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ELECTRONIC COMMERCE

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  1. 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.

  2. Strategies • Exclusionary • Solely domestic • Inclusionary • “Passively” international • “Glocals” (adaptive approach) • “Globals” (standardized approach) Middle ground Completely standardized (“Globals”) Completely adapted

  3. 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%)

  4. 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 e-business support services Information and Telecommunications (ITC) International Telecommunications Union 26 indicators-e.g., Technology infrasturctures Market conditions Internet Readiness Indices

  5. Internet Readiness Criteria • Infrastructure availability • Performance • Types of access available • Cost of access • Metered • Unmetered • Dial-up issues • Proportion of population with access

  6. 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.

  7. 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.

  8. Internet Leaders • U.S., Canada • Western Europe • Japan • Australia • New Zealand • Taiwan • South Korea • Israel

  9. Countries with Largest Absolute Number of Internet Users

  10. Countries With the Largest Absolute Number of Users Sources: World Bank, Nielsen

  11. Country Internet Penetration Rates by Per Capita GDP Note accounting issues! Source: Nielsen.

  12. 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

  13. Risks in International Expansion • Over-expansion • Brand dilution • Over-estimation of revenue • Under-estimation of costs • Underestimation of competition • Regulations

  14. Europe High penetration rates; access outside home Strong economies Low credit card use Competing technologies Interactive TV U.S./Canada Canadian specialty shopping High penetration rates Weakening U.S. dollar; strengthening Canadian dollar Mexico Growth potential Low credit card penetration Area Issues

  15. 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 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 More Regions

  16. 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 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 Language Issues

  17. Language Display • Single-byte (Latin-based) vs. double-byte 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

  18. 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

  19. Color Black as background “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 Symbolism Dogs as pets Numbers “Unlucky” numbers 4, 9, 13 (Japan) 4, 14 (China) “Lucky” numbers 1, 8 (China) Formality of communication Cultural Issues

  20. Measurement issues Metric vs. U.S., British systems Clothing sizes Representation of numbers 1,000.00 vs. 1.000,00 Dates Offensive content Specific body parts “Revealing” content Gestures More Cultural Issues

  21. Regulation Extraterritorial laws and regulations Privacy “Safe Harbor” procedures Encryption restrictions Extent of regulation Protection of small businesses Limitations on online advertising (China) Taxation Censorship Fraud Government Issues

  22. Finding buyers Local search engines Advertising Search engine optimization Mailing lists from catalogs prior to Internet entry Demographics Gender ratios Socioeconomic status of users 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 International Internet Users

  23. 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 Censorship issues Extreme (China, Singapore) More modest (Europe) Gambling U.S. based Indirect ownership of foreign sites Foreign based Loopholes in rules Import/export constraints Government oversight/ regulation Extent of regulation Policy on competition Selected Issues

  24. 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/

  25. Some issues Values depicted Aesthetics Conventions Symbolism Color Desirability of features For reassurance To affirm values Some areas considered Hofstede’s dimensions High vs. low context orientation of culture Chapter 1:Cultural Customization

  26. Research • Level of customization vs. • Attitude (liking) • Purchase intention • Both more favorable attitudes and higher purchase intentions for customized web sites in several countries • Italy • India • Netherlands • Switzerland • Spain

  27. Standardized 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 Localized Country specific pages Translation into local languages as needed http://www.Dell.com 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 Culturally customized “Complete immersion” Three levels Adaptation Symbolism Behavior None identified; closest is http://www.Ikea.com Web Site Classifications (Somewhat Arbitrary)

  28. 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

  29. Perception—what is Noticed Processed Language Chinese found to learn faster visually due to pictoral alphabet Color perception Associations, preferences Naming Implications Spatial orientation (right-left, left-right, up-down)  navigation modes Translation issues Idiomatic equivalence Vocabulary equivalence Conceptual equivalence Relevant Cultural Issues: Perception, Language

  30. More Language Issues • Dialects • Text length  formatting implications • Language structure • Use of acronyms • Color categories

  31. 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

  32. Cultural Issue: Behavior • National norms • Expectations of how to do things • Relationships between people

  33. 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)

  34. 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

  35. High U.S. Australia U.K. Netherlands Canada New Zealand Middle India Japan Argentina “Arab World” Low Guatemala Ecuador Panama Venezuela Columbia Indonesia China Pakistan Indonesia Taiwan Country Examples

  36. 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

  37. Clubs May be “offline”—sense of belonging Chat rooms Emphasis on community relations Family (“we”) theme Family bonds Loyalty programs To company or brand Japanese: amae—loyalty to the group Links to local web sites Demonstration of connection to local community Symbols/pictures of national identity Flags Architecture Important buildings Local role models Suggestions for Sites for Collectivist Societies

  38. Independence theme “I-consciousness” Individual determinism “Invest on your terms” Strong privacy statement Personalization and product uniqueness Unique content (e.g., self-selected news, features, adjustment of view) Personalized products, if applicable Personal product recommendations Suggestions for Sites for Individualist Societies

  39. 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

  40. High Greece Portugal Guatemala Uruguay El Salvador Belgium Japan Medium Germany Thailand Iran Finland Low Singapore Jamaica Denmark Hong Kong Sweden Ireland U.S. Countries Note that no clear geographic patterns are evident.

  41. Customer service Personnel positioned as experts Easily accessible on the site Guided navigation Traditional theme Connection to local stores Depictions Ability to return merchandise Local terminology Free Trials Downloads Transaction security Testimonials Suggestions for Sites for High Uncertainty Avoidance Societies

  42. Suggestions for Sites for Low Uncertainty Avoidance Societies • None listed. Ideas?

  43. 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 Preference for face-to-face contact for display of respect Emphasis on hierarchical structures Emphasis on organization charts Chapter 6—Cultural Customization: Power Distance

  44. High Malaysia Panama Guatemala Philippines Mexico “Arab World” Middle Taiwan Iran Spain Poland Low Austria Israel Denmark New Zealand Ireland Norway Countries

  45. 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

  46. Suggestions for Low Power Distance Societies • None specifically listed. Ideas?

  47. Value of achievement, assertiveness, ambition vs. nurturance, care for others Masculine societies Tendency toward clear gender roles “Success orientation” Decisiveness Directness (depending on levels of collectivism, power distance) Feminine societies “Oneness with nature” Service orientation Harmony Modesty Chapter 7—Cultural Customization: Masculinity-Femininity

  48. High masculinity Japan Hungary Austria Venezuela Switzerland Mexico Middle: Malaysia Brazil Singapore Israel West Africa High Femininity Sweden Norway Netherlands Denmark Costa Rica Finland Countries

  49. 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

  50. Recommendations for Masculine Societies • Similar considerations to “high context” societies • Harmony • Aesthetics • Soft sell