LECTRONIC COMMERCE Lars Perner, Instructor ELECTRONIC COMMERCE • Strategies • Regional markets • Risks • Language issues • Other cultural issues • Legal/ regulatory issues Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
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MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 1 ELECTRONIC COMMERCE Strategies Regional markets Risks Language issues Other cultural issues Legal/regulatory.
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MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 1
ELECTRONIC COMMERCE
• Strategies• Regional markets• Risks• Language issues• Other cultural
issues• Legal/regulatory
issues
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 2
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 3
Evaluating Markets
• Economic viability– Income distribution and averages– Segment potential
• Internet readiness– “Least Internet Ready Areas of the
World” (LIRAs) (35% of World population)
– “Internet Ready Areas of the World” (IRAs) (50)%
– “Internet Leaders” (15%)
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 4
Internet Readiness Indices
• Economist– Approximately 100
measures in 6 categories
• Technology infrastructure
• General business environment
• Consumer and business adoption of e-business
• Social/cultural conditions affecting Internet use
• Availability of e-business support services
• Information and Telecommunications (ITC)
• International Telecommunications Union– 26 indicators-e.g.,
• Technology infrasturctures
• Market conditions
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 5
Internet Readiness Criteria
• Infrastructure availability– Performance– Types of access available
• Cost of access– Metered– Unmetered– Dial-up issues
• Proportion of population with access
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 6
LIRAS
• Southern Mexico
• Andean countries
• Most of Brazil
• Sub-Saharan Africa
• Remotest former Soviet Republics
• Laos, Cambodia
• Chinese interior
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 7
IRAs
• Coastal India• Parts of Brazil• Northern Mexico, Mexico City• Hungary• Estonia• Malaysia• Former Soviet Republics closer to Europe• Parts of China (e.g., Shanghai, Hong
Kong)Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 8
Internet Leaders
• U.S., Canada
• Western Europe
• Japan
• Australia
• New Zealand
• Taiwan
• South Korea
• Israel
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 9
Countries with Largest Absolute Number of Internet Users
Number of Internet Users by Country
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
Country
Nu
mb
er
of In
tern
et U
sers
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 10
Countries With the Largest Absolute Number of Users
Sources: World Bank,Nielsen
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 11
Country Internet Penetration Rates by Per Capita GDP
• The extent to which goals of the individual, as opposed to the group, are valued
• Extent to which individual differences in behavior are accepted and/or encouraged
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 35
Country Examples
• High– U.S.
– Australia
– U.K.
– Netherlands
– Canada
– New Zealand
• Middle– India
– Japan
– Argentina
– “Arab World”
• Low– Guatemala
– Ecuador
– Panama
– Venezuela
– Columbia
– Indonesia
– China
– Pakistan
– Indonesia
– Taiwan
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 36
Authors’ Caveats
• Numbers represent averages
• Web sites which happen to portray individualist and/or collectivist values may do so without actually having sought to customize for the particular culture
• Other variables are important
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 37
Suggestions for Sites for Collectivist Societies
• Clubs– May be “offline”—sense
of belonging
– Chat rooms
• Emphasis on community relations
• Family (“we”) theme– Family bonds
• Loyalty programs– To company or brand
– Japanese: amae—loyalty to the group
• Links to local web sites– Demonstration of
connection to local community
• Symbols/pictures of national identity– Flags
– Architecture
– Important buildings
– Local role models
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 38
• Personalization and product uniqueness– Unique content
(e.g., self-selected news, features, adjustment of view)
– Personalized products, if applicable
• Personal product recommendations
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 39
Chapter 5—Uncertainty Avoidance
• Relative importance of predictable environment, defined structure, order vs. acceptance of risk taking, reduced structure, and acceptance of ambiguity
• Extent of acceptance of new ways of doing things if not known
• Valuing conservatism and “traditional” beliefs• Example: Mexican beverage company explicitly
lists behaviors expected from employees
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 40
Countries
• High– Greece– Portugal– Guatemala– Uruguay– El Salvador– Belgium– Japan
• Medium– Germany– Thailand– Iran– Finland
• Low– Singapore
– Jamaica
– Denmark
– Hong Kong
– Sweden
– Ireland
– U.S.
Note that no clear geographic patterns are evident.
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 41
Suggestions for Sites for High Uncertainty Avoidance Societies
• Customer service– Personnel positioned as
experts
– Easily accessible on the site
• Guided navigation• Traditional theme• Connection to local
stores– Depictions
– Ability to return merchandise
• Local terminology
• Free– Trials
– Downloads
• Transaction security• Testimonials
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 42
Suggestions for Sites for Low Uncertainty Avoidance Societies
• None listed. Ideas?
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 43
Chapter 6—Cultural Customization: Power Distance
• Extent to which hierarchy and status are emphasized as opposed to a preference for more “distributed” power and decision making
• High sensitivity to those older, with seniority, and in authority
• Tendency to obey “suggestions” from authority figures
• Preference for face-to-face contact for display of respect
• Emphasis on hierarchical structures
• Emphasis on organization charts
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 44
Countries
• High– Malaysia
– Panama
– Guatemala
– Philippines
– Mexico
– “Arab World”
• Middle– Taiwan
– Iran
– Spain
– Poland
• Low– Austria
– Israel
– Denmark
– New Zealand
– Ireland
– Norway
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 45
Suggestions for High Power Distance Societies
• Hierarchy information
• Picture of CEO and other “important” people
• Use of proper titles
• Quality assurance– “Superior quality”
• Awards
• Vision statement by CEO
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 46
Suggestions for Low Power Distance Societies
• None specifically listed. Ideas?
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 47
• Importance of “context” in communication style—important information may be “embedded” in society as opposed to being more detailed and explicit with unambiguous explanation.
• High context societies– Politeness/indirectness
are emphasized
– Soft sell approach
– Aesthetics
• Low context societies– Hard sell
– Superlative word usage
– Emphasis on rank and prestige of company
– Explicit terms and conditions
– Emphasis on logical, “linear” thinking
– Action orientation
– Emphasis on rationality
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 52
Countries
• High Context– Asia (generally)
– Africa
– South America
– Parts of Middle East
– Japan
– China
– Spain
– Thailand
– Turkey
– Taiwan
– Philippines
• Low context– Most of Northern Europe
– North America
– New Zealand
– Australia
– U.K.
MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 53
Recommendations
• For High Context Societies– Aesthetics– Politeness– Indirectness– “Soft-sell”
approach
• For Low Context Societies– Harder sell– Terms and