Chapter 3 The Internet macro-environment

1
Chapter 3The Internet macro-environment
2
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.

3
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?

4
What is the macro-environment?
Figure 2.1 The Internet marketing environment
5
Example - Oxfam
6
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?

7
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?

8
Types of information needed

• Contact info
• Profile info
• Behavioural info
• Single site
• Multiple sites

9
Company best practice 1 (see p.88)

• 1 Inform the user, before asking for
  information
• Who the company is
• What personal data is collected, processed and
  stored
• Purpose of collection
• 2 Ask for consent for collecting sensitive
  personal data and good practice to ask before
  collecting any type of data.
• 3 Provide a statement of privacy policy. A
  privacy statement helps individuals to decide
  whether or not to visit a site and, when they do
  visit, whether or not to provide any personal
  information to the data controller.
• 4 Always let individuals know when 'Cookies' or
  other covert software are used to collect
  information about them.

10
Company best practice 2 (see p88)

• 5 Never collect or retain personal data unless
  it is strictly necessary for the organisations
  purposes. For example, a persons name and full
  address should not be required to provide an
  online quotation. If extra information is
  required for marketing purposes this should be
  made clear and the provision of such information
  should be optional.
• 6 Amend incorrect data when informed and tell
  others. Enable correction on-site.
• 7 Only use data for marketing (by the company,
  or third parties) when a user has been informed
  this is the case and has agreed to this (this is
  opt-in).
• 8 Provide the option for customers to stop
  receiving information (this is opt-out).
• 9 Use technology to protect the customer
  information on your site.

11
A summary of actions

• 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. Emphasise the excellence of service quality in
  all marketing communications

12
Technology

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

13
Managers choices

• Wait and see
• Early adopter
• Intermediate
• What are the benefits of each for mobile phone
  companies introducing these technologies?

14
Diffusion of innovation curve
Figure 3.5 Diffusionadoption curve
15
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.
Personalisation 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.
16
WAP infrastructure
Figure 3.8 Hardware and software infrastructure
for a WAP system
17
Mobile technology standards
Figure 3.9 Mobile access technology standards
18
Example 3G device
19
iDTV proposition
Element of proposition Evaluation
Instant access/ convenience Interactive services are available quite rapidly, but return path connections using phone lines for purchase are slower.
Personalisation This is less practical for PC and mobile since there are usually several viewers.
Security Credit card details can be held by the iDTV provider making it theoretically unnecessary to repeatedly enter personal details.
20
Interactive digital TV
Figure 3.12 Components of an interactive digital
TV system
21
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?

22
Encryption
Figure 3.13 Public-key or asymmetric encryption
23
SET standard
Figure 3.14 An example of the Secure Electronic
Transaction (SET) standard
24
Open Buying on the Internet
Figure 3.15 The Open Buying on the Internet model
for business-to-business e-commerce
25
Leaders and laggards
Figure 3.16 Leaders and contenders in
e-commerce Source Adapted from the Economist
Intelligence Unit/Pyramid Research e-readiness
ranking (www.eiu.com)