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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                            Completely
    standardized                          adapted
    (“Globals”)
MKTG 376           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                        • Information and
           – Approximately 100           Telecommunications
             measures in 6               (ITC)
             categories
              • Technology
                                       • International
                infrastructure           Telecommunications
              • General business         Union
                environment                – 26 indicators-e.g.,
              • Consumer and                  • Technology
                business adoption of            infrasturctures
                e-business
                                              • Market conditions
              • Social/cultural
                conditions affecting
                Internet use
              • Availability of e-
                business support
                services


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
    •      Southern Mexico
    •      Andean countries
    •      Most of Brazil
    •      Sub-Saharan Africa
    •      Remotest former Soviet Republics
    •      Laos, Cambodia
    •      Chinese interior
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.

MKTG 376                       LECTRONIC COMMERCE                                    Lars Perner, Instructor   6
               IRAs
    •      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)
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.

MKTG 376                       LECTRONIC COMMERCE                                    Lars Perner, Instructor   7
            Internet Leaders
    •      U.S., Canada
    •      Western Europe
    •      Japan
    •      Australia
    •      New Zealand
    •      Taiwan
    •      South Korea
    •      Israel
MKTG 376         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

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MKTG 376                                          LECTRONIC COMMERCE           Lars Perner, Instructor   9
           Countries With the Largest   Sources: World Bank,

           Absolute Number of Users
                                        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         0.1

accounting    0
issues!            $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                           • U.S./Canada
           – High penetration rates;       – Canadian specialty
             access outside home             shopping
           – Strong economies              – High penetration rates
           – Low credit card use           – Weakening U.S. dollar;
           – Competing                       strengthening
             technologies                    Canadian dollar
              • Interactive TV         • Mexico
                                           – Growth potential
                                           – Low credit card
                                             penetration



MKTG 376              LECTRONIC COMMERCE            Lars Perner, Instructor   14
            More Regions
    • Asia/Oceania                        – South Korea
           – China/Japan                    • High Internet
                                              penetration rate
             • Use of wireless                (45%)
               technology for
               other purposes               • Faster high speed
                                              access than in the
             • Low rates of credit            U.S.
               card use
                                          – Australia/New
           – China                          Zealand
             • Modest economic
                                            • English language
               power
                                              use
           – Japan                          • Relatively similar
             • Internet ordering              culture to U.S.
               through local                • High shipping costs
               merchants
MKTG 376             LECTRONIC COMMERCE           Lars Perner, Instructor   15
           Language Issues
    • Prior to 2000, 96% of    • 75% of Europeans are
      web sites were             multi-lingual; 90% of
      estimated to be in         these include English
      English, the “first      • Dangers of U.S.
      language” of 6% of         English
      the World population           – British English is
    • 40.2% of online users            international standard
      are estimated to               – “American” often
      speak English to                 perceived as
      some extent                      misspelled
                                     – Use of slang
    • 2000: Non-English
      speakers became          • Lesser distance to
      majority of Internet       British English than
      users                      to other European
                                 languages

MKTG 376        LECTRONIC COMMERCE            Lars Perner, Instructor   16
            Language Display
    • Single-byte (Latin-based) vs. double-
      byte 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                          • Symbolism
           – Black as                     – Dogs as pets
             background                   – Numbers
              • “Stylish” in U.S.           • “Unlucky” numbers
              • “Unlucky” in Asia,             – 4, 9, 13 (Japan)
                Europe, Latin                  – 4, 14 (China)
                America
                                            • “Lucky” numbers
           – Red as a “lucky”                  – 1, 8 (China)
             color in China but
             can be over-used
                                     • Formality of
                                       communication
           – White and green
             are “unlucky” in
             Cina
MKTG 376             LECTRONIC COMMERCE          Lars Perner, Instructor   19
             More Cultural Issues
    • Measurement                  • Offensive content
      issues                             – Specific body parts
           – Metric vs. U.S.,            – “Revealing”
             British systems               content
           – Clothing sizes              – Gestures
    • Representation of
      numbers
           – 1,000.00 vs.
             1.000,00
           – Dates

MKTG 376            LECTRONIC COMMERCE           Lars Perner, Instructor   20
             Government Issues
    • Regulation                    • Extent of
           – Extraterritorial         regulation
             laws and                     – Protection of small
             regulations                    businesses
           – Privacy                      – Limitations on
              • “Safe Harbor”               online advertising
                procedures                  (China)
           – Encryption
                                    • Taxation
             restrictions
                                    • Censorship
                                    • Fraud
MKTG 376             LECTRONIC COMMERCE           Lars Perner, Instructor   21
             International Internet Users
    • Finding buyers                • Access speed
       – Local search                  – High broadband
         engines                         access rates in
              • Advertising              Europe and Korea
              • Search engine       • Out-of-Home Access
                optimization
                                       – Portable systems
       – Mailing lists from               • Web enabled cell
         catalogs prior to                  phones/PDAs
         Internet entry                   • Solar/battery
    • Demographics                          powered devices
           – Gender ratios                  for developing
                                            World
           – Socioeconomic status
             of users               • Pirates and piracy
MKTG 376             LECTRONIC COMMERCE        Lars Perner, Instructor   22
             Selected Issues
    • Internet governance               • Gambling
           – Running of “top domain”        – U.S. based
             and IP numbering                  • Indirect ownership of foreign
             systems                             sites

           – Fear of constraining           – Foreign based
             influences if countries        – Loopholes in rules
             with reputations for
             censorship participate
                                        • Import/export
                                          constraints
    • Cross-border
      spamming                          • Government
           – Identification               oversight/ regulation
           – Action against offenders       – 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                        • Some areas
           –   Values depicted             considered
           –   Aesthetics                      – Hofstede’s
           –   Conventions                       dimensions
           –   Symbolism                       – High vs. low
                • Color                          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
           –   Italy
           –   India
           –   Netherlands
           –   Switzerland
           –   Spain
MKTG 376             LECTRONIC COMMERCE   Lars Perner, Instructor   26
             Web Site Classifications
             (Somewhat Arbitrary)
    • Standardized                       • Highly localized
           – Same content for whole         – Country specific URLs
             world                          – Local formats (e.g., zip
                                              vs. postal code, time)
           – http://www.Tyco.com
                                            – Local content
    • Semi-Localized                        – http://www.Amazon.com;
           – Limited local                    http://www.Amazon.co.uk
             information—e.g., contact   • Culturally customized
             info for foreign
                                            – “Complete immersion”
             subsidiaries
                                            – Three levels
           – http://www.Gap.com
                                               • Adaptation
    • Localized                                • Symbolism
           – Country specific pages            • Behavior
           – Translation into local         – None identified;
             languages as needed              closest is
           – http://www.Dell.com              http://www.Ikea.com

MKTG 376               LECTRONIC COMMERCE             Lars Perner, Instructor   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                    • Implications
      is                                   – Spatial orientation
           – Noticed
                                             (right-left, left-right,
           – Processed
                                             up-down) 
    • Language                               navigation modes
           – Chinese found to learn
             faster visually due to        – Translation issues
             pictoral alphabet
                                              • Idiomatic
    • Color perception                          equivalence
           – Associations, preferences        • Vocabulary
           – Naming                             equivalence
                                              • Conceptual
                                                equivalence

MKTG 376              LECTRONIC COMMERCE             Lars Perner, Instructor   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                            • Low
           –   U.S.                         –   Guatemala
           –   Australia                    –   Ecuador
           –   U.K.                         –   Panama
           –   Netherlands                  –   Venezuela
           –   Canada                       –   Columbia
           –   New Zealand                  –   Indonesia
                                            –
    • Middle                                –
                                                China
                                                Pakistan
           –   India
                                            –   Indonesia
           –   Japan
                                            –   Taiwan
           –   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                           • Links to local web
           – May be “offline”—sense     sites
             of belonging                  – Demonstration of
           – Chat rooms                      connection to local
    • Emphasis on                            community

      community relations             • Symbols/pictures of
    • Family (“we”) theme               national identity
                                           –   Flags
           – Family bonds
                                           –   Architecture
    • Loyalty programs                     –   Important buildings
           – To company or brand           –   Local role models
           – Japanese: amae—loyalty
             to the group


MKTG 376              LECTRONIC COMMERCE               Lars Perner, Instructor   37
             Suggestions for Sites for
             Individualist Societies
    • Independence                • Personalization
      theme                         and product
           – “I-consciousness”      uniqueness
                                        – Unique content
           – Individual                   (e.g., self-selected
             determinism                  news, features,
           – “Invest on your              adjustment of view)
             terms”                     – Personalized
    • Strong privacy                      products, if
                                          applicable
      statement
                                  • Personal product
                                    recommendations
MKTG 376           LECTRONIC COMMERCE           Lars Perner, Instructor   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                               • Low
           –   Greece                          –   Singapore
           –   Portugal                        –   Jamaica
           –   Guatemala
                                               –   Denmark
           –   Uruguay
                                               –   Hong Kong
           –   El Salvador
                                               –   Sweden
           –   Belgium
           –   Japan                           –   Ireland
                                               –   U.S.
    • Medium
           –   Germany                         Note that no
           –   Thailand                        clear geographic
           –   Iran                            patterns are
           –   Finland                         evident.



MKTG 376                  LECTRONIC COMMERCE             Lars Perner, Instructor   40
              Suggestions for Sites for High
              Uncertainty Avoidance Societies
    • Customer service                  • Free
           – Personnel positioned as         – Trials
             experts                         – Downloads
           – Easily accessible on the
             site
                                        • Transaction security
    • Guided navigation                 • Testimonials
    • Traditional theme
    • Connection to local
      stores
           – Depictions
           – Ability to return
             merchandise
    • 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             • Preference for face-to-
      hierarchy and status are      face contact for display
      emphasized as opposed         of respect
      to a preference for more    • Emphasis on
      “distributed” power and       hierarchical structures
      decision making             • Emphasis on
    • High sensitivity to those     organization charts
      older, with seniority,
      and in authority
    • Tendency to obey
      “suggestions” from
      authority figures


MKTG 376         LECTRONIC COMMERCE           Lars Perner, Instructor   43
               Countries
    • High                             • Low
           –   Malaysia                      –   Austria
           –   Panama                        –   Israel
           –   Guatemala                     –   Denmark
           –   Philippines                   –   New Zealand
           –   Mexico                        –   Ireland
           –   “Arab World”                  –   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,             • Feminine societies
      assertiveness,                       –   “Oneness with nature”
      ambition vs.                         –   Service orientation
      nurturance, care for                 –   Harmony
                                           –   Modesty
      others
    • Masculine societies
           – Tendency toward clear
             gender roles
           – “Success orientation”
           – Decisiveness
           – Directness (depending on
             levels of collectivism,
             power distance)

MKTG 376              LECTRONIC COMMERCE              Lars Perner, Instructor   47
               Countries
    • High masculinity                 • High Femininity
           –   Japan                         –   Sweden
           –   Hungary                       –   Norway
           –   Austria
                                             –   Netherlands
           –   Venezuela
                                             –   Denmark
           –   Switzerland
                                             –   Costa Rica
           –   Mexico
                                             –   Finland
    • Middle:
           –   Malaysia
           –   Brazil
           –   Singapore
           –   Israel
           –   West Africa


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       • Low context societies
      communication style—                  – Hard sell
      important information may             – Superlative word usage
      be “embedded” in society              – Emphasis on rank and
      as opposed to being more                prestige of company
      detailed and explicit with            – Explicit terms and
      unambiguous explanation.                conditions
    • High context societies                – Emphasis on logical,
           – Politeness/indirectness          “linear” thinking
             are emphasized                 – Action orientation
           – Soft sell approach             – Emphasis on rationality
           – Aesthetics




MKTG 376               LECTRONIC COMMERCE             Lars Perner, Instructor   51
               Countries
    • High Context                      • Low context
           –   Asia (generally)               –   Most of Northern Europe
           –   Africa                         –   North America
           –   South America                  –   New Zealand
           –   Parts of Middle East           –   Australia
           –   Japan                          –   U.K.
           –   China
           –   Spain
           –   Thailand
           –   Turkey
           –   Taiwan
           – Philippines


MKTG 376                 LECTRONIC COMMERCE              Lars Perner, Instructor   52
               Recommendations
    • For High Context               • For Low Context
      Societies                        Societies
           –   Aesthetics                  – Harder sell
           –   Politeness                  – Terms and
           –   Indirectness                  conditions
           –   “Soft-sell”                 – Rank
               approach                    – Prestige
                                           – Superlatives




MKTG 376              LECTRONIC COMMERCE          Lars Perner, Instructor   53

				
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