Topic 3
Global E-Markets
Objectives
• After reading this lecture notes, 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.
Objectives, cont.
– Describe how e-marketing strategy is influenced by
computer and telephone access, credit card
availability, attitudes toward internet use, Web site
design, and infrastructure issues.
– 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.
Idol Goes Global
• American Idol is broadcast in over 100
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.
Idol Goes Global, cont.
• Indian viewers vote for singers and apply to
be a contestant on Indian Idol through short
message services, 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.
Overview of Global
E-Marketing Issues
• 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.
• Global e-marketers must understand that a
country’s e-readiness profile significantly
influences marketing strategy and tactics.
Worldwide internet Usage
and Population Statistics
Developed Economies
• Developed countries are highly industrialized, use technology
to increase efficiency, and have a high GDP per capita.
• Developed countries are ideal for the e-marketing activities
discussed in the text.
Emerging Economies
• 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).
Importance of
Information Technology
• 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 services.
• E-marketers in emerging economies confront
marketing issues and unique challenges related
to the conditions of operating within a still
developing nation.
E-Commerce Payment and Trust
Issues
• E-commerce in emerging markets is often hampered by
limited use of credit cards and lack of trust in safely
conducting online transactions.
• Nepal, for example, is a cash-based economy and credit cards
are scarce. For local Nepalis, only Visa, MasterCard, and
Himalayan Bank cards are accepted.
• In Bolivia, only 2.3 percent of the population has a credit card.
• Credit card use is virtually non-existent in Ethiopia.
E-Commerce Payment
and Trust Issues cont.
• E-commerce in emerging markets is often
hampered by limited use of credit cards and
lack of trust in safely conducting online
transactions.
– 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.
E-Commerce Payment
and Trust Issues, cont.
• E-marketers working in emerging economies
should also understand buyer behavior and
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.
• To overcome trust issues in the Czech Republic,
eBanka, an internet bank, was established in 1998
to handle secure online purchases.
Consumer Concern About Online Use
Of Credit Cards In Selected Countries
Country & Market Opportunity Analysis
• Market Similarity: 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.
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 can target diaspora communities.
– Tortas Peru offers homemade, traditional Peruvian
cakes online.
– Shop.muncha.com offers products to Nepalis living
overseas can send to individuals in Nepal.
• Market convergence, in which markets become more
similar over time, can be expedited by the Web.
Technological Tipping Points
• E-marketers must understand the seismic
changes occurring in consumer access to
online content.
– Computer and mobile phone
technology.
– Rapid development of broadband.
Computers & Telephones
• Global computer ownership and access is unevenly
distributed, according to a global survey.
– Ownership in Latin America ranged from 43% in
Venezuela to 22% in Mexico.
– Ownership was 2% in Bangladesh.
• 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.
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.
Smartphones
• 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
because of real-time, online research.
– 37% of smartphone users in Argentina make
an in-store purchase after online research
with their smartphones.
Broadband
• There will be over 740 million broadband lines
worldwide by 2014.
• Exhibits 4.5 and 4.6 provide broadband usage
and growth rates for various countries.
• Global prices continue to decline as more
individuals and firms subscribe to broadband.
The Digital Divide
• E-marketers must consider the social environment in
which e-business operates.
– The division between those who have access to
information and those who don’t is termed “digital divide.”
– Disparities 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, international business, and
entrepreneurship: what are their responsibilities, if
any, for narrowing the gap?
Building Inclusive
E-Markets
• Explosive growth of mobile phones has enabled
e-marketers to reach base of the pyramid
consumer segments.
• Mobile banking is one of the most successful e-
marketing efforts in LDCs.
• In heavily agricultural countries, mobile
applications for farmers are making them more
productive.
Social Networking
• 82% of the world’s 1.2 billion online consumers
reported using at least one social networking site
when online.
– Latin America, Israel and Russia, where the
social network Vkontakte dominates, have some
of the world’s heaviest and most engaged users
of social media.
– Facebook is a market follower, not leader, in
South Korea, Japan, China, Brazil and Vietnam.
THE END
