1. Chapter 4
E-environment

2. Learning outcomes
Identify the different elements of an organisation macro-environment that impact on an organisation’s digital business and digital 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 economics, governmental digital business policies, taxation and legal constraints

3. Management issues
What are the constraints such as legal issues which should be taken into account when developing and implementing a digital business strategy?
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.

4. Table 4.1 Factors in the macro-​and micro-​environment of an organisation

5. SLEPT factors Macro-environment Social Legal Economic Political
Technological

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

7. Environmental scanning
The process of continuously monitoring the environment and events and responding accordingly.

8. Social and legal factors
Social and cultural impacts of the internet are important since they govern demand for internet services.

9. Table 4.2 Significant laws which control digital marketing

10. Table 4.2 Significant laws which control digital marketing (Continued)

11. E-commerce adoption Social exclusion! Cost of access (cost of ISP)
Value proposition (the need to be online)
Ease of use
Security
Fear of the unknown (fear of technology)
Social exclusion!

12. Understanding user’s access requirements
It is important to understand “Webographics”;
Usage location (home vs. work)
Access device
Connection speed
ISP
Experience level
Usage type
Usage level

13. Online buyer behavior
To develop effective online services we need to understand customers’ online behavior and motivation.
Activities online
Sources of information used to buy
The influence of these sources on the buying process

14. Figure 4.2 Applications of using the Internet (Activities online)

15. Source: Google Shopper Sciences (2011).
Figure 4.3 Variation in number of sources on information used to inform buying decision by sector
Source: Google Shopper Sciences (2011).

16. Figure 4. 4 The influence of different information sources on purchase
Figure 4.4 The influence of different information sources on purchase. ZMOT = Zero Moment of Truth (before visiting store), FMOT = First Moment of Truth (in‑store)
[IMPACT OF DIFFERENT FORMS OF ONLINE PURCHASE] Source: Google Shopper Sciences (2011).

17. Motivation for use of online services
Psychographic segmentation can help explaining motivation.
Psychodemographic profiles have been developed for web users.

20. Motivation for use of online services
To understand different motivation the Web Motivation Inventory (WMI) can be very helpful.
4 motives which cut across cultures:
Research (information acquisition)
Communication (socialization)
Surfing (entertainment)
And shopping
These can be broken into…

21. WMI 4 categories can be broken into:
Community
Entertainment
Product trial
Information
Transaction
Game
Survey
Downloads
Interaction
Search
Exploration
News

22. Purchase online Increased number of consumers are purchasing online
However, there is a huge difference in online purchasing behavior depending on product’s price and complexity
Travel
Cinema ticket
Car
Clothes

23. Figure 4.5 Development of experience in Internet usage

24. Business demand for digital business services
B2B market is more complex than B2C
Analysis is important as part of the segmentation of different groups within a B2B target market, profile businesses according to:
Variation in organization characteristics
Individual role

25. Variation in organization characteristics
Size of company (employees or turnover)
Industry sector and products
Organisation type (private, public, government, not-for-profit)
Division
Country and region

26. Individual role
Role and responsibility from job title, function or number of staff managed
Role in buying decision (purchasing influence)
Department
Product interest
Demographics: age, sex and possibly social group.

27. B2B profiles
We can profile business users of the Internet in a similar way to consumers by assessing:
Companies with access; B2B access levels are higher, buying unit reach
Influenced online; identify suppliers rather than completing a transaction
Purchase online;
We need to understand percentage of each!

28. Adoption of digital business by businesses
Important to understand:
What digital business services are businesses adopting?
What the barriers?

29. Figure 4.6 Enterprises adopting technologies for digital business, by size class, EU27, 2012 Source: EuroStat (2013).

30. Figure 4.7 Barriers to adoption of e‑commerce services of European countries Source: European Commission (2010): No longer available.

31. Adoption of digital business by businesses
Digital business in the UK SMEs can be divided into 4 clusters:
Developers; which were actively developing services
Communicators; which use to communicate internally and externally
Web presence
Transactors
Resources, planning, implementing an internet strategy?

32. Ethical issues and data protection
Ethical issues concerned with personal information ownership have been usefully summarised 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?

33. Table 4.4 Types of information collected online and related technologies

34. Table 4.4 Types of information collected online and related technologies (Continued)

35. Economic and competitive forces
A comprehensive framework for assessing an ‘e‑economy’ has been developed by Booz Allen Hamilton (2002). The report authors define the e‑economy as:
the dynamic system of interactions between a nation’s citizens, the businesses and government that capitalise upon online technology to achieve a social or economic good.

37. E-business and e-economy
Globalization can insulate a company to some extent from fluctuations in regional markets.
Globalization:
Free movement of capital, labor, and products
The increase of international trading and shared social and cultural values
The move towards international trading in a single global marketplace.

38. Globalization
consequences for organisations that wish to compete in the global marketplace;
a 24‑hour order-​taking and customer service response capability;
regulatory and customs-​handling experience to ship internationally;
in‑depth understanding of foreign marketing environments to assess the advantages of its own products and services.

39. Globalization VS. Localization
Tailoring e‑commerce services for individual countries or regions is referred to as localization; might include:
Different product needs;
Language differences;
Cultural differences.

40. Localization The language that content is provided in.
Tone and style of copy.
Site design – certain colours or images may be unsuitable or less effective in some countries.
Range of product offerings.
Product pricing.
Promotional offers used to encourage acquisition of customer address This may be affected by local data protection, taxation and trading laws.
Local contact points.

41. Localisation
Singh and Pereira (2005) provide an evaluation framework for the level of localisation:
1 Standardised websites (not localised). A single site serves all customer segments (domestic and international).
2 Semi-localised websites. 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.
3 Localised websites. Country-specific websites with language translation for international customers, wherever relevant. 3M ( has adapted the websites for many countries to local language versions. It initially focused on the major websites.

42. Localisation (Continued)
4 Highly localised websites. Country-specific websites with language translation; they also include other localisation efforts in terms of time, date, postcode, currency formats, etc. Dell ( and IKEA ( provides highly localised websites.
5 Culturally customised websites. Websites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple websites for that country depending on the dominant cultures present. Durex ( is a good example of a culturally customised website.

43. Political factors
Political environment is shaped by the interplay of government agencies., public opinion, consumer pressure group.

44. E-political environement
Booz Allen Hamilton (2002) review approaches used by governments to encourage use of the Internet. They identify five broad themes in policy:
Increasing the penetration of ‘access devices’. Approaches include either home access through Sweden’s PC Tax Reform, or in public places, as in France’s programme todevelop 7,000 access points by a specific year/target date. France also offers a tax incentive scheme, where firms can make tax- free gifts of PCs to staff for personal use.

45. Increasing skills and confidence of target groups
Increasing skills and confidence of target groups. These may target potentially excluded groups, as with France’s €150 million campaign to train the unemployed.
Establishing ‘driving licences’ or ‘passport’ qualifications. France, Italy and the UK have schemes which grant simple IT qualifications, particularly aimed at low- skilled groups.
Building trust, or allaying fears. The US 1998 Child Online Protection Act used schemes to provide ‘kitemark’-type verification, or certification of safe services.

46. Direct marketing campaigns
Direct marketing campaigns. According to the report, only the UK, with its UK Online campaign, is marketing directly to citizens on a large scale.

47. Technological issues Rate of change Are our systems secure?
Which new technologies should we adopt?
Monitoring for new techniques
Evaluation are we early adopters?
Re-skilling and training
Are our systems secure?

48. Figure 4.12 Diffusion–adoption curve of a Gartner hype cycle

49. Figure 4.13 Example of a Gartner hype cycle
Replace with 4.13
Figure Example of a Gartner hype cycle
Source: Gartner (2010).

50. Gartner hype cycle
Technology trigger – The first phase of a hype cycle is the ‘technology trigger’ or breakthrough, product launch or other event that generates significant press and interest.

51. Gartner hype cycle
Peak of inflated expectations – In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

52. Gartner hype cycle
Trough of disillusionment – Technologies enter the ‘trough of disillusionment’ because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

53. Gartner hype cycle
Slope of enlightenment – Although the press may have stopped covering the technology, some businesses continue through the ‘slope of enlightenment’ and experiment to understand the benefits and practical application of the technology.

54. Gartner hype cycle
Plateau of productivity – A technology reaches the ‘plateau of productivity’ as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

55. Figure 4.13 Example of a Gartner hype cycle
Replace with 4.13
Figure Example of a Gartner hype cycle
Source: Gartner (2010).

56. Approaches to identify emerging technology
Technology networking
Crowdsourcing
Technology hunting
Technology mining

57. Technology networking.
Individuals monitor trends through their personal network and technology scouting and then share them through an infrastructure and process that supports information sharing.
For example Novartis facilitates sharing between inside and outside experts on specific technologies through an extranet and face‑to‑face events.

58. Crowdsourcing
Crowdsourcing facilitates access to a marketplace of ideas from customers, partners or inventors for organisations looking to solve specific problems.
E.g. Lego is well known for involving customers in discussion of new product developments.
InnoCentive: is an online marketplace which connects and manages the relationship between ‘seekers’ and ‘solvers’.
Seekers are the companies conducting research and development that are looking for new solutions to their business challenges and opportunities.
Solvers are the 170,000 registered members of InnoCentive who can win cash prizes ranging from $5,000 to $1,000,000 for solving problems in a variety of domains, including business and technology.

60. Technology hunting
This is a structured review of new technology through reviewing the capabilities of start‑up companies.
For example, British Telecom undertakes a structured review of up to 1,000 start-ups to assess relevance for improving their own capabilities which may ultimately be reduced to five companies with which BT will enter into a formal arrangement each year.

61. Technology mining
A traditional literature review of technologies described in published documents.
Deutsche Telekom AG use technology to automate the process through software such as Autonomy which searches for patterns indicating potential technology solutions within patents, articles, journals, technological reports and trend studies.
A simpler approach is setting up a keyword search for technologies through a free service such as Google Alerts (

62. Responses to changes in technology
Innovators
Responders
Laggards

63. Figure 4.15 Alternative responses to changes in technology