©2006 Prentice Hall

ELC 310

DAY 4

©2006 Prentice Hall

Agenda• Questions?• Assignment 1 due• Assignment 2 will be assigned by next class

• Due Sept 30

• Exam 1 on Sept 30• Chaps 1-5 of Strauss Text • 10 Short Essays (2 per chapter)• You will have 70 minutes to complete exam• Open book, open notes

• You should be working on your eMarketing Plans• Due Nov 4, Presentations on Nov. 1 & 4

• Discussion on Global Markets

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E-Marketing 4/EJudy Strauss, Adel I. El-Ansary, and Raymond Frost

Chapter 4: Global Markets

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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 Hall 4-3

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 Hall 4-4

The FIFA Story• Federation Intérnationalé de Football

Association (FIFA) partnered with Yahoo to create the most popular sports site in history.• FIFAworldcup.com was seen by 3.7 million

people from 17 countries May 1-June 23, 2002.

• 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?

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Worldwide Internet Usage

• Ex. 4.1 (page 71) shows that there were over 785 million Internet users worldwide.

• Worldwide usage more than doubled from 2000-2004.

• Asia, with 243 million users, has the highest number of users.

• North America has the highest penetration of users, almost 70%.

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Internet Use Varies by Country

• The world’s largest online markets are the U.S. (186 million users) and China (96 million users).

• The top 10 countries account for 62.4% of all global users.

• Some smaller countries, such as South Korea and Iceland have the highest penetration, over 70% of their populations.

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Top Ten Countries

Rank CountryNumber of Internet Users

(millions) Country% of Population Internet

Users

1 United States 185.9 South Korea 74.9

2 China 95.8 Iceland 70.5

3 Japan 77.9 Norway 69.1

4 Germany 41.8 Denmark 69.1

5 India 39.2 Sweden 69.0

6 United Kingdom 34.1 Australia 66.1

7 South Korea 32.0 United States 64.0

8 Italy 28.6 The Netherlands 64.0

9 France 26.6 Switzerland 64.0

10 Brazil 23.0 Canada 63.5

Total 584.9 67.42

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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.

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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

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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 obstacles to e-commerce in emerging economies include:• Slow connection speeds• Costs of domestic phone calls• ISP costs• Lack of local content and content in one’s own language

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Country and Market Opportunity Analysis

Emerging Economies

DevelopedEconomies

Emerging EconomiesDifferences

Similarities

Differ

ence

s

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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.

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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.

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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.

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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.

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Connection Costs in Arab Countries

0 10 20 30 40 50 60 70 80

Morocco

Bahrain

Jordan

Qatar

Lebonan

Tunisia

Saudi Arabia

Average

Oman

Kuwait

Egypt

UAE

U.S. Dollars

ISP Charges

Telephone Charges

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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.

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Broadband Penetration for Selected Countries

Country Broadband Subscribers as a percentage of total population

Italy 0.77

Hungary 0.31

China 0.21

Brazil 0.19

Bulgaria 0.12

Colombia 0.05

Turkey 0.03

Russia 0.02

Nigeria 0.01

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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.

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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.