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8/11/2019 E-Marketing Ch 4
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E-Marketing
Dr. Karim Kobeissi
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Chapter 4: Building Inclusive E-Markets
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Keywords: Inclusive Markets
Inclusive Marketsare markets that
extend choices and opportunities to
the poor (and other excluded groups)
as producers consumers and wage
earners!
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vervie! o" #lobal E-MarketingIssues
"ne o# the $ig changes online: users "rom
other countries$ speaking languages
other than English$ !ill dominate the
Internet - %y %&'& there were
approximately 4(( million English-speaking
and 4&)million &hinese-speaking we$ users!
Discussoveralltrendsin
Internetaccessusageand
purchasingaroundtheworld!
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Exhi$it '! *+,D*IDE IE+E/01#E
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*orld!ide Internet /sage/n important e6ect o# the increasing num$er o# non-74
Internet users on the Internet is that the onlinemarketplace is changing which will re8uire that glo$al
e-marketers understand countr2 e-readiness!
9lo$al e-marketers must di6erentiate $etween
developed countries and emerging
economies where the greatest growth
opportunities and marketing challenges lie!
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Economies
&ountries that have high levels o# economic
development (7nited 4tates apan etc!) areclassi;ed as developed countries!
ciency result 3 ahigh gross domestic product (9?@) per capita!
&ountries that are still struggling with
standards o# living #or their citi1ens are
classi;ed as emerging economiesand are
experiencing rapid economical gro!th!
4-8
?e;ne
emergingeconomiesand explainthe vitalrole o#
in#ormationtechnologyineconomicdevelopme
nt!
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4-9
Developed Countries 3 EmergingEconomies con5
Emerging economies are characteri1ed $y a rapidl2
developing middle class which creates demand #or
products and services!
6our countries represent the power and opportunity in
emerging markets: Bra7il$ +ussia$ India and China
B+IC5.
&ountries with emerging economies can $e #ound on every
continent!
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Importance o# In#ormation Aechnology
I 3 Internet accelerates the process o" economic
gro!th through di8usion o" ne! technologies (e!g!
Internet $anking online reservation online education!!!) !hich
increase e9ciencies in the production (e!g! producing a
given set o# goods or services in a more technically e>cient
manner) distribution$ and sale o" goods and services.
he application o" in"ormation technolog2 opens up ne!$
eciting$ global markets and opportunities especiall2 "or
businesses in emerging economies . 6or eample$ online
direct trade (instant access to a glo$al marketplace) online
direct investments (having #oreign ;rms $ring them to you)!
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Importance o" I in Economic Development
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Importance o# In#ormation Aechnology (con)
Ahe Internet can $oost emerging economies (e!g! India)
where people will $e armed with greater in#ormation #or
agriculture manu#acturing trade $usiness selling their
products and services across the world and not Bust
limiting themselves in the local market
instantaneously
tap a glo$al marketplace!
0uccess"ul marketing on the Internet
can leap"rog a compan2 "rom nowhere
to somewhereovernight.
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1nal2sis
/n e-marketing plan guides the marketer
through the process o# identi"2ing and
anal27ing potential markets 9lo$al e-
marketers must $alance two di6erent
analytical approaches:
Market similarit2
Market di8erences
Market di8erencesand market similaritiesmust $emeasured and comparedto determine strengthsand !eaknesses!
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Understand market differences
Emerging economy Emerging economy
Developed economy
Understandmarket similarities
Understand
market differences
Market Approaches Between Emerging and Developed Economies
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M a r k e t 4 i m i l a r i t y
&oncept o# market similarity 3 marketers choose #oreign markets
that have similar characteristics (language Internet usage rates
secure online payment mechanisms use o# credit cards rate e>cient
package delivery services clearly de;ned market segments willing to
shop on-lineC!) to their home market #or initial market entry!
/ 7nited 4tates-$ased company would target &anada the 7nitedKingdom and /ustralia $e#ore Drance apan or 9ermany!
1ma7on.com has used this strateg2 as it epanded globall2. Ithas international *eb 0IE0 in the /K$ 6rance$ #erman2$1ustria$ and ;apan.
Market similarity not only reduces (without eliminating) the risk o#
entry into #oreign markets $ut also helps explain why it targeted
these countries in the ;rst place!
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M a rke t ? i 6 e re n c es
Market di6erences are ways in which two
markets exhi$it dissimilar characteristics!Internet marketing di6erences $etween
developed and developing countries #orm thegreatest o$stacles to e-commerce!
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M a r ke t ? i6 e re n c e s ( c o n )
7!4! and European list:
@rivacy concerns (5*) &ensorship (+'*) 0avigation di>culties
(*)
Aaxes (.*)!
Emerging economies list:
4low connection speeds(+.*)
&osts o# domestic phone calls(+.*)
Internet 4ervice @rovider costs(.*)
ack o# content in oneFs ownlanguage (,*)
ack o# local content (,*)!
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&hallenges o# E-marketers "perating in Emerging Economies
E-marketers operating in emerging economies #ace many
challenges such as solving pa2ment 3 trust Issues!In #act one o# the $iggest di6erences $etweendeveloped countries and emerging economies is thelimited use and acceptance o# credit cards inunderdeveloped countries (e!g! %olivia 0epalEthiopia)! Ahis pro$lem limits the a$ility #or potentialcustomers to make a purchase via the Internet!International e-marketers understand these di6erencesand must ;nd alternative means #or conducting
$usiness over the Internet!
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E-&ommerce @ayment G Arust Issues
E-marketers working in emerging economies
should also understand attitudes toward onlinepurchasing! / +,, study in ithuania #ound that * o#
Internet users had not made an online purchase$ecause they thought it was too risky!
1lternativepayments were accepted %ank trans#ers &ash on delivery @ostal orders
e%anka de$it cards speci;cally created #or online$uying&1ech 2epu$lic e%anka an Internet $ank was
esta$lished in ..H to handle secure online purchases!
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&hallenges o# E-marketers "perating in Emerging Economies
0olving credit card pa2ment issues is onl2 one o"
several problems. E-marketers must also deal
!ith:
a) %asic technology issues
$)
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a ) %as i c Aech no l ogyE-marketers must deal with #rightening issues o# $asic
technology such as the limited access to and use o#
computersand telephones:
Computers In many o# the developing nations there are markets to
$e penetrated $ut with low levels o# internet access itproves to $e very di>cult #or companies to reach theseuntapped markets! "ne aspect which helps thispro$lem is that entrepreneurs in these countries arediscovering that personal computers are too expensive
#or most people to o$tain! elephone
Aelephone land lines are entering the decline stage o#their product li#e cycle
/s wireless technology increases landlines will $ecomeless use#ul and ultimately o$solete
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%as i c Aech no l ogy ( co n )
Challenges
9lo$al computer ownership and access is
unevenly distri$uted!
"wnership ranges #rom H'* in Kuwait to +* in
%angladesh!
elephones (and connectivity) can $e scarce
and expensive!
Many consumers in countries with emerging
economies access the Internet #rom telecenters
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$)
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c) 4low Internet &onnection 4peeds
Broadbandconnections are developing =uickl2 and growth
is predicted to come #rom emerging markets!
0outh Korea has one o# the highest $road$and penetration rates
and one o# the worldFs "astest$ cheapest net!orks.
E-marketers must analy1e the relationship$etween *eb site
design and customerFs connection speeds! Many #eel the dial-up era is 8uickly coming to an end
"nline companies with a diverse customer $ase must keep their
e$ sites simple
E-marketerFs must understand how connection speeds
inuence do!nloadrates
E-marketers and graphic designers must di8erentiate
$etween what LcanJ $e done and what LshouldJ $e done!
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d ) 7 n p r e d i c t a $ l e @ o w e r 4 u p p l i e s
Emerging economiesF irregular
electricit2 can also $e a challenge #or
e-marketers!
Internet $ased $usiness cannot
complete transaction i# customerFs have
no electricity!
5 i l
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e 5 * i r e l e s s I n t e r n e t 1 c c e s s
Many countries including those with emerging
economies have more mo$ile telephone su$scri$ersthan ;xed-line telephone su$scri$ers (two-thirds o# the
world are now connected via mo$ile phones)! /s a
result e-marketers must consider how to:
Modi#y e$ site content #or small cell phone displays
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# ) A h e ? i g i t a l ? i v i d eInternet adoption is a6ected $y money literacy
and education! Ahis creates a divide $etweenthose who have access to the Internet and
those who donFt! It weakens the upward
mo$ility o# those on the lower socioeconomic
level who donFt have access to the Internet and
the in#ormation that comes with it! Ahis impactsindividuals on the lower socioeconomic levels
and those living in less developed countries!
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Ahe ?igital ?ivide (con)
Digital divide: Is that $etween countries and
$etween di6erent groups o# people within
countries there is a wide division $etween those
who have real access to in#ormation and
communications technology and are using it
e6ectively and those who donFtJ!
Ahe digital divide raises challenging8uestions #or
glo$al policy international $usiness and
entrepreneurship!
Ahe orld ide e$ is not really worldwide
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Building Inclusive E-Markets
Explosive growth o# mo$ile phoneshas ena$led e-marketers to reachbase of the pyramid consumer
segments! Mobile banking is one o# the most
success#ul e-marketing e6orts inE/4A developed countries (,DCs.5
In heavily agricultural countriesmo$ile applications #or "armers aremaking them more productive (e!g!7ganda India G Indonesia)
Explainhow e-marketingis $eing
used withvery lowincomeconsumers!
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Building Inclusive E-Marketscon5
Ahe Internet is aiding in closing the technologyand ;nancial gapin several ways: 6inancial assistance
Micro loans
Micro;nance &redit can $e issued to low income consumers
echnological assistance Mo$ile phones
4atellite Internet access Banking assistance
4olve the rural related pro$lem Many people are Lun$anka$leJ Mo$ile phones can $e used to conduct $anking