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Chapter 5: Ethical and Legal Issues

Software Infringement  Copyright infringement occurs when people or companies loan software to others for which they have no licenses.  Counterfeiting occurs when illegally copied software is duplicated and distributed on a large scale.  Countries with weak software copyright enforcement cost software owners billions of dollars in lost revenue.  Globally, over a third of the software sold is an infringing version.  Microsoft uses the following remedies: † Proposes intellectual property legislation. † Files civil lawsuits. † Creates non-infringement technologies.  Microsoft believes that education is the best weapon against piracy. Do you agree? ( Terms

† Recorded users¶ clickstreams to form user profiles for marketing purposes. † Acquired consumer names, addresses, and buying histories and planned to combine the offline data with clickstream data (Controversy arose in 2000 when DoubleClick) 2. Cookies Files that serve many purposes † Create shopping baskets to hold purchases † Recall stored sales information † Collect user data † Cookies are normally executed without any user action. † Cookies allow marketers individual¶s online behavior.  Privacy with an electronic mail to pinpoint an

Privacy; Digital Property; Patents; Copy Right; Trademark; Licenses; Online Expression Privacy Within Digital Contexts Online privacy issue  Access to Personal Data  For example 1. Online advertising firms (e.g DoubleClick)

Information plays a pivotal role in the concept of privacy.  AMA Code of Ethics for Marketing on the internet: ³information collected from customers should be confidential and used only for expressed purposes.´ Digital Property The law protects intangible or intellectual property through 3 basic mechanisms:

may result in trademark † A trademark violation. Patent law is centered on inventions. involves the registration of domains that resemble or duplicate existing ones. .  The U. cybersquatting. Licenses † Critics argue that patents will have stifling and monopolistic effects. † Doctrine of First Sale Limit the ability of copyright holder to obtain profit after the initial time at which the material is sold.S. Patents  Applying patent law to computing is an uncertain but developing field.  Licenses may be two basic types: † Shrinkwrap or break-the-seal licenses † Clickwrap licenses where the user is required to click a button to accept the terms  Legal trend favors enforcement of software licenses. Online Expression  Internet technology has resulted in what many consider inappropriate or untargeted types of consumer contact.  Licenses are an increasingly popular method of intellectual property protection. Patent Office recently decided to increase the rigor of reviewing applications for software-related protection.  Creators of software are attempting to make use of patent law protection.  Copyright addresses issues of expression. † Spam is the mass distribution of unsolicited electronic mail.  Trademark law as been applied to the internet naming system of domain names. Copyright  Copyright is the primary means of protecting most expression on the Internet. † Advocates argue that granting of patents for software will encourage innovation. Trademarks  Trademark law concerns the ownership of intellectual property that identifies goods or services. † Similarities in names infringement claims. † Licenses allow the buyer to use the product but restrict duplication or distribution.  Chief protections include: † Doctrine of Fair Use Ability to copy protected material for education and news reporting.  Trademark is concerned with words or images used in the market.

Ownership of intellectual property 2. Data Drive Strategy Is a process of strategy that starts  SOURCES (S) † to collect all sources of data (internal data. competitive intelligence)  DATA (D) † then filter the data into the database (product information. the marketing knowledge information will then use to create e-marketing strategy Chapter 6: E-Marketing Research The Purina Story Nestle Purina PetCare wanted to know whether their Web sites and online advertising increased off-line behavior. primary data. customer base) in order to get marketing knowledge  STRATEGY (S) † Finally. The role of privacy in a virtual world 3. Nestle Purina developed 3 research questions: Are our buyers using our branded Web sites? Should we invest in other Web sites? If so. Status of children and digital networks † 31% of subjects who were exposed to both online and offline advertising mentioned Purina. Freedom of expression 4. information ± consumer behavior. † Home/health and living sites received the most visits from their customers. Critical issues include: 1. Use of data and its collection and about. where should we place the advertising? They combined online and off-line shopping panel data and found that: † Banner click-through rate was low (0. secondary data.Marketing Ethics  Information technology presents challenges to marketing ethics. † The high exposure group mentioned Purina more than the low exposure group. Can you think of other Web sites besides petsmart.06%).com that would be appropriate for Purina PetCare ads? What are the sources of data? As an example is that you need those data/information to start your ebusiness Why do you need those sources of data? I. .

use. t e CE (new customers of t e company gets t e info about t e leads Uses of Knowledge Management  Sc er ec O D A l sis  Sales Pr m i Trac i  Freq e B er Pr ram anagement Knowledge Management Metrics  Two metrics are currently in widespread use: † ROI: total cost sa ings di ided by total cost of t e installation. Marketing Knowledge Management 1. information. t e leads ( new customers for t eir sales teams Furt er. † Total Cost of Owners ip (T O) includes cost of hardware. t e customer information. and dissemination of knowledge † Sales Data.† For e am le on e of t e strate a ertising is to buil internet † Data. and knowledge are s ared wit internal decision makers. Internal Records  Knowle ge management † is t e process of managing t e creation. II. Inventory Data † Customer Characteristics and Behavior 3. software. and sometimes customers † E ample IT firm uses salesforce com ± to manage t e sales. Secondary Data . labor. The Electronic Marketing Information Systems Marketing Knowle ge Management 2. partners. and cost sa ings. c annel members.

g a computer company coll ects data from its customer online and its customer by telephone OR website logs † Salesforce. finance.g Nielsen Television Ratings). † Focus groups † Internal sales data  E ample 2.  Mostly commonly used primary data collection methods † Surveys † Syndicated research (data collected using a systematic process e. † Sales data E.† Public Data † Private Data † Competitive Intelligence † Information Quality 4. The Electronic Marketing Information System  Marketers manage knowledge through a marketing information system (MIS). bar code scanners). Many firms store data in databases and data warehouses .com . Primary Data † Research † Internet based research 1. Source: Internal Records  Accounting. production. and marketing personnel collect and analyze data.g a customer purchases online.  Sources of data are collected by using the internet and other technologies (telephone. the transaction is recorded in a database for access † Customer Characteristics and Customer behavior E.

 Primary data collection enhanced by the internet: Experiments. Census Bureau  Privately generated data † Nielsen/NetRatings † Commercial online databases Secondary Data ± Competitive Intelligence  Competitive Intelligence sources are: Competitor press releases. advertising strategy. blogs Source 3: Primary Data  Primary data are information gathered for the first time to solve a particular problem. Secondary Data ± Advantages and Disadvantages  Advantages : † Can be collected more quickly and less expensively than primary data. Focus groups. † Quality of secondary data may be unknown. Source: Secondary Data  Marketers continually gather business intelligence by scanning the macro environment. The macro environment aspects that are used for the threats and opportunities are: † Demographic trends † Competitors † Technological forces † Natural Reources † Social and Cultural trends † World and Local economies † Legal and Political environment Secondary Data ± Public Data & Private Data  Publicly generated data † What are some examples of public generated data? † Example BPS. new products. Survey research .Online software system for tracking customer sales and information 3.  Disadvantages are that the secondary data may not meet emarketer¶s information needs. † Data was gathered for a different purpose. † Data may be old. trade show activity Competitor website links Identify users via website log User conversation. Observation.

 Other ethical concerns include: † Respondents are increasingly upset at getting unsolicited e mail re uests for survey participation. † Privacy of user data. . † ³Surveys´ for the sole purpose of building a database.Ethics of Online Research  Companies conducting research on the Web often give respondents a gift or fee for participating.

. blogs.  Real-space techniques include: † bar code scanners † credit card terminals † Interactive point of sales machines † Universal Product Code (UPC) VI. sees a video on the blog. VII. frequency. Data Analysis and Distribution  Four important types of analysis for marketing decision making include: † Data mining † Customer profiling † RFM (recency.  Companies can hire public relations firms or online reputation management firms to help. Picks up his computer to find a blog mentioned during the podcast. and photo sites in order to learn what is being said about their brands or executives.  They can also set up automated monitoring systems using e-mail. not just for marketing data. and inventory levels. IV. Monitoring the Social Media  Companies must now monitor numerous web pages.  Customer databases † hold information about customer characteristics. Other Technology-Enabled Approaches  Client-side Data Collection † Cookies † Use PC meter with panel of users to track the user clickstream. monetary value) analysis † Report generating Chapter 7: Consumer Behavior Online The Customer¶s Story A typical one-hour adventure in the life of a 25-year-old professional male. Justin: Tunes his iPod to the latest Diggnation podcast while his TV is tuned to a soccer game and his cell phone and PC are within reach. Real-Space Approaches  Real-space primary data collection occurs † Technology-enabled approaches to gather information at offline points of purchase.III.  Server-side Data Collection † Site log software † Real-time profiling tracks users¶ movements through a Web site.  Data are stored in the data warehouse system and used for analysis by marketing decision makers. V. Marketing Databases & Data Warehouses  Product databases † hold information about product features.  Data warehouses are † repositories for the entire organization¶s historical data. prices. and texts a friend about the video.

home has 26 different electronic devices for media and communication. and entertainment than do those acces sing from a mobile device or 56K (dial-up) modem.S. consumers use the internet.  Ten countries account for 53% of all global users and adoption rates range from 69-88%.4 billion people had access to the internet. leading marketers to ask more questions about con sumer behavior on the internet. He posts a link to the video and Vimeo site on his Twitter stream. † It refers to the act of obtaining a desired object by offering something in return. † Consumers spend an average of 1. music.  Broadband users enjoy more multimedia games. 19% of the global population.Justin searches for the video title on Google and finds a job posting on Vimeo. .  Internet usage in developed nations has reached a critical mass. 1.S.  E change occurs within the following conte ts:  50% of online Americans connect to the internet at home with a broadband connection.5 hours online daily. an online video -posting site.  Internet Reaches Maturity: 1996 -2008 The Internet E change Process Technological Conte t  E change is a basic marketing concept. How can a marketer capture dollars from these behaviors? Consumers in the 21 st Century † Technological † Social/cultural † Legal  71% of U.  The typical U. the other 29% can be characterized as: † Net evaders † Net dropouts † Truly unconnected † Intermittent users  In 2007. Justin is the new consumer: a multitasker interested in the social media.

† Attitudes toward technology. † Only 23% shared files in 2004. 69 minutes each time. Energy . the number of unsolicited emails has increased. and gender.  In spite of the Can-Spam law. † Age. Psychic costs Monetary Cost  The internet exchange doesn¶t use cash or paper checks for online transactions.  There are many forms of digital money. † Electronic checks through a third-party such as PayPal. Time Cost  Online attention is a desirable and scarce commodity. † Smart cards or Splash Plastic. † Convenience or price orientation. † Multitasking speeds up normal processes and lowers attention to each task.  Consumer Resources † Consumers perceive value as benefits minus costs. income. consumer behavior changed. visiting over 1.Social and Cultural Contexts  One of the most important social trends is that consumers trust each other more than they trust advertising or companies online. † In 2002. † Home and work boundaries are dissolving. ethnicity. † Goal orientation. the average user goes online 34 times/month. Legal Context  Despite piracy laws. when the recording industry sued thousands of illegal music file downloaders. † Privacy and data security are paramount. † Information overload overwhelms consumers. 37% of online consumers shared music files.  However. † Online skill and experience. Time. † These costs constitute a consumer¶s resources for exchange: Money.´ † Self-service is required.  Worldwide. illegally used software abounds. † Other innovative forms are appearing in other countries.  In South Korea some mobile phones have chips that allow vending machine purchases by phone. education. . † Consumers cannot do without internet access: ³online oxygen.500 Web sites. † Consumers seek convenience and have high expectations regarding customer service. Individual Characteristics & Resources  Individual characteristics affect internet use. † Online crime worries consumers. † Sophisticated consumers. † Credit and debit cards.  Social/cultural trends have a huge effect on online exchanges.

Trade  Each is ripe with marketing opportunity. Create. Enjoy. Learn. † Hoffman and Novak applied the concept of flow to online behavior. . Energy and Psychic Costs  It takes effort to log on and check e-mail.  Shopping cart abandonment and failed online purchases have numerous causes. especially for dial-up users. † Short text messaging (SMS) via cell phones and PDAs is becoming more popular.  Consumers apply psychic resources to understand information or when facing technical problems. Some researchers believe that consumers pay more focused attention online than with other media. † Technical reasons † Marketing problems Exchange Outcomes  There are 5 basic things that people do online: Connect.