Slide 4.

CHAPTER 4 E-ENVIRONMENT

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.2

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.

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.3

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?
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.4

Macro-environment (SLEPT factors) Social Legal, ethical Economic Political

Micro-environment (e-marketplace) The organization Its customer Its suppliers Its competitors

Technological

Intermediaries

Factors in the macro- and micro- environment

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Figure 4.1

Waves of change different timescales for change in the environment

Slide 4.6

SLEPT Factors/PEST Factors

Macro-environment
Social:

the influence of consumer perceptions in determining usage of the Internet for different activities Legal:
Determine

Include

the method by which products can be promoted and sold online Governments, on behalf of society, seek to safeguard individuals right to privacy

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.7

SLEPT:
Economic:

Variations

in the economic performance in different countries and region affects spending patterns and international trade

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
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.8

SLEPT
Technological:

Changes

in technology offer new opportunities to the ways products can be marketed

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.9

Factors governing Internet adoption

Cost of access Value proposition Ease of use Security Fear of the unknown

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.10

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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Global variation in number of PCs per hundred population and percentage Internet access in 2004
Figure 4.2
Source: ITU (www.itu.int/ITU-D/ict/statistics/)

Variation in demographic characteristics of UK Internet users: (a) gender, (b) age, (c) social grade
Figure 4.3
Source: eMori Technology Tracker www.mori.com/technology/trackerdata.shtml

Slide 4.13

Consumers influenced by using the online channel

Psychographic segmentation
Realistic

enthusiasts Confident brand shoppers Carefree spenders Cautious shoppers Bargain hunters Unfulfilled

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

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

Figure 4.5

Development of experience in Internet usage

Slide 4.16

B2B Profiles

The percentage of companies with access Influenced online Purchase online

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Figure 4.6

Percentage of businesses that order online

Source: DTI (2004), Fig 7.3a

Slide 4.18

Why personal data are valuable?

1.

2.
3. 4.

Contact information Profile information Behavioral information (on a single site) Behavioral information (on multiple site)

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.19

Ethical issues and data protection

1. 2.

3.

4.

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?

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.20

Ethics Fletchers view

1.

2.

3.

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?

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.21

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.

www.dataprotection.gov.uk
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

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

Slide 4.23

Anti-spam legislation

To protect individual privacy and with intention of reducing spam or unsolicited commercial email (UCE) Sending Persistent Annoying e-Mail Anti-spam legislation can be viewed at http://www.spamlaws.com

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.24

Avoiding SPAM

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.25

Regulations on privacy and electronic communications

1.

2.
3. 4.

5.

Privacy and Electronic Communications Regulations (PECR) Act Applies to consumer marketing using email 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
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.26

Regulations on privacy and electronic communications

6.

7. 8.

The From identification of the sender must be clear Applies to direct marketing communications Restricts the use of cookies

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.27

Understanding cookies

A data file placed on your computer that identifies an individual computer

Persistent Temporary First-party Third-party

or session

Cookies are stored as individual text files

dave_chaffey@british_airways.txt FLT_VIS\K:bapzRnGdxBYUU\D:Jul-25-

1999\british-airways.com\0 425259904 293574 26 1170747936 *

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.28

Using Cookies

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.29

What are cookies used for?

Personalizing a site for individual Online ordering systems Tracking within a site Tracking across sites

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.30

Viral e-mail marketing

To reassure web users about threats to their personal information TRUSTe ISIS a UK accreditation initiative getsafeonline

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.31

TRUSTe and ISIS

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.32

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
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.33

Legal Sparrows eight areas

1. 2.

3.
4.

5.
6. 7. 8.

Marketing your e-commerce business Forming an electronic contract Making and accepting payment Authenticating contracts concluded over the Internet E-mail risks Protecting Intellectual Property Advertising on the Internet Data protection.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.34

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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.35

2.Forming an electronic contract

E-commerce sites must contain easily accessible content that clearly states
The

companys 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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.36

Economic/Political

Ensuring companies competitive

Funding for education and technology Promoting new technology e.g. broadband 12% in UK, 70% Taiwan, South Korea E-government all UK services online by 2005 Singapore Intelligent Island
Legislation for offshore trading.

Achieving government efficiencies

Taxation regimes

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Figure 4.8

A framework describing the e-economy

Source: Booz Allen Hamilton (2002). International E-Economy: Benchmarking The Worlds Most Effective Policy for the E -Economy. Report published 19 November, London. www.e-envoy.gov.uk/oee/oee/nsf/sections/summit_benchmarking/$file/indexpage.htm Crown copyright 2002

Figure 4.9

Leaders and laggards in e-commerce

Source: 2005 Adapted from Economist Intelligence Unit data 2005, Economist Intelligence Unit

Slide 4.39

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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.40

Localization

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.41

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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.42

E-government

The application of e-commerce technologies to government and public services

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.43

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?

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Figure 4.10

Diffusionadoption curve

Figure 4.11

Example of a Gartner hype cycle

Source: Gartner (2005) Gartners Hype Cycle Special Report for 2005

Figure 4.12

Alternative responses to changes in technology

Slide 4.47

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.

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007

Slide 4.48

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 e-mail Replying promptly to e-mail 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

Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition Marketing Insights Ltd 2007