E-MARKETING 5/EJUDY STRAUSS AND RAYMOND FROST

Part II: E-Marketing Environment

Chapter 4: A World of E-Marketing Opportunities

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Chapter 4 Objectives

After reading Chapter 4, you will be able to: Discuss overall trends in Internet access,

usage, and purchasing around the world. Define emerging economies and explain the

vital role of information technology in economic development.

Outline how e-marketers apply market similarity and analyze online purchase and payment behaviors in planning market entry opportunities.

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Chapter 4 Objectives, cont.

Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward internet use, slow connection speeds, Web site design, and electricity problems.

Review the special challenges of e-marketing on the wireless internet in the context of emerging economies.

Discuss the controversy related to the Digital Divide.

Explain why China is becoming a major market for e-marketing innovation and competition.

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Idol Goes Global

American Idol is broadcast in over 100 countries.

Its popularity has spawned 39 national versions in countries such as Ethiopia, the Philippines, and Russia.

The sharing of popular culture has been enhanced by the convergence of TV, internet, mobile phones, and messaging services.

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Idol Goes Global, cont.

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Check out international versions that are streamed over the internet: Music Idol in Bulgaria:

http://musicidol.btv.bg/news/6 Ethiopian Idol:

http://www2.jumptv.com/seo/Ethiopian_Idols/Ethiopian_Idols.htm

Indian Idol: http://sify.com/indianidol/

Overview of Global E-Marketing Issues

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The globe is literally a world of opportunities.

Exhibit 4.1 shows that worldwide internet usage increased more than 58% from 2004 to 2007.

Asia has the most internet users. Africa saw the greatest growth in internet

use. North America has the highest penetration

as a percent of the population.

Worldwide Internet Usage

Ex 4.1

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Internet Use Varies by Country The world’s largest online markets are

the U.S. (215 million users) and China (162 million users).

The top 10 countries account for 70% of all global users.

Some smaller countries, such as Norway, Netherlands and Iceland, have the highest penetration, over 85% of their populations.

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Top Ten Internet Usage Countries Ex.4.2

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Developed Economies

Developed countries are highly industrialized, use technology to increase efficiency, and have a high GDP per capita. Western Europe North America Japan Australia & New Zealand

Developed countries are ideal for the e-marketing activities discussed in the text.

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Emerging Economies

Have low levels of GDP per capita and are experiencing rapid economic growth.

Emerging economies can be found on every continent. Mexico, Central & South America Baltic States & Eastern Europe Russia, Belarus & Ukraine Africa Central & Southeast Asia China

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Importance of Information Technology The internet accelerates the process of

economic growth through diffusion of new technologies. Bangalore, India is the center of India’s

explosive growth in software and IT. Internet marketing differences in

emerging economies include: Fewer computer users Limited credit card use Lack of secure online payment methods Unexpected power failures

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Market Approaches Ex 4.4

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E-Commerce Payment and Trust Issues

E-commerce in emerging markets is often hampered by limited use of credit cards and lack of trust in safely conducting online transactions. Nepal, for example, is a cash-based economy and

credit cards are scarce. For local Nepalis, only Visa, MasterCard, and Himalayan

Bank cards are accepted. In Bolivia, only 2.3 percent of the population has a

credit card. Credit card use is virtually non-existent in Ethiopia.

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E-Commerce Payment and Trust Issues, cont.

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In addition to credit card usage, e-marketers working in emerging economies should understand attitudes toward online purchasing. A 2007 study in Lithuania found that 51% of

internet users had not made an online purchase because they thought it was too risky.

To overcome trust issues, eBanka, an internet bank, was established in the Czech Republic in 1998 to handle secure online purchases.

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Technological Readiness Influences Marketing

E-marketers must deal with daunting issues of basic technology:

Limited access to and use of computers and telephones

High internet connection costs Slow internet connections speeds Unpredictable power supplies

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Computers & Telephones

Computer access is unevenly distributed throughout the world.

Exhibit 4.6 shows computer ownership data for selected countries. Ownership ranges from 84% in Kuwait to 2% in

Bangladesh and Uganda. Telephones (and connectivity) can be

scarce and expensive. Many consumers in countries with emerging

economies access the internet from free-standing shops rather than homes.

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Internet Connection Costs

Countries with emerging economies often have higher internet-related business costs.

Dial-up connection costs can vary considerably.

Broadband connections are developing quickly. In 2002, 88 countries had broadband vs. 166

countries in 2006. Broadband connections are still expensive in

most countries.

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Wireless Internet Access

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At the end of 2007, there were 3.25 billion mobile phone subscriptions worldwide.

Countries with emerging economies have leapfrogged industrial countries in terms of usage.

Challenges of wireless e-marketing: Modification of Web site content for small

screens Text entry using tiny keypads Content development Pricing and secure payments

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The Digital Divide

E-marketers must consider the social environment in which e-business operates.

Disparities with regard to technology access can create a digital divide between countries or populations.

The digital divide raises challenging questions for global policy, international business, and entrepreneurship.

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China: A View of the Future

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China is expected to be the largest economy in the world by 2015.

China represents both the promise and challenge of e-marketing in emerging market economies. 70% of all Chinese internet users are under

the age of 30. China’s vibrant, growing online market

requires adaption to success.

Popular Web Sites in China Ex.4.16

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