Slide 4.1 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 CHAPTER 4 E-ENVIRONMENT

Slide 4.2 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Learning outcomes  Identify the different elements of an organization macro-environment that impact on an organization e- business and e-marketing strategy  Assess the impact of legal, privacy and ethical constraints or opportunities on a company  Assess the role of macro-economic factors such as governmental e-business policies, economics, taxation and legal constraints.

Slide 4.3 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Management issues  What are the constraints placed on developing and implementing an e-business strategy by the e-environment?  What factors influence the adoption of new digital media and how can we estimate future demand for online services?  How trust and privacy can be assured for the customer while seeking to achieve marketing objectives of customer acquisition and retention?

Slide 4.4 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 SLEPT Factors  Macro-environment  Social  Legal  Economic  Political  Technological

Slide 4.5 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 SLEPT: Social  Include the influence of consumer perceptions in determining usage of the Internet for different activities

Slide 4.6 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Slide 4.7 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 SLEPT: Economic  Variations in the economic performance in different countries and region affects spending patterns and international trade

Slide 4.8 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Slide 4.9 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 SLEPT: Technological  Changes in technology offer new opportunities to the ways products can be marketed

Figure 4.1 ‘Waves of change’ – different timescales for change in the environment

Slide 4.11 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Factors governing Internet adoption  Cost of access  Value proposition  Ease of use  Security  Fear of the unknown

Slide 4.12 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Figure 4.2 Global variation in number of PCs per hundred population and percentage Internet access in 2004 Source: ITU (

Figure 4.3 Variation in demographic characteristics of UK Internet users: (a) gender, (b) age, (c) social grade Source: eMori Technology Tracker –

Slide 4.15 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Consumers influenced by using the online channel  Psychographic segmentation  Realistic enthusiasts 14%  Confident brand shoppers 18%  Carefree spenders 19%  Cautious shoppers 14%  Bargain hunters 21%  Unfulfilled 14%

Figure 4.4 Percentage by category who bought offline after researching online Source: BrandNewWorld: AOL UK / Anne Molen (Cranfield School of Management) / Henley Centre, 2004

Figure 4.5 Development of experience in Internet usage

Slide 4.18 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 B2B Profiles  The percentage of companies with access  Influenced online  Purchase online

Figure 4.6 Percentage of businesses that order online Source: DTI (2004), Fig 7.3a

Slide 4.20 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Why personal data are valuable? 1. Contact information 2. Profile information 3. Behavioral information (on a single site) 4. Behavioral information (on multiple site)

Slide 4.21 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Ethical issues and data protection  Ethical issues concerned with personal information ownership have been usefully summarized by Mason (1986) into four areas: 1. Privacy – what information is held about the individual? 2. Accuracy – is it correct? 3. Property – who owns it and how can ownership be transferred? 4. Accessibility – who is allowed to access this information, and under which conditions?

Slide 4.22 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Ethics – Fletcher’s view  Fletcher (2001) provides an alternative perspective, raising these issues of concern for both the individual and the marketer: 1. Transparency – who is collecting what information? 2. Security – how is information protected once collected by a company? 3. Liability – who is responsible if data is abused?

Slide 4.23 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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.

Figure 4.7 Information flows that need to be understood for compliance with data protection legislation

Slide 4.25 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Anti-spam legislation  To protect individual privacy and with intention of reducing spam or unsolicited commercial (UCE)  ‘Sending Persistent Annoying ’  Anti-spam legislation can be viewed at

Slide 4.26 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Avoiding SPAM

Slide 4.27 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Regulations on privacy and electronic communications  Privacy and Electronic Communications Regulations (PECR) Act 1. Applies to consumer marketing using or SMS text messages 2. Is an ‘opt-in’ regime 3. Requires an opt-out option 4. Does not apply to existing customers when marketing similar products 5. Contact details must be provided

Slide 4.28 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Regulations on privacy and electronic communications 6. The ‘From’ identification of the sender must be clear 7. Applies to direct marketing communications 8. Restricts the use of cookies

Slide 4.29 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Understanding cookies  A data file placed on your computer that identifies an individual computer  Persistent  Temporary or session  First-party  Third-party  Cookies are stored as individual text files   FLT_VIS\K:bapzRnGdxBYUU\D:Jul \british- airways.com\ *

Slide 4.30 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Using Cookies

Slide 4.31 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 What are cookies used for?  Personalizing a site for individual  Online ordering systems  Tracking within a site  Tracking across sites

Slide 4.32 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Viral marketing  To reassure web users about threats to their personal information  TRUSTe  ISIS – a UK accreditation initiative  getsafeonline

Slide 4.33 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 TRUSTe and ISIS

Slide 4.34 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Slide 4.35 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Legal – Sparrows eight areas 1. Marketing your e-commerce business 2. Forming an electronic contract 3. Making and accepting payment 4. Authenticating contracts concluded over the Internet 5. risks 6. Protecting Intellectual Property 7. Advertising on the Internet 8. Data protection.

Slide 4.36 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 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: hukum bagi orang berkebutuhan khusus

Slide 4.37 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd Forming an electronic contract  E-commerce sites must contain easily accessible content that clearly states  The company’s identity including address  The main features of the goods or services  Prices information  The period for which the offer or price is valid  Payment, delivery and fulfillment  Substitution

Slide 4.38 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Economic/Political  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.

Figure 4.8 A framework describing the e-economy Source: Booz Allen Hamilton (2002). International E-Economy: Benchmarking The World’s Most Effective Policy for the E-Economy. Report published 19 November, London. © Crown copyright 2002

Figure 4.9 Leaders and laggards in e-commerce Source: © 2005 Adapted from Economist Intelligence Unit data © 2005, Economist Intelligence Unit

Slide 4.41 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Slide 4.42 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Localization

Slide 4.43 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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

Slide 4.44 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 E-government  The application of e-commerce technologies to government and public services

Slide 4.45 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 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?

Figure 4.10 Diffusion–adoption curve

Figure 4.11 Example of a Gartner hype cycle Source: Gartner (2005) Gartner’s Hype Cycle Special Report for 2005

Figure 4.12 Alternative responses to changes in technology

Slide 4.49 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Activity 4.1  List all the social, legal and ethical issues that the manager of a sell-side e-commerce web site needs to consider to avoid damaging relationships with users of his or her site or which may leave the company facing prosecution.  You can base your answer on issues which may concern you, your friends or your family when accessing a web site.

Slide 4.50 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Activity answer – this lecture  Cookies – laws and consumer perception on placing these  Are we limiting access to information from certain sections of society (social exclusion)?  Privacy of personal information entered on a web site  Sending unsolicited  Replying promptly to  Copyright  Site content and promotional offers/adverts are in keeping with the different laws in different countries  Providing text, graphics and personality in keeping with social mores of different countries

Slide 4.51 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Summary 1. Environmental scanning and analysis are necessary in order that a company can respond to environmental changes and act on legal and ethical constraints on its activities 2. Environmental constraints are related to the micro- environment variables reviewed in chapter 5 and the macro-environment variables in this chapter using the SLEPT mnemonic

Slide 4.52 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Summary 3. Social factors that must be understood as part of the move to the Information Society include buyer behaviour characteristics such as access to the Internet and perceptions about it as a communications tool 4. Ethical issues include the need to safeguard consumer privacy and security of personal information. Privacy issues include collection and dissemination of customer information, cookies and the use of direct

Slide 4.53 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Summary 5. Legal factors to be considered by e-commerce managers include: accessibility, domain name registration, copyright and data protection legislation 6. Economic factors considered in the chapter are the regional differences in the use of the Internet for trade. Different economic conditions in different markets are considered in developing e-commerce budgets

Slide 4.54 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Summary 7. Political factors involve the role of governments in promoting e-commerce, but also trying to control it 8. Rapid variation in technology requires constant monitoring of adoption of the technology by customers and competitors and appropriated responses

Slide 4.55 Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition © Marketing Insights Ltd 2007 Tugas  Di Indonesia, undang-undang apa saja yang berhubungan dengan pemanfaatan ICT? Mengatur apa sajakan hukum2 tersebut?