©2006 Prentice Hall MRKG 2312 E-Commerce

©2006 Prentice Hall4-1 E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost Chapter 4: Global Markets

©2006 Prentice Hall4-2 Chapter 4 Objectives After reading Chapter 4 you will be able to: Discuss overall trends in 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.

©2006 Prentice Hall4-3 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.

©2006 Prentice Hall4-4 The FIFA Story Federation Intérnationalé de Football Association (FIFA) partnered with Yahoo to create the most popular sports site in history. was seen by 3.7 million people from 17 countries May 1-June 23, Site offered continual updates of information, photos and video highlights. Do you think FIFA’s subscription model ($4.95-$19.95) for video access would work for U.S. sports events? Which ones?

World Internet Users ©2006 Prentice Hall

4-5 Worldwide Internet Usage All statistics in the book are out of date!

©2006 Prentice Hall4-6 Internet Use Varies by Country What countries are top 5 countries with the highest number of Internet users? Where does Viet Nam rank? What percentage of users do the top 10 countries account for? What are Asia top 10 Internet countries? What is the percentage of internet user penetration in Viet Nam?

©2006 Prentice Hall4-8 Developed Economies Developed countries are highly industrialized, use technology to increase efficiency, and have a high GDP per capita. Western European countries North American countries Japan Australia & New Zealand Developed countries are ideal for the e- marketing activities discussed in the text.

©2006 Prentice Hall4-9 Emerging Economies Have low levels of GDP per capita and are experiencing rapid economic growth. Emerging economies can be found on every continent. China Central & Southeast Asian countries Mexico, Central & South America Baltic States & Eastern Europe African countries

©2006 Prentice Hall4-10 Technology plays an important role. 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. 330-acre Electronic City ( Greatest technological obstacles to e-commerce in emerging economies include: Slow connection speeds Costs of domestic phone calls (per min) ISP costs Lack of local content and content in one’s own language

Country and Market Opportunity Analysis Marketers often choose foreign markets that have characteristics similar to their home market for initial market entry. E-business in countries with emerging markets make parallel target market decisions. One of the biggest differences between developed countries and countries with emerging economies is the limited use and acceptance of credit cards in underdeveloped countries. ©2006 Prentice Hall

4-11 Credit Cards & E-Commerce Payments Convenience and ease of transactions are two of the Internet’s greatest benefits. Credit cards and secure online payment systems are the basis for Web-based transactions in developed countries. Marketers must analyze relevant buyer behaviors within a market. Number of credit cards in circulation. Consumer attitudes toward credit.

©2006 Prentice Hall4-12 Technological Readiness Influences Marketing Limited access to and use of computers and telephones. High Internet connection costs per minute charges Slow Internet connections speeds. Unpredictable power supplies.

©2006 Prentice Hall4-13 Computers & Telephones Computer access is unevenly distributed throughout the world. Exhibit 4.8 (page 82) shows computer ownership data for selected countries. Many consumers in countries with emerging economies access the Internet from free- standing shops, rather than homes. Telephones (and connectivity) can be scarce and expensive.

©2006 Prentice Hall4-14 Internet Connection Costs Dial-up is still the most common way to connect to the Internet worldwide. Broadband and mobile phone connections are developing quickly. Sometimes faster than land-lines Cambodia Dial-up connection charges vary considerably in emerging economies.

©2006 Prentice Hall4-16 Connection Speed & Web Design Most Internet connections in the developing world are still dial-up. Connection speed has significant implications for Web site design. Graphics usage Sound Google’s simple, text-only format supports rapid downloads worldwide. High speed access is gaining momentum worldwide.

©2006 Prentice Hall4-17 Broadband Penetration for Selected Countries CountryBroadband Subscribers as a percentage of total population Italy0.77 Hungary0.31 China0.21 Brazil0.19 Bulgaria0.12 Colombia0.05 Turkey0.03 Russia0.02 Nigeria0.01

©2006 Prentice Hall4-18 Other Issues Electrical problems can pose another challenge for e-marketers. Lack of electricity can force an e-business offline. Explosive diffusion of cellular telephones is changing e-marketing dramatically. Countries with emerging economies can leapfrog industrial countries in terms of usage. Short messaging service (SMS) is very popular worldwide.

©2006 Prentice Hall4-19 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.