1. E-Marketing/6E Chapter 4
Building Inclusive E-Markets

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.
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3. Chapter 4 Objectives, cont.
Describe how e-marketing strategy is influenced by computer and telephone access, credit card availability, attitudes toward Internet use, 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.
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4. Idol Goes Global
American Idol is broadcast in over 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.
Georgians can follow the season’s music contestants by searching the YouTube key word: Geostari.
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5. Idol Goes Global, Cont.
Indian viewers vote for singers and apply to be a participant on Indian Idol through SMS.
Over 5 billion votes were cast worldwide for Idol contestants in 2010.
The sharing of popular culture has been enhanced by the convergence of TV, internet, mobile phones, and SMS.
Freemantle Media, which markets Idol abroad, generates over $1B/year.
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6. Overview Of Global E-marketing Issues
Discuss overall trends in Internet access, usage, and purchasing around the world.
Users from other countries, speaking languages other than English, will dominate the Web.
By May 2011 there were approximately 565 million English-speaking and 510 million Chinese-speaking Web users.
The online marketplace is changing and will require that global e-marketers must understand that a country’s e-readiness profile significantly influences marketing strategy and tactics.
E-marketers must differentiate between industrialized nations and emerging economies.
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7. WORLDWIDE INTERNET USAGE And Population Statistics
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8. Global Markets
Globalization has changed the way marketers conduct business.
Market places that either have been difficult to access because of their physical distance from company headquarters or because of a consumer buying profile that did not match the firm’s core customer is increasingly being targeted.
Exhibit 4.1 shows that worldwide Internet usage increased more than 45% between 2007 and 2009.
Asia has the most Internet users: : 922M
The Middle East saw the greatest growth in Internet use: 104.8%.
North America has the highest penetration as a percent of the population: 78.4%.
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9. Emerging Economies
Define emerging economies and explain the vital role of information technology in economic developme nt.
Countries that have high levels of economic development (USA, Canada, Japan, etc.) are classified as developed countries.
Highly industrialized and use technology to increase their production efficiency
High gross domestic product (GDP) per capita
Enough income to purchase items.
Countries that are still struggling with standards of living for their citizens are called emerging economies and are poised for rapid technological growth.
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10. Emerging Economies, Cont.
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 (BRIC).
The next group of emerging market economies includes Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa (CIVETS).
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11. Importance of Information Technology
Technology can increase a nation’s overall production capacity and efficiency.
The internet and its supporting technologies can jump-start national economies.
Bangalore, India is the center of India’s explosive growth in software and IT.
The internet allows businesses in emerging countries to tap a global marketplace
E-marketers in emerging economies must meet marketing issues and unique challenges related to the conditions of operating within a still developing nation.
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12. Importance of Information Technology, Cont.
Unique challenges in emerging economies (still developing nation)
Slow connection speeds
High costs of domestic phone calls
ISP costs
Privacy concerns
Censorship
Navigation difficulties
Taxes
Lack of content in one’s own language
Lack of local content
Limited credit card use
Lack of secure online payment methods
Unexpected power failures
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13. Country and Market Opportunity Analysis
Outline how e-marketers apply market similarity & analyze online purchase & payment behaviors in planning market entry opportunities.
Marketers in emerging economies must find market similarities in order to be successful in selling products.
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14. Country and Market Opportunity Analysis, Cont.
E-marketing plan guides the marketer through the process of identifying and analyzing potential markets.
Market differences and market similarities must be measured and compared to determine strengths and weaknesses.
Global e-marketers bust balance two different analytical approaches.
Market similarity
Market differences
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15. Market similarity
Market similarity refers to ways in which two markets exhibit similar characteristics
Marketers often choose foreign markets that have characteristics similar to their home market for initial entry.
A U.S. company might first target Canada, UK, and Australia before targeting France, Japan or Germany, for example.
CAGE (culture, administration, geography, economic) framework helps e-marketers evaluate similarities and differences between markets.
If a firm is based in an emerging economy and wants to market to its home target, the marketer must identify market differences within the population.
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16. Market similarity, Cont.
Marketers will choose foreign markets that have similar characteristics to their home market for initial market entry.
All similar markets between developed countries have
High literacy rates
High Internet usage rates
Clearly defined market segments willing to shop various products online
High Credit card usage rate
Secure, trusted online payment mechanisms
Efficient package delivery services
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17. Diaspora Communities
When people leave their home country they may become part of a diaspora community and want to maintain relationships with their homeland.
E-businesses in countries with emerging markets use market similarity to target their own diaspora communities living abroad
Tortas Peru offers homemade, traditional Peruvian cakes online.
Shop.muncha.com offers products to Nepalis living overseas can send to individuals in Nepal.
Market similarity can be seen in “market convergence” phenomena that is “markets that were once very different become more similar over time”. Market convergence can be speed up by the Web
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18. E-Commerce Payment and Trust Issues
Describe how e-marketing strategy is influenced by computer & telephone access, credit card availability, attitudes toward Internet use, slow connections, website design, & electricity problems.
E-commerce in emerging markets is often hampered by:
Limited credit card use and consumer skepticism.
Customers did not think shopping online was “fun”
Customers did not “trust” online brands
Firms reassured customers concerning online security
In Egypt, Senegal and Pakistan less than 2% of the population owns a credit card.
Most credit card usage in Nepal is by young professionals, upper-income Nepalis and tourists.
Credit card use is virtually non-existent in Ethiopia.
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19. E-Commerce Payment and Trust Issues, cont.
4-19
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.
Alternative payments were accepted
Bank transfers
Cash on delivery
Postal orders
eBanka; is the oldest purely internet bank in Central and Eastern Europe; debit cards specifically created for online buying
Czech Republic, eBanka, an Internet bank, was established in 1998 to handle secure online purchases.
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20. Consumer concern about online use of credit cards
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21. Infrastructure Considerations
A country’s physical infrastructure also influences online marketing strategy
Unless the firm’s product is completely digital, online retailers of tangible products still need to solve logistics problems of physically moving the product from one location (a warehouse) to another (e.g. road conditions, traffic…)
Countries with emerging economies are also prone to electricity blackouts
We will discuss each of these issues in the next slides
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22. Technological Tipping Points
E-marketers must understand the seismic changes occurring in consumer access to online content.
A tipping point occurs when an emerging trend or phenomenon becomes so big that it becomes irreversible.
Computer and mobile phone technology.
Rapid development of broadband.
We will discuss each of these issues in the next slides
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23. Legacy Technologies: Computers & Telephones
Historically, Internet connection is with a desktop PC and dial-up ISP
In emerging economies, global computer ownership and access is unevenly distributed
according to a global survey Ownership was 2% in Bangladesh.
Creates opportunities for local, small business entrepreneurs
Telecenters, small shops that offer internet connections to the public, are popular means of accessing the Web in many countries.
Peru has one of the highest usage rates of telecenters in the world.
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24. Legacy Technologies: Computers & Telephones
Landline-connected telephones are entering the decline stage of their product life cycle.
As wireless technology increases, landlines will become less useful and ultimately obsolete.
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25. Wireless internet Access: Mobile Phones
In 2012, over half of the world’s population had at least one handset (4.3B users).
Challenges of wireless e-marketing:
Modification of content for small screens
Text entry using tiny keypads
Content development
Pricing and secure payments
E-marketers must also understand that mobile consumer behavior differs from desktop or laptop consumer behavior.
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26. Wireless internet Access: Smartphones
A recent study noted that smartphone adoption rates were the fastest ever of any technology innovation.
Marketers must understand how smartphones are influencing consumer purchase behavior in various countries.
36% Egyptian consumers with a smartphone changed their minds about buying a product while they were in a store because of real-time, online research.
37% of smartphone users in Argentina make an in- store purchase after online research with their smartphones.
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27. Wireless internet Access: Broadband
Broadband illustrates another significant tipping point
Broadband connections, or high-speed internet access, are developing quickly and growth is predicted to come from emerging markets.
Global prices continue to decline as more individuals and firms subscribe to broadband.
The rapid development of broadband networks in developed and developing countries is creating new opportunities for e-marketers.
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28. The Digital Divide
Discuss the controversy related to the Digital Divide.
The division between those who have access to information and those who don’t is termed “digital divide.”
Differences with regard to technology access can create a digital divide between countries or populations, such as urban and rural consumers in China.
The digital divide raises challenging questions for global policy makers, international business, and entrepreneurship: what are their responsibilities, if any, for narrowing the gap?
The World Wide Web is not really worldwide.
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29. Building Inclusive E-Markets
Peter Drucker said that business consists of two activities: marketing and innovation.
Explosive growth of mobile phones has enabled e- marketers to reach base of the pyramid consumer segments in interesting and creative ways.
Base of the pyramid used to describe 4 billion people who live on less than $2 per day
Mobile banking is one of the most successful e- marketing efforts in LEAST developed countries (LDCs.)
In heavily agricultural countries, mobile applications for farmers are making them more productive (e.g. Uganda, India & Brazil)
Explain how e-marketing is being used with very low income consumers.
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30. M-KRISHI® For Rural Indian Farmers
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31. Building Inclusive E-Markets, Cont.
The Internet is aiding in closing the technology and financial gap in several ways:
Financial assistance
Micro loans
Microfinance
Credit can be issued to low income consumers
Technological assistance
Mobile phones
Satellite Internet access
Banking assistance
Solve the rural related problem
Many people are “unbanked”
Mobile phones can be used to conduct banking
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32. Social Networking
82% of the world’s 1.2 billion online consumers reported using at least one social networking site when online.
Half of the world’s most engaged markets for social networking are in Latin America.
Facebook is a market follower, not leader, in South Korea, Japan, China, Brazil and Vietnam.
Forward thinking e-marketers are integrating Facebook into their overall marketing strategy.
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