E-Marketing 5/E Judy Strauss and Raymond Frost

1. E-Marketing 5/EJudy Strauss and Raymond Frost Part II: E-Marketing Environment Chapter 4: A World of E-Marketing Opportunities

2. 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.

3. 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. 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.

5. Idol Goes Global, cont. • Check out international versions that are streamed over the internet: • Music Idol in Bulgaria: http://musicidol.btv.bg/news/6 • Ethiopian Idol: http://www2.jumptv.com/seo/Ethiopian_Idols/Ethiopian_Idols.htm • Indian Idol: http://sify.com/indianidol/

6. Overview of Global E-Marketing Issues • The globe is literally a world of opportunities. • Exhibit 4.1 shows that worldwide internet usage increased more than 58% from 2004 to 2007. • 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.

7. Worldwide Internet Usage Ex 4.1

8. 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.

9. Top Ten Internet Usage Countries Ex.4.2 4-9

10. 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.

11. 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

12. 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

13. Market Approaches Ex 4.4

14. 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.

15. E-Commerce Payment and Trust Issues, cont. • 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.

16. 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

17. 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.

18. 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 2006. • Broadband connections are still expensive in most countries.

19. Wireless Internet Access • 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

20. 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.

21. China: A View of the Future • China is expected to be the largest economy in the world by 2015. • 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.

22. Popular Web Sites in China Ex.4.16