Chapter_4.ppt

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Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
CHAPTER 4
E-ENVIRONMENT

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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.

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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?

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SLEPT Factors
 Macro-environment
 Social
 Legal
 Economic
 Political
 Technological

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SLEPT: Social
 Include the influence of consumer perceptions
in determining usage of the Internet for
different activities

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SLEPT: Legal and ethical
 Determine the method by which products can
be promoted and sold online
 Governments, on behalf of society, seek to
safeguard individuals right to privacy

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SLEPT: Economic
 Variations in the economic performance in
different countries and region affects spending
patterns and international trade

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SLEPT: 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

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SLEPT: Technological
 Changes in technology offer new opportunities
to the ways products can be marketed

Figure 4.1 ‘Waves of change’ – different timescales for change in the environment

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Factors governing Internet
adoption
 Cost of access
 Value proposition
 Ease of use
 Security
 Fear of the unknown

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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

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

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

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Consumers influenced by using the
online channel
 Psychographic segmentation
 Realistic enthusiasts 14%
 Confident brand shoppers 18%
 Carefree spenders 19%
 Cautious shoppers 14%
 Bargain hunters 21%
 Unfulfilled 14%

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

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B2B Profiles
 The percentage of companies with access
 Influenced online
 Purchase online

Figure 4.6 Percentage of businesses that order online
Source: DTI (2004), Fig 7.3a

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Why personal data are
valuable?
1. Contact information
2. Profile information
3. Behavioral information (on a single site)
4. Behavioral information (on multiple site)

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Ethical issues and data
protection
 Ethical issues concerned with personal information
ownership have been usefully summarized by Mason
(1986) into four areas:
1. Privacy – what information is held about the individual?
2. Accuracy – is it correct?
3. Property – who owns it and how can ownership be
transferred?
4. Accessibility – who is allowed to access this information,
and under which conditions?

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Ethics – Fletcher’s view
 Fletcher (2001) provides an alternative
perspective, raising these issues of concern for
both the individual and the marketer:
1. Transparency – who is collecting what
information?
2. Security – how is information protected once
collected by a company?
3. Liability – who is responsible if data is abused?

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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

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

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

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Avoiding SPAM

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Regulations on privacy and
electronic communications
 Privacy and Electronic Communications
Regulations (PECR) Act
1. Applies to consumer marketing using email
or SMS text messages
2. Is an ‘opt-in’ regime
3. Requires an opt-out option
4. Does not apply to existing customers when
marketing similar products
5. Contact details must be provided

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Regulations on privacy and
electronic communications
6. The ‘From’ identification of the sender must
be clear
7. Applies to direct marketing communications
8. Restricts the use of cookies

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Understanding cookies
 A data file placed on your computer that
identifies an individual computer
 Persistent
 Temporary or session
 First-party
 Third-party
 Cookies are stored as individual text files
 dave_chaffey@british_airways.txt
 FLT_VISK:bapzRnGdxBYUUD:Jul-25-
1999british-airways.com0 425259904 293574
26 1170747936 *

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Using Cookies

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What are cookies used for?
 Personalizing a site for individual
 Online ordering systems
 Tracking within a site
 Tracking across sites

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Viral e-mail marketing
 To reassure web users about threats to their
personal information
 TRUSTe
 ISIS – a UK accreditation initiative
 getsafeonline

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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

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Legal – Sparrows eight areas
1. Marketing your e-commerce business
2. Forming an electronic contract
3. Making and accepting payment
4. Authenticating contracts concluded over the
Internet
5. E-mail risks
6. Protecting Intellectual Property
7. Advertising on the Internet
8. Data protection.

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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: hukum bagi orang
berkebutuhan khusus

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2.Forming an electronic
contract
 E-commerce sites must contain easily
accessible content that clearly states
 The company’s 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

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Economic/Political
 Ensuring companies competitive
 Funding for education and technology
 Promoting new technology e.g. broadband 12% in UK, 70%
Taiwan, South Korea
 Achieving government efficiencies
 E-government – all UK services online by 2005
 Singapore ‘Intelligent Island’
 Taxation regimes
 Legislation for offshore trading.

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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

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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

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

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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?

Figure 4.10 Diffusion–adoption curve

Figure 4.11 Example of a Gartner hype cycle
Source: Gartner (2005) Gartner’s Hype Cycle Special Report for 2005

Figure 4.12 Alternative responses to changes in technology

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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.

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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

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Summary
1. Environmental scanning and analysis are
necessary in order that a company can
respond to environmental changes and act
on legal and ethical constraints on its
activities
2. Environmental constraints are related to the
micro-environment variables reviewed in
chapter 5 and the macro-environment
variables in this chapter using the SLEPT
mnemonic

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Summary
3. Social factors that must be understood as
part of the move to the Information Society
include buyer behaviour characteristics such
as access to the Internet and perceptions
about it as a communications tool
4. Ethical issues include the need to safeguard
consumer privacy and security of personal
information. Privacy issues include collection
and dissemination of customer information,
cookies and the use of direct e-mail

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Summary
5. Legal factors to be considered by e-
commerce managers include: accessibility,
domain name registration, copyright and data
protection legislation
6. Economic factors considered in the chapter
are the regional differences in the use of the
Internet for trade. Different economic
conditions in different markets are considered
in developing e-commerce budgets

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Summary
7. Political factors involve the role of
governments in promoting e-commerce, but
also trying to control it
8. Rapid variation in technology requires
constant monitoring of adoption of the
technology by customers and competitors
and appropriated responses

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Tugas
 Di Indonesia, undang-undang apa saja yang
berhubungan dengan pemanfaatan ICT?
Mengatur apa sajakan hukum2 tersebut?

Chapter_4.ppt

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