Slide 4.1 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Chapter 4 E-environment

Slide 4.2 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Learning outcomes Identify the different elements of an organization macro-environment that impact on an organizations 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, 4 th Edition, © Marketing Insights Limited 2009 Management issues What are the constraints placed on developing and implementing an e-business strategy by the e-environment? How can trust and privacy be assured for the customer while seeking to achieve marketing objectives of customer acquisition and retention? Assessment of the business relevance of technological innovation.

Slide 4.4 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Activity 4.1 Introduction to social, legal and ethical issues 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 family when you access a web site.

Slide 4.5 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 SLEPT Framework Social-influence consumer perception of Internet use for e-commerce Legal & Ethical-determine what can be promoted and sold online Economic-affect spending patterns Political-Determine the adoption and the future of Internet Technological-offer new opportunities

Slide 4.6 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.1 ‘Waves of change’ – different timescales for change in the environment

Slide 4.7 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 SLEPT Framework E-Commerce Manager has to monitor the changes of the Macro-environment (also called environment scan) Among the 5 factor type, Legal factor is one of the most important. P.195, Table 4.2 Lists the Key legal issues that have direct impact on e-commerce

Slide 4.8 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Factors Govern E-commerce Adoption Cost of Access Value proposition Ease of use Security and trust Fear of the unknown Skills

Slide 4.9 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Webographics –Usage location –Access device –Connection speed –ISP –Experience level –Usage type-work, social, entertainment, etc. –Usage level-hours or minutes / month

Slide 4.10 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.2 Variation in broadband subscribers per 100 inhabitants, by technology, December 2007 Source: OECD (

Slide 4.11 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Influences of Online Channel Finding products and services online is a popular web activity Online research occurs at every phase of purchase, even for offline purchases

Slide 4.12 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.3 Percentage by category who bought offline after researching online Source: BrandNewWorld: AOL UK / Anne Molen (Cranfield School of Management) /Henley Centre, 2004

Slide 4.13 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Motivation for Using Online Services CommunitySurvey EntertainmentDownload Product trialSearch InformationInteraction Make purchasesExploration GamesNews

Slide 4.14 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 E-commerce-Psychographic Segmentation Ref. Box 4.1 on pp Online Consumer Type Realistic Enthusiasts15%14% Confident brand shoppers16%18% Carefree spenders15%19% Cautious Shoppers20%14% Bargain hunter16%21% Unfulfilled17%14%

Slide 4.15 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Trust in Different Information Sources The role of social media and friends in influencing sales was highlighted by this research _Shoppers_Report.pdf _Shoppers_Report.pdf –Search engines (76%) –Personal recommendations (72%)

Slide 4.16 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Trust in Different Information Sources –Price comparison web sites (61%) –Web sites of well-known brands (59%) –Newspapers/magazines (58%) –Customer web site reviews (58%) –Expert web site reviews (57%) –Retailer web sites (57%) –Sales people in shops (50%) –Content provided by ISPs (38%).

Slide 4.17 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.4 Development of experience in Internet usage

Slide 4.18 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.5 Variation in purchase rates of online products and services in Europe Source: European Interactive Advertising Association ( Mediascope Eupore 2008

Slide 4.19 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Business as Online Buyers B2B Profiles The % of companies with access by the right personnel Influenced online—may not buy online but affected by online information Purchase online

Slide 4.20 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 E-Business Adoption by SMEs SMEs have a lower adoption rate in comparison to larger enterprises. They can be classified into 4 categories –Developers –Communicators –Web presence –Transactors

Slide 4.21 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.6 Variation in use of e-commerce services between SMEs and larger enterprises Source: European Commission (2007)

Slide 4.22 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 E-Business Adoption by SMEs Assessing the risk and reward for SME adoption Revenue Reputation Strategic importance Regulatory compliance

Slide 4.23 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Privacy and Trust in E-Commerce What are ethical standards? Why is it so important for e-commerce? What’s privacy? Why privacy a big deal for e-commerce? Identity fraud in Canada-

Slide 4.24 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Personal Data and E-Commerce Online businesses and e-marketer typical need these data –Contact info –Profile info—segmentation –Access platform –Behavioural info on a single site –Behavioural Info on multiple sites Anything else?

Slide 4.25 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Table 4.6 Types of information collected online and related technologies

Slide 4.26 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Table 4.6 Types of information collected online and related technologies (Continued)

Slide 4.27 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 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 4.28 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Table 4.2 Significant laws which control digital marketing

Slide 4.29 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Table 4.2 Significant laws which control digital marketing (Continued)

Slide 4.30 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 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 4.31 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 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

Slide 4.32 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Ethical issues and data protection In Canada, Personal Information Protection and Electronic Documents Act (PIPEDA) establishes principles for collection, use, and disclosure of personal information. Provinces have parallel legislation

Slide 4.33 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.7 Standard information collected about web site visitors from the DaveChaffey.com site Source: Feedjit

Slide 4.34 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.8 Information flows that need to be understood for compliance with data protection legislation

Slide 4.35 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Market e-commerce business o Domain name and brand/trademark protection o Using competitor name in meta-tag and pay- per-click advertising o Accessibility law Other E-Commerce Legislation

Slide 4.36 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.9 Comparison of number of blog postings for three consumer brands Source: Blogpulse ( reprinted by permission of Nielsen Buzzmetrics

Slide 4.37 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Forming Electronic Contracts Country of origin principle Distance selling law Making and accepting payment Others—ref. pp Other E-Commerce Legislation

Slide 4.38 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 E-Commerce & Green Environment Do you think e-commerce have positive effect on environment? Read the Box 4.6 on page 228

Slide 4.39 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.10 HSBC virtual forest Source:

Slide 4.40 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Taxation What do you know about the e-commerce taxes?

Slide 4.41 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Taxation Tax Jurisdiction In general, taxes are collected in the jurisdiction where consumption take place This applies to EU and Canada The US federal government doesn’t collect taxes for online purchases States may have different legislations

Slide 4.42 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Taxation Canadian merchants must collect Federal taxes (H/GST) for any order in the county, and Provincial taxes for orders made in any region that they have a physical location. If you are a merchants outside of Canada shipping to Canada, with no physical presence in Canada, you do not have collect any taxes

Slide 4.43 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Freedom Restriction Legislation Read p. 232 Activity 4.4 Discuss the questions

Slide 4.44 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Economic & Competitive Factors The e-commerce potential would be determined by the economic health and competitive environment of the country. A 4-layer model was proposed to assess such e-economy environment by Booz Allen Hamilton (2002)

Slide 4.45 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.11 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.

Slide 4.46 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Localization Singh and Pereira (2005) provide an evaluation framework for the level of localization: –Standardized web sites (not localized). A single site serves all customer segments (domestic and international) Many sites, especially small business sites fall into this category –Semi-localized web sites. A single site serves all customers; however, there will be contact information about foreign subsidiaries available for international customers. Many sites fall into this category –Localized web sites. Country-specific web sites with language translation for international customers, wherever relevant. 3M ( has adapted the web sites for many countries to local language versions.

Slide 4.47 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Localization (Continued) Highly localized web sites. Country-specific web sites with language translation; they also include other localization efforts in terms of time, date, postcode, currency formats, etc. Dell ( provides highly localized web sites Culturally customized web sites.Web sites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple web sites for that country depending on the dominant cultures present. Durex ( is a good example of a culturally customized web site

Slide 4.48 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Localization Why localize a website? Is it important? What to be considered for localization?

Slide 4.49 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 B2B International E-Trading Large organizations are doing fairly well. How about SMEs? What’s your opinion on SME B2B international trading? Complete Activity 4.5 on p. 237

Slide 4.50 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Economic / political Ensuring companies competitiveness –Funding for education and technology –Promoting new technology for example, broadband 12% in UK; Canada is more advanced with 84% penetration and large portion of that is broadband Achieving government efficiencies –E-government – all UK services online by 2005 –Singapore ‘Intelligent Island’ Taxation regimes –Legislation for offshore trading

Slide 4.51 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Technological issues Rate of change –Which new technologies should we adopt? Monitoring for new techniques Evaluation – are we early adopters? Re-skilling and training

Slide 4.52 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.12 Diffusion–adoption curve

Slide 4.53 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.13 Example of a Gartner hype cycle Source: Gartner (2005) Gartner’s Hype Cycle Special Report for 2005

Slide 4.54 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Identifying Emerging Technologies Technology networking—monitoring, scouting, and sharing Crowd-sourcing—facilitate access to ideas from customers, partners, inventors, etc. e.g., innocentive.com Technology hunting—structured review of start-up companies for new tech capability Technology mining—search the published documentations. E.g., googlealert

Slide 4.55 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.14 InnoCentive

Slide 4.56 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Figure 4.15 Alternative responses to changes in technology

Slide 4.57 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Summary What are the SLEPT factors? How could they affect e-commerce? What’s a strategy to adopt in coping with the SLEPT factors?

Slide 4.58 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Lab Exercise Read the Box 4.3 on p.217. Compare to PIPEDA of Canada to see any similarity and differences

Slide 4.59 Dave Chaffey, E-Business and E-Commerce Management, 4 th Edition, © Marketing Insights Limited 2009 Next Class Read pp of the Econsultancy Interview and answer/discus these questions –What type of business does Standard Life do? –What’s their online business target % in their whole business? –Can you find a favorite Canadian company to see what a typical % of their business are done online? –What are the key challenges in implementing the online business? –What’s the relationship between the online and other channels? –What can we learn from this interview?