not all companies need to establish and manage their
community from scratch, but suggests that all companies should have a presence in
communities.
29

34. 2.1.5Drawing Revenue from the Community
The main revenue streams available to community hosts are as follows:
SOURCE OF TYPE OF
DESCRIPTION
REVENUE REVENUE
Subscription A fixed monthly-charge for participation in the
fees community.
A charge based on the number of usage hours, the
Usage fees number of pages accessed or a combination of the
Users two.
Content A charge for downloading specific information, such
delivery fees as a magazine article.
A charge for specialised services, such as a
Service fees
notification service.
Advertising Banners, e-mail, icon-type advertisements.
Transaction Charge to the vendor on each transaction.
Vendors and commission
Sale or rental Sale or rental of lists of members’ profiles to
Advertisers
of member vendors.
profile
(Hagel and Armstrong, 1997)
As on-line consumers are likely to develop long-lasting relationships with the
community organisers if they are treated as special members with special prestige and
benefits, Kozinets (1999) regards the membership or subscription model as the most
pertinent for virtual communities. The subscription model, however, makes it more
difficult for members to join and can, therefore, impede membership growth. Hagel and
Armstrong (1997), consequently, recommend that community organisers focus
exclusively on revenue generated from advertising and transactions in order to avoid the
undesirable dampening effect on member acquisition created by subscription or usage
fees. This is supported by research from Evans et al. (2001), which suggests that many
users would not be willing to pay a subscription to become a member of a virtual
30

35. community. Furthermore, the same research indicates that on-line advertising can be
distracting and have little effect on people (Evans et al., 2001). These conclusions,
however, were based on advertising on common web-sites as opposed to virtual
community sites. Analysing the impact of carefully targeted advertising with a high
degree of relevance to the community focus could lead to a different conclusion.
Besides, when consumers are allowed to purchase a product by pressing on an icon in
the advertisement itself, the distinction between advertising and selling becomes blurred
from the customer’s point of view (Barnatt, 1998) and the impact of advertising alone
becomes difficult to measure.
Revenue from advertising is also difficult to generate before a critical mass of
community members is reached, which creates a near-term economic challenge for
community hosts (Hagel and Armstrong, 1997). In the early stages of community
development, subscription and usage fees are the sources of revenue immediately
available to the community organiser, but are also likely to slow down the growth
process:
“One revenue source immediately available to the community organiser is
member fees (especially subscription or usage fees), which can be charged
from the first day. However, charging member fees is likely to slow growth
of membership substantially. That is turn could delay readiness to tap into
other attractive revenue streams: advertising and transaction commissions”
(Hagel and Armstrong, 1997).
On the other hand, attractive revenues upon which long term profits can be built come
from advertising and transaction commissions. These sources of revenue are,
31

36. nonetheless, out of reach until the number of members is high enough to attract
advertisers or to generate a sufficient number of transactions. Revenue generation by
virtual communities in the near term is, therefore, likely to be quite limited (Hagel and
Armstrong, 1997).
When a sufficient number of members is reached, revenue from advertising and
transactions can, however, grow extremely fast due to the re-inforcing effects of two
cycles. The first is the ‘member profile’ loop (Hagel and Armstrong, 1997). As
previously discussed, this loop has the power to yield a better understanding of
members’ needs and behaviours; the better the members are profiled, the more
successful segmentation and commercial targeting can be (See figure 4). Importantly,
this loop also results in an increase in the revenue generated through commission and
advertisements because efficient segmentation and commercial targeting will attract
more vendors and advertisers. Revenue from commission on transaction can be further
enhanced by the second of these cycles, the ‘transaction offering’ loop (Hagel and
Armstrong, 1997), which advocates the widening of the commercial offering within the
community (See figure 7). As the portfolio of products and services available to
members gets broader, more members are attracted and more transactions are carried
out. More vendors are then themselves attracted by the increasing pool of consumers in
the community and, therefore, the more varied the portfolio becomes (Hagel and
Armstrong, 1997).
32

37. Vendor-
Vendors in
marketing
community
spending
Vendor-
marketing Transaction
effectiveness Offerings
Members in
community
Attractiveness Member
to vendors willingness to
spend
Fig. 7 - The Transaction Offering Dynamic Loop (Hagel & Armstrong, 1997)
2.2Virtual Communities on the Wireless Web
Networked computers have significantly reduced the limitations of geography and time
that people face when trying to communicate with one another. Wireless networks
remove any remaining limitations in that they offer a means of communication that is
truly ‘anywhere, anytime’. The imminent introduction of new technology, such as
GPRS or 3G, should give birth to what Kenny & Marshall (2000) term the ‘ubiquitous’
Internet, i.e. an Internet accessible from anywhere at anytime via wireless telephones,
palmtop or laptop PCs with wireless connections. Virtual communities have already
been built on such wireless networks, using SMS or WAP technologies or simply voice:
“Mobile users typically join a community via an interactive voice responder
(IVR) server, answering a few profile questions to determine preference. A
registration message and micro-tutorial is then sent back. The user responds
33

38. with anonymous nicknames and can begin to use the service. In SMS-based
forums, users have simple commands which allow them to search and
navigate using keywords, themes, nicknames, geographical areas or search
words to find discussions on shared interests. Users can browse the text
messages available and post their own, replying on a many or one-to-one
basis. In the case of a voice-based forum, the messages are voicemails left
under the user’s nickname, to which users listen and respond again, to the
individual or the community at large. These features support the
development of relationships and transactions, allowing users to progress
from an interest in, say music, to buying or swapping discs, and from
finding out about events in their city to meeting up”
(Traisnel, 2001).
An ethnographic study recently carried out throughout Europe, the USA, Asia and
Australia to analyse the relationship between people and their mobile phones revealed
that, throughout the globe, people want devices that make them feel wanted, needed and
socially accepted (The Context-Based Research Group, 2000). People, therefore, want a
mobile phone to fulfil their need for social identity and social interaction. As
highlighted in the first part of this literature review, the need for social interaction is
also central to virtual communities. There is, therefore, a strong similarity between the
need for mobile telecommunication and the attraction of virtual communities. The
wireless Internet is, hence, likely to be extremely fertile ground for the growth of virtual
communities:
“Building communities and strengthening the experience of doing things
together will be an increasingly strong driver for applications of the mobile
Internet“ (Andersson, 2000).
34

39. Kenny and Marshall (2000) argue that successful marketing on the wireless Internet will
not aim to bring the customer to the site, but alternatively take the message directly to
the customer at the point of need:
“The companies that can anticipate and meet the real needs of their
customers based on where they are located, what they do, and which
communities of interest they belong to, will be valued partners. The
companies that cannot will be dismissed as pesky nuisances” (Kenny and
Marshall, 2000).
Kenny and Marshall (2000) further suggest that the emergence of the ubiquitous
Internet will see the birth of a new kind of intermediary; the mobilemediary:
“The mobilemediary will be able to break into the value chain at any point,
bringing information and transaction capabilities to customers whenever and
wherever they are ready to buy a product or a service” (Kenny and
Marshall, 2000).
Giving customers what they want when they are likely to want it will, however, be a
difficult balancing act to achieve. Drawing the line between spamming (i.e. the mass
mailing of unwelcomed messages) and delivering tailored messages and information to
customers at the point of need presents a challenge. Marketers will need to avoid the
perception of harassment, which comes with unsolicited, albeit timely, offerings from
unknown and, therefore, untrusted sources:
35

40. “Good information is bundled information chosen and determined by the
user. ‘The spam should be kept in the can’” (The Context-Based Research
Group, 2000).
Instead, the Context-Based Research Group (2000) suggests that applications or
services that connect people with common interests through shared enthusiasm are
desired because they give people the ability to interact opportunistically. Wireless
connections will give customers the opportunity to contact trusted virtual friends to
obtain advice whenever and wherever needed. Virtual communities indeed have the
potential to be strong mobilemediaries because any solicitation coming from within the
community will be treated with a much higher level of tolerance from the members.
Hagel and Armstrong (1997) point out that the churn rate in wired communities is high:
people come and go and surfing rules. Cellphone users are more impatient than Internet
users and do not benefit from the user-friendliness of the PC’s big screen and keypad:
the paradigm here, therefore, is not surfing (Rao, 2000). The community will add value
to their members by being a one-stop shop offering fast and reliable access to rich and
trusted information without having to surf for it.
The author anticipates that the ubiquity offered by mobile telecommunication will
impact directly on the dynamics of virtual communities. Social interaction will not just
take place when all members are sitting at their PC; it will be continuous and triggered,
as well as fuelled, by the ever-changing physical environment in which each member is
located. The opportunity for people to participate in an on-line community will radically
increase as they will always be ‘on’ and will not need to own a PC to join in. Their
wireless device will be their unique gateway to the community (Cothrel, 2000). The link
between real-life situations and virtual social interaction will increase the number of
36

41. opportunities to interact and the variety of topics of conversation. In the train when
commuting, in a coffee shop while waiting for someone, any idle moment in the day
becomes an opportunity to interact with members of the community; an everyday event
or a decision can become a reason to do so. Hours on-line will also increase
significantly:
“The basic mobile phone provides an interesting medium for realising
communities. Its combination of voice, data communication and compact
size make it an intimate companion, which can be called on readily when
there is free time or a desire to communicate” (Traisnel, 2001).
Similarly, the author anticipates that the speed with which relationships will be
established and the depth of these relationships are likely to increase as members will
have more things to talk about and will talk about them more frequently. Furthermore,
interaction will no longer be restricted to text; voice will also be a means of exchanging
messages. This will enrich the communication as intonations, hesitations and laughter
will be heard. This might, however, engender some problems as it will reduce
anonymity; accents, for example, could lead to prejudices. Finally, the propagation of
‘word of mouth’, as well as the update of information, will be faster, giving customers
greater knowledge and, therefore, power.
37

42. 3.Field Work
3.1Research Design
This project aims to explore the potential of virtual communities to be the basis for a
profitable business model for the mobile Internet. For this purpose, the study focuses on
the following three questions:
• How do virtual communities function on the wireless Internet as compared to those
on the wired Internet?
• What are the practical issues involved in analysing behaviours, needs and tastes in
order to segment and target community members?
• What are the practical issues related to generating revenue?
This project is, hence, concerned with collecting ideas, stories and insights by tapping
into the experience of people who manage mobile and on-line virtual communities. This
research can, therefore, clearly be categorised as ‘exploratory’, according to the
following definition:
“The major emphasis in exploratory research is on the discovery of ideas
and insights” (Churchill, 1999).
Marshall & Rossman (1995) in Remenyi et al. (1998) argue descriptive or exploratory
research is best carried out using qualitative research methods. It is evident from the
literature that definitions of qualitative research emphasise its superiority in dealing
with data that is not easily quantifiable:
38

43. “By the term qualitative research we mean any kind of research that
produces findings not arrived at by means of statistical procedures or other
means of quantification. It can refer to research about persons’ lives, stories,
behaviours, but also about organisational functioning, social movements or
interactional relationships” (Strauss & Corbin, 1990).
“Qualitative research is research based on evidence that is not easily
reduced to numbers” (Remenyi et al., 1998).
Considering the nature of this research and its objectives, it is unlikely that the evidence
collected will be easily quantifiable. Qualitative methodologies have, consequently,
been applied to both data collection and analysis.
Finally, qualitative research methods are also useful when subject matter is not well
understood (Remenyi et al., 1998). This is of particular relevance to wireless virtual
communities as they are a social, interactive and complex field of study, which is at an
embryonic stage of evolution and, hence, constitutes uncharted territory. Furthermore,
the early stage of development of these types of mobile virtual communities also
implies that the sample of wireless community hosts will not be large. Carrying out
statistical research would, therefore, not necessarily yield representative results.
3.2Data Collection: The Choice of In-depth Interviewing
Several data collection techniques are associated with qualitative research. From these
methods, ‘in-depth interviewing’ or more specifically ‘semi-structured, undisguised
interviewing’ was chosen for this project as it is the method best suited to exploratory
research (Churchill, 1999; Remenyi et al., 1998). Community hosts manage their
39

44. communities in different ways, therefore, flexibility was required in the gathering of
data. In-depth interviewing offers tremendous scope and flexibility in that it allows the
respondent to raise topics and issues of particular importance to them, in addition to
those covered by the researcher.
3.3Reliability and Validity
A number of measures have been taken throughout this project to safeguard the
reliability as recommended by Remenyi et al. (1998). The research design, data
collection and interpretation have been systematic and all attempts have been made to
ensure the transparency of this. Retest reliability has also been allowed for by providing
a clear account of the method used and the data collected. This should enable the data to
stand independently, so that another researcher could analyse it and reach the same
conclusions.
Similarly, all attempts have been made to protect validity. The limitations and
boundaries of the study and the location of the sample are clearly indicated (Mason,
1996). In order to demonstrate the validity of the method used to generate data, the
researcher has emphasised the match between the research method and the research
objectives, attempted to relate the data to the current literature and presented the
selection criteria used to ensure the relevance of the research sample (Mason, 1996).
Finally, to demonstrate the validity of the interpretation of the data, the researcher has
made all efforts to clearly explain how that interpretation was reached (Mason, 1996).
40

45. 3.4Data Analysis
The primary data collected during the interviews was analysed using the ‘Framework’
method, which has been developed by the Social and Community Planning Research
Organisation (Ritchie & Spencer, 1994). The ‘Framework’ method involves a number
of distinct, although highly inter-connected stages (Ritchie & Spencer, 1994). Whilst
these stages will be listed in a particular order below for ease of presentation, they are
not to be viewed as denoting a purely mechanical process as they allow for flexibility
and the re-working of ideas. The technique relies on the analyst’s ability to elicit
meaning and identify connections, suggesting an element of subjectivity in the
conclusions drawn, which naturally impacts upon the reliability of the approach.
However, as stated above, all attempts to allow for retest reliability have been made.
The approach involves a systematic process of sifting, charting and organising the data
according to key issues and themes. The five inter-connected stages to the ‘Framework’
analysis are as follows:
• Familiarisation - whereby the researcher gains a sense of the material as a whole
and becomes familiar with its range and diversity. In this study, familiarisation was
born out of the transcription of the recorded tapes and extensive reading of each
transcription
• The identification of a thematic framework - whereby the data is examined and
referenced using the recurrent themes that emerge from it
• Indexing - whereby a classification system or index is systematically applied to the
data in its contextual form
41

46. • Charting - during which sections of the data are lifted from their original context
and re-arranged according to a thematic reference, thereby allowing a picture to be
built up of the data as a whole
• Mapping and interpretation - which describes the process by which the range and
pattern of views in the data are assimilated and interpreted as a whole
The findings and associated recommendations resulting from the mapping and
interpretation stage are reviewed in the next section.
42

47. 4.Findings
The aims of this research project were fourfold: to explore how virtual communities
function on wireless networks as compared to on-line, to investigate the practical issues
involved in analysing members’ behaviours and needs, to evaluate segmentation and
targeting within virtual communities, and, finally, to analyse how revenue can be
generated from wireless communities.
This section presents a review of the common findings from the on-line and wireless
communities studied for each of these objectives in turn. A table detailing quotations in
support of the researcher’s interpretation of the data is provided for each finding. For
confidentiality the names of the interviewees and their communities have been replaced
with R1 to R12. Other company and product names have also been abbreviated to their
first initial.
4.1Comparison between the Management of On-Line Virtual Communities and
Wireless Virtual Communities
All the managers interviewed displayed a similar level of experience with the virtual
community model (i.e. approximately 1.5 years). In order to assess their knowledge of
the concept and the relevance of their feedback, they were asked to give their own
definition of a virtual community. The definitions given demonstrated a sound and
consistent understanding across the sample of interviewees and made reference to the
defining features detailed in the literature: a) a place to meet for b) a group of people
with c) a common interest and d) where people are given the means to communicate
with one another:
43

48. COMMUNITY MANAGEMENT
Relevance
QUOTATIONS TO SUPPORT
of Feedback
“It means a meeting place, an area for people to come together,
people with a common interest or people who would like to
develop a common interest and to come together and to be able to
bond in a comfortable environment” (R.5 (on-line)).
Managers’
“A community is a group of people who have a shared interest, it
Definitions could be a hobby, it could be anything but, and I think that is the
of a Virtual most important, they are given the opportunity to get in touch with
each other” (R.7 (wireless)).
Community
“For me, the community consists of two things. One, it’s a hard
core group of users […] and then the second factor is that you give
them the opportunity to talk to you and to each other” (R.4 (on-
line)).
When analysing the data relating to the creation of the communities under study in this
research, a model of community development common to both on-line and wireless
communities emerges from the samples collected. This model consists of the following
four key stages in the management of the community members:
1. Attracting Users
2. Engaging Lurkers
3. Safeguarding Conviviality
4. Rewarding Heavy Users
Elaboration of each of these developmental stages is presented below:
1. Attracting Users
44

49. In order to make themselves known to their target group, the communities studied have
either associated themselves with a pole of attraction for the target group or used an
initial advertising campaign:
COMMUNITY MANAGEMENT
Attracting
QUOTATIONS TO SUPPORT
Traffic
“We have a unique relationship with U., they are in a way our
sister company and the students are sent through them to us” (R.5
(on-line)).
“We are a joint venture between ‘R.4’ and T.. So, T. has a
somewhat similar demographic, female audience and obviously
we leverage our position in terms of that relationship to get
Partnership
ourselves into their consciousness as much as possible” (R.4 (on-
with a Pole line)).
of
“People come to ‘R.3’ in many different ways. ‘R.3’ is a
Attraction
recognised brand name” (R.3 (on-line)).
“We pushed ‘R.9 ’ very hard to ‘C.’ users saying, “Hey, if you
like doing this [C.], you’re gonna love this [R.9 ]!” So we pulled
them across to there” (R.9 (wireless)).
“At the start, we did an initial 2 weeks of advertising by fly-post
around London. London only. We had a small radio broadcast on
Initial Kiss FM for two weeks and that was it. That got some people to
the site” (R.2 (on-line)).
Marketing
Campaign “I think, originally, a lot of people are drawn to the site for things
that we have sent out, like competitions, like viral marketing
things” (R.5 (on-line)).
COMMUNITY MANAGEMENT
45

50. Attracting
QUOTATIONS TO SUPPORT
Traffic
Initial “They’d spent a lot of money on quite a flashy marketing
campaign” (R.1 (on-line)).
Marketing
Campaign
(continued)
However, beyond the initial marketing efforts to generate traffic, most of the on-line
community managers emphasised their reliance on ‘word of mouth’ to attract people to
their site as opposed to sustained advertising:
COMMUNITY MANAGEMENT
Attracting
QUOTATIONS TO SUPPORT
Traffic
“A great deal of the attraction is triggered by word of mouth” (R.3
(on-line)).
“I think that a lot of it is about word-of-mouth. Our marketing, at
the moment, has not been very good up until this point” (R.5 (on-
line)).
Word Of “Word of mouth and the odd search engine, but mainly word of
Mouth mouth” (R.2 (on-line)).
“We are not advertising. Word-of-mouth is very important” (R.11
(wireless)).
“It has marketed itself, e-mail, word-of–mouth […] The mobile
channel has not had any marketing budget for the past 9 months, but
also we do not need it” (R.8 (wireless)).
2. Engaging Lurkers
Once people have been attracted to visit the community web site, the next challenge is
to encourage them to take part and make their first contact:
46

51. COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
“That is a challenge, getting people to communicate and take some
The
ownership […] If you are lurking, you’re just looking, there is
Challenge
nothing we can do” (R.2 (on-line)).
In order to succeed at this stage, careful consideration must be given to the user’s first
impression when entering the site. Consequently, it is extremely important to present
attractive and relevant content, as well as to show that the site is a popular meeting
place. People are attracted to communities by their desire to find a space where they can
meet and interact with other like-minded people or people sharing similar interests.
They will, therefore, leave straight away if they enter an empty space:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
“To give people a feel that this was a place where they could come
to pick up information before they found it elsewhere or different
Appropriate
information than they would get elsewhere” (R.1 (on-line)).
and
Attractive “To actually drive membership, which is a slightly different
question to traffic, the challenge there is to get things up on the
Content
site that people want to become a member for” (R.4 (on-line)).
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
Impression “If you go into a chat room and there is nobody there, it is pretty
bad” (R.2 (on-line)).
of
Popularity
47

52. “You might set up a subject on a notice board, but you have to be
quite ruthless with checking whether it’s caught on. If it’s not, pull
it out” (R.1 (on-line)).
“That’s a worry for us if people find themselves in a situation
where they think they’re the only person there, then they’ll leave”
(R.9 (wireless)).
The editorial team evidently plays a key role in triggering participation and calls upon
tools, such as provoking questions, topical subjects, polls and competitions, to
encourage visitors to make the initial contact:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
“You need someone in there kind of agitating, throwing things
about” (R.4 (on-line)).
Promote “So you would write pieces, get people to respond to it, do
competitions, do as many traditional tools of the trade as it were
Participation
to kick things off” (R.1 (on-line)).
and Stimulate
Interactivity “What we have got to try and get you to do is to click and chat or
somewhere in the text, put a text that says, “What do you think?
E-mail us”. At some point you have got to convince the users to
take action, to do something. That’s the key” (R.2 (on-line)).
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
Promote “Polls are excellent for just keeping people engaged; member of
the day, gaming fan of the day, quote of the day or best comment
Participation
of the day from a discussion board.” (R.10 (wireless)).
and Stimulate
Interactivity “I tried to kick start the community more by putting in some
48

53. (continued) messages. It does work” (R.8 (wireless)).
The communities under study have also used member-generated content to complement
the content published by the editorial team in order to stimulate interactivity between
members. Content received from individual members, for example, is broadcasted back
to the rest of the community and member-generated content is transferred between the
different sub-communities that occupy the community site:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
“We try to convert the e-mails because they are just one-to-one,
Member-
“Let see what everybody else thinks, can you post your
Generated comments on the discussion boards?” to try and get something
with interactivity” (R.2 (on-line)).
Content
Cross- “Sometimes, we have conversations going on and then we’ll take
that topic and put it on the message board for the rest of the
Pollination
community to answer and to discuss and that will again prompt
Between
more conversations about it within the chat” (R.5 (on-line)).
Sub-
Communities
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
Cross- “You might set up a subject on a notice board […] See what else
is going on in other areas of the web site that you might be able
Pollination
to feed into or pull across” (R.1 (on-line)).
Between
Sub-
Communities
(continued)
49

54. Once a user attempts to join in, the data emphasises the importance of ensuring that they
are never ignored:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
“If you go into a chat room and there are forty people there and you
say, “Hi, everybody” and they all ignore you, then you have an
issue” (R.2 (on-line)).
“Everybody is very open and very chatty and tries to include the
others”( R.5 (on-line)).
Sense of “When someone joins the community or the forums, first of all they
Inclusion get a welcoming message saying, “Welcome to the forum, this is
the way you have to do it”. You are not left on your own” (R.11
(wireless)).
“We’ve now implemented what we call a ‘hostbot’, which is an
automated robot, which wanders around the community, looking for
people who are trying to chat with somebody, but have not got a
response” (R.9 (wireless)).
At this stage of community development, the findings indicate that the visual
stimulation created by the richness of the content plays an important role in enticing
lurkers to engage with other community members:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
Visual “I was really impressed with AOL, it spoke to you, it had wonderful
sounds and colourful screens. I showed my mum AOL, she liked
Stimulus
that. She could see it, she could visualise it in her mind easily,
whereas I was young enough, I think, to map this Internet to myself
and my mum was not able to, “Look, this is a community. This is a
discussion forum” and my mum said, “Yes, but it is just text”. But
I could view the community through the text and she could not
50

55. because it was just text. But with AOL, they actually put nice
folders, lots of chat icons and forum icons” (R.2 (on-line)).
The community managers highlight, however, that rich and attractive content cannot be
downloaded or displayed on mobile phones due to the limitations of current wireless
technology and the user interface of cellular handsets. SMS technology is limited to 160
characters of text. The speed of data download with WAP technology is extremely slow
and the graphics that can be displayed on the screen of current mobile phones are small,
black and white and of poor resolution. The current wireless technology cannot,
consequently, generate strong visual stimuli. Furthermore, text restriction makes it
difficult to demonstrate popularity:
COMMUNITY MANAGEMENT
Engaging
QUOTATIONS TO SUPPORT
People
Inadequacy “I guess the two things are the lack of visual stimuli on a wireless
device, particularly as we live in a visual world. It is quite
of Current
important when we talk about communities. So that’s one issue
Wireless
that we had to think about and the second one, which is a much
Technology more practical one, is that a wireless device, it’s a lonely pursuit,
it’s just you and your mobile phone. How do I know there’s
anybody out there in that world? Because there is no way of
seeing, there is no way of knowing. When I’m on the web, I can
tend to see activity, but if I’m on my phone, I don’t see activity.
These two things are quite important for us to convey to people.
One, because visual stimuli helps us set the environment the
community is operating in. Two, people only want to join
51

56. something when there are lots of other people on board, so we
have to make them believe and understand that there’s a lot of
people out there. That can be quite hard to do on a mobile phone
with text messaging” (R.9 (wireless)).
“In terms of the volume that you can send over SMS, the
information has to be concise and to the point and relevant, which
is a challenge for a content-rich site as we are. Not a lot of our
content per se is suitable for SMS” (R.4 (on-line)).
Virtual communities are born out of groups of people using ‘many-to-many’ interaction
in a public space, where they can choose who to meet, develop relationships and bond
with one another. It is, therefore, vital to enable members to locate each other by
creating a comfortable environment in which they can interact. Although the data shows
that it is technically feasible for innovative and resourceful community hosts to enable
members to find one another in today’s wireless space (i.e. without having to visit an
on-line web site), wireless technology and devices do not currently allow community
managers to make this space user-friendly and easily accessible:
COMMUNITY MANAGEMENT
Community
QUOTATIONS TO SUPPORT
Development
Inadequacy “When we set up the mobile chat service, we really wanted to be
of Current absolutely only mobile-based, with no web site. We recognised
Wireless that this was just going to be impractical and we would be doing
Technology ourselves a disservice. So, we have created a web site, which, I
think is a more important point than we originally thought it
(continued) would be” (R.9 (wireless)).
“For finding other members the on-line side of things is
essential. There is no way from your phone to actually find other
members […] The main problem is that you can’t really browse
a profile information about a user from a handset and if I want to
52

57. look through one hundred users to find someone else who likes
monkeys, for instance, I’ve got to look through all these pages
and find someone that sounds about my age, that is also into
monkeys and, maybe, likes music I do […] Once I’ve got my
group of friends, I can continue to have conversations with them
wireless, I don’t need to use the web again. But to select the
people you’re going to talk to, the on-line side of things is
essential at the moment” (R.6 (wireless)).
“In order to establish a community, you need four or five key
things. You need someone to be able to define their identity that
can then be shouted at to others. To define your identity on-line
by filling in a few forms about yourself, saying a few things is
fine. You can define one’s identity in an SMS, but it’s hard. […]
You then, within a community, have to enable people to find one
another. And what are the tools that enable that? So, I described
‘Honey finder’ which is equivalent to the web matching-up
system, but you can have less criteria on WAP because it takes
COMMUNITY MANAGEMENT
Community
QUOTATIONS TO SUPPORT
Development
Inadequacy too long to click etc.. ‘Friend finder’ the same, I want people into
of Current clubbing who like garage music. So, you can on ‘R.10’ on-line
Wireless define these things. You can on ‘R.10’ , on WAP, you can do
Technology some of it, SMS, how much can you do? ‘Find me a friend’
that’s about all you can do and maybe a couple of criteria. So,
(continued) you need ‘identity matching’ and then you need
‘communication’ once you’ve been matched: ‘One-on-one’,
‘one-on-many’, ‘many-on-many’. SMS is great for ‘one-on-one’,
‘many-on-many’ is a nightmare. If you’ve been in SMS chat
rooms where you get blitzed, it’s a nightmare” (R.10 (wireless)).
“I get lots of very, very strange text messages and some of them
are an equivalent of the one step beyond lurking. They’re the
kind of, “Hi, I’m new to ‘R.6’. Who are you? Does this work?”
53