Chapter 3 The Internet macro-environment

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Chapter 3The Internet macro-environment
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Learning objectives

• Identify the different elements of the Internet
  macro-environment that impact on an
  organisations Internet marketing strategy and
  execution
• assess the impact of legal, moral and ethical
  constraints and opportunities on an organisation
  and devise solutions to accommodate them
• evaluate the significance of other macro-economic
  factors such as economics, taxation and legal
  constraints.

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Questions for marketers

• Which factors affect the environment for online
  trading in a country?
• How do I make sure my online marketing is
  consistent with evolving online culture and
  ethics?
• How do I assess new technological innovations?
• Which laws am I subject to when trading online?

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What is the macro-environment?
Figure 2.1 The Internet marketing environment
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Ethical issues

• Ethical issues concerned with personal
  information ownership have been usefully
  summarised by Mason (1986) into four areas
• Privacy what information is held about the
  individual?
• Accuracy is it correct?
• Property who owns it and how can ownership be
  transferred?
• Accessibility who is allowed to access this
  information, and under which conditions?

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Ethics Fletchers view

• Fletcher (2001) provides an alternative
  perspective, raising these issues of concern for
  both the individual and the marketer
• Transparency who is collecting what
  information?
• Security how is information protected once
  collected by a company?
• Liability who is responsible if data is abused?

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For the customers sake

• 1. Reassure customers by providing clear and
  effective privacy statements and explaining the
  purpose of data collection
• 2. Follow privacy and consumer protection
  guidelines and laws in all local markets
• 3. Make security of customer data a priority
• 4. Use independent certification bodies
• 5. Emphasize the excellence of service quality in
  all marketing communications

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Technology wears the pants!

• Think of new mobile technologies introduced in
  past 2-3 years.
• Examples
• WAP
• 3G
• MMS (multimedia messaging)
• What issues do these raise for managers?

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Diffusion of innovation curve
Figure Diffusionadoption curve
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Mobile/wireless proposition
Element of proposition Evaluation
Not fixed location The user is freed from the need to access via the desktop making access possible when commuting, for example.
Location-based services Mobiles can be used to give geographically-based services, e.g. an offer in a particular shopping centre. Future mobiles will have global positioning services integrated.
Instant access / convenience The latest GPRS and 3G services are always on, avoiding the need for lengthy connection.
Privacy Mobiles are more private than desktop access, making them more suitable for social use or for certain activities such as an alert service for looking for a new job.
Personalization As with PC access personal information and services can be requested by the user, although these often need to be set up via PC access.
Security In the future mobile may become a form of wallet, but thefts of mobile make this a source of concern.
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Example 3G device
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Security requirements

• Authentication are parties to the transaction
  who they claim to be?
• Privacy and confidentiality is transaction data
  protected? The consumer may want to make an
  anonymous purchase. Are all non-essential traces
  of a transaction removed from the public network
  and all intermediary records eliminated?
• Integrity checks that the message sent is
  complete i.e. that it isnt corrupted.
• Non-repudiability ensures sender cannot deny
  sending message.
• Availability how can threats to the continuity
  and performance of the system be eliminated?

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Encryption
Figure Public-key or asymmetric encryption
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Leaders and Contenders
Figure 3.16 Leaders and contenders in
e-commerce Source Adapted from the Economist
Intelligence Unit/Pyramid Research e-readiness
ranking (www.eiu.com)