CHAPTER 4 E-ENVIRONMENT

SLEPT Factors Macro-environment Social Legal Economic Political Technological

SLEPT: Legal and Ethical SLEPT: Social Include the influence of consumer perceptions in determining usage of the Internet for different activities SLEPT: Legal and Ethical Determine the method by which products can be promoted and sold online Governments, on behalf of society, seek to safeguard individuals right to privacy

SLEPT: Economic SLEPT: Political Variations in the economic performance in different countries and region affects spending patterns and international trade SLEPT: Political National governments and transnational organizations have an important role in determining the future adoption and control of the Internet and the rules by which it is governed

SLEPT: Technological Changes in technology offer new opportunities to the ways products can be marketed

Factors Governing Internet Adoption Cost of access Value proposition Ease of use Security Fear of the unknown

Internet Access Consumers and businesses who uses Internet vary according to countries Within each country, adoption of the Internet vary significantly according to individual demographic characteristics Broadband adoption

Why Personal Data are Valuable? Contact information Profile information Behavioral information (on a single site) Behavioral information (on multiple site)

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?

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?

The Eight Principles for Data Protection Fairly and lawfully processed; 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.

Regulations on Privacy and Electronic communications Privacy and Electronic Communications Regulations (PECR) Act Applies to consumer marketing using email or SMS text messages Is an ‘opt-in’ regime Requires an opt-out option Does not apply to existing customers when marketing similar products Contact details must be provided

Regulations on Privacy and Electronic Communications The ‘From’ identification of the sender must be clear Applies to direct marketing communications Restricts the use of cookies

Viral e-mail Marketing To reassure web users about threats to their personal information TRUSTe ISIS – a UK accreditation initiative

Checklist of Compliance Follow privacy and consumer protection Inform the user Ask for consent for collecting sensitive personal data Reassure customers by providing clear privacy statements Let individual know when cookies are used Never collect or retain personal data Amend incorrect data Only use data for marketing Provide the option to stop receive information Use appropriate security technology

Legal – Sparrows Eight Areas Marketing your e-commerce business Domain name registration Using competitor names and trademarks in meta tags Using competitor names and trademarks in pay- per-click advertising Accessibility law 16

Legal – Sparrows Eight Areas Forming an electronic contract Making and accepting payment Authenticating contracts concluded over the Internet E-mail risks Protecting Intellectual Property Advertising on the Internet Data protection.

Economic/Political, Competitive Factors Ensuring companies competitive Funding for education and technology Promoting new technology e.g. broadband 12% in UK, 70% Taiwan, South Korea Achieving government efficiencies E-government – all UK services online by 2005 Singapore ‘Intelligent Island’ Taxation regimes Legislation for offshore trading.

A framework describing the e-economy Source: Booz Allen Hamilton (2002).

E-commerce and Globalization The increase of international trading and shared social and cultural values Language and cultural understanding English becoming the lingua franca of commerce Tailoring e-commerce services for individual countries or regions

Political Factors Promoting the benefits of adopting the Internet Enacting legislation to protect privacy or control taxation Providing guidelines and assistance for compliance with legislation Setting up international bodies to coordinate the Internet

Technological Issues Need to be able to assess new innovation Rate of change Which new technologies should we adopt? Monitoring for new techniques Evaluation – are we early adopter Re-skilling and training Are our systems secure?