19 - GLOBAL MARKETING AND THE INTERNET.pdf

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19

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GLOBAL MARKETINGAND THE INTERNET

CHAPTER OVERVIEW

1 BARRIERS TO GLOBAL INTERNETMARKETING

2 COMPETITIVE ADVANTAGE AND CYBERSPACE

3 GLOBAL INTERNET CONSUMERS

4 GLOBALLY INTEGRATEDVERSUS LOCALLY RESPONSIVE INTERNET

MARKETING STRATEGIES

5 THE INTERNETANDGLOBAL PRODUCT POLICY

6 GLOBAL PRICING AND THEWEB

7 GLOBAL DISTRIBUTION STRATEGIES AND THE INTERNET

8 THE ROLE OF THE INTERNET FORGLOBAL COMMUNICATION

STRATEGIES

Although the obituaries of numerous dot-com companies were written during the 2001tech-bust the internet remains a technological marvel for global marketers Theinternet has reshaped the global marketplace for international marketers both onthe demand- and the supply-side The web clearly provides a unique distribution andcommunication channel to marketers across the globe It is the ultimate marketplace tobuy and to sell goods and services The challenge for many global multinationals is towring out the benefits that the web offers For scores of internet startups that initiallyfocused on their home market going global can provide an avenue for further growthAmazon foresees that Europe could ultimately prove to be a better place for doinge-commerce than the United States for two reasons with Europersquos high populationdensity (1) delivery is faster and (2) real estate prices are high in high traffic city areasleading to a cost advantage to virtual retailers over their brick-and-mortar competi-tors1 EBay has already planted its foot in thirty countries across the globe Other webfirms are following suit Small and medium sized enterprises (SMEs) also participate in

1lsquolsquoJeff Bezosrsquo Amazon Adventurersquorsquo Ad Age Global (February 2002) pp 16ndash17

626

the flurry In fact for many SMEs the internet has proven to be a welcome opportunityfor overseas expansion

Although the internet originated in the United States it has rapidly morphed into aglobalphenomenonTheworldwide internetpopulation surpassed the1billionmilestonein 2005mdashup from only 45 million users 10 years earlier and 420million in 2000 The totalnumber of users was nearly 15 billion in mid-2008 Exhibit 19-1 presents a geographicbreakdownof internet usageworldwideAs you can see the internet population inChinais larger now than the number of US internet users Another notable fact is the rapidincrease of the internet population with growth rates of around 1000 percent for each ofthe four BRIC countries (see last column of Exhibit 19-1)2

Until the early 1990s the internet was primarily the preserve of the military andacademic researchers However the development of new software (eg Java Netscape)during the early 1990s has turned the internet into a commercial medium that hastransformed businesses worldwide In the advent of the forces unleashed by this newtechnology this final chapter focuses on the role of the internet in global marketing Wefirst highlight the main challenges that international marketing managers face with theinternet The remainder of the chapter explores the impact of the web on globalmarketing strategies

BARRIERS TOGLOBAL INTERNETMARKETING r r r r r r r

Although most forecasts about the future of global e-commerce are rosy there areseveral structural barriers thatmight slowdown its expansion Inparticular the followinghurdles might interfere (1) language barriers (2) cultural barriers (3) infrastructure(eg penetration of personal computers broadband or 3G) (4) knowledge barriers(5) access charges and (6) government regulations Let us look at each one of thesein turn

When Avis Europe PLC set up its global car-rental website in 1997 clients could rent acar almost anywhere in the world as long as they spoke English Avis soon found out

EXHIBIT 19-1TOP 15 COUNTRIES IN INTERNETUSAGE

Country

Internet Users

(in millions)

of World

Users

Penetration

(as of countryrsquos

population)

User Growth

(2000-2008)

1 China 2530 173 190 102442 United States 2201 150 725 13093 Japan 940 64 738 9974 India 600 41 52 110005 Germany 525 36 638 11896 Brazil 500 34 261 90007 United Kingdom 418 29 686 17158 France 361 25 581 32539 South Korea 348 24 707 82910 Italy 347 24 597 162911 Russia 327 22 232 954812 Canada 280 19 843 120513 Turkey 265 18 369 1225014 Spain 256 18 633 375615 Indonesia 250 17 105 11500

Worldwide Total 14636 1000 219 3055

Source httpwwwinternetworldstatscomtop20htm accessed on March 92009

2Brazil Russia India and China

LanguageBarriers

Barriers to Global Internet Marketing 627

that its English-only website was not enticing to non-English speakers Towin customersit rolled out localized sites in the clientrsquos language3 The multilingual sites were alsocustomized in other ways For instance the German site targets the business segmentwhereas the Spanish site focuses on leisure bookings Given the internetrsquos origins in theUnited States it is not surprising that much of the content is US-focused and that theEnglish language has dominated theweb so far According to the latest data English stillprevails as the leading language on the internet (450 million users) followed by Chinese(3213 million) and Spanish (122 million)4

One survey of 186 US online merchants found that 74 percent use only English ontheir sites and 79 percent present prices in US dollars only5 However more than 70percent of the worldrsquos internet population now lives outsideEnglish-speaking countries6

A study by Forrester research found that business users on the web are three timesmorelikely to purchase when the website lsquolsquospeaksrsquorsquo their native language7 Hence a companythat plans to become a global e-business player may need to localize its websites in orderto communicate with target customers in their native tongue In some cases companiescan stick toEnglish especially if theyoperate inan industry that is primarilyAnglo-Saxon(eg aerospace) However inmost cases translation becomes necessary if the firmwantsto sell to non-English speakers AsWilly Brandt a formerGerman Chancellor once putit lsquolsquoIf Irsquom selling to you I speak your language If Irsquom buying dann meuroussen Sie Deutschsprechenrsquorsquomdashthen you must speak German

Companies that want to localize their websites by translating the content intoother languages have several options One approach is to hire a third party to do thetranslation job One example is Translation Services USA (httpwwwtranslation-services-usacom) which is a company that specializes in website translation Thecompanywhose clients range from small businesses toFortune 500 companies translateswebsites into 150 languages including dialects such as Creole Corsican Basque andGreenlandic A second option is to use an online translation tool such as Yahoo BabelFish (httpbabelfishyahoocom) which can translate blocks of text and also an entirewebpage These tools are usually free but their results can be very inaccurate Their rangeof languages is also very limited Another alternative is to use specialized softwareto do the translation A market leader in this area is SYSTRAN a company head-quartered in Paris SYSTRAN develops software products that enable instantaneoustranslation of web pages internet portals into and from 52 language pairs Several majorinternet portals such as Yahoo Google andAltaVista also use SYSTRANrsquos translationtechnology8

Cultural norms and traditions can also hinder the spread of the internet In Confucian-based cultures (most East Asian nations) business is routinely conducted on a personalbasis Networking and personal relationships play a major role in business transactionsNonetheless Dell was able to gain a foothold in markets like China and Hong Kongwith its Dell Online business concept One major impediment in numerous markets isthe lack of a credit card culture and security concerns In many countries outside NorthAmerica credit card penetration is still very low In countries like Egypt only theupper-class people use a credit card to buy goods9 Companies that use the internet as adistribution channel in such countries are usually forced to offer a range of paymentoptions such as cash on delivery wire transfers and e-money China has about 50 onlinepayment systems now The leader is AliPay a service developed by Chinarsquos top auctionsite Taobao With the AliPay system the seller gets the money only after the buyer

3lsquolsquoLearning Local Languages Pays Off for Online Sellersrsquorsquo Asian Wall Street Journal (November 24ndash6 2000) p 124httpwwwinternetworldstatscomstats7htm accessed on March 15 20095wwwimediaconnectioncomglobal5728aspref=httpwwwimediaconnectioncomcontent6090asp6httpwwwinternetworldstatscomstats7htm accessed on March 15 20097wwwinternetindicatorscomglobalhtml8wwwsystransoftcom accessed on March 15 20099IbrahimElbeltagi lsquolsquoE-commerce andGlobalization AnExploratory Study of EgyptrsquorsquoCross CulturalManagementAn International Journal 14(3 2007) pp 196ndash201

Cultural Barriers

628 Chapter 19 Global Marketing and the Internet

obtains the goods10 Even where credit card penetration is high online shoppers whoare worried about credit card fraud are reluctant to release their credit card numberand other personal data online Instead internet users end up giving the informationthrough fax or over the phone to the online merchant Advances in encryption- andsmart card-technology should provide a solution on this frontHowever evenwith all theenhanced security features many internet users still prefer to pay for their transactionsoffline

Culture sensitivity also matters in website design11 Websites must include contentandhave a structure that conforms to the cultural values symbols andheroes of the sitersquosvisitors12On theUS site ofAmazoncom bookdelivery is promisedwith lsquolsquoUsually shipswithin 24 hoursrsquorsquoOn theBritish site thewording is lsquolsquoUsually dispatchedwithin 24hoursrsquorsquoBooks chosen go into a lsquolsquoshopping cartrsquorsquo onAmazoncomrsquosUS site and into a lsquolsquoshoppingbasketrsquorsquo on theBritish site These are subtle distinctions but they can be very important ifa global web marketer wants to lure foreign customers By failing to respect the localcultural norms companies run the risk of antagonizing the customers they are trying toattract For instance in the male-dominated Arab world websites should avoid portray-ing women in roles of authority In countries with strong individualism (eg the UnitedStates) the website should show how the product can improve the individualrsquos life incountries with a strong group-sense (eg many East Asian countries) a sales pitch mayneed to reveal how the product can benefit the group as a whole Attitudes towardprivacy vary widely with Americans far less concerned than most Europeans and theJapanese

Patriotism is another important consideration In China several websites havetriggered public fury by for instance listing Taiwan and Hong KongMacao aslsquolsquocountriesrsquorsquo instead of as a province or territories respectively Being sensitive tonational identity could imply having a country-specific website for each country insteadof bundling smaller countries with larger ones (eg New Zealand with AustraliaIreland with the United Kingdom) IBM for instance has a huge menu of country sitesincluding for tiny countries such as Montserrat and Bermuda These are essentially thesame but they show that IBM is being sensitive to smaller markets13

Symbols very familiar in the home market do not necessarily have a universalmeaning or may even offend foreign customers A thumbs-up icon would indicatesomething good to US consumers but would be insulting in Italy Website colors alsoconvey different meanings In Japan soft pastels are effective whereas in the UnitedStates bold and sharp tones work better in connecting with consumers

One concern is that managers may overlook the need for cultural alertness whensetting up a global online business operation Traditionally managers would scout localmarkets and communicate with local partners to become familiar with the local cultureWith a virtual business face-to-face contacts are minimal especially for small andmedium-sized enterprises (SMEs) One suggestion here is for managers to join internetdiscussion groups and bulletin boards to gain knowledge about cultural norms andvalues in the foreign market14Global Perspective 19-1 discusses how Dell surmountedcultural sensitivity issues for its websites

In many countries the local information technology (IT) infrastructure imposes con-straints on e-commerce market opportunities One measure of interest here is theEconomist Intelligence Unitrsquos annual ranking of e-readiness15 A countryrsquos e-readinessmeasures the extent of internet connectivity and technology (ICT) infrastructure in the

10lsquolsquoChinarsquos E-tail Awakeningrsquorsquo Business Week International November 19 2007 p 44

11lsquolsquoGlobal website Design Itrsquos All in the Translationrsquorsquo International Herald Tribune (March 22 2001) p 17

12David Luna Laura A Peracchio and Maria D de Juan lsquolsquoCross-Cultural and Cognitive Aspects of Web SiteNavigationrsquorsquo Journal of the Academy of Marketing Science 30(4) pp 397ndash41013lsquolsquoLooking Local Can Make a Big Difference on the Webrsquorsquo Financial Times February 11 2008 p 2

14John Q Quelch and Lisa R Klein lsquolsquoThe internet and International Marketingrsquorsquo Sloan Management Review(Spring 1996) pp 60ndash7515httpgraphicseiucomfilesad_pdfs2005Ereadiness_Ranking_WPpdf

Infrastructure


country Obviously a key component of the measure relates to the hardware infra-structure number of Wi-Fi hotspots broadband penetration security of internet con-nections andmobile phones in the country The index also captures other elements suchas citizensrsquo ability to utilize technology skillfully the transparency of the countryrsquosbusiness and legal environment the extent to which the government encourages the

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GLOBAL PERSPECTIVE 19-1

LESSONS FROMDELLrsquoSWEBGLOBALIZATION PROJECT

In October 2003 Dell Inc (wwwdellcom) launched anenhanced global e-commerce site followed by an upgradedservice and support site in July 2004 The project had taken 3years to complete and involved the joint efforts of 30 businessteams A key challenge of the web globalization project wasthe creation of a global online brand communication Toimplement this task Dell formed a core team Global BrandManagement (GBM) in spring 2002 with participants fromtheAmericas Asia andEuropeMiddle East Themain goal oftheir assignment was to develop a coherent visual interfacedesign (VID) standard for Dellrsquos websites balanced with localadaptations if necessary The key issues in this endeavorcentered around five VID components corporate logotypeand brand tagline country names national flags and countryselection menu language selection

CORPORATE LOGOTYPE AND TAGLINE

The firstVID issuedealtwith the degreeof localizationofDellrsquoscorporate icon For regions not using Latin alphabets western-ized corporate names are typically phonetically transcribed forlegal registration and to ease customer pronunciation For somelanguages choosing a proper phonetic equivalent is rarely easyFor instance picking Chinese characters purely based on pho-netics might lead to meaningless or even bizarre combinationsFor the Dell brand name the following character groupings allhave a similar dai er sound (idle pastry) (evilchild) and (imbecile two) In the case of Dell China thecorporate name in local script was rendered by dai er(honor thus) which projects a positive corporate image

Although localizing the corporate icon couldhavebenefits itviolates the spirit of a coherent imagery in terms of geometricdimensions color schema and typeface Awell-recognized andvalued logotype can communicate a rangeof positivemarketingmessages (eg trust product quality prestige) For that reasonlocalDellwebsites incorporate theblue corporate logotypewithan angledE character even in regions not usingLatin alphabets

Another important brand element is the brand tagline InOctober 2001 Dell had introduced theEasy asDell slogan Forthe homepages of many countries Dell simply settled on the

English tagline However for some countries Dell opted tocreate an equivalent localized tagline This was not always aneasy task For example for the Japanese tagline Dellrsquos teamcame up with a pool of 60 candidates In the end the localizedtagline became SinpuruAnata ni Deru (Simple for you Dell)

COUNTRY NAMES

Choosing the right country name for Dellrsquos websites was farless trivial than it sounds Part of the discussion centered onusing a countryrsquos official name or its short-form equivalentThe short form was chosen as the standard (eg Mexicoinstead of Estados Unidos Mexicanos) For some regionsDell also needed to navigate around delicate political issuesFor instance to avoid controversy with Mainland China Dellchose for Taiwan the provincial name tai wan waswritten in traditional Chinese characters not the simplifiedscript used in Mainland China

FLAG IDENTIFIERS AND COUNTRY SELECTOR

MENU

Another delicate issue is the usage of flag identifiers Flagscarry many meanings While for most countries flag identifiersare not controversial Greater China poses obstacles Focusgroup research showed that Mainland Chinese might lodgeobjections over the display of the Taiwanese flag As a resultno flag identifier is used for the Taiwan website Likewise theKorean website does not display any flag A similar issue arosewith the design of the country selector menu For markets likeTaiwan or Canada the team inserted the phrase lsquolsquoChoose acountryregionrsquorsquo to take a neutral stance For other regions itkept the original lsquolsquoChoose a countryrsquorsquo phrase

LANGUAGE SELECTION

Countries with multiple languages also needed a languagetoggle Toggle options were decided for the respective regionsbased on socioeconomic factors For instance theDell-Canadawebsite displays the lsquolsquoEnglishFrancSaisrsquorsquo toggle theDell-Belgiumwebsite contains a lsquolsquoNederlandsFrancSaisrsquorsquo toggle Given thesignificance of English as a language of commerce websitesfor markets such as Hong Kong Taiwan and Switzerland alsoinclude lsquolsquoEnglishrsquorsquo as an option for the language toggle

Sources Leon Z Lee lsquolsquoCreating Worldwide Brand RecognitionrsquorsquoMultilingual Computing amp Technology 16 (1) 41ndash46 and Leon ZLee lsquolsquoVirtual Teams Formation Flexibility and Foresight in theGlobal Realmrsquorsquo The Globalization Insider wwwlocalizationorgaccessed on April 16 2005


use of digital technologies16 Exhibit 19-2 shows the e-readiness rankings and scores for2008

Not surprisingly the leading countries in this ranking have high per capita incomesMost emerging markets rank very low in terms of e-readiness For instance all fourBRIC countriesrsquo e-readiness rank very lowly Brazil comes 42nd Russia 57th India54th and China 56th The bottom spots in the ranking are taken by Algeria IndonesiaAzerbaijan and Iran This split between rich and poor countries is often referred to asthe digital divide between rich and poor nations17

A critical component for international internet marketing is the digital literacy level ofthe host country Digital literacy is defined as the ability to locate understand and createinformation using digital information18 Digital literacymatters both on the demand andsupply side On the demand side low computer literacy could limit consumersrsquo willing-ness to engage in e-commerce transactions On the supply side setting up an e-businessoften requires recruiting people with high computer literacy skills that inmany countriesare often in short supply Especially in emerging markets scarcity of proper talent andskills can restrain the development of a digital economy

Governments around the world do recognize the crucial importance of havingdigitally savvy human resources to compete in the global marketplace Several govern-ments have launched initiatives to improve digital literacy within their society ThePhilippine government for instance launched an ambitious project in 2008 to improvethe digital literacy skills of more than 100000 teachers The project is carried out withthe assistance of Intel Microsoft and the USAID the US governmentrsquos foreignaid organization19 Several non-profit organizations also help out in bridging thedigital divide between developed and developing countries One example is Silicon

EXHIBIT 19-2EIUE-READINESS RANKINGS BY COUNTRY 2008

Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)

USA 1 2 895Hong Kong 2 6 891Sweden 3 3 885Australia 4 10 883Denmark 4 (tie) 1 883Singapore 6 11 874Netherlands 6 (tie) 8 874United Kingdom 8 5 868Switzerland 9 4 867Austria 10 14 863Norway 11 9 860Canada 12 12 849Finland 13 6 842Germany 14 12 839South Korea 15 18 834New Zealand 16 16 828Bermuda 17 NA 822Japan 18 21 808Taiwan 19 22 805Belgium 20 17 804 Source Economist Intelligence

Unit 2008

16The scoring criteria and weights are connectivity and technology infrastructure (20) business environment(15) cultural environment (15) legal environment (10) government policy (15) and consumerbusinessadoption (25)17httpnewsbbccouk2hitechnology4296919stm18httpenwikipediaorgwikiDigital_literacy accessed on March 16 200919wwwpiagovph accessed on March 16 2009

KnowledgeBarrier


Valley-based Inveneo a non-profit social enterprise that helps to provide access toinformation communications technology (ICT) to underprivileged communities primar-ily in sub-Saharan Africa20

Early in 1999 the Campaign for Unmetered Telecommunications (CUT) organized aweb boycott in several European countries Internet users in Belgium France ItalyPoland Portugal Spain and Switzerland were asked to go offline for 24 hours in protestof high access charges In October 1998 Italian internet users repeatedly downloadedinformation from the website of Telecom Italia thereby blocking access to the site forother users The move was organized to protest an increase in local telephone ratesSimilar campaigns have occurred in other countries as a means to protest against hightelecommunication charges

In numerous countries high internet access charges are a sore point Until March1999 the cost to Chinese internet users was 30 times higher than in the United StatesThe cost of surfing the web typically consists of two parts internet subscription ratesand telephone charges While internet subscription fees are often low or free of chargetelephone charges can be prohibitive In markets with excessive access chargescomparison-shopping becomes very costly For instance while eBayrsquos US customersmay spend hours browsing the auction site this is less likely in Europe where mostpeople pay per-minute phone charges for internet access21 Furthermore shoppers areless likely to complete a purchase transaction

Government deregulation increased competition and new access alternatives(eg through cable TV) should put downward pressure on the cost of going onlineInternet users in Germany used to pay between $6 and $28 per month to their localInternet Service Providers (ISPs) and then pay Deutsche Telekom 4 cents for eachminute on the phone to their ISP Even for moderate users these charges easily led tobills of over $50 per month New competitors now offer internet access at much lowerrates Access to the web in Japan used to be dominated byNTT which charged sky-highfees However as new rivals entered the web access market in Japan access rates havebeen falling rapidly22

The host countryrsquos legal environment is another critical factor that affects internationalinternet marketing Most governments are very enthusiastic about the internet and theopportunities that the digital industry offers Yet red tape and government regulationstypically stifle the industry in dozens of countries Regulations differ on issues such asdata protection customs acceptance of the use of digital signatures and e-mailedcontracts as legally binding

E-commerce is global the law on the other hand is mostly local Hence one of thefundamental issues is the question of jurisdiction Whose contract and consumer lawsapply These issues remain largely unsolved Problems related to national laws arecompounded by a shortage of legal precedents and experts who can interpret existinglegislation In general companies have two alternatives to handle legal concerns Theycan either set up separate websites that comply with local laws or one mega-site thatcopes with every conceivable local legal requirement23

To see how fragmented government regulations and laws affect e-commerceconsider the experience in Europe of Gateway the US-based PC maker24 WhenGateway wanted to sell computers in Europe online it initially planned to set up asingle electronic storefront with different views for each separate market listing adifferent price However differences in value added tax rates currencies and culture in

20httpwwwinveneoorg21lsquolsquoEBay Steams Into Europersquorsquo Business Week (Asian Edition) (October 16 2000) p 32

22lsquolsquoFinally Japanrsquos Netizens May Be Able to Afford the Netrsquorsquo Business Week (November 22 1999)

23lsquolsquoGlobal E-commerce Law Comes Under the Spotlightrsquorsquo Financial Times (December 23 1999) p 4 Gateway

pulled out of Europe in the late 1990s24Gateway was acquired in October 2007 by Acer the Taiwanese computer company

Access Charges

Legal Environmentand Government

Regulations


the end forced Gateway to create separate websites for each individual Europeanmarket25

Several governments have been trying to come to terms with global e-commerceissues by enacting legislation that covers the various areas of concern Legal conflictsalso arise about domain names AOL for example was engaged in a lengthy legal battleover the use of the lsquolsquoaolcombrrsquorsquodomain name in Brazil with Curitiba America a smalllocal internet concern26 One attempt to resolve such domain disputes was theestablishment of ICANN27 This non-governmental body handles such disputesthrough a process of mandatory arbitration28

Although government over-regulation can discourage the digital industry someamount of regulation is clearly necessary especially to defend intellectual propertyrights (IPR) and to stamp out cybercrime Some countries have gone the extra mile todefend IPR Denmark for instance made history when a court ruled that local ISPsmust block access to The Pirate Bay website a Sweden-based website that facilitatesillegal downloading29

Apart from the barrierswediscussed above there are othersGeographical distancescan be a major constraint when goods need to be stocked and shipped Shipping costseasily become a major hurdle for many e-shoppers especially for bulky items Deliverydelays also increase with distance Getting paid is another complicating factor Creditcard fraud and lack of trust in general is another challenge Several e-tailers have ablacklist of countries to which they refuse to ship because of past fraud problems

COMPETITIVE ADVANTAGE ANDCYBERSPACE r r r r r r r

The internet offers two major benefits to companies that use the tool as a gateway toglobal marketing costefficiency savings and accessibility (lsquolsquoconnectivityrsquorsquo) Comparedto traditional communication tools (eg media advertising catalogs) and distributionchannels the costs of the internet as a delivery channel are far lower The internet alsooffers access to customers around the world As a result the value of some of the pre-internet sources of competitive advantage has been deflated One of these potentialsources is scale Some observers have argued that one of the major consequences of theinternet is that small and large firms are on an equal footing now as far as globalcompetition is concerned Barriers to entry due to size have been dismantled Theadvantages of sizewill disappear30Barriers due to geographical space and time zones areno longer relevant31

Although size-related advantages will probably lessen claims that the internetprovides a level playing field to small and large global players alike are somewhatoverblown Largemultinationals will still maintain an edge inmost industries over theirsmaller competitors especially in the global arena Large firms still enjoy a substantialcompetitive advantage because of larger resources and more visibility among prospec-tive customers worldwide Deep pockets allow them to hire the best talent and buy thelatest technologies in the area Large multinationals can also tap into their globalexpertise to cope with the countless challenges that going international poses thelogistics of getting tangible goods to the customers differing payment methods andcurrencies a maze of rules and regulations coping with customs and so forth It is also

25lsquolsquoNet Marketers Face Hurdles Abroadrsquorsquo Advertising Age International (June 1999) p 42

26lsquolsquoAOLWaltzes Into Brazil Unprepared for the Sambarsquorsquo The New York Times (December 11 1999) p B2

27Internet Corporation for Assigned Names and Numbers (wwwicannorg)28lsquolsquoGlobal E-commercersquorsquo p 4

29lsquolsquoPirate Bay to Remain Blocked in Denmarkrsquorsquo httpwwwmacworldcoukdigitallifestylenewsindexcfm

RSSampNewsID=2379930lsquolsquoThe internet and International Marketingrsquorsquo p 71

31lsquolsquoThe Integration of internet Marketingrsquorsquo p 13ndash14

Competitive Advantage and Cyberspace 633

more likely that target customers will find the website of a well-known large multi-national rather than of a small upstart32

Instead of size technology is now being touted as a key source for competitiveadvantage Although technology matters marketing skills will still play a major role inglobal marketing lsquolsquoA site with the latest technologies but one that doesnrsquot meetcustomer expectations will not make the cutrsquorsquo33

r r r r r r r r GLOBAL INTERNET CONSUMERS

One of the tasks facing global marketers who plan e-commerce endeavors is to gain asolid understanding of their prospective customers One question that arises is to whatextent online customers differ from offline ones A second issue is to what degreeinternet users differ across cultures or countries Do global internet users prefer tobrowse and buy from standardized global web sites or do they prefer websites adaptedto their local cultures Do their preferences and buying motivations overlap or do theydiffer and if so how If they are indeed similar companies can standardize their e-commerce strategies on a global or pan-regional basis except for a few minor changessuch as language or shipping policies If on the other hand there are significantdifferences then a standardized internet strategy might be a recipe for disaster

Internet usage patterns clearly differ across countries A survey conducted by thePew Research Center finds that internet use is on the rise in both industrialized anddeveloping countries According to the study most people in the United States Canadaand Western Europe are internet savvy However fewer than 10 percent went online inPakistan and Indonesia Internet use was also relatively low in India Russia andTurkey34 Not surprisingly in all the countries surveyed internet use rises with highereducation and incomes

Internet users also differ in terms of their online buying behavior One studysponsored by Accenture an international management consulting firm looked intocross-country internet shopping patterns35 The study sampled 515 individuals from 20countries The key finding of the study was that there are enormous regional differ-ences However differences between countries within the same region were minimalNorth Americans have a greater affinity for the web more trust less anxiety enjoyshopping more and look for branded products more than internet users from mostother regions They also showed the highest commitment to return to websites forpurchases Asians had the least favorable attitude toward the web and the greatest fearabout internet shopping Their intent to purchase through the web and to return towebsites was fairly low despite their affinity for technology

Consumers can also vary in the lsquolsquoperceived valuersquorsquo that they derive from visiting abrandrsquos website One large-scale study that involved 8500 website visitors and 30websites found that

1 The most important driver of perceived value is the utilitarian experience associatedwith the website Companies can increase that experience by offering usefultruthful and new information about their products or brands The second mostcritical factor is the amount of pleasure provided by the site with visual materialbeing a major component Customization ranks third Examples of the latter includethe ability for the visitor to personalize the content or lookfeel of the site online

32Saeed Samiee lsquolsquoThe internet and International Marketing Is There a Fitrsquorsquo Journal of Interactive Marketing 12(Autumn 1998) pp 5ndash2133lsquolsquoThe Integration of internet Marketingrsquorsquo p 15

34wwwpewglobalorg accessed on March 16 200935Patrick D Lynch and John C Beck lsquolsquoProfiles of internet Buyers in 20 Countries Evidence for Region-SpecificStrategiesrsquorsquo Journal of International Business Studies 32 (4) (Fourth Quarter 2001) pp 725ndash48


consultation or personally addressing the visitor Especially website visitors living inmore individualistic countries put high weight on customization

2 The effect of privacysecurity protection on perceived value is strongest for peopleliving countries high on individualism and where the rule of law is weak

3 Not surprisingly websites should be adapted to the local context for countries whereconsumers take pride in their countryrsquos symbols culture and language36



EBAYmdashAGLOBAL FLEAMARKET

A New Yorker cartoon shows a woman driving a huge tractorinto her living room to show it to friends Its caption lsquolsquoI got itfrom eBayrsquorsquo An eBay search on the magazinersquos cartoon-bankproduces five other cartoons Clearly eBay has become part ofthe cultural landscape EBay the online auction group wasfounded in the mid-1990s by Pierre Omidyar a young Frenchcomputer programmer To most venture capitalists the idea ofanonline fleamarketwas not exactly captivatingAnd yet eBaymanaged to do something that very few other dot-coms wereable to it has always made a profit Its business model isbasically very simplematch individual buyers and sellers onlineand take a cut of the transaction What is behind eBayrsquos profitpotential A mixture of no cost of goods no inventories lowmarketing costs and no huge capital investments EBay hasturned into one of the worldrsquos most successful internet enter-priseswith 84million active usersMegWhitman eBayrsquos formerCEO managed to turn the firm from a purely domestic com-pany with auctions in 300 categories into a global empirespanning 21 countries and 16000 categories Categories nowinclude computers used cars time-share holidays EBay hastruly become a global trading platform

EBayrsquos biggest strength has been its willingness to itscustomers incessantly Early on it introduced buyer and sellerfeedback ratings and showed pictures of the goods being soldWhen the firm launched Billpoint many customers resentedthe new payment service EBay quickly redesigned the site andexplained that Billpoint was optional EBay also constantlyscans the site to see whether any new opportunities arise in the

miscellaneous category EBay users also have an emotionalattachment to the site a community sense which translatesinto strong site loyalty As one eBay customer explainedlsquolsquoThere a lot of people who are afraid to take the chance ofleaving eBay because they have built up thousands of positiverecommendations from buyers which they cannot transfer to acompetitorrsquorsquo The company bills itself as lsquolsquoa community bynature not by designrsquorsquo It imposes very few restrictions on themerchandise being traded For instance it stopped the auctionof a human kidney and has banned the sales of guns alcoholand tobacco

EBay has patched together a global empire via a string ofacquisitions (eg Alando in Germany France) and start-upsfrom scratch (eg Japan the UK) It dominates most of itsmarkets Not all overseas forays have been successful In JapanYahoo has pre-empted eBay and now claims leadership EBaymade two mistakes in Japan it came in late (5 months afterYahoo Japan launched its auction site) and it charged a com-mission for every transaction (Yahoo Japan didnrsquot) The com-pany claims that as a whole its international business isprofitable In France eBay was ordered by a court to pay a$61million fine for selling fake luxury goods fromLouisVuittonand Dior on its site

China is the auction housersquos big ambition In March 2002the firm took a cautious first step by investing $30 million for aone-third stake in EachNet a Shanghai-based online auctioncompany EBay acquired the company fully in June 2003Unfortunately eBay failed togain traction inChina particularlyagainst local incumbent Taobao which is part of the Alibabagroup InDecember 2006 eBay foldedEachNet into a new jointventure it set up with China-based TomOnline The move gaveeBay access to TomOnlinersquos user base of 75 million along withits localmarket expertise EBay hoped that the new partnershipwould enable it to crack the Chinese market The firm imposedstrict restrictions on sellers to stamp out sales of counterfeitgoods It also launched creative campaigns to build up its imagein China One campaign Jigsaw Puzzle consisted of a virtualpuzzle where users were invited to upload puzzle pieces toeBayrsquos local website For each piece submitted eBay donatedRmb 1 (about 15 cents) to a local charity that builds libraries

Sources lsquolsquoEBay the flea market that spanned the globersquorsquo FinancialTimes (January 11 2002) p 18 lsquolsquoThe community that listens to custom-ersrsquorsquo Financial Times (January 11 2002) p 18 lsquolsquoSuccess depends onrapid growth abroadrsquorsquo Financial Times (January 11 2002) p 18 lsquolsquoEBayBids for a Piece of Chinarsquorsquo Asian Wall Street Journal (March 18 2002)p A12 lsquolsquoAuction Brawlrsquorsquo Business Week (Asian edition) (June 4 2001)pp 18-19 httpwwwecommerce-guidecomessentialsebayarticlephp3578921 lsquolsquoHow to Find Focus Onlinersquorsquo Media October 20 2006p 27 lsquolsquoEBay Shifts China Strategyrsquorsquo httpwwwwashingtonpostcomwp-dyncontentarticle20061220AR2006122000234_pfhtml andlsquolsquoEBay Returning to Chinarsquorsquo httpwwwihtcomarticles20070621technologyebayphp

36Jan-Benedict E M Steenkamp and Inge Geyskens lsquolsquoHow Country Characteristics Affect the Perceived Value ofWeb Sitesrsquorsquo Journal of Marketing 70 (July 2006) pp 136ndash50

Global Internet Consumers 635



PLANETGOOGLE

Google the Silicon Valley-based internet juggernaut domi-nates the search engine market in most Western countriesHowever there are still several major markets where Googlehas made little headway against well-entrenched local searchcompanies In China which comprises the worldrsquos largestinternet population Baidu a NASDAQ-listed Chinese inter-net firm handles more than 60 percent of all internet searchescompared to only 11 percent for Google China Other countr-ies where Google lags behind include the Czech RepublicRussia Japan and South Korea (see Table A) In thesemarkets Google has been kept at bay by local firms whohave capitalized their first-mover advantage These local play-ers have been able to consolidate their lead by building up astrong brand reputation and combining search with a range ofother portal-like services In Russia and the Czech RepublicGoogle did not initially match the locals in the quality of locallanguage search results Also initially with few local languageweb documents available Googlersquos computer algorithm tech-nology proved to be less of a competitive advantage in thosemarkets

TABLEAGooglersquos Share in the Non-Google World

Country Number 1 Number 2 Number 3

Czech Republic Seznam 625 Google 248 Centrum 48

China Baidu 665 Google 113 Alibaba 74

Russia Yandex 459 Google 33 Rambler Media

88

South Korea Naver 577 Lycos 184 Google 85

Japan Yahoo Japan

510

Google 395 Rakuten 20

Sources ComScore e-3internet

Google counts on its ability to invest more in technology toget an edge over the competition The firm expects that as thenumber of web documents in local languages explodes its localrivalswill find ithardertokeepupGoogle isalsowilling tochangeits game plan to reflect local preferences Several local firmssuch asNaver in SouthKorea and Seznam in theCzechRepublichave created a very successful service where users answer ques-tions posed by others similar to the service offered by YahooAnswers Google has copycatted this service in several of itsemerging markets including Thailand and China Google alsolaunched anArabic version (and the first non-English version) ofKnol a site that posts user-written articles on a range of topics

Source lsquolsquoThe Plucky Local Groups Who Dare to Defy PlanetGooglersquorsquo Financial Times September 17 2008 p 18


GLOBALLY INTEGRATEDVERSUS LOCALLYRESPONSIVEINTERNETMARKETING STRATEGIES

r r r r r r r

At the core of any global web marketing strategy is the conflict between local respon-siveness and global integration By being in tune with the local marketrsquos demands themultinational candoabetter job in satisfying its overseas customersResearch shows thatconsumers have a higher purchase intention and better attitude toward highly adaptedwebsites compared to sites that are medium or low on cultural adaptation37 GlobalPerspective 19-3 discusses some of the initiatives that Google took to make its servicemore locally responsive However localization comes at a price By global or regionalintegration the global web marketer can achieve operational efficienciesmdashin terms ofsetup learning and maintenance costs Multinationals can leverage these efficiencies togain a competitive edge over local players or global rivals that use a different businessmodel These cost savings can be passed on to the distributors and end-customers in theform of lower prices Just as with global ad campaigns an integrated web marketingstrategy can also ensure cross-country consistency in building up a global brand image

Exhibit 19-3 provides a useful framework for deciding on the most suitable globalinternet marketing strategy The schema is based on two dimensions global integrationand local responsiveness By combining these two dimensions four possible types ofinternet marketing strategies become possible (1) a nationally differentiated strategies(2) pure local adaptation (3) global cost leadership and (4) transnational cost adapta-tion strategies Which of these four strategies is most suitable depends on the nature ofthe product or service The first class of goods covers lsquolsquolook and feelrsquorsquoproducts These areproducts where no gains can be made from global integration (eg because the localmarkets are large enough to get economies of scale)Multinationals pursue a strategy ofnational differentiation for this class of products (Cell 1) Adapting to unique character-istics of each individual country can help develop a competitive edge Adaptations maybe in terms of website design language shipping policies assortment and so forthGiven that such strategy can easily becomeexpensiveMNCs should carefully deliberatewhethermarket presence is really justified The second class covers goodswhere neitherlocal sensitivity nor global integration offers a competitive edge A typical example iscommodity-like products that are very local in nature because of perishability orbulkiness Cell 3 involves goods where there is no need for localization but there are

EXHIBIT 19-3GLOBAL INTERNET STRATEGIES ACCORDING TONATURE OFGOODOR

SERVICE BEING SOLD

Cultural or Regulated Goods and Services(Transitional cost-adaptive strategy)

Examples Wines financialproducts information

Look and Feel Goods and Services(Nationally differentiated strategy)

Examples Clothing used carscollectible art auctions

Global Commodities(Global low-cost strategy)

Examples Books CDs videos usedrecords industrial goods and components

Local commodities(Pure local adaptation strategy)

Examples Produce Internet access

Global IntegrationHigh Low

Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2

Source Reprinted withpermission from BusinessHorizons MayndashJune 2002Copyright (2002) by theTrustees at Indiana UniversityKelley School of Business

37Nitish Singh Olivier Furrer and Massimiliano Ostinelli lsquolsquoTo Localize or to Standardize on the Web EmpiricalEvidence from Italy India Netherlands Spain and Switzerlandrsquorsquo The Multinational Business Review 12 (Spring2004) pp 69ndash87

Globally Integrated versus Locally Responsive Internet Marketing Strategies 637

opportunities for global integration As with the previous case these are mostlycommodity-like products However here a competitive advantage is achievable viaglobal scale efficiencies The last category involves products or services that require bothglobal integration and local sensitivity A global webmarketing strategy for these goodsdemands a balancing act that allows the company to achieve scale economies whilecoping with local peculiarities On the product side a transnational strategy could beaccomplished via mass-customization38

What do companies do in practice One study looked at 206 websites to explorehow American brands standardize their websites in four European countries (the UKFrance Germany and Spain)39 Most US MNCs tailored the specific content of theircountry websites especially textual information and visual images However a mini-mum level of standardization was found for logos colors and layouts Further theamount of web standardization was larger for durable goods than for non-durables Aswith global new product development firms can strike a balance between globalizationand localization of their website using a core-product like strategy create a globalportal for the brandrsquos (or companyrsquos) website that channels website visitors tonationally tailored sites40 The BMW website is a good illustration of this approachthe BMW portalmdashwwwbmwcommdashoffers two broad choices an lsquolsquointernational web-sitersquorsquo available in English and German with various topics covering the different BMWmodels and other information and highly customized country sites (see Exhibit 19-4)Another good example is the website for Nivea the German skincare brand (seeExhibit 19-5) The Nivea portal gives visitors access to around 60 country territory and

EXHIBIT 19-4INTERNATIONALWEBSITE OF THE BMWBRAND

Source wwwbmwcom

38Mauro F Guillen lsquolsquoWhat is the Best Global Strategy for the Internetrsquorsquo Business Horizons 45(3) pp 39ndash4639Shintaro Okazaki lsquolsquoSearching the Web for Global Brands How American Brands Standardise Their Web Sitesin Europersquorsquo European Journal of Marketing 39 12(2005) 87ndash10940lsquolsquoHow Country Characteristics Affect the Perceived Value of Web Sitesrsquorsquo pp 146ndash47


EXHIBIT 19-5WEBSITES OF THENIVEABRAND

Source wwwniveacom (Nivea international portal)

Source wwwniveaie (Nivea Ireland website)


(Continued )

Source wwwniveacoth (Nivea Thailand website)

Source wwwniveacombr (Nivea Brasil website)

(Continued )


regional sites Each country site has Nivearsquos signature blue with the same visuals andimagery and similar features (eg Highlights Brand Advice) The sites are localized inseveral respects the models used in the images language (several country sites havemultiple language choices) the products displayed Some features are also unique to orrelabeled on a particular country site (eg the lsquolsquoGamesrsquorsquo feature on European sites iscalled lsquolsquoFunrsquorsquo on Nivearsquos US site)

THE INTERNETANDGLOBAL PRODUCT POLICY r r r r r r r

From a product policy perspective the internet offers tremendous opportunities Giventhe intrinsic nature of the internet the medium can be used to foster global brandbuilding The internet can also be leveraged as a platform for global new productdevelopment Furthermore the internet can also be a major driver in the diffusion ofnew products or services Below we elaborate more the role of the internet in globalproduct policy

Management of global brands on the web is one of the challenges that global internetmarketers face41 Many MNCs allow their local subsidiaries to set up their ownwebsites Cultural fragmentation is often themain driver behind customization Yahoodeliberately puts its countrymanagers in charge of the local websitersquos content42 Yahooportals around the world carry the Yahoo logo on top and offer standard services (egAnswersMovies FinanceMaps) but differences do exist In India online auctions andonline shopping are not offered as few people have credit cards On the other hand the

Source wwwniveausacom (Nivea USA website)

41lsquolsquoThe internet and International Marketingrsquorsquo p 70

42lsquolsquoYahoo Uses Local Road In Drive to Expand Its Brand Across Asiarsquorsquo Asian Wall Street Journal (March 1 2001)

p N1

Global Brandingand the Internet

The Internet and Global Product Policy 641

India Yahoo portal includes topics that most other countries do not provide such asastrology and cricket Other Yahoo country sites also offer very distinctive featuressuch as online courses in Australia and topics on gourmet clothingbeauty and realestate in Japan By granting autonomy to its country managers Yahoo hopes tocapitalize on its technology and global brand while catering to local customers

Often however websites lack coordination and oversight As a result they canbecome a collage projecting different images visuals content and messages for thebrand andor company Consequently consumers who visit sites associated with thebrand or the company may get confused With global cult brands (eg Land RoverHarley Davidson) the issue of multiple sites becomes further compounded as individ-ual distributors and brand enthusiasts set up their own websites featuring the brandThis problem becomes especially thorny when the company tries to broadcast a singlebrand or corporate image Therefore just as with more traditional communicationmedia such as advertising some amount of coordination of the content and tone ofwebsites under theMNCrsquos control is a must when a consistent brand or company imageis desirable Unfortunately consumer-generated websites related to the brand arebeyond the firmrsquos control

Companies increasingly use the web to support the different stages of the new productdevelopment (NPD) process43 The internet plays a role in the area of global productinnovation on at least three fronts global product design generating new product ideasthrough consumer co-creation and new product diffusion First of all companiesincreasingly rely on geographically distributed innovation centers for their new productdevelopment efforts Dell for example has established product design centers in fourlocations around the world Austin Singapore Bangalore and Shanghai By using theweb as a platform multinationals like Dell and Lenovo can streamline their productdevelopment management lower overall global development costs and shorten thetime to market Advances in computer-aided design (CAD) software have turned web-based global NPD more efficient One example is the PTC Windchill1 suite44 of web-based software products that has been used by firms like Dell to facilitate NPD in aglobal environment This software uses a single repository for all product-data andenables engineers and managers alike to access product data from anywhere in theworld through a simple web-based interface45

The internet is also a driving force behind the rise of consumer co-creation whichrefers to innovation processes where consumers co-create value with the companyInstead of the consumers simply being passive and only giving feedback on new productconcepts (eg via focus groups) they actively become involved in the NPD processThe internet makes this process more powerful by offering amassive worldwide pool ofpeople to tap into and by providing information access to those people Co-creation hasbeen applied by numerous companies includingDell (lsquolsquoIdeaStormrsquorsquomdashseeExhibit 19-6)Nike Diageo and Starbucks PampG for instance aims to have one-third of its innova-tions being spurred through co-creation with customers or former employees JacquesBughin a McKinsey partner provides the following five tips to make co-creationeffective

1 Signal credibility to potential contributors This can be done by signaling thereputation of the brand or the presence of third-party funding

2 Create incentives to participate Such incentives could be monetary (cash revenuesharing) but also non-monetary (eg public acknowledgements) Dellrsquos IdeaStormwebsite includes a listing of the top-20 idea contributors

43Muammer Ozer lsquolsquoUsing the Internet in New Product Developmentrsquorsquo Research Technology Management 46 1(JanFeb 2003) 10ndash1644httpwwwptccomproductswindchill45lsquolsquoHowDell Accelerates Product DevelopmentWorldwidersquorsquowwwdellcompowersolutions accessed onMarch 18

2009

Web-based GlobalNew ProductDevelopment


3 Establish a clear model of leadership in co-creation networks Decide who is incharge of the co-creation network and how to manage it

4 Get the brand right before engaging in co-creation People need to trust the brandbefore they are willing to engage in consumer co-creation46

Finally the internet can also play a critical role in the diffusion of new productswithin and across countries47 Companies can use the web to inform potential adoptersof new products or planned launches around the world Online hype or buzz can alsostoke interest about the innovation even long before the product is released in aparticular market as demonstrated by recent high-profile new product launches such asApplersquos iPhone Amazonrsquos Kindle e-book reader and Sonyrsquos PSP On the other handnegative online chatter from consumers where the new product has already beenintroduced can hamper the adoption of the innovation in later markets

The internet heralds changes in the marketing of international services Services differfrom goods in four respects (1) intangibility (2) simultaneity (3) heterogeneity and(4) perishability Intangibility means that services cannot be stored protected throughpatents or displayed Simultaneity refers to the fact that services are typically producedand consumed at the same time Service delivery is also heterogeneous meaning that itdepends on many uncontrollable factors There is no guarantee that the servicedelivered will match the service that was promised The final characteristic perishabil-ity refers to the fact that services usually cannot be saved stored resold or returned In

EXHIBIT 19-6EXAMPLE OF CONSUMERCO-CREATIONmdashDELLrsquoS IDEASTORM

Source wwwideastormcom

46lsquolsquoInnovation and Co-Creationrsquorsquo MSI Conference Summary June 16ndash18 2008

47Venkatesh Shankar and Jeffrey Meyer lsquolsquoThe Internet and International Marketingrsquorsquo in The Sage Handbook ofInternational Marketing Masaaki Kotabe and Kristiaan Helsen (eds) London Sage 2009

Web-basedMarketingof Services


the global marketplace these issues become even more taxing because of environ-mental differences between the foreign markets and the companyrsquos home market

The internet allows global service marketers to break the logjam posed by thesechallenges48 Consider the tangibility issue first International service providers can usethe web to substantiate the service promises they make For instance internationaltravelers who rent a car or book a hotel online can print out the confirmation noteThereby they can get instant tangible evidence of the transaction Another way tomanage intangibility is by offering samples of the service online Visitors of Amazonrsquoswebsite can sample music or read book extracts before placing their order

The web also offers solutions to overcome the simultaneity issue The fact thatservices in general need tobe lsquolsquomanufacturedrsquorsquo at thepointof salemakesmassproductiondifficult However simultaneity becomes less of an issue with the internet Indeed masscustomization is oneof themajorplusesof thewebbasedon information technology datastorage and data processing capabilities Services can very easily be tailor-made via theinternet to the individual needs of the customer

The web also makes it easier for international service marketers to deal with theheterogeneity issue Themedium offers opportunities to standardizemany aspects of theservice provision thereby making service transactions less unpredictable and moreconsistent Elements such as greetings reminders and thank-you expressions can easilybe standardized Obviously one risk here is that in some cultures customersmight resenthaving the human element removed from service encounters Therefore one of thedilemmas that international service firms face is what elements of the service provisioncould be standardized Because of cultural differences these choices may differ acrosscountries

Finally the web also enables companies to manage perishability Marketers can usetheir website to balance demand and supply49 A website gives service marketers theability to offer 24-hour7 day service to customers around the world Geographicboundaries and time zones no longer matter Marketers can also use their site tomanage demand Airlines occasionally use their website to sell seats via online auctions

r r r r r r r r GLOBAL PRICING AND THEWEB

ManyMNCs that have set up a web presence find that a downside of the internet is thatit makes global pricing decisions less flexible The internet creates price transparencyfor customers and distributors alike by opening a window on a companyrsquos prices for aparticular item around the world It now takes only a few mouse clicks to gather andcompare price and product attribute information for a given product from the differentmarkets where the product is sold Various websites like Germanyrsquos DealPilotcom orBritainrsquos shopguidecouk offer price comparisons of different shopping sites therebylowering the search effort for e-shoppers Customers can also sample the lsquolsquoprice floorrsquorsquothrough various auction sites hosted by firms such as eBay in Western countries orTaobao in China The information advantage that sellers traditionally enjoyed overbuyers has dissipated due to the very nature of the internet technology

For global marketers price transparency creates several issues50 First and foremostit severely impairs the firmrsquos ability to price discriminate between countries Transpar-ency may also transform differentiated products into commodity-like goods where theonly point of difference is price A third consequence coupled to the previous one is thatprice transparency might undermine consumersrsquo brand loyalties and make them moreprice conscious The number-one purchase criterion becomes price Rather than being

48Pierre Berthon Leyland Pitt Constantine S Katsikeas and Jean Paul Berthon lsquolsquoVirtual Services Go Interna-tional International Services in the Marketspacersquorsquo Journal of International Marketing 7(3) (1999) pp 84ndash10549Leyland Pitt Pierre Berthon and Richard T Watson lsquolsquoCyberservice Taming Service Marketing Problems withthe World Wide lsquolsquowebrsquorsquo Business Horizons (Jan-Feb 1999) pp 11ndash1850Indrajit Sinha lsquolsquoCost Transparency The Netrsquos Real Threat to Prices amp Brandsrsquorsquo Harvard Business Review 78(MarchApril 2000) pp 43ndash50


loyal to a particular brand consumers become more and more deal-prone buying thecheapest brand available within their consideration set of acceptable brands Finallyprice transparency may also raise questions among consumers about price unfairnessBecause of various restrictions customers in one countrymay not be able to order via theinternet the same product at a lower price from another country However when theyrealize that the product is much cheaper outside their country consumers in high-pricemarkets may feel that they are being taken for a ride unless the price gaps can be fullyjustified Some of these issues are illustrated by Applersquos experience with the pricing ofiTunes downloads in Europe Until early 2008 Apple charged much more for iTunesdownloads in the United Kingdom than in euro-zone countries whereas iTunes custom-ers inBritainhad topay79p todownloada song those inGermanyandFrancehad to forkout 68p (s099) In early 2008 following public outcry in the United Kingdom Appledecided to lower its UK prices by almost 10 percent to bring them in line with the rest ofEurope51

To cope with price transparency due to the internet companies can pursue variousroutes First as we discussed in Chapter 12 firms can align their prices by for instancecutting prices in high-price countries andor raising them in low-price markets This wasthe route taken by Apple for iTunes downloads in the United Kingdom the companynarrowed the price gap between theUK and the euro-zone Second companies can alsolsquolsquolocalizersquorsquo their products so that they differ across countries and comparison-shoppingbecomes less feasible In some industries (eg pharmaceuticals consumer electronics)manufacturers can also alert buyers about the adverse consequences of buying from low-price overseas suppliers Risks that consumers might run into include limited or nowarranty coverage lack of service support buying products that are not suitable (egwrong technology standard) or that turn out to be counterfeit Finally outright refusal tohandle orders fromoverseas buyers is another tactic For instance some countrywebsites(eg iTunes) only allow payment for shipping orders through credit cards registered inthat particular country

GLOBALDISTRIBUTION STRATEGIES AND THE INTERNET r r r r r r r

The internet has also brought momentous changes for international distribution strate-gies Firms thatplan tomake the internetan integralpartof their international distributionchannel need to reflect on questions such as these Should internet distribution comple-ment or replace our existing channelsWill the role of our current distributors change as aresult of having the internet as an additional channel medium Should we allow ourdistributors to set up their own internet channelsGlobal retailers facing the onslaught ofonline sellers need to decide whether they should remain a brick-and-mortar business ortransform themselves into a click-and-mortar business by setting up a web presence

Connectivity means that in many industries buyers can now hook up directly throughthe internet with manufacturers thereby bypassing existing channels Some observershave gone so far as to claim that the internet heralds the end of the middlemanEspecially in Japan where there are sometimes up to seven layers of distributionbetween the manufacturer and the end user the internet has the potential to cut outscores of middlemen

Although the internet could diminish the role of intermediaries in certain busi-nesses in most industries distributors can still play a vital role Manufacturers that planto add the internet to their existing international channels need to ponder the effects ofthis new medium on the incumbent channels In general there are two possibilities areplacement effect or a complementary effect With the former the internet primarilycannibalizes existing distribution channels With the latter on the other hand theinternet expands the overall business by offering a more attractive value proposition to

51lsquolsquoApple to Cut UK Prices for iTunes Tracksrsquorsquo wwwguardiancouk accessed on March 6 2009

Role of ExistingChannels

Global Distribution Strategies and the Internet 645

prospective buyers The extent to which the internet has mostly a replacement orcomplementary impact will depend on the nature of the industry (see Exhibit 19-7)52

EXHIBIT 19-7COMPLEMENTARY VERSUS REPLACEMENT EFFECTOF

THE INTERNET

Customeraccess toInternet

Internetvalue proposition

similar to traditionalchannels

Product canbe deliveredover Internet

Customersdesire immediate

delivery

Cost ofdelivery relative

to price

Product can bestandardized

Customersprefervariety

Primarilyreplacement

effect

Primarilycomplementary

effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High

Source Courtesy ofProfessor Nirmayal KumarLondon Business School

52lsquolsquoInternet Distribution Strategies Dilemmas for the Incumbentrsquorsquo Mastering Information Management Part

SevenndashElectronic Commerce Supplement to the Financial Times (March 15 1999) pp 6ndash7


Most likely the effects will also depend on the country Manufacturers may havedifferent distribution channels in place in the various countries where they operateAlso when the product life cycle stage varies across markets the effect of the interneton incumbent channels will probably differ

The most successful distributors will be those that are able to build up new compe-tences that leverage the internet The reason for having a distribution channel in the firstplace is the value-added that the middleman offers Traditionally sources of value-addedmight have been scale inventory assortment and so forth With the rise of the internetdistributors will need to look into novel ways to build competences For instance onepotential downside of the internet is lsquolsquoinformation overloadrsquorsquo Intermediaries can addvalue for their customers by collecting interpreting and disseminating information53

Manufacturers who decide to incorporate the web in their international distributionstrategy also need to ponder what approach to adopt54 One choice is not to use theinternet for purchase transactions and also forbid distributors fromusing the internet as asales medium In that case websites accessible to outsiders would merely function as aproduct information andor communication toolA second approach consists of allowingmiddlemen to sell goods over the internet However the manufacturer itself would notsell directly via the internetOnedownsidewith this strategy is that sales frommiddlemenvia the internetmay impinge on existing pricing policies and territorial restrictions In theworst-case scenario internet sales might spur gray market activity The third strategy isthe complete opposite of the previous one Here internet sales are restricted to themanufacturer A major risk here is that sales thus generated simply cannibalize incum-bent resellers thereby leading to channel conflicts One way to counter such a risk is byselling different product lines through the various channels However resellers maydislike such differentiation strategy if it turns out that the product lines sold directly overthe internet aremorepopular than theones allocated to themFinally companies can alsopursue a free-for-all strategy where goods are sold direct through the internet andmanufacturers allow their resellers to sell online It is thenup to themarket to settleon theultimate winning combination

Some people see the battle between conventional bricks-and-mortar retailers andinternet retailers as a beauty contest with the cards stacked in favor of the latterConsumers enjoy the convenience the broad product assortment and the productinformation provided by shopping websites There are three e-tailing business modelsFirst there is the manufacturerrsquos direct website where the manufacturer sells directly tothe end-customer Second there are the pure web-only retailers Pure web retailersoften have a price advantage over traditional retailers because they have lowerproperty and warehousing costs The third possibility is the hybrid click-and-mortarretailing model in which the online presence becomes an extension of the traditionalchannel Dozens of large retail chains have been trying to meet the challenge posed bypure web retailers by setting up a website presence By going online these chains areable to combine the advantages of having a website presence with those of a physicalpresence55 Click-and-mortar retailers can cross-market between their website andtheir store outlets thereby adding value for their clients Customers have the advantageof being able to touch the goods or even try them out before buying them online Theycan pick up the goods ordered online at the local retail outlet to save shipping costsClick-and-mortar retailers also often enjoy substantial brand equity whereas most pureweb retailers still need to invest a lot to build up a brand As a result their customeracquisition costs are generally much higher than for their click-and-mortar competitorsMost hybrid retailers also have a financial advantage Whereas retailers such as Wal-Mart FNAC or Bertelsmann have plenty of cash available many pure cyber-retailersoftenhavehadhuge losses orminusculeprofits so farOne final benefit is that local chains


54lsquolsquoInternet Distribution Strategies Dilemmas for the Incumbentrsquorsquo p 7

55lsquolsquoThe Real internet Revolutionrsquorsquo The Economist (August 21 1999) pp 53ndash54

E-TailingLandscape


often have a better feel of the local culture Most of the well-known brands in pure webretailing (eg E-trade Amazoncom) still have rather limited international expertise

A good example of the clash between click-and-mortar and pure internet retailerswas the rivalry in France between FNAC a leading French music and bookstore chainand CDNOW a US-based online music vendor56 When CDNOWentered France andGermany it added local language lsquolsquogatewaysrsquorsquo to its US website For instance Frenchshoppers could place orders in French and pay in their local currency FNAC launched apre-emptive strike by setting up a music website to compete with CDNOW CDNOWenjoyed several competitive advantages Sony and AOL Time Warner two leadingmusic content companies had a major stake in CDNOW (37 percent each) Thisenabled CDNOW to offer international internet shoppers the latest releases at bargainprices As one of the pioneers in online retailing CDNOW also enjoyed a technologyadvantage over FNAC FNAC on the other hand also had several competitive advan-tages It was able to use its website as an extension of its store network and viceversa Furthermore in France and other European countries the FNAC brand nameis a trusted brand with much more familiarity among consumers than the CDNOWbrand name57

Whether the e-tailing business model will succeed in a particular country dependson a wide range of factors58

Consumer behavior Will consumers value a website component Does it add value(eg customization information bigger selection price) Are there any valuablebenefits of being part of an online community (eg eBay) Are there concerns aboutreleasing personal data or paying via a credit card online

Cost structure Are the costs of distribution (shipping logistics) and marketingacceptable

Government policies What are the tax rules for buying online Are they likely tochange Are there (or will there be) any restrictive privacy legislation or customspolicies

r r r r r r r r THEROLE OF THE INTERNET FORGLOBALCOMMUNICATION STRATEGIES

From a communication perspective global marketers can leverage the internet in twoways The first role is as a pure advertising medium This can be done via banner adssearch engine advertising or more sophisticated forms of online advertising Thesecondmdashand probably far more crucialmdashrole is as a communication medium thatenables the company to build customer tiesGlobal Perspective 19-4 discusses a recentdigital pan-Asian marketing campaign launched by Unilever for its Yellow LabelLipton tea brand

One use of the web is as an advertising tool In that function internet advertising wouldcomplement other forms of promotion such as TV radio outdoor Online advertisingspending although still marginal is growing rapidly By 2009 JupiterResearch forecaststhat advertising spending will grow to about $161 billion in the US and $39 billion inEurope59 Overall in almost all countries internet advertising still is a very tiny slice ofthe global advertising pie even in the developed world

As a global interactive broadcast medium the internet offers several advantagesto international advertisers One potent quality is the internetrsquos global reach Online

56lsquolsquoStorming a CD Bastillersquorsquo Business Week (November 15 1999) pp 46ndash47

57CDNOW was ultimately absorbed by Amazon58Diane D Wilson lsquolsquoThe Future of internet Retailing Bigger than Catalogs Bigger than Bricks and Mortarrsquorsquo inThe World According to E E-Commerce and E-Customers MSI Report No 00-102 pp 5ndash859httpnewsbbccouk2hibusiness4203805stm

Online Advertising


advertising is not restricted by geographic boundaries or time zones In principlecustomers anywhere around the world can be targeted via web advertisements Onlineadvertising is also far less expensive than more traditional forms of advertising eventhough its rates are rising rapidly The internet also allows precision as onlinemarketerscan get very precise information about website visitors based on visitor feedbackbrowsing behavior and historical buying patterns Advertising messages can becustomized to individual prospects Advertisers can save money by sending the rightmessage to the right people60 As a result the relevance of an online ad can be muchhigher than for ads using traditional media tools One more useful characteristic thatsets the internet apart from conventional advertising media is the fact that advertiserscan instantly assess whether or not a particular advertisement is working Onlineadvertisers can experiment with different creative messages Based on the experimen-tal findings they can replace overnight one message with another one

Internet advertising uses a wide spectrum of techniques One form that is still verypopular is banner advertising By clicking on the banner ad users are taken to theadvertiserrsquos website where they can obtain more product information Unfortunatelybanner advertising is one of the least effective online advertising techniquesOne formofonline advertising which is gaining increasing popularity is search engine advertisingmdasheither based on keyword search or website context Keyword search advertising allowsthe company to have a link to its website when people are looking for product-relatedinformation Advertisers only pay a fee to the search engine provider when users click onthe linkorplaceanorderWebsite publishers canalso earnadvertisingmoneybyallowingthe search engine company to display targeted advertising on their website related to thecontent of thewebsiteOther internet advertising forms include e-mail ads video ads thatprecede a video clip being downloaded wallpaper ads and Google map ads

A very effective form of online campaigns is the microsite that marketers oftencreate to promote a particular brand Such campaigns are often integrated with othercommunication tools Dockers India created a new microsite (wwwdockersindiacom)



LIPTONHIRAMEKImdashMAKING TEATRENDYAMONGYOUNGOFFICEWORKERS INASIA

In early 2007 Unilever launched a major regional digitalcampaign dubbed lsquolsquoHirameki Parkrsquorsquo in Asia with the aim topersuade young office workers to switch their drink of choicefrom coffee to Unileverrsquos Yellow Label Lipton tea brand Theinitial campaign was developed in Japan The campaignrsquosconcept refers to the Japanese word hirameki which roughlytranslates to lsquolsquoIrsquove got an idearsquorsquo in English More specificallythe hirameki campaign tries to make tea trendy among youngoffice workers lsquolsquoThe strategy was about inspiring a newgeneration of tea drinkers so it doesnrsquot seem old-fashionedbut rather a healthy alternative to energy drinks like Red Bullor coffeersquorsquo (adagecom) To woo the target consumers thecampaign touts the benefits of tea One of ad agency execu-tives behind the campaign explained its basis as follows

lsquolsquoAsians know there is goodness in tea What is not commonlyknown is tea contains theanine and this has been found tocreate a relaxed but alert mental state The idea is thatHirameki brightens my day with new perspectives and inspi-rational momentsrsquorsquo (Media March 23 2007)

Thecampaign includedTVcommercials butalsohadamajordigital element Unileverrsquos ad agency created a regional web-sitemdashhiramekiparkcommdashas well as customized country sitesfor 11 countries The sites have a range of activities thatencourage consumer interaction around an inspiration themeincluding blogs downloads quizzes and videos For instanceone application would ask the consumer every day at a desig-nated time what type of break they would like to have amongthree categories inspiration flash of mind or new perspectiveAfter the consumer picks a choice the site would then streamcontent from the internet based on the chosen selection Uni-lever also ran online banner ads on MSN Messenger as part ofthe campaign

Sources lsquolsquoLipton Ads to Go Regionalrsquorsquo Media March 23 2007 p 5and lsquolsquoLipton Hirameki Launch Hits Chinarsquorsquo adagecom accessed onMarch 23 2009

60lsquolsquoAdvertising that Clicksrsquorsquo The Economist (October 9 1999) pp 75ndash81

The Role of the Internet for Global Communication Strategies 649

to promote a new line of Never-Iron 100-percent cotton pants in India The site targeted25 to 35-year-old urban males To drive visitors to the site Dockers did onlineadvertising on websites such as Yahoo India Rediffcom and tech-oriented Zdne-tindiacom The campaign also had a viral marketing element by encouraging visitorsvia a lucky drawing to spread word-of-mouth about the site to their friends61

Despite the appeal of internet advertising as a medium many advertisers are stillquite wary about its potential as a global promotion tool For one thing there is theannoyance factor Most people find online ads pretty irritating Audience measurementis still a major issue Tomonitor the effectiveness of an online campaign what should bethe right metric Should it be the number of views of the page that contains the ad orshould it be the click-through rate that is the number of times that surfers click on thead62 Too often advertisers simply look at the click through rate to determine whetheran online ad campaign is workingWhatmetric to use will depend on the purpose of thecampaign63 If the goal is to sell or to gather a database then click-through rates costper acquisition or cost per sale could be possible metrics However if the campaignrsquospurpose is to build the brand then gross impressions will be more appropriate

Several forms of online advertising take a long time to download This can beirritating to users in countries where access andor phone charges are high especially inplaces where internet access is slow In many countries access to the internet andespecially broadband is still quite limited Therefore the scope of internet advertisingmay be restricted to a very narrow segment of the target population Also the agencytalent to create attractive internet advertisements is lacking in many countries Finallyinternational marketers that plan to use the web as an advertising tool should familiarizethemselves with advertising regulations and restrictions that apply in the foreignmarkets64 The ultimate success of an online campaign hinges on three factors

The nature of the product For some product online advertising is much moresuitable than for other categories For example online campaigns would work forhigh involvement goods where buyers engage in product research and price compar-isons (eg mortgages travel)

The targeting Whether or not a campaign will work also depends on how well thetarget markets have been chosen For mass-market campaigns the web is usually notthe right medium

Choice of site Picking the right sites is also vital Ads on low-traffic niche sites areoften more effective than ads on high-traffic general portals (eg Yahoo)

Execution of the ad The quality of the production is also an important variable Nomatter howmany sites the banner ads appears on if the banner is boring it will fail tograb viewersrsquo attention or build strong brand impressions65

Apart from online advertising global online marketers can also use the web for non-traditional communication campaigns to build up their brand image A good example isan internet contest that Coca-Cola organized for its Coke Zero line in China inNovember 2008 In the campaign called lsquolsquoBe Bond for a Dayrsquorsquo visitors of Xiaoneicom a local social networking site were asked why they deserved to be the next JamesBond Winners received a lsquolsquoDay of James Bondrsquorsquo including a ride in a helicopter and inBondrsquos signature AstonMartin car66 Several marketers have created web-based globalNT marketing campaigns An excellent example is the Olympic-themed lsquolsquoThe LostRingrsquorsquo campaign (wwwthelostringcom) that McDonaldrsquos released in March 2008 The

61lsquolsquoDockers Goes Online to Hit Targetrsquorsquo Media (August 12 2005) 16

62lsquolsquoCaught in a tangled lsquolsquoweb of confusionrsquorsquo Financial Times (January 21 2000)

63lsquolsquoClients Must Look at Available Tools for Better Online Resultsrsquorsquo Media (August 9 2002) p 9

64Richard C Balough lsquolsquoWebsites Shouldnrsquot Advertise Troublersquorsquo Marketing News (August 16 1999) p 1565lsquolsquoNetting Gains As Hype Dies Downrsquorsquo Media (August 23 2002) pp 16ndash17

66lsquolsquoSlump May Help Chinarsquos Online-Ad Marketrsquorsquo The Wall Street Journal Asia December 11 2008 p 18

Non-Traditional(NT) Web-basedCommunication


campaign centered on an Olympic-themed online game Players searched for clues touncover a secret tied to the Games Ten characters provided clues via channels such asYouTube blogs and Twitter updates Gradually the puzzle revealed that McDonaldrsquoswas behind the game The game which was available in seven languages attractedmorethan 150000 players with 70 percent of the traffic coming from outside the UnitedStates67 Global Perspective 19-5 discusses how Hewlett-Packard leverages the web inChina to build up HPrsquos brand image



lsquolsquoMYCOMPUTERMYSTAGErsquorsquomdashHEWLETT-PACKARDTRIES TOCEMENT

ITSELFAS THE COMPUTER BRANDOF CHOICE IN CHINA

In 2008 Hewlett-Packard (HP) ran amajor digital campaign inChina in its drive to become the computer brand of choiceamong Chinese youth HP had become Chinarsquos second mostpopular computer brand behind Lenovo The first phase of thecampaign called lsquolsquoMy computer My stagersquorsquo involved an artcompetition that attracted 36000 entries HP relied on part-ners such as Mingshen Bank which offered customers theoption to create their personalized credit card using a designsubmitted for the competition

For the second phase which ran until the end of 2008 HPlaunched a user-generated campaign around hip-hop musicHPrsquos ad agency in China created a website called hpmystagecom to invite aspiring Chinese rappers to create their own hip-hop tracks using an online studio and design avatars toperform them Somewhat surprisingly maybe hip-hop cultureis big among Chinese youngsters The campaign was inspiredby a Chinese movie titled Kungfu Hip-Hop which promi-nently featured a strategic HP laptop product placement HPrsquostarget audience was the 18- to 25-year-old Chinese Otherelements of the campaign included dance competitions atuniversities and malls

Source lsquolsquoHP Seeks Online Rappers in User-generatedDriversquorsquoMediaJuly 10 2008 p 8

Source wwwhpmystagecom

67lsquolsquoAnOnline Game SoMysterious Its Famous Sponsor Is Hiddenrsquorsquo wwwnytimescom accessed onMarch 19 2009


Besides company-generated content the internet also enables user-generated com-munication Several cult brands have spawned global or local online brand communitiesof loyal customersThrough these forums customers candiscuss thevarious aspects of thebrand or the company A recent example of branded social networks is the launch byBMWof theMyBMWClubcn site in China in April 2009 The goal of the site is to fosterbrand loyalty amongChinarsquosBMWdriversUsersof the site createprofiles share tips andowner-experiences and upload videos68 The rise of YouTube has created a forum foruser-generated ads Several companies have used YouTube as a platform for ad-creationcontests Unfortunately the downside of user-generated content is lack of controlNetizens can denigrate the brand or spread false rumors Several people have alsoused their creative juices to develop online ads that spoof or mock the brand A case inpoint is the lsquolsquofunny terroristrsquorsquo Volkswagen hoax spot69 that spread like wildfire on theinternet The spoof ad opens with a suicide bomber jumping into his VW Polo and thenparking in front of a busyLondon restaurant todetonate his bombThebombgoes off butthe blast is contained within the car The ad ends with the punch line lsquolsquoPolo Small buttoughrsquorsquo70

International marketers who rely on the internet need have access to high-quality datato make informed decisions for their web-based communication strategies Data isneeded on areas such as website visitor traffic visitor demographics competitorrsquosonline ad spending Two companies currently dominate the internet audience trackingindustry Nielsen Online and comScore Although both firms are US-based they arerapidly expanding overseas InOctober 2008 Nielsen formed a joint venture called CR-Nielsen with a local company to track internet use in China One issue with onlinemeasurement is that standard yardsticks are in short supply The most popular measurestill is the page view metric which counts the number of times an entire page is loadedHowever this metric has limited use for media-rich portals such as YouTube Reliableonline portal auditing is also missing for many developing countries For these marketsonline advertisers need to trust claims made by the portal on metrics such as visitortraffic71

While numbers are useful the real challenge is to measure sentiment (lsquolsquobuzzrsquorsquo)including items such as what was said the authority of the contributor where thewebsite links to and the number of links Several tools exist such as Nielsen Buzz-metrics and CRMMetrix One difficulty is that the relevant types of sites depend on themarket For instance in the Asia-Pacific region Chinese consumers love bulletinboards Koreans embrace social networks Singaporeans crave blogs Thais build onlinecommunities Japanese social media are built around the mobile phone72

Online Monitoring

68lsquolsquoBMW China Launches Social Networkrsquorsquo wwwbrandrepublicasia accessed on April 20 2009

69See httpwwwyoutubecomwatchv=u1irD0c9K34ampfeature=related70lsquolsquoSpoof Suicide Bomber Ad Sparks Global Rowrsquorsquo guardiancouk accessed on March 19 2009

71lsquolsquoOnline Measurementrsquorsquo Media August 10 2007 p 13

72lsquolsquoTools that Track Buzzrsquorsquo Media April 20 2007 p 6

SUMMARY r r r r r r r r r r r r r r r r r r r r r r r r r r

The internet offers international marketers a platter full ofpromises It can be leveraged to save costs and time and togenerate revenues Customers previously outside the market-errsquos reach now become easily accessible The medium can beused to build up brand equity or to showcase new products orservices For scores of business around the world it has provento be a cost-efficient distribution channel The internet also

offers great potential as a global interactive advertising chan-nel One-to-one marketing to customers anywhere in theworld is no longer a pipe dream

In spite of all these goodies marketers should not overlookthe challenges that international internet marketing posesSome of those barriers are structural and may be difficult toovercome government regulations cultural barriers lack of


internetbroadband access the knowledge barrier and soforth Other challenges are strategic Companies who wantto embrace the internet have to think about the implications ofthis medium for their global marketing strategy Building awebsite does not automatically mean that consumers world-wide will beat a path to your door Customers need to be luredto the site Also the site should be continuously updated andrefreshed to entice first-time visitors to come back Globalmarketers also need to balance off the advantages of custom-ized content versus the rewards of having a consistent world-wide image

The internet has brought profound changes for businessesaround the world It has created a new business paradigm e-commerce In a cover article in The Atlanticmagazine the latePeterDruckerwrote lsquolsquoIn themental geography of e-commerce

distance has been eliminated There is only one economy andonly one market every business must be globally competi-tive the competition is not local anymoremdashin fact it knowsno boundariesrsquorsquo73 For marketers probably the biggest conse-quence of the web is indeed that competition is no longer localAny firm can set up a global business on the internet from dayone Having an internet presence has become for scores ofcompanies a matter of survival Suppliers who are reluctant togoonline risk losing out to thosewho arenotCompanies that donot develop a website presence soon risk having their customersbrowsing their competitorsrsquo sites for information

KEY TERMS r r r r r r r r r r r r r r r r r

Banner adClick-and-Mortar retailerComplementary effect

Cost transparencyDigital divideE-commerce

Knowledge barrierOnline surveyReplacement effect

Search engine advertising

REVIEW QUESTIONS r r r r r r r r r r r r r r r r r r r r r r

1 What structural barriers impact the use of the internet asan international marketing medium

2 What advantages do click-and-mortar retailers have overpure web retailers What are the disadvantages

3 Explain the notion of price transparency in the context ofthe internet What are the possible solutions that marketerscan have to cope with the problem

4 In many countries the internet infrastructure is far lesssophisticated than in the United States Phone lines are of poorquality Transmission rates are slow What does poor infra-structure imply for lsquolsquointernationalizingrsquorsquo e-commerce

5 For international web marketers one major dilemma is towhat degree they should localize their websites What forcesfavor centralization Which factors might tilt the balancetoward localization

DISCUSSION QUESTIONS r r r r r r r r r r r r r r r r r r r r

1 Some observers claim that the internet revolutionizes theway small andmedium-sized companies (SMEs) can compete inthe global market place In essence the internet has created alevel playing field for SMEs Where before SMEs had a hardtime to internationalize now any mom-and-pop outfit can openanelectronic storefrontwith a global reachDoyouagreeWhatdownsides do small e-businesses face vis-a-vis large companies

2 Dozens of internet research firms such as Forrester Re-search and International Data Corp issue projections andstudies about the future of e-commerce and the internet marketin general The figures usually vary wildly For instance whenforecasts weremade for the number of internet users worldwideduring 2000 predictions ranged from a low of 157 million(Morgan Stanley) to a high of 327 million users (internetIndustry Almanac) What explains this huge data disparity

3 While numerous brands have created pages on existingsocial networking sites such as Facebook andMySpace a hand-ful of brands (eg BMWMercedes-BenzMTV) have taken theidea a step further and created their own networking domainsfrom scratch One example is the MyClubBMWcn site thatBMW launched in April 2009 in China The goal of such sites isto strengthen brand loyalty among brand users Is setting up abranded social site instead of using an existing mainstreamnetworking site something other brands should considerWhat are the key advantages What are possible downsidesFor what kind of brands and in what type of countries wouldbranded social networks be a worthwhile strategy

4 Select a global brand (eg Ray-Ban SK-II Lenovo) Visitthe brandrsquos international portal and then visit 4 to 5 countrysites preferably from distinct continents If necessary you can

73Peter Drucker lsquolsquoBeyond the Information Revolutionrsquorsquo The Atlantic(October 1999) pp 47ndash57

Discussion Questions 653

translate the site into English using babelfishyahoocom Howis the global portal organized What are the differences andsimilarities among the individual country sites Do they tendto be very localized or globalized What could be the reasonsfor either outcome

5 Web companies that rely on advertising are booming indeveloping countries YouTubersquos audience nearly doubled inIndia and Brazil This sounds like good news Unfortunatelymany of these big web players with huge global audiences and

renowned brands are struggling to make even tiny profits inthat part of the world Operating costs to deliver images andvideos to users are high in countries where bandwidth islimited especially for sites that have a lot of user-generatedcontent At the same time advertising rates are low Oneextreme approach would be to lsquolsquoshut offrsquorsquo all those countriesFew internet companies have taken that option What otherways would you suggest to raise revenue andor lower costs forinternet companies in developing countries


SHORT CASES r r r r r r r r

r r r r r r r r r r r r r r r r r r r r r r r r r r r

CASE 19-1

YAHOO ANDALIBABA SEEKINGDOMINANCE IN CHINESE CYBERSPACE

People who thought that the internet craze had died during thedot-com bust of the late 1990s may have had groundhog-dayfeelings in the summer of 2005 Early August 2005 shares ofBaidu a search engine company heralded as Chinarsquos answer toGoogle went up some 350 percent on the day of its US$4bnIPO Then on August 11 2005 Yahoo the US portalannounced it would pay $1bn for a 40 percent stake in Alibabaa Chinese B2B portal owned by Jack Ma With 15 millionregistered users Alibaba clearly offers great reach Its twoB2Bwebsites generated around $5bn worth of transactions in 2005However the portal had revenues of only $46m in 2004Taobao its online auction website rapidly became Chinarsquosnumber 2 consumer auction website behind EachNet theauction site owned by eBay The quick market share increasethough was partly due to Taobaorsquos free services

Jack Ma once compared local e-commerce companies suchas Alibaba to crocodiles in the Yangtze River He claimed thatforeign lsquolsquosharksrsquorsquo who swim up from the sea would have a hardtime fighting the local crocodiles lurking in the river as lsquolsquothesmell of the water is differentrsquorsquo Such logic must have resonatedwith Yahoo So far foreign internet players have had littlesuccess with their standalone operations Most of the topplayers in Chinarsquos internet market are homegrown Sina isthe top portal Baidu dominates the search engine marketShanda Interactive is the largest gaming company

Jerry Yang Yahoorsquos co-founder said lsquolsquoWe are playing forthe longtermWebelievetheprize ishugersquorsquoNodoubt theChineseinternet sector offers great promise The value of all e-commercetransactions is expected to rise toaround$2175bnby2007Onlineadvertising is predicted to go up from $208m in 2004 to $1bn by2009AndChinarsquos onlineauctionmarket could rise from$425m in2004 to$27bn in2007However richesarenotguaranteedCreditcard usage though on the rise is still very limited Foreigncompanies also need to cope with the challenges of cultural andlinguistic differences Also the Beijing government exercises

strict control over the internet Policy or regulatory changes are aconstant hazard for Chinarsquos internet companies For instanceCommunist party officials recently expressed unease over thespread of multiplayer role-playing games

The AlibabaYahoo deal closely resembles the cooperationmodel thatYahooused in Japanandwhichworkedoutverywellin that market According to the deal Alibaba would takecontrol of Yahoorsquos assets in China The diversity of Alibabarsquosbusiness might prove a clear strength The company commandsa strongposition inB2Be-commerceOtherassets includeAlipayan online payment facility similar to eBayrsquos Paypal and TaobaoaneBay-likeauction siteTheassets thrown inbyYahoo includedits internet portal its email service a search engine (3721) and anonline auction site (1Pai) The new operation covers almost allmajor internet areas except for online gaming

Skeptics view the diversity as a lack of focus Some analystsalso suggested that Yahoo overpaid for its 40 percent share ofAlibaba Rival eBayrsquos aspirations for China most likely trig-gered the dealMegWhitman eBayrsquos CEO declared thatChinais a lsquolsquomust winrsquorsquo for the company Rumor had it that eBay wascourting Jack Ma

There are immediate branding considerations on the hori-zon for the newly formed entity The combination owns amishmash of brands Whether the Sino-US marriage will bea success remains to be seen Yahoo offered a huge pile of cashand its Chinese brand portfolio Alibaba already has a criticalmass of 15 million registered users The task for Jack Ma is toturn those eyeballs into profits

DISCUSSION QUESTIONS

1 WasYahoo right tooutsource its future inChina toAlibaba

2 The case points out that the AlibabaYahoo combinationled to a mishmash of internet brands How should Alibabamanage this mix of brands

3 What other marketing actions would you prescribe for theAlibabaYahoo combination to succeed

4 Do you agree with some of the critics that the new entitylacks focus What might be some of the advantages thatdiversity offers to internet players in China

Sources lsquolsquoYahoo Search Is Complete Alibaba Finds aWay toReap theRiches of Online Chinarsquorsquo Financial Times (August 12 2005) 9lsquolsquoCrocodile Amid the Pebblesrsquorsquo Financial Times (August 12 2005)9ChinaHand Chapter 12 (December 1 2005) lsquolsquoSeeking toDominateChinese Cyberspacersquorsquo Media (December 2 2005) 20


CASE 19-2

VW POLOmdashHOAXAD SPREADS LIKE AWILDFIRE

In January 2005 Volkswagen was at the center of a bigcontroversy after a spoof advert featuring a suicide bomberspread across the world on the internet The spoof ad opens

with the suicide bomber leaving his home and hopping into hisVWPolo The driver wears the signature scarf made famous bythe late Palestinian leader Yasser Arafat He parks his car in

Short Cases 655

front of a busy London restaurant and then detonates hisbomb The blast is contained within the car saving the dinersThe ad ends with the slogan lsquolsquoPolo Small but toughrsquorsquo The clipbecame themost watched viral ad of 2005 with over 23 milliondownloads74

The hoax created quite a stir as the ad flashed around theworld on the internet Many people were confused and thoughtthe ad was for real given its high production values showing theVW logo An investigation by the British newspaper TheGuardian revealed that the hoax was created by a duo ofmaverick advertisers Lee and Dan (leeanddancom) The adwas shot on 35mm film and a shoestring budget of L40000(around $65000) In an interview with The Guardian a Britishnewspaper Lee said that lsquolsquoWe made the advert for Volkswa-gen We never really intended it for public consumption It wasprincipally something we made to show people in the industrybut it got out somehow The adrsquos a comment on whatrsquos

happening at the moment People see this on the news everyday the car comes out as a herorsquorsquo as it stops the blast Viralads are often produced by creative talent looking for workApparently the duo had sent the spoof to DDB Volkswagenrsquosad agency

Volkswagen was not amused A company spokespersonsaid that lsquolsquoWe were horrified This is not something we wouldconsider using it is incredibly bad taste to depict suicidebombersrsquorsquo He added that VW was considering legal actionand blamed the advert on lsquolsquotwo young creatives who are tryingto make a name for themselvesrsquorsquo

This was not the first time that a spoof ad wreaked havoc fora famous car brand A year earlier Ford had to distance itselffrom a viral e-mail showing a catrsquos head being cut off by a Fordcarrsquos sunroof


1 What could be the impact of the viral lsquolsquosuicide bomberrsquorsquo adfor Volkswagen Is the company right to be concerned aboutthe hoax

2 What should VW do Should they indeed take legal actionand sue the makers of the ad Or is there a better course ofaction74See httpwwwyoutubecomwatchv=HnL-7x4n4d8 for a clip

Sources lsquolsquoSuicide Bomber Sells VW PolomdashHoax Ad Takes Internetby Stormrsquorsquo guardiancouk lsquolsquoSpoof Suicide Bomber Ad Sparks GlobalRowrsquorsquo guardiancouk and lsquolsquoInfectious Humorrsquorsquo guardiancouk allaccessed on March 15 2009


CASE 19-3

MYSPACE IN CHINA

When News Corporation brought MySpace to China in April2007 the launch seemed to make perfect sense the worldrsquosleading social networking site (SNS) in theworldrsquos fastest growinginternet market Although MySpace was a relative latecomerNews Corp was betting that it could overcome that handicapthrough heavy investment and by competing unconventionallyas a start-up in China News Corp entered Chinarsquos SNS scene bysetting up a joint venture with a venture capital firm and a localChinese investment firm News Corp was aware that China hadbeen a hard nut to crack for international internet brandsExamples of famous foreign web brands that failed miserablyin China include Amazon Yahoo and eBay

Upfront NewsCorp decided to set up theChineseMySpaceventure as a wholly localized entity Luo Chan a formerMicro-soft executive who used to run the MSN portal was hiredto become the CEO He and his local team would have totalcontrol of the sitersquos operations and being nativeChinesewouldunderstand how to build up the site in the local environmentWilliam Bao a partner at Softbank China amp India explainedlsquolsquoByputting a localmanager in they give the company a fightingchance This is a very crowded area with at least 100 companiescompeting in the same space that MySpace enteredrsquorsquo

MySpacersquos competition is indeed very diverse One com-petitor Xiaonei started out as a campus-based site It is oftenreferred to as the lsquoChinese Facebookrsquo given the very similarinterface Xiaoneirsquos owner received $430 million funding inMay 2008 Another SNS operator with campus roots is 51comKaixin001 is popular among white-collar workers in Chinabecause of its microblogging platform its gigabyte storagespace and popular applications such as Friends for Sale andParking Wars Probably MySpacersquos most formidable competi-tor is Qzone an instant messaging service (lsquolsquoQQrsquorsquo) developedby Shenzhen-based Tencent Although not a Western-stylesocial network site Qzone shares many features and is highlypopular among adolescents and online gamers

About a year after its entryMySpacecn had notmuch to showfor its effort and heavy investments By 2008 the site claimedaround 5 million members Also less than 18 months afterentering the market its CEO left Chinese reports speculatedthat Luo Chan left because News Corp had not given him theautonomy he had hoped for Rumor has it that News Corptargeted 50 million users by 2010 If this were indeed the caseMySpace could face an uphill struggle Market leader Qzonealreadyhas 105million registeredusers and51comhas 95million

TheWestern-style social networking format was slow to takeoff in China partly because of the need to use onersquos real nameBulletin boards which allow anonymity aremuchmore popularamongChinese netizens These typically focus on specific topicsof interest

Sources lsquolsquoMySpace China Struggles for a Nichersquorsquo Media October 22008 lsquolsquoMurdoch Is Taking MySpace to Chinarsquorsquo wwwnytimescomaccessed on March 6 2009 and lsquolsquoMySpace China Looks for Answersafter Setbackrsquorsquo wwwbusinessweekcom accessed on March 6 2009


FURTHER READINGS r r r r r r r r r r r r r r r r r r r r r

Berthon Pierre Leyland Pitt Constantine S Katsikeas andJean Paul BerthonlsquolsquoVirtual Services Go International In-ternational Services in the Marketspacersquorsquo Journal of Inter-national Marketing 7(3) (1999) 84ndash105

Cronin Mary J Global Advantage on the Internet FromCorporate Connectivity to International CompetitivenessNew York Van Nostrand Reinhold 1996

Dodd Jonathan lsquolsquoMarket Research on the InternetmdashThreator OpportunityrsquorsquoMarketing and Research Today (February1998) 60ndash67

Okazaki Shintaro lsquolsquoSearching the Web for Global BrandsHow American Brands Standardise Their Web Sites inEuropersquorsquo European Journal of Marketing 39 12 (2005)87ndash109

Some observers doubt whether MySpacersquos business modelwill ever succeed in China Brad Greenspan chairman ofBroadWebAsia said lsquolsquoEverybody knows itrsquos a US brand Ifyou want to spend time on a site thatrsquos about you itrsquos harder topull that off with a US brand It just doesnrsquot feel authenticrsquorsquo(wwwbusinessweekcom) Others concur and argue that SNS isan entirely local game in China Furthermore Chinese usersmay be reluctant to switch to a newcomer Many youngChinese students may also have trouble simply spelling thename MySpace

One observer of the industry commented that lsquolsquoGiven thebrand name amount of money behind it and team it has puttogether MySpace China has no choice but to go after themassive mainstream social networking market to reach criticalvolume However in the long run I donrsquot think that Chineseonline habits or preferences will support general social net-working sitesrsquorsquo (Media October 2 2008) Others suggest that

MySpace China needs to differentiate itself from its wide rangeof competitors and come up with a niche and unique servicesAnother challenge which MySpace also faces in other coun-tries is how to monetize the site


1 Is there a market opportunity for MySpace in China Whyor why not

2 Why is MySpacecn struggling Is News Corp overambi-tious with its 50 million users goal

3 What should by the business model for MySpace ChinaShould the site indeed go for a niche If so which one How tolsquolsquomonetizersquorsquo (generate revenue) the site

4 Why do you think well-known global website brands find ithard to crack Chinarsquos internet market

Source wwwMySpacecn

Further Readings 657

Pitt Leyland Pierre Berthon and Richard TWatsonlsquolsquoCyberser-vice Taming ServiceMarketing Problemswith theWorldWideWebrsquorsquo Business Horizons (JanuaryFebruary 1999) 11ndash18

Quelch John A and Lisa R KleinlsquolsquoThe Internet and Inter-national Marketingrsquorsquo Sloan Management Review (Spring1996) 60ndash75

Samiee Saeed lsquolsquoThe Internet and International Marketing IsThere a Fitrsquorsquo Journal of Interactive Marketing 12(4) (Au-tumn 1998) 5ndash21

Shankar Venkatesh and Jeffrey MeyerlsquolsquoThe Internet andInternational Marketingrsquorsquo in The SAGE Handbook ofInternational Marketing Masaaki Kotabe and KristiaanHelsen (eds) London SAGE 2009

Steenkamp Jan-Benedict E M and Inge GeyskenslsquolsquoHow Country Characteristics Affect the PerceivedValue of Web Sitesrsquorsquo Journal of Marketing 70 (July2006) pp 136ndash150


the flurry In fact for many SMEs the internet has proven to be a welcome opportunityfor overseas expansion

Although the internet originated in the United States it has rapidly morphed into aglobalphenomenonTheworldwide internetpopulation surpassed the1billionmilestonein 2005mdashup from only 45 million users 10 years earlier and 420million in 2000 The totalnumber of users was nearly 15 billion in mid-2008 Exhibit 19-1 presents a geographicbreakdownof internet usageworldwideAs you can see the internet population inChinais larger now than the number of US internet users Another notable fact is the rapidincrease of the internet population with growth rates of around 1000 percent for each ofthe four BRIC countries (see last column of Exhibit 19-1)2

Until the early 1990s the internet was primarily the preserve of the military andacademic researchers However the development of new software (eg Java Netscape)during the early 1990s has turned the internet into a commercial medium that hastransformed businesses worldwide In the advent of the forces unleashed by this newtechnology this final chapter focuses on the role of the internet in global marketing Wefirst highlight the main challenges that international marketing managers face with theinternet The remainder of the chapter explores the impact of the web on globalmarketing strategies

BARRIERS TOGLOBAL INTERNETMARKETING r r r r r r r

Although most forecasts about the future of global e-commerce are rosy there areseveral structural barriers thatmight slowdown its expansion Inparticular the followinghurdles might interfere (1) language barriers (2) cultural barriers (3) infrastructure(eg penetration of personal computers broadband or 3G) (4) knowledge barriers(5) access charges and (6) government regulations Let us look at each one of thesein turn

When Avis Europe PLC set up its global car-rental website in 1997 clients could rent acar almost anywhere in the world as long as they spoke English Avis soon found out

EXHIBIT 19-1TOP 15 COUNTRIES IN INTERNETUSAGE

Country

Internet Users

(in millions)

of World

Users

Penetration

(as of countryrsquos

population)

User Growth

(2000-2008)

1 China 2530 173 190 102442 United States 2201 150 725 13093 Japan 940 64 738 9974 India 600 41 52 110005 Germany 525 36 638 11896 Brazil 500 34 261 90007 United Kingdom 418 29 686 17158 France 361 25 581 32539 South Korea 348 24 707 82910 Italy 347 24 597 162911 Russia 327 22 232 954812 Canada 280 19 843 120513 Turkey 265 18 369 1225014 Spain 256 18 633 375615 Indonesia 250 17 105 11500

Worldwide Total 14636 1000 219 3055

Source httpwwwinternetworldstatscomtop20htm accessed on March 92009

2Brazil Russia India and China

LanguageBarriers








Cultural Barriers












Infrastructure












COUNTRY NAMES



MENU


LANGUAGE SELECTION









Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)


Unit 2008


KnowledgeBarrier













Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn














Cultural Barriers












Infrastructure












COUNTRY NAMES



MENU


LANGUAGE SELECTION









Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)


Unit 2008


KnowledgeBarrier













Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn


















Infrastructure












COUNTRY NAMES



MENU


LANGUAGE SELECTION









Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)


Unit 2008


KnowledgeBarrier













Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn


















COUNTRY NAMES



MENU


LANGUAGE SELECTION









Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)


Unit 2008


KnowledgeBarrier













Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn













Country

2008 e-readiness

rank

2005 e-readiness

rank

2008 e-readiness

score (max = 10)


Unit 2008


KnowledgeBarrier













Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn



















Access Charges


Regulations











































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn

















































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn



































PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn
























PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn










PLANETGOOGLE







88


Japan Yahoo Japan

510







r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn









r r r r r r r




SERVICE BEING SOLD










Loca

l Res

pons

iven

ess

Low

Hig

h

4 1

3 2







Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn











Source wwwbmwcom







(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn












(Continued )



(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn










(Continued )









p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn















p N1










2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn















2009


































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn







































THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn





























THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn



















THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn










THE INTERNET






delivery


to price




effect


effect

YesNo

Yes

No

Yes

No

Low

High

Yes

No

No

Low

Yes

High












E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn















E-TailingLandscape














Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn




















Online Advertising











































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn

















































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn





































Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn






















Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn











Online Monitoring





































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn



































CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn














CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn










CASE 19-1
















CASE 19-2




Short Cases 655











CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn


















CASE 19-3

MYSPACE IN CHINA





















Source wwwMySpacecn





















Source wwwMySpacecn














19 - GLOBAL MARKETING AND THE INTERNET.pdf

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