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Building Inclusive E-Markets E-M ARKETING /6E C HAPTER 4
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-2 C HAPTER 4 O BJECTIVES 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.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-3 C HAPTER 4 O BJECTIVES, CONT. Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward Internet use, slow connections, website 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 how e-marketing is being used with very low income consumers.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-4 I DOL G OES G LOBAL American Idol is broadcast in over 100 countries, often 48 hours after the show has been aired in the U.S. Its popularity has spawned 39 national versions in countries such as Ethiopia, the Philippines, Russia, and Kazakhstan. Bulgarians can follow the seasons music contestants by logging onto
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-5 I DOL G OES G LOBAL, CONT. Indian viewers vote for singers and apply to be a contestant on Indian Idol through SMS. The sharing of popular culture has been enhanced by the convergence of TV, Internet, mobile phones, and short message services.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-6 O VERVIEW OF G LOBAL E-M ARKETING I SSUES Users from other countries, speaking languages other than English, will dominate the Internet. By 2010 there were approximately 499 million English-speaking and 407 million Chinese-speaking web users. The online marketplace is changing and will require that global e-marketers understand country e-readiness.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-7 WORLDWIDE INTERNET USAGE
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-8 G LOBAL M ARKETS Exhibit 4.1 shows that worldwide Internet usage increased more than 45% between 2007 and 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.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-9 E MERGING E CONOMIES Emerging economies are characterized by a rapidly developing middle class, which creates demand for products and services. Four countries represent the power and opportunity in emerging markets: Brazil, Russia, India and China. Countries with emerging economies can be found on every continent.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-10 I MPORTANCE OF I NFORMATION T ECHNOLOGY The Internet accelerates the process of economic growth through diffusion of new technologies. Bangalore, India is the center of Indias explosive growth in software and IT. E-marketers in emerging economies confront marketing issues and unique challenges related to the conditions of operating within a still developing nation.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-11 M ARKET SIMILARITY Marketers in emerging economies must find market similarities in order to be successful in selling products.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-12 E-C OMMERCE P AYMENT AND T RUST I SSUES 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 still predominately a cash-based economy and credit cards are scarce. In Bolivia, only 2.3 percent of the population has a credit card. Credit card use is virtually non-existent in Ethiopia.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-13 E-C OMMERCE P AYMENT AND T RUST I SSUES, CONT E-marketers working in emerging economies should also 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 in the Czech Republic, eBanka, an Internet bank, was established in 1998 to handle secure online purchases.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-14 C ONSUMER CONCERN ABOUT ONLINE USE OF CREDIT CARDS
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-15 T ECHNOLOGICAL R EADINESS I NFLUENCES M ARKETING 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
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-16 C OMPUTERS & T ELEPHONES Global computer ownership and access is unevenly distributed. Ownership ranges from 84% in Kuwait to 2% in Bangladesh. Telephones (and connectivity) can be scarce and expensive. Many consumers in countries with emerging economies access the Internet from telecenters, small shops that offer Internet connections.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-17 Internet ACCESS EXHIBIT 4.6 Entrance to a Typical Cabinas in Lima, Peru
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-18 Internet INFRASTRUCTURE Countries with emerging economies often have higher Internet-related costs. Dial-up costs can vary considerably. Broadband connections are developing quickly and growth is predicted to come from emerging markets. South Korea has one of the highest broadband penetration rates and one of the worlds fastest, cheapest networks. Emerging economies sporadic electricity can also be a challenge for e-marketers.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-19 WIRELESS INTERNET ACCESS At the end of 2010, there were billion mobile phone subscriptions worldwide. Two-thirds of the world are now connected via mobile phones. Challenges of wireless e-marketing: Modification of website content for small screens Text entry using tiny keypads Content development Pricing and secure payments Differences in consumer behavior with the mobile Internet
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-20 T HE D IGITAL D IVIDE 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.
©2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 4-21 B UILDING I NCLUSIVE E-M ARKETS Explosive growth of mobile phones has enabled e-marketers to reach base of the pyramid consumer segments. Mobile banking is one of the most successful e-marketing efforts in LDCs. In heavily agricultural countries, mobile applications for farmers are making them more productive.
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