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 4-1

©2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 4 Objectives  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. 4-2

©2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 4 Objectives, cont.  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. 4-3

©2009 Pearson Education, Inc. Publishing as Prentice Hall Idol Goes Global  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. 4-4

Idol Goes Global, cont. ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-5  Check out international versions that are streamed over the internet: Music Idol in Bulgaria : Ethiopian Idol: Indian Idol:

Overview of Global E-Marketing Issues ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-6  The globe is literally a world of opportunities.  Exhibit 4.1 shows that worldwide internet usage increased more than 58% from 2004 to  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.

Worldwide Internet Usage Ex 4.1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-7

©2009 Pearson Education, Inc. Publishing as Prentice Hall Internet Use Varies by Country  The world’s 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. 4-8

©2009 Pearson Education, Inc. Publishing as Prentice Hall Top Ten Internet Usage Countries Ex

©2009 Pearson Education, Inc. Publishing as Prentice Hall Developed Economies  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 e-marketing activities discussed in the text. 4-10

©2009 Pearson Education, Inc. Publishing as Prentice Hall Emerging Economies  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 4-11

©2009 Pearson Education, Inc. Publishing as Prentice Hall Importance of Information Technology  The internet accelerates the process of economic growth through diffusion of new technologies.  Bangalore, India is the center of India’s 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 4-12

Market Approaches Ex 4.4 ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-13

©2009 Pearson Education, Inc. Publishing as Prentice Hall E-Commerce Payment and Trust Issues  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. 4-14

E-Commerce Payment and Trust Issues, cont. ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-15  In addition to credit card usage, e-marketers 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 Hall 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 4-16

©2009 Pearson Education, Inc. Publishing as Prentice Hall Computers & Telephones  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. 4-17

©2009 Pearson Education, Inc. Publishing as Prentice Hall Internet Connection Costs  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  Broadband connections are still expensive in most countries. 4-18

Wireless Internet Access ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-19  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 Hall The Digital Divide  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. 4-20

China: A View of the Future ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-21  China is expected to be the largest economy in the world by  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.  China’s vibrant, growing online market requires adaption to success.

Popular Web Sites in China Ex.4.16 ©2009 Pearson Education, Inc. Publishing as Prentice Hall 4-22

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