MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 1 ELECTRONIC COMMERCE Strategies Regional markets Risks Language issues Other cultural issues Legal/regulatory

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.


Strategies

• Exclusionary– Solely domestic

• Inclusionary– “Passively” international– “Glocals” (adaptive approach)– “Globals” (standardized approach)

Completely standardized (“Globals”)

Completely adapted

Middle ground


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%)


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


Internet Readiness Criteria

• Infrastructure availability– Performance– Types of access available

• Cost of access– Metered– Unmetered– Dial-up issues

• Proportion of population with access


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.


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.


Internet Leaders

• U.S., Canada

• Western Europe

• Japan

• Australia

• New Zealand

• Taiwan

• South Korea

• Israel


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

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Countries With the Largest Absolute Number of Users

Sources: World Bank,Nielsen


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


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


Risks in International Expansion

• Over-expansion

• Brand dilution

• Over-estimation of revenue

• Under-estimation of costs

• Underestimation of competition

• Regulations


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


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


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


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


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


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


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


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


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


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


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/


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


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


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


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


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


More Language Issues

• Dialects

• Text length formatting implications– Language structure– Use of acronyms

• Color categories


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


Cultural Issue: Behavior

• National norms

• Expectations of how to do things

• Relationships between people


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)


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


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


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


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


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


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


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.


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


Suggestions for Sites for Low Uncertainty Avoidance Societies

• None listed. Ideas?


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


Countries

• High– Malaysia

– Panama

– Guatemala

– Philippines

– Mexico

– “Arab World”

• Middle– Taiwan

– Iran

– Spain

– Poland

• Low– Austria

– Israel

– Denmark

– New Zealand

– Ireland

– Norway


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


Suggestions for Low Power Distance Societies

• None specifically listed. Ideas?


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


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


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


Recommendations for Masculine Societies

• Similar considerations to “high context” societies

• Harmony

• Aesthetics

• Soft sell


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


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.


Recommendations

• For High Context Societies– Aesthetics– Politeness– Indirectness– “Soft-sell”

approach

• For Low Context Societies– Harder sell– Terms and

conditions– Rank– Prestige– Superlatives

Documents

MKTG 376 LECTRONIC COMMERCE Lars Perner, Instructor 1 ELECTRONIC COMMERCE Strategies Regional markets Risks Language issues Other cultural issues Legal/regulatory