ELECTRONIC COMMERCE
•
•
•
•
•
Strategies
Regional markets
Risks
Language issues
Other cultural
issues
• Legal/regulatory
issues
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
1
Strategies
• Exclusionary
– Solely domestic
• Inclusionary
– “Passively” international
– “Glocals” (adaptive approach)
– “Globals” (standardized approach)
Middle ground
Completely
standardized
(“Globals”)
MKTG 376
Completely
adapted
LECTRONIC COMMERCE
Lars Perner, Instructor
2
Evaluating Markets
• Economic viability
– Income distribution and averages
– Segment potential
• Internet readiness
– “Least Internet Ready Areas of the
World” (LIRAs) (35% of World
population)
– “Internet Ready Areas of the World”
(IRAs) (50)%
– “Internet Leaders” (15%)
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
3
Internet Readiness Indices
• Economist
– Approximately 100
measures in 6
categories
• Technology
infrastructure
• General business
environment
• Consumer and
business adoption of
e-business
• Social/cultural
conditions affecting
Internet use
• Availability of ebusiness support
services
MKTG 376
• Information and
Telecommunications
(ITC)
• International
Telecommunications
Union
LECTRONIC COMMERCE
– 26 indicators-e.g.,
• Technology
infrasturctures
• Market conditions
Lars Perner, Instructor
4
Internet Readiness Criteria
• Infrastructure availability
– Performance
– Types of access available
• Cost of access
– Metered
– Unmetered
– Dial-up issues
• Proportion of population with access
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
5
LIRAS
•
•
•
•
•
•
•
Southern Mexico
Andean countries
Most of Brazil
Sub-Saharan Africa
Remotest former Soviet Republics
Laos, Cambodia
Chinese interior
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
6
IRAs
•
•
•
•
•
•
•
•
Coastal India
Parts of Brazil
Northern Mexico, Mexico City
Hungary
Estonia
Malaysia
Former Soviet Republics closer to Europe
Parts of China (e.g., Shanghai, Hong
Kong)
Reference: Carolyn Siegel (2006), Internet Marketing: Foundations and Applications, Houghton-Mifflin.
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
7
Internet Leaders
•
•
•
•
•
•
•
•
MKTG 376
U.S., Canada
Western Europe
Japan
Australia
New Zealand
Taiwan
South Korea
Israel
LECTRONIC COMMERCE
Lars Perner, Instructor
8
Countries with Largest Absolute
Number of Internet Users
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
St
at
es
C
hi
na
Ja
pa
n
In
U Ge di a
ni
te rm
an
d
Ko Ki n y
re gd
o
a
(S m
ou
th
)
Ita
l
Fr y
an
ce
Br
az
R il
us
s
C ia
an
In ad
do a
ne
si
a
Sp
a
M in
ex
Au ic o
st
ra
l
Ta i a
N
et iwa
he n
rl a
nd
Po s
la
n
Tu d
rk
ey
0
U
ni
te
d
Number of Internet Users
Number of Internet Users by Country
Country
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
9
Countries With the Largest
Absolute Number of Users
MKTG 376
LECTRONIC COMMERCE
Sources: World Bank,
Nielsen
Lars Perner, Instructor
10
Country Internet Penetration Rates by
Per Capita GDP
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
Note
accounting
issues!
0.1
0
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Source: Nielsen.
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
11
Online Language Communities
• Sizable group of people
communicating in the same
language
• Not proportional to percentage of
off-line speakers
– Demographics of Internet users within
a country
– Willingness to use English or other
language sites
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
12
Risks in International Expansion
•
•
•
•
•
•
MKTG 376
Over-expansion
Brand dilution
Over-estimation of revenue
Under-estimation of costs
Underestimation of competition
Regulations
LECTRONIC COMMERCE
Lars Perner, Instructor
13
Area Issues
• Europe
• U.S./Canada
– High penetration rates;
access outside home
– Strong economies
– Low credit card use
– Competing
technologies
• Interactive TV
– Canadian specialty
shopping
– High penetration rates
– Weakening U.S. dollar;
strengthening
Canadian dollar
• Mexico
– Growth potential
– Low credit card
penetration
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
14
More Regions
• Asia/Oceania
– China/Japan
• Use of wireless
technology for
other purposes
• Low rates of credit
card use
– China
• Modest economic
power
– Japan
• Internet ordering
through local
merchants
MKTG 376
LECTRONIC COMMERCE
– South Korea
• High Internet
penetration rate
(45%)
• Faster high speed
access than in the
U.S.
– Australia/New
Zealand
• English language
use
• Relatively similar
culture to U.S.
• High shipping costs
Lars Perner, Instructor
15
Language Issues
• Prior to 2000, 96% of
web sites were
estimated to be in
English, the “first
language” of 6% of
the World population
• 40.2% of online users
are estimated to
speak English to
some extent
• 2000: Non-English
speakers became
majority of Internet
users
MKTG 376
• 75% of Europeans are
multi-lingual; 90% of
these include English
• Dangers of U.S.
English
– British English is
international standard
– “American” often
perceived as
misspelled
– Use of slang
• Lesser distance to
British English than
to other European
languages
LECTRONIC COMMERCE
Lars Perner, Instructor
16
Language Display
• Single-byte (Latin-based) vs. doublebyte languages (Cyrillic, Arabic,
Chinese, Japanese, Korean)
– Characters may not be displayed
correctly (“????” in Internet Explorer)
– Conversion software
– Brower adaptation may not be
“backwards compatible” with other
software
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
17
Translation
• Whole vs. part
– FAQ, feedback forms, product
specifications, warnings, shopping cart
info, legal
• Quality of translation
– Superficial
– “De-centering” (“back translation)
• English language instruction as a
product
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
18
Cultural Issues
• Color
• Symbolism
– Black as
background
– Dogs as pets
– Numbers
• “Stylish” in U.S.
• “Unlucky” in Asia,
Europe, Latin
America
– Red as a “lucky”
color in China but
can be over-used
– White and green
are “unlucky” in
Cina
MKTG 376
• “Unlucky” numbers
– 4, 9, 13 (Japan)
– 4, 14 (China)
• “Lucky” numbers
– 1, 8 (China)
• Formality of
communication
LECTRONIC COMMERCE
Lars Perner, Instructor
19
More Cultural Issues
• Measurement
issues
• Offensive content
– Metric vs. U.S.,
British systems
– Clothing sizes
– Specific body parts
– “Revealing”
content
– Gestures
• Representation of
numbers
– 1,000.00 vs.
1.000,00
– Dates
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
20
Government Issues
• Regulation
– Extraterritorial
laws and
regulations
– Privacy
• Extent of
regulation
– Protection of small
businesses
– Limitations on
online advertising
(China)
• “Safe Harbor”
procedures
– Encryption
restrictions
MKTG 376
• Taxation
• Censorship
• Fraud
LECTRONIC COMMERCE
Lars Perner, Instructor
21
International Internet Users
• Finding buyers
– Local search
engines
• Advertising
• Search engine
optimization
– Mailing lists from
catalogs prior to
Internet entry
• Demographics
– Gender ratios
– Socioeconomic status
of users
MKTG 376
• Access speed
– High broadband
access rates in
Europe and Korea
• Out-of-Home Access
– Portable systems
• Web enabled cell
phones/PDAs
• Solar/battery
powered devices
for developing
World
• Pirates and piracy
LECTRONIC COMMERCE
Lars Perner, Instructor
22
Selected Issues
• Internet governance
– Running of “top domain”
and IP numbering
systems
– Fear of constraining
influences if countries
with reputations for
censorship participate
• Cross-border
spamming
– Identification
– Action against offenders
• Gambling
– U.S. based
• Indirect ownership of foreign
sites
– Foreign based
– Loopholes in rules
• Import/export
constraints
• Government
oversight/ regulation
• Censorship issues
– Extent of regulation
– Policy on competition
– Extreme (China,
Singapore)
– More modest (Europe)
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
23
The Culturally Customized
Web Site
• Book objectives
– Describe comprehensive
study of web site evaluation
by consumers in five
countries
– Make suggestions for
adapting web sites for
different cultures
• Book web site
http://theculturallycustomizedwebsite.com/
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
24
Chapter 1:
Cultural Customization
• Some issues
–
–
–
–
Values depicted
Aesthetics
Conventions
Symbolism
• Some areas
considered
• Color
– Desirability of
features
– Hofstede’s
dimensions
– High vs. low
context orientation
of culture
• For reassurance
• To affirm values
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
25
Research
• Level of customization vs.
– Attitude (liking)
– Purchase intention
• Both more favorable attitudes and higher
purchase intentions for customized web
sites in several countries
–
–
–
–
–
MKTG 376
Italy
India
Netherlands
Switzerland
Spain
LECTRONIC COMMERCE
Lars Perner, Instructor
26
Web Site Classifications
(Somewhat Arbitrary)
• Standardized
• Highly localized
– Country specific URLs
– Local formats (e.g., zip
vs. postal code, time)
– Local content
– http://www.Amazon.com;
http://www.Amazon.co.uk
– Same content for whole
world
– http://www.Tyco.com
• Semi-Localized
– Limited local
information—e.g., contact
info for foreign
subsidiaries
– http://www.Gap.com
• Culturally customized
• Localized
– Country specific pages
– Translation into local
languages as needed
– http://www.Dell.com
MKTG 376
LECTRONIC COMMERCE
– “Complete immersion”
– Three levels
• Adaptation
• Symbolism
• Behavior
– None identified;
closest is
http://www.Ikea.com
Lars Perner, Instructor
27
Ch. 2: The Rationale for Cultural
Customization
• Web return on investment (ROI)
• Characteristics favoring customization
–
–
–
–
Open
Interactive  dialogue, culturally sensitive
Hyperlinks, self search  need for motivation
Customization opportunities from technology
 ability to meet diverse customer needs
– Increasing bandwidth  opportunities for
integrated experience based on customization
– Need to “hold” customers  need for
motivation
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
28
Relevant Cultural Issues: Perception,
Language
• Perception—what
is
• Implications
– Noticed
– Processed
• Language
– Chinese found to learn
faster visually due to
pictoral alphabet
• Color perception
– Associations, preferences
– Naming
MKTG 376
LECTRONIC COMMERCE
– Spatial orientation
(right-left, left-right,
up-down) 
navigation modes
– Translation issues
• Idiomatic
equivalence
• Vocabulary
equivalence
• Conceptual
equivalence
Lars Perner, Instructor
29
More Language Issues
• Dialects
• Text length  formatting
implications
– Language structure
– Use of acronyms
• Color categories
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
30
Cultural Issue: Symbolism
• Association of concepts or images
with meaning (e.g., flag with
patriotism)
• Associations will tend to vary; often
based on language and experience
or word sounds (Chinese)
• Country specific symbols
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
31
Cultural Issue: Behavior
• National norms
• Expectations of how to do things
• Relationships between people
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
32
Ch. 3: A Cultural Values
Framework for Web Design
• Cultures vs. countries  may need
to subdivide—e.g.,
– India, Ireland, Switzerland
• Culture vs. within-culture variation—
e.g., lifestyle segmentation (VALS2)
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
33
Chapter 4—Cultural Customization:
Individualism-Collectivism
• The extent to which goals of the
individual, as opposed to the group,
are valued
• Extent to which individual
differences in behavior are accepted
and/or encouraged
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
34
Country Examples
• High
• Low
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
U.S.
Australia
U.K.
Netherlands
Canada
New Zealand
• Middle
–
–
–
–
MKTG 376
India
Japan
Argentina
“Arab World”
LECTRONIC COMMERCE
Guatemala
Ecuador
Panama
Venezuela
Columbia
Indonesia
China
Pakistan
Indonesia
Taiwan
Lars Perner, Instructor
35
Authors’ Caveats
• Numbers represent averages
• Web sites which happen to portray
individualist and/or collectivist
values may do so without actually
having sought to customize for the
particular culture
• Other variables are important
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
36
Suggestions for Sites for
Collectivist Societies
• Clubs
– May be “offline”—sense
of belonging
– Chat rooms
• Emphasis on
community relations
• Family (“we”) theme
• Links to local web
sites
– Demonstration of
connection to local
community
• Symbols/pictures of
national identity
– Family bonds
• Loyalty programs
– To company or brand
– Japanese: amae—loyalty
to the group
MKTG 376
LECTRONIC COMMERCE
–
–
–
–
Flags
Architecture
Important buildings
Local role models
Lars Perner, Instructor
37
Suggestions for Sites for
Individualist Societies
• Independence
theme
– “I-consciousness”
– Individual
determinism
– “Invest on your
terms”
• Strong privacy
statement
MKTG 376
• Personalization
and product
uniqueness
– Unique content
(e.g., self-selected
news, features,
adjustment of view)
– Personalized
products, if
applicable
• Personal product
recommendations
LECTRONIC COMMERCE
Lars Perner, Instructor
38
Chapter 5—Uncertainty
Avoidance
• Relative importance of predictable environment,
defined structure, order vs. acceptance of risk
taking, reduced structure, and acceptance of
ambiguity
• Extent of acceptance of new ways of doing
things if not known
• Valuing conservatism and “traditional” beliefs
• Example: Mexican beverage company explicitly
lists behaviors expected from employees
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
39
Countries
• High
• Low
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Greece
Portugal
Guatemala
Uruguay
El Salvador
Belgium
Japan
• Medium
–
–
–
–
MKTG 376
Singapore
Jamaica
Denmark
Hong Kong
Sweden
Ireland
U.S.
Note that no
clear geographic
patterns are
evident.
Germany
Thailand
Iran
Finland
LECTRONIC COMMERCE
Lars Perner, Instructor
40
Suggestions for Sites for High
Uncertainty Avoidance Societies
• Customer service
– Personnel positioned as
experts
– Easily accessible on the
site
• Guided navigation
• Traditional theme
• Connection to local
stores
• Free
– Trials
– Downloads
• Transaction security
• Testimonials
– Depictions
– Ability to return
merchandise
• Local terminology
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
41
Suggestions for Sites for Low
Uncertainty Avoidance Societies
• None listed. Ideas?
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
42
Chapter 6—Cultural
Customization: Power Distance
• Extent to which
hierarchy and status are
emphasized as opposed
to a preference for more
“distributed” power and
decision making
• High sensitivity to those
older, with seniority,
and in authority
• Tendency to obey
“suggestions” from
authority figures
MKTG 376
• Preference for face-toface contact for display
of respect
• Emphasis on
hierarchical structures
• Emphasis on
organization charts
LECTRONIC COMMERCE
Lars Perner, Instructor
43
Countries
• High
• Low
–
–
–
–
–
–
–
–
–
–
–
–
Malaysia
Panama
Guatemala
Philippines
Mexico
“Arab World”
Austria
Israel
Denmark
New Zealand
Ireland
Norway
• Middle
–
–
–
–
MKTG 376
Taiwan
Iran
Spain
Poland
LECTRONIC COMMERCE
Lars Perner, Instructor
44
Suggestions for High Power
Distance Societies
• Hierarchy information
• Picture of CEO and other
“important” people
• Use of proper titles
• Quality assurance
– “Superior quality”
• Awards
• Vision statement by CEO
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
45
Suggestions for Low Power
Distance Societies
• None specifically listed. Ideas?
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
46
Chapter 7—Cultural Customization:
Masculinity-Femininity
• Value of achievement,
assertiveness,
ambition vs.
nurturance, care for
others
• Masculine societies
• Feminine societies
–
–
–
–
“Oneness with nature”
Service orientation
Harmony
Modesty
– Tendency toward clear
gender roles
– “Success orientation”
– Decisiveness
– Directness (depending on
levels of collectivism,
power distance)
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
47
Countries
• High masculinity
–
–
–
–
–
–
• High Femininity
Japan
Hungary
Austria
Venezuela
Switzerland
Mexico
• Middle:
–
–
–
–
–
MKTG 376
–
–
–
–
–
–
Sweden
Norway
Netherlands
Denmark
Costa Rica
Finland
Malaysia
Brazil
Singapore
Israel
West Africa
LECTRONIC COMMERCE
Lars Perner, Instructor
48
Recommendations for
Masculine Societies
• Indication of product effectiveness
• Quizzes, games (competitive element)
• “Realism” theme
– Decisiveness vs. fantasy, imagery
– “Rational”/performance appeals
• Clear depiction of gender roles and
segregation
– E.g., female section of Japanese search
engine
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
49
Recommendations for
Masculine Societies
• Similar considerations to “high
context” societies
• Harmony
• Aesthetics
• Soft sell
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
50
Chapter 8—Cultural
Customization: High-Low Context
• Importance of “context” in
communication style—
important information may
be “embedded” in society
as opposed to being more
detailed and explicit with
unambiguous explanation.
• High context societies
• Low context societies
– Politeness/indirectness
are emphasized
– Soft sell approach
– Aesthetics
MKTG 376
LECTRONIC COMMERCE
– Hard sell
– Superlative word usage
– Emphasis on rank and
prestige of company
– Explicit terms and
conditions
– Emphasis on logical,
“linear” thinking
– Action orientation
– Emphasis on rationality
Lars Perner, Instructor
51
Countries
• High Context
–
–
–
–
–
–
–
–
–
–
• Low context
Asia (generally)
Africa
South America
Parts of Middle East
Japan
China
Spain
Thailand
Turkey
Taiwan
–
–
–
–
–
Most of Northern Europe
North America
New Zealand
Australia
U.K.
– Philippines
MKTG 376
LECTRONIC COMMERCE
Lars Perner, Instructor
52
Recommendations
• For High Context
Societies
–
–
–
–
MKTG 376
• For Low Context
Societies
Aesthetics
Politeness
Indirectness
“Soft-sell”
approach
LECTRONIC COMMERCE
– Harder sell
– Terms and
conditions
– Rank
– Prestige
– Superlatives
Lars Perner, Instructor
53
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