1. Chapter 4 E-environment

2. 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.

3. 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?

4. SLEPT Factors Macro-environment Social Legal Economic Political
Technological

5. SLEPT: Social
Include the influence of consumer perceptions in determining usage of the Internet for different activities

6. 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

7. SLEPT: Economic
Variations in the economic performance in different countries and region affects spending patterns and international trade

8. 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

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

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

11. Factors governing Internet adoption
Cost of access
Value proposition
Ease of use
Security
Fear of the unknown

12. 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

13. Figure 4.2 Variation in broadband subscribers per 100 inhabitants, by technology, December 2007 Source: OECD (

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

15. Consumers influenced by using the online channel
73% of Internet users agree that they now spend longer time researching products
The Internet is used at every stage of the research process
Consumers are more informed from a multiplicity of sources
Online information and experience translates into offline purchase

16. Consumers influenced by using the online channel
Psychographic segmentation
Realistic enthusiasts
Confident brand shoppers
Carefree spenders
Cautious shoppers
Bargain hunters
Unfulfilled

17. Motivation for use of online services
Community
Entertainment
Product trial
Information
Transaction
Game
Survey
Downloads
Interaction
Search
Exploration
News

18. 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

19. Figure 4.5 Development of experience in Internet usage

20. B2B Profiles The percentage of companies with access Influenced online
Purchase online

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

22. Privacy and trust in e-commerce
A moral rights of individuals to avoid intrusion into their personal affairs by third parties
Identity theft
The misappropriation of the identity of another person without their knowledge and consent

23. Why personal data are valuable?
Contact information
Profile information
Platform usage information
Behavioral information (on a single site)
Behavioral information (on multiple site)

24. Table 4.1 Types of information collected online and related technologies

25. Table 4.2 Types of information collected online and related technologies (Continued)

26. Figure 4.7 Standard information collected about web site visitors from the DaveChaffey.com site Source: Feedjit

27. 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?

28. 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?

29. 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.

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

31. 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

32. Regulations on privacy and electronic communications
Privacy and Electronic Communications Regulations (PECR) Act
Applies to consumer marketing using 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
, sms and cookies

33. 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

34. 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\ *

35. What are cookies used for?
Personalizing a site for individual
Online ordering systems
Tracking within a site
Tracking across sites

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

38. TRUSTe and ISIS

39. 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

40. Legal – Sparrows eight areas
Marketing your e-commerce business
Forming an electronic contract
Making and accepting payment
Authenticating contracts concluded over the Internet
risks
Protecting Intellectual Property
Advertising on the Internet
Data protection.

41. 1.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

42. 2.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

43. 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.

44. 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

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

46. 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

47. Localization

48. 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)
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. It initially focused on the major web sites

49. 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

50. 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

51. E-government
The application of e-commerce technologies to government and public services
Types of actions to encourage e-business:
Access, participation and skills
Adoption of e-business
Confidence, trust and security
E-Government strategies and implementation
Environment for information economy firms
International dimensions

52. 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?

53. Figure 4.10 Diffusion–adoption curve

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

55. Figure 4.12 Alternative responses to changes in technology

56. 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.

57. 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