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MKTG 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 2
Strategies
• Exclusionary– Solely domestic
• Inclusionary– “Passively” international– “Glocals” (adaptive approach)– “Globals” (standardized approach)
Completely standardized (“Globals”)
Completely adapted
Middle ground
MKTG 769 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 769 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 769 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 769 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 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 8
Internet Leaders
• U.S., Canada
• Western Europe
• Japan
• Australia
• New Zealand
• Taiwan
• South Korea
• Israel
MKTG 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 10
Countries With the Largest Absolute Number of Users
Sources: World Bank,Nielsen
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 11
Country Internet Penetration Rates by Per Capita GDP
Note accounting issues!
Source: Nielsen.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 12
Online Language Communities
• Sizable group of people communicating in the same language
• Not proportional to percentage of off-line speakers– Demographics of Internet users within
a country– Willingness to use English or other
language sites
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 13
Risks in International Expansion
• Over-expansion
• Brand dilution
• Over-estimation of revenue
• Under-estimation of costs
• Underestimation of competition
• Regulations
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 14
Area Issues
• Europe– High penetration rates;
access outside home– Strong economies– Low credit card use– Competing
technologies• Interactive TV
• U.S./Canada– Canadian specialty
shopping– High penetration rates– Weakening U.S. dollar;
strengthening Canadian dollar
• Mexico– Growth potential– Low credit card
penetration
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 15
More Regions
• Asia/Oceania– China/Japan
• Use of wireless technology for other purposes
• Low rates of credit card use
– China• Modest economic
power
– Japan• Internet ordering
through local merchants
– South Korea• High Internet
penetration rate (45%)
• Faster high speed access than in the U.S.
– Australia/New Zealand
• English language use
• Relatively similar culture to U.S.
• High shipping costs
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 16
Language Issues
• Prior to 2000, 96% of web sites were estimated to be in English, the “first language” of 6% of the World population
• 40.2% of online users are estimated to speak English to some extent
• 2000: Non-English speakers became majority of Internet users
• 75% of Europeans are multi-lingual; 90% of these include English
• Dangers of U.S. English– British English is
international standard– “American” often
perceived as misspelled
– Use of slang• Lesser distance to
British English than to other European languages
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 17
Language Display
• Single-byte (Latin-based) vs. double-byte languages (Cyrillic, Arabic, Chinese, Japanese, Korean)– Characters may not be displayed
correctly (“????” in Internet Explorer)– Conversion software– Brower adaptation may not be
“backwards compatible” with other software
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 18
Translation
• Whole vs. part– FAQ, feedback forms, product
specifications, warnings, shopping cart info, legal
• Quality of translation– Superficial– “De-centering” (“back translation)
• English language instruction as a product
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 19
Cultural Issues
• Color– Black as
background• “Stylish” in U.S.• “Unlucky” in Asia,
Europe, Latin America
– Red as a “lucky” color in China but can be over-used
– White and green are “unlucky” in Cina
• Symbolism– Dogs as pets– Numbers
• “Unlucky” numbers– 4, 9, 13 (Japan)– 4, 14 (China)
• “Lucky” numbers– 1, 8 (China)
• Formality of communication
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 20
More Cultural Issues
• Measurement issues– Metric vs. U.S.,
British systems– Clothing sizes
• Representation of numbers– 1,000.00 vs.
1.000,00– Dates
• Offensive content– Specific body parts– “Revealing”
content– Gestures
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 21
Government Issues
• Regulation– Extraterritorial
laws and regulations
– Privacy• “Safe Harbor”
procedures
– Encryption restrictions
• Extent of regulation– Protection of small
businesses– Limitations on
online advertising (China)
• Taxation• Censorship • Fraud
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 22
International Internet Users
• Finding buyers– Local search
engines• Advertising• Search engine
optimization
– Mailing lists from catalogs prior to Internet entry
• Demographics– Gender ratios– Socioeconomic status
of users
• Access speed– High broadband
access rates in Europe and Korea
• Out-of-Home Access– Portable systems
• Web enabled cell phones/PDAs
• Solar/battery powered devices for developing World
• Pirates and piracy
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 23
Selected Issues
• Internet governance– Running of “top domain”
and IP numbering systems
– Fear of constraining influences if countries with reputations for censorship participate
• Cross-border spamming– Identification– Action against offenders
• Censorship issues– Extreme (China,
Singapore)– More modest (Europe)
• Gambling– U.S. based
• Indirect ownership of foreign sites
– Foreign based– Loopholes in rules
• Import/export constraints
• Government oversight/ regulation– Extent of regulation– Policy on competition
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 24
The Culturally Customized Web Site
• Book objectives– Describe comprehensive study
of web site evaluation by consumers in five countries
– Make suggestions for adapting web sites for different cultures
• Book web site
http://theculturallycustomizedwebsite.com/
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 25
Chapter 1:Cultural Customization
• Some issues– Values depicted– Aesthetics– Conventions– Symbolism
• Color
– Desirability of features
• For reassurance• To affirm values
• Some areas considered– Hofstede’s
dimensions– High vs. low
context orientation of culture
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 26
Research
• Level of customization vs. – Attitude (liking)
– Purchase intention
• Both more favorable attitudes and higher purchase intentions for customized web sites in several countries– Italy
– India
– Netherlands
– Switzerland
– Spain
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 27
Web Site Classifications (Somewhat Arbitrary)
• Standardized– Same content for whole
world– http://www.Tyco.com
• Semi-Localized– Limited local information
—e.g., contact info for foreign subsidiaries
– http://www.Gap.com
• Localized– Country specific pages– Translation into local
languages as needed– http://www.Dell.com
• Highly localized– Country specific URLs– Local formats (e.g., zip
vs. postal code, time)– Local content– http://www.Amazon.com;
http://www.Amazon.co.uk
• Culturally customized– “Complete immersion”– Three levels
• Adaptation• Symbolism• Behavior
– None identified; closest is http://www.Ikea.com
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 28
Ch. 2: The Rationale for Cultural Customization
• Web return on investment (ROI)• Characteristics favoring customization
– Open– Interactive dialogue, culturally sensitive– Hyperlinks, self search need for motivation– Customization opportunities from technology
ability to meet diverse customer needs– Increasing bandwidth opportunities for
integrated experience based on customization– Need to “hold” customers need for
motivation
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 29
Relevant Cultural Issues: Perception, Language
• Perception—what is – Noticed– Processed
• Language– Chinese found to learn
faster visually due to pictoral alphabet
• Color perception– Associations, preferences– Naming
• Implications– Spatial orientation
(right-left, left-right, up-down) navigation modes
– Translation issues• Idiomatic
equivalence• Vocabulary
equivalence• Conceptual
equivalence
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 30
More Language Issues
• Dialects
• Text length formatting implications– Language structure– Use of acronyms
• Color categories
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 31
Cultural Issue: Symbolism
• Association of concepts or images with meaning (e.g., flag with patriotism)
• Associations will tend to vary; often based on language and experience or word sounds (Chinese)
• Country specific symbols
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 32
Cultural Issue: Behavior
• National norms
• Expectations of how to do things
• Relationships between people
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 33
Ch. 3: A Cultural Values Framework for Web Design
• Cultures vs. countries may need to subdivide—e.g., – India, Ireland, Switzerland
• Culture vs. within-culture variation—e.g., lifestyle segmentation (VALS2)
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 34
Chapter 4—Cultural Customization: Individualism-Collectivism
• The extent to which goals of the individual, as opposed to the group, are valued
• Extent to which individual differences in behavior are accepted and/or encouraged
MKTG 769 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 769 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 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 38
Suggestions for Sites for Individualist Societies
• Independence theme– “I-consciousness”– Individual
determinism– “Invest on your
terms”
• Strong privacy statement
• Personalization and product uniqueness– Unique content
(e.g., self-selected news, features, adjustment of view)
– Personalized products, if applicable
• Personal product recommendations
MKTG 769 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 769 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 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 42
Suggestions for Sites for Low Uncertainty Avoidance Societies
• None listed. Ideas?
MKTG 769 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 769 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 769 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 769 LECTRONIC COMMERCE Lars Perner, Instructor 46
Suggestions for Low Power Distance Societies
• None specifically listed. Ideas?
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 47
Chapter 7—Cultural Customization: Masculinity-Femininity
• Value of achievement, assertiveness, ambition vs. nurturance, care for others
• Masculine societies– Tendency toward clear
gender roles
– “Success orientation”
– Decisiveness
– Directness (depending on levels of collectivism, power distance)
• Feminine societies– “Oneness with nature”
– Service orientation
– Harmony
– Modesty
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 48
Countries
• High masculinity– Japan– Hungary– Austria– Venezuela– Switzerland– Mexico
• Middle:– Malaysia– Brazil– Singapore– Israel– West Africa
• High Femininity– Sweden
– Norway
– Netherlands
– Denmark
– Costa Rica
– Finland
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 49
Recommendations for Masculine Societies
• Indication of product effectiveness• Quizzes, games (competitive element)• “Realism” theme
– Decisiveness vs. fantasy, imagery– “Rational”/performance appeals
• Clear depiction of gender roles and segregation– E.g., female section of Japanese search
engine
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 50
Recommendations for Masculine Societies
• Similar considerations to “high context” societies
• Harmony
• Aesthetics
• Soft sell
MKTG 769 LECTRONIC COMMERCE Lars Perner, Instructor 51
Chapter 8—Cultural Customization: High-Low Context
• 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 769 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 769 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
conditions– Rank– Prestige– Superlatives
Recommended