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ELECTRONIC COMMERCE • • • • • Strategies Regional markets Risks Language issues Other cultural issues • Legal/regulatory issues Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin. MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 1 Strategies • Exclusionary – Solely domestic • Inclusionary – “Passively” international – “Glocals” (adaptive approach) – “Globals” (standardized approach) Middle ground Completely standardized (“Globals”) MKTG 376 Completely adapted LECTRONIC COMMERCE Lars Perner, Instructor 2 Evaluating Markets • Economic viability – Income distribution and averages – Segment potential • Internet readiness – “Least Internet Ready Areas of the World” (LIRAs) (35% of World population) – “Internet Ready Areas of the World” (IRAs) (50)% – “Internet Leaders” (15%) MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 3 Internet Readiness Indices • Economist – Approximately 100 measures in 6 categories • Technology infrastructure • General business environment • Consumer and business adoption of e-business • Social/cultural conditions affecting Internet use • Availability of ebusiness support services • Information and Telecommunications (ITC) • International Telecommunications Union – 26 indicators-e.g., • Technology infrasturctures • Market conditions MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 4 Internet Readiness Criteria • Infrastructure availability – Performance – Types of access available • Cost of access – Metered – Unmetered – Dial-up issues • Proportion of population with access MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 5 LIRAS • • • • • • • MKTG 376 Southern Mexico Andean countries Most of Brazil Sub-Saharan Africa Remotest former Soviet Republics Laos, Cambodia Chinese interior LECTRONIC COMMERCE Lars Perner, Instructor Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin. 6 IRAs • • • • • • • • MKTG 376 Coastal India Parts of Brazil Northern Mexico, Mexico City Hungary Estonia Malaysia Former Soviet Republics closer to Europe Parts of China (e.g., Shanghai, Hong Kong) LECTRONIC COMMERCE Lars Perner, Instructor Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin. 7 Internet Leaders • • • • • • • • MKTG 376 U.S., Canada Western Europe Japan Australia New Zealand Taiwan South Korea Israel LECTRONIC COMMERCE Lars Perner, Instructor 8 Countries with Largest Absolute Number of Internet Users Number of Internet Users by Country Number of Internet Users 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 St at es C hi na Ja pa n In U Ge di a ni te rm an d Ko Ki n y re gd o a (S m ou th ) Ita l Fr y an ce Br az R il us s C ia an In ad do a ne si a Sp a M in ex Au ic o st ra l Ta i a N et iwa he n rl a nd Po s la n Tu d rk ey ni te d U Country MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 9 Countries With the Largest Absolute Number of Users Sources: World Bank, Nielsen MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 10 Country Internet Penetration Rates by Per Capita GDP 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 Note accounting issues! 0.1 0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 Source: Nielsen. MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 11 Online Language Communities • Sizable group of people communicating in the same language • Not proportional to percentage of off-line speakers – Demographics of Internet users within a country – Willingness to use English or other language sites MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 12 Risks in International Expansion • • • • • • Over-expansion Brand dilution Over-estimation of revenue Under-estimation of costs Underestimation of competition Regulations MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 13 Area Issues • Europe – High penetration rates; access outside home – Strong economies – Low credit card use – Competing technologies • Interactive TV • U.S./Canada – Canadian specialty shopping – High penetration rates – Weakening U.S. dollar; strengthening Canadian dollar • Mexico – Growth potential – Low credit card penetration MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 14 More Regions • Asia/Oceania – China/Japan • Use of wireless technology for other purposes • Low rates of credit card use – South Korea • High Internet penetration rate (45%) • Faster high speed access than in the U.S. – China • Modest economic power – Australia/New Zealand • English language use • Relatively similar culture to U.S. • High shipping costs Lars Perner, Instructor – Japan • Internet ordering through local merchants MKTG 376 LECTRONIC COMMERCE 15 Language Issues • Prior to 2000, 96% of web sites were estimated to be in English, the “first language” of 6% of the World population • 40.2% of online users are estimated to speak English to some extent • 2000: Non-English speakers became majority of Internet users MKTG 376 • 75% of Europeans are multi-lingual; 90% of these include English • Dangers of U.S. English – British English is international standard – “American” often perceived as misspelled – Use of slang • Lesser distance to British English than to other European languages Lars Perner, Instructor LECTRONIC COMMERCE 16 Language Display • Single-byte (Latin-based) vs. doublebyte languages (Cyrillic, Arabic, Chinese, Japanese, Korean) – Characters may not be displayed correctly (“????” in Internet Explorer) – Conversion software – Brower adaptation may not be “backwards compatible” with other software MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 17 Translation • Whole vs. part – FAQ, feedback forms, product specifications, warnings, shopping cart info, legal • Quality of translation – Superficial – “De-centering” (“back translation) • English language instruction as a product MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 18 Cultural Issues • Color – Black as background • “Stylish” in U.S. • “Unlucky” in Asia, Europe, Latin America • Symbolism – Dogs as pets – Numbers • “Unlucky” numbers – 4, 9, 13 (Japan) – 4, 14 (China) – Red as a “lucky” color in China but can be over-used – White and green are “unlucky” in Cina MKTG 376 • “Lucky” numbers – 1, 8 (China) • Formality of communication LECTRONIC COMMERCE Lars Perner, Instructor 19 More Cultural Issues • Measurement issues – Metric vs. U.S., British systems – Clothing sizes • Offensive content – Specific body parts – “Revealing” content – Gestures • Representation of numbers – 1,000.00 vs. 1.000,00 – Dates MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 20 Government Issues • Regulation – Extraterritorial laws and regulations – Privacy • “Safe Harbor” procedures • Extent of regulation – Protection of small businesses – Limitations on online advertising (China) – Encryption restrictions • Taxation • Censorship • Fraud Lars Perner, Instructor MKTG 376 LECTRONIC COMMERCE 21 International Internet Users • Finding buyers – Local search engines • Advertising • Search engine optimization – Mailing lists from catalogs prior to Internet entry • Demographics – Gender ratios – Socioeconomic status of users MKTG 376 • Access speed – High broadband access rates in Europe and Korea • Out-of-Home Access – Portable systems • Web enabled cell phones/PDAs • Solar/battery powered devices for developing World • Pirates and piracy Lars Perner, Instructor LECTRONIC COMMERCE 22 Selected Issues • Internet governance – Running of “top domain” and IP numbering systems – Fear of constraining influences if countries with reputations for censorship participate • Gambling – U.S. based • Indirect ownership of foreign sites – Foreign based – Loopholes in rules • Cross-border spamming – Identification – Action against offenders • Import/export constraints • Government oversight/ regulation – Extent of regulation – Policy on competition • Censorship issues – Extreme (China, Singapore) – More modest (Europe) MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 23 The Culturally Customized Web Site • Book objectives – Describe comprehensive study of web site evaluation by consumers in five countries – Make suggestions for adapting web sites for different cultures • Book web site http://theculturallycustomizedwebsite.com/ MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 24 Chapter 1: Cultural Customization • Some issues – – – – Values depicted Aesthetics Conventions Symbolism • Color • Some areas considered – Hofstede’s dimensions – High vs. low context orientation of culture – Desirability of features • For reassurance • To affirm values MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 25 Research • Level of customization vs. – Attitude (liking) – Purchase intention • Both more favorable attitudes and higher purchase intentions for customized web sites in several countries – – – – – MKTG 376 Italy India Netherlands Switzerland Spain LECTRONIC COMMERCE Lars Perner, Instructor 26 Web Site Classifications (Somewhat Arbitrary) • Standardized – Same content for whole world – http://www.Tyco.com • Highly localized – Country specific URLs – Local formats (e.g., zip vs. postal code, time) – Local content – http://www.Amazon.com; http://www.Amazon.co.uk • Semi-Localized – Limited local information—e.g., contact info for foreign subsidiaries – http://www.Gap.com • Culturally customized – “Complete immersion” – Three levels • Adaptation • Symbolism • Behavior • Localized – Country specific pages – Translation into local languages as needed – http://www.Dell.com MKTG 376 – None identified; closest is http://www.Ikea.com Lars Perner, Instructor LECTRONIC COMMERCE 27 Ch. 2: The Rationale for Cultural Customization • Web return on investment (ROI) • Characteristics favoring customization – – – – Open Interactive dialogue, culturally sensitive Hyperlinks, self search need for motivation Customization opportunities from technology ability to meet diverse customer needs – Increasing bandwidth opportunities for integrated experience based on customization – Need to “hold” customers need for motivation MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 28 Relevant Cultural Issues: Perception, Language • Perception—what is – Noticed – Processed • Implications – Spatial orientation (right-left, left-right, up-down) navigation modes – Translation issues • Idiomatic equivalence • Vocabulary equivalence • Conceptual equivalence Lars Perner, Instructor • Language – Chinese found to learn faster visually due to pictoral alphabet • Color perception – Associations, preferences – Naming MKTG 376 LECTRONIC COMMERCE 29 More Language Issues • Dialects • Text length formatting implications – Language structure – Use of acronyms • Color categories MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 30 Cultural Issue: Symbolism • Association of concepts or images with meaning (e.g., flag with patriotism) • Associations will tend to vary; often based on language and experience or word sounds (Chinese) • Country specific symbols MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 31 Cultural Issue: Behavior • National norms • Expectations of how to do things • Relationships between people MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 32 Ch. 3: A Cultural Values Framework for Web Design • Cultures vs. countries may need to subdivide—e.g., – India, Ireland, Switzerland • Culture vs. within-culture variation— e.g., lifestyle segmentation (VALS2) MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 33 Chapter 4—Cultural Customization: Individualism-Collectivism • The extent to which goals of the individual, as opposed to the group, are valued • Extent to which individual differences in behavior are accepted and/or encouraged MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 34 Country Examples • High – – – – – – U.S. Australia U.K. Netherlands Canada New Zealand • Low – – – – – – – – – – Guatemala Ecuador Panama Venezuela Columbia Indonesia China Pakistan Indonesia Taiwan • Middle – – – – India Japan Argentina “Arab World” MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 35 Authors’ Caveats • Numbers represent averages • Web sites which happen to portray individualist and/or collectivist values may do so without actually having sought to customize for the particular culture • Other variables are important MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 36 Suggestions for Sites for Collectivist Societies • Clubs – May be “offline”—sense of belonging – Chat rooms • Links to local web sites – Demonstration of connection to local community • Emphasis on community relations • Family (“we”) theme – Family bonds • Symbols/pictures of national identity – – – – Flags Architecture Important buildings Local role models • Loyalty programs – To company or brand – Japanese: amae—loyalty to the group MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 37 Suggestions for Sites for Individualist Societies • Independence theme – “I-consciousness” – Individual determinism – “Invest on your terms” • Personalization and product uniqueness – Unique content (e.g., self-selected news, features, adjustment of view) – Personalized products, if applicable • Strong privacy statement • Personal product recommendations Lars Perner, Instructor MKTG 376 LECTRONIC COMMERCE 38 Chapter 5—Uncertainty Avoidance • Relative importance of predictable environment, defined structure, order vs. acceptance of risk taking, reduced structure, and acceptance of ambiguity • Extent of acceptance of new ways of doing things if not known • Valuing conservatism and “traditional” beliefs • Example: Mexican beverage company explicitly lists behaviors expected from employees MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 39 Countries • High – – – – – – – – – – – Greece Portugal Guatemala Uruguay El Salvador Belgium Japan Germany Thailand Iran Finland • Low – – – – – – – Singapore Jamaica Denmark Hong Kong Sweden Ireland U.S. • Medium Note that no clear geographic patterns are evident. MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 40 Suggestions for Sites for High Uncertainty Avoidance Societies • Customer service – Personnel positioned as experts – Easily accessible on the site • Free – Trials – Downloads • Guided navigation • Traditional theme • Connection to local stores – Depictions – Ability to return merchandise • Transaction security • Testimonials • Local terminology MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 41 Suggestions for Sites for Low Uncertainty Avoidance Societies • None listed. Ideas? MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 42 Chapter 6—Cultural Customization: Power Distance • Extent to which hierarchy and status are emphasized as opposed to a preference for more “distributed” power and decision making • High sensitivity to those older, with seniority, and in authority • Tendency to obey “suggestions” from authority figures • Preference for face-toface contact for display of respect • Emphasis on hierarchical structures • Emphasis on organization charts MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 43 Countries • High – – – – – – Malaysia Panama Guatemala Philippines Mexico “Arab World” • Low – – – – – – Austria Israel Denmark New Zealand Ireland Norway • Middle – – – – Taiwan Iran Spain Poland MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 44 Suggestions for High Power Distance Societies • Hierarchy information • Picture of CEO and other “important” people • Use of proper titles • Quality assurance – “Superior quality” • Awards • Vision statement by CEO MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 45 Suggestions for Low Power Distance Societies • None specifically listed. Ideas? MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 46 Chapter 7—Cultural Customization: Masculinity-Femininity • Value of achievement, assertiveness, ambition vs. nurturance, care for others • Masculine societies – Tendency toward clear gender roles – “Success orientation” – Decisiveness – Directness (depending on levels of collectivism, power distance) MKTG 376 • Feminine societies – – – – “Oneness with nature” Service orientation Harmony Modesty LECTRONIC COMMERCE Lars Perner, Instructor 47 Countries • High masculinity – – – – – – – – – – – Japan Hungary Austria Venezuela Switzerland Mexico Malaysia Brazil Singapore Israel West Africa • High Femininity – – – – – – Sweden Norway Netherlands Denmark Costa Rica Finland • Middle: MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 48 Recommendations for Masculine Societies • Indication of product effectiveness • Quizzes, games (competitive element) • “Realism” theme – Decisiveness vs. fantasy, imagery – “Rational”/performance appeals • Clear depiction of gender roles and segregation – E.g., female section of Japanese search engine MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 49 Recommendations for Masculine Societies • Similar considerations to “high context” societies • Harmony • Aesthetics • Soft sell MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 50 Chapter 8—Cultural Customization: High-Low Context • Importance of “context” in communication style— important information may be “embedded” in society as opposed to being more detailed and explicit with unambiguous explanation. • High context societies – Politeness/indirectness are emphasized – Soft sell approach – Aesthetics • Low context societies – Hard sell – Superlative word usage – Emphasis on rank and prestige of company – Explicit terms and conditions – Emphasis on logical, “linear” thinking – Action orientation – Emphasis on rationality MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 51 Countries • High Context – – – – – – – – – – Asia (generally) Africa South America Parts of Middle East Japan China Spain Thailand Turkey Taiwan • Low context – – – – – Most of Northern Europe North America New Zealand Australia U.K. – Philippines MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 52 Recommendations • For High Context Societies – – – – Aesthetics Politeness Indirectness “Soft-sell” approach • For Low Context Societies – Harder sell – Terms and conditions – Rank – Prestige – Superlatives MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 53
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