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E-MARKETING 5/E
JUDY STRAUSS AND RAYMOND FROST

Part II: E-Marketing Environment


Chapter 4: A World of E-Marketing Opportunities

2009 Pearson
Education, Inc.
Publishing as Prentice
Hall

Chapter 4 Objectives
4-2

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.
2009 Pearson Education,
Inc. Publishing as Prentice

Chapter 4 Objectives, cont.


4-3

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.
2009 Pearson Education,
Inc. Publishing as Prentice

Idol Goes Global


4-4

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.

2009 Pearson Education,


Inc. Publishing as Prentice

Idol Goes Global, cont.


4-5

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/Ethiopi
an_Idols.htm
Indian Idol: http://sify.com/indianidol/

2009 Pearson Education,


Inc. Publishing as Prentice

4-6

Overview of Global EMarketing Issues

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.
2009 Pearson Education,
Inc. Publishing as Prentice

4-7

Worldwide Internet Usage


Ex 4.1

2009 Pearson Education,


Inc. Publishing as Prentice

4-8

Internet Use Varies by


Country

The worlds 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.
2009 Pearson Education,
Inc. Publishing as Prentice

Top Ten Internet Usage


Countries Ex.4.2

4-9

2009 Pearson
Education, Inc.
Publishing as
Prentice Hall

Developed Economies
410

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 emarketing activities discussed in the text.
2009 Pearson Education,
Inc. Publishing as Prentice

Emerging Economies
411

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
2009 Pearson Education,
Inc. Publishing as Prentice

412

Importance of Information
Technology

The internet accelerates the process of


economic growth through diffusion of new
technologies.

Bangalore, India is the center of Indias


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
2009 Pearson Education,
Inc. Publishing as Prentice

Market Approaches Ex 4.4


413

2009 Pearson Education,


Inc. Publishing as Prentice

E-Commerce Payment and


Trust Issues

414

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.
2009 Pearson Education,
Inc. Publishing as Prentice

415

E-Commerce Payment and Trust


Issues, cont.

In addition to credit card usage, emarketers 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.
2009 Pearson Education,
Inc. Publishing as Prentice

416

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

2009 Pearson Education,


Inc. Publishing as Prentice

Computers & Telephones


417

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.
2009 Pearson Education,
Inc. Publishing as Prentice

Internet Connection Costs


418

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.
2009 Pearson Education,
Inc. Publishing as Prentice

Wireless Internet Access


419

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
2009 Pearson Education,
Inc. Publishing as Prentice

The Digital Divide


420

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.
2009 Pearson Education,
Inc. Publishing as Prentice

China: A View of the Future


421

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.
Chinas vibrant, growing online market
requires adaption to success.
2009 Pearson Education,
Inc. Publishing as Prentice

422

Popular Web Sites in China


Ex.4.16

2009 Pearson Education,


Inc. Publishing as Prentice

23

2009 Pearson Education,


Inc. Publishing as Prentice