4 EENVIRONMENT Slide 4 2 LEARNING OUTCOMES Identify

4. E-ENVIRONMENT

Slide 4. 2 LEARNING OUTCOMES Identify the different elements of an organization macroenvironment that impact on an organizations e-business and e-marketing strategy Assess the impact of legal, privacy and ethical constraints or opportunities on a company Assess the role of macro-economic factors such as governmental e-business policies, economics, taxation and legal constraints. Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 3 MANAGEMENT ISSUES What are the constraints placed on developing and implementing an e-business strategy by the e-environment? How can trust and privacy be assured for the customer while seeking to achieve marketing objectives of customer acquisition and retention? Assessment of the business relevance of technological innovation. Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 4 ACTIVITY 4. 1 INTRODUCTION TO SOCIAL, LEGAL AND ETHICAL ISSUES List all the social, legal and ethical issues that the manager of a sell-side e-commerce web site needs to consider to avoid damaging relationships with users of his or her site or which may leave the company facing prosecution. You can base your answer on issues which may concern you, your friends or family when you access a web site. Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 5 SLEPT FRAMEWORK Social-influence consumer perception of Internet use for ecommerce Legal & Ethical-determine what can be promoted and sold online Economic-affect spending patterns Political-Determine the adoption and the future of Internet Technological-offer new opportunities Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 6 Figure 4. 1 ‘Waves of change’ – different timescales for change in the environment Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 7 SLEPT FRAMEWORK E-Commerce Manager has to monitor the changes of the Macro-environment (also called environment scan) Among the 5 factor type, Legal factor is one of the most important. P. 195, Table 4. 2 Lists the Key legal issues that have direct impact on e-commerce Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 8 FACTORS GOVERN ECOMMERCE ADOPTION Cost of Access Value proposition Ease of use Security and trust Fear of the unknown Skills Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 9 WEBOGRAPHICS Usage location Access device Connection speed ISP Experience level Usage type-work, social, entertainment, etc. Usage level-hours or minutes / month Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 10 Figure 4. 2 Variation in broadband subscribers per 100 inhabitants, by technology, December 2007 Source: OECD (www. oecd. org/sti/ict/broadband) Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 11 INFLUENCES OF ONLINE CHANNEL Finding products and services online is a popular web activity Online research occurs at every phase of purchase, even for offline purchases Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 12 Figure 4. 3 Percentage by category who bought offline after researching online Source: Brand. New. World: AOL UK / Anne Molen (Cranfield School of Management) /Henley Centre, 2004 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 13 MOTIVATION FOR USING ONLINE SERVICES Community Survey Entertainment Download Product trial Search Information Interaction Make purchases Exploration Games News Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 14 E-COMMERCEPSYCHOGRAPHIC SEGMENTATION Online Consumer Type 1999 2004 Realistic Enthusiasts 15% 14% Confident brand shoppers 16% 18% Carefree spenders 15% 19% Cautious Shoppers 20% 14% Bargain hunter 16% 21% Unfulfilled 17% 14% Ref. Box 4. 1 on pp. 202 -203 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 15 TRUST IN DIFFERENT INFORMATION SOURCES The role of social media and friends in influencing sales was highlighted by this research http: //eiaa. net/ftp/casestudiesppt/EIAA_Online_Shoppers_Rep ort. pdf Search engines (76%) Personal recommendations (72%) Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 16 TRUST IN DIFFERENT INFORMATION SOURCES Price comparison web sites (61%) Web sites of well-known brands (59%) Newspapers/magazines (58%) Customer web site reviews (58%) Expert web site reviews (57%) Retailer web sites (57%) Sales people in shops (50%) Content provided by ISPs (38%). Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 17 Figure 4. 4 Development of experience in Internet usage Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 18 Figure 4. 5 Variation in purchase rates of online products and services in Europe Source: European Interactive Advertising Association (www. eiaa. net), Mediascope Eupore 2008 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 19 BUSINESS AS ONLINE BUYERS B 2 B Profiles The % of companies with access by the right personnel Influenced online—may not buy online but affected by online information Purchase online Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 20 E-BUSINESS ADOPTION BY SMES SMEs have a lower adoption rate in comparison to larger enterprises. They can be classified into 4 categories Developers Communicators Web presence Transactors Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 21 Figure 4. 6 Variation in use of e-commerce services between SMEs and larger enterprises Source: European Commission (2007) Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 22 E-BUSINESS ADOPTION BY SMES Assessing the risk and reward for SME adoption Revenue Reputation Strategic importance Regulatory compliance Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 23 PRIVACY AND TRUST IN E-COMMERCE What are ethical standards? Why is it so important for e-commerce? What’s privacy? Why privacy a big deal for e-commerce? Identity fraud in Canada- http: //www. safecanada. ca/identitytheft_e. asp Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 24 PERSONAL DATA AND ECOMMERCE Online businesses and e-marketer typical need these data Contact info Profile info—segmentation Access platform Behavioural info on a single site Behavioural Info on multiple sites Anything else? Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 25 Table 4. 6 Types of information collected online and related technologies Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 26 Table 4. 6 Types of information collected online and related technologies (Continued) Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 27 ETHICAL ISSUES AND DATA PROTECTION Ethical issues concerned with personal information ownership have been usefully summarized by Mason (1986) into four areas: Privacy – what information is held about the individual? Accuracy – is it correct? Property – who owns it and how can ownership be transferred? Accessibility – who is allowed to access this information, and under which conditions? Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 28 Table 4. 2 Significant laws which control digital marketing Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 29 Table 4. 2 Significant laws which control digital marketing (Continued) Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 30 ETHICS – FLETCHER’S VIEW Fletcher (2001) provides an alternative perspective, raising these issues of concern for both the individual and the marketer: Transparency – who is collecting what information? Security – how is information protected once collected by a company? Liability – who is responsible if data is abused? Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 31 THE EIGHT PRINCIPLES FOR DATA PROTECTION Fairly and lawfully processed for limited purposes adequate, relevant and not excessive accurate not kept longer than necessary processed in accordance with the data subject's rights secure not transferred to countries without adequate protection www. dataprotection. gov. uk Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 32 ETHICAL ISSUES AND DATA PROTECTION In Canada, Personal Information Protection and Electronic Documents Act (PIPEDA) establishes principles for collection, use, and disclosure of personal information. http: //laws. justice. gc. ca/en/showdoc/cs/P-8. 6///en? page=1 Provinces have parallel legislation Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 33 Figure 4. 7 Standard information collected about web site visitors from the Dave. Chaffey. com site Source: Feedjit Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 34 Figure 4. 8 Information flows that need to be understood for compliance with data protection legislation Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 35 OTHER E-COMMERCE LEGISLATION Market e-commerce business Domain name and brand/trademark protection Using competitor name in meta-tag and pay-per-click advertising Accessibility law Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 36 Figure 4. 9 Comparison of number of blog postings for three consumer brands Source: Blogpulse (www. blogpulse. com), reprinted by permission of Nielsen Buzzmetrics Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 37 Figure 4. 10 HSBC virtual forest Source: www. hsbc. co. uk Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 38 TAXATION What do you know about the e-commerce taxes? Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 39 TAXATION Tax Jurisdiction In general, taxes are collected in the jurisdiction where consumption take place This applies to EU and Canada The US federal government doesn’t collect taxes for online purchases States may have different legislations Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 40 TAXATION Canadian merchants must collect Federal taxes (H/GST) for any order in the county, and Provincial taxes for orders made in any region that they have a physical location. If you are a merchants outside of Canada shipping to Canada, with no physical presence in Canada, you do not have collect any taxes http: //www. ecomnet. ca/? p=87 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 41 LOCALIZATION Singh and Pereira (2005) provide an evaluation framework for the level of localization: Standardized web sites (not localized). A single site serves all customer segments (domestic and international) Many sites, especially small business sites fall into this category Semi-localized web sites. A single site serves all customers; however, there will be contact information about foreign subsidiaries available for international customers. Many sites fall into this category http: //scotiabank. com/ Localized web sites. Country-specific web sites with language translation for international customers, wherever relevant. 3 M (www. 3 m. com) has adapted the web sites for many countries to local language versions. Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 42 LOCALIZATION (CONTINUED) Highly localized web sites. Country-specific web sites with language translation; they also include other localization efforts in terms of time, date, postcode, currency formats, etc. Dell (www. dell. com) provides highly localized web sites Culturally customized web sites. Web sites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple web sites for that country depending on the dominant cultures present. Durex (www. durex. com) is a good example of a culturally customized web site Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 43 B 2 B INTERNATIONAL ETRADING Large organizations are doing fairly well. How about SMEs? What’s your opinion on SME B 2 B international trading? Complete Activity 4. 5 on p. 237 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 45 TECHNOLOGICAL ISSUES Rate of change Which new technologies should we adopt? Monitoring for new techniques Evaluation – are we early adopters? Re-skilling and training Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 46 Figure 4. 12 Diffusion–adoption curve Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 47 IDENTIFYING EMERGING TECHNOLOGIES Technology networking—monitoring, scouting, and sharing Crowd-sourcing—facilitate access to ideas from customers, partners, inventors, etc. e. g. , innocentive. com Technology hunting—structured review of start-up companies for new tech capability Technology mining—search the published documentations. E. g. , googlealert Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 48 Figure 4. 14 Inno. Centive Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 49 Figure 4. 15 Alternative responses to changes in technology Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009

Slide 4. 50 SUMMARY What are the SLEPT factors? How could they affect e-commerce? What’s a strategy to adopt in coping with the SLEPT factors? Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009