Chapter 5

Slide 4.
CHAPTER 4
E-
ENVIRONMENT
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 4.2
Learning
 outcomes
Identify the different elements of an organization
macro-environment that impact on an organization
e- business and
e-marketing strategy
 Assess the impact of legal, privacy and
ethical constraints or opportunities on a
company
 Assess the role of macro-economic factors such as
governmental e-business policies, economics,
taxation and legal constraints.
Slide 4.3
Management
 issues
What are the constraints placed on developing
and implementing an e-business strategy by the
e-environment?
 What factors influence the adoption of new
digital media and how can we estimate future
demand for online services?
 How trust and privacy can be assured for the
customer while seeking to achieve marketing
objectives of customer acquisition and
retention?
Slide 4.4
SLEPT
Factors
Macro-
environment
🞑 Social
🞑 Legal
🞑 Economic
🞑 Political
🞑 Technological
Slide 4.5
SLEPT:
Social
 Include the influence of consumer perceptions
in determining usage of the Internet for
different activities
Slide 4.6
SLEPT: Legal and

ethical
 Determine the method by which products can
be promoted and sold online
 Governments, on behalf of society, seek
to safeguard individuals right to privacy
Slide 4.7
SLEPT:
Economic
 Variations in the economic performance in
different countries and region affects spending
patterns and international trade
Slide 4.8
SLEPT:
Political
 National governments and transnational
organizations have an important role in
determining the future adoption and control of the
Internet and the rules by which it is governed
Slide 4.9
SLEPT:
Technological
 Changes in technology offer new opportunities
to the ways products can be marketed
Figure 4.1 ‘Waves of change’ – different timescales for change in the environment
Slide 4.11
Factors governing Internet

adoption
 Cost of access
 Value proposition
 Ease of use
 Security
 Fear of the
unknown
Slide 4.12
Internet
Access
 Consumers and businesses who uses Internet
vary according to countries
 Within each country, adoption of the Internet
vary significantly according to individual
demographic characteristics
 Broadband adoption
Global variation in number of PCs per hundred population and percentage
Figure 4.2
Internet access in 2004
Source: ITU (www.itu.int/ITU-D/ict/statistics/)
Variation in demographic characteristics of UK Internet users: (a) gender,
Figure 4.3
(b) age, (c) social grade
Source: eMori Technology Tracker – www.mori.com/technology/trackerdata.shtml
Slide 4.15
Consumers influenced by using the

online channel
 Psychographic
segmentation
🞑 Realistic enthusiasts 14%
🞑 Confident brand shoppers
18%
🞑 Carefree spenders 19%
🞑 Cautious shoppers 14%
🞑 Bargain hunters 21%
🞑 Unfulfilled 14%
Figure 4.4 Percentage by category who bought offline after researching online
Source: BrandNewWorld: AOL UK / Anne Molen (Cranfield School of Management) / Henley Centre, 2004
Figure 4.5 Development of experience in Internet usage
Slide 4.18
B2B
Profiles
 The percentage of companies with
access
 Influenced online
 Purchase online
Figure 4.6 Percentage of businesses that order online
Source: DTI (2004), Fig 7.3a
Slide 4.20
Why personal data are

valuable?
1. Contact information
2. Profile information
3. Behavioral information (on a single
site)
4. Behavioral information (on multiple
site)
Slide 4.21
Ethical issues and data

 protection
Ethical issues concerned with personal information
ownership have been usefully summarized by Mason
(1986) into four areas:
1. Privacy – what information is held about the individual?
2. Accuracy – is it correct?
3. Property – who owns it and how can ownership be
transferred?
4. Accessibility – who is allowed to access this information,
and under which conditions?
Slide 4.22
Ethics – Fletcher’s
 view
Fletcher (2001) provides an alternative
perspective, raising these issues of concern for both
the individual and the marketer:
1. Transparency – who is collecting what information?
2. Security – how is information protected once
collected by a company?
3. Liability – who is responsible if data is abused?
Slide 4.23
The eight principles for

data protection
 Fairly and lawfully processed;
 Processed for limited purposes;
 Adequate, relevant and not excessive;
 Accurate;
 Not kept longer than necessary;
 Processed in accordance with the data subject's rights;
 Secure;
 Not transferred to countries without adequate
protection.
www.dataprotection.gov.uk
Information flows that need to be understood for compliance with data
Figure 4.7
protection legislation
Slide 4.25
Anti-spam
legislation
 To protect individual privacy and with intention
of reducing spam or unsolicited commercial e-
mail (UCE)
 ‘Sending Persistent Annoying e-Mail’
 Anti-spam legislation can be viewed
at http://www.spamlaws.com
Slide 4.26
Avoiding
SPAM
Slide 4.27
Regulations on privacy and electronic

communications
 Privacy and Electronic Communications
Regulations (PECR) Act
1. Applies to consumer marketing using email or
SMS text messages
2. Is an ‘opt-in’ regime
3. Requires an opt-out option
4. Does not apply to existing customers
when marketing similar products
5. Contact details must be provided
Slide 4.28
Regulations on privacy and electronic

communications
6. The ‘From’ identification of the sender must
be clear
7. Applies to direct marketing communications
8. Restricts the use of cookies
Slide 4.29
Understanding
cookies
 A data file placed on your computer that
identifies an individual computer
🞑 Persistent
🞑 Temporary or session
🞑 First-party
🞑 Third-party
 Cookies are stored as individual text files
🞑 dave_chaffey@british_airways.txt
🞑 FLT_VIS\ K:bapzRnGdxBYUU\ D:Jul-25-1999\
british- airways.com\ 0 425259904 293574 26
1170747936
* Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 4.30
Using
Cookies
Slide 4.31
What are cookies used

for?
 Personalizing a site for
individual
 Online ordering systems
 Tracking within a site
 Tracking across sites
Slide 4.32
Viral e-mail
marketing
 To reassure web users about threats to
their personal information
 TRUSTe
 ISIS – a UK accreditation initiative
 getsafeonline
Slide 4.34
Checklist of
compliance
 Follow privacy and consumer protection
 Inform the user
 Ask for consent for collecting sensitive personal data
 Reassure customers by providing clear privacy
statements
 Let individual know when cookies are used
 Never collect or retain personal data
 Amend incorrect data
 Only use data for marketing
 Provide the option to stop receive information
 Use appropriate security technology
Slide 4.35
Legal – Sparrows eight

1.areas
Marketing your e-commerce business
2. Forming an electronic contract
3. Making and accepting payment
4. Authenticating contracts concluded over the
Internet
5. E-mail risks
6. Protecting Intellectual Property
7. Advertising on the Internet
8. Data protection.
Slide 4.36
1.Marketing your e-commerce

business
 Domain name registration
 Using competitor names and trademarks in
meta tags
 Using competitor names and trademarks in
pay- per-click advertising
 Accessibility law: hukum bagi orang
berkebutuhan khusus
Slide 4.37
2.Forming an electronic
contract
 E-commerce sites must contain easily
accessible content that clearly states
🞑 The company’s identity including address
🞑 The main features of the goods or services
🞑 Prices information
🞑 The period for which the offer or price is valid
🞑 Payment, delivery and fulfillment
🞑 Substitution
Slide 4.38
Economic/Political
 Ensuring companies competitive
🞑 Funding for education and technology
🞑 Promoting new technology e.g. broadband 12% in UK, 70% Taiwan,
South Korea
 Achieving government efficiencies
🞑 E-government – all UK services online by 2005
🞑 Singapore ‘Intelligent Island’
 Taxation regimes
🞑 Legislation for offshore trading.
Slide 4.41
E-commerce and
globalization
 The increase of international trading and
shared social and cultural values
 Language and cultural understanding
 English becoming the lingua franca of
commerce
 Tailoring e-commerce services for
individual countries or regions
Slide 4.43
Political
factors
 Promoting the benefits of adopting the Internet
 Enacting legislation to protect privacy or
control taxation
 Providing guidelines and assistance for
compliance with legislation
 Setting up international bodies to coordinate
the Internet
Slide 4.44
E-
government
 The application of e-commerce technologies
to government and public services
Slide 4.45
Technological
 issues
Need to be able to assess new
innovation
 Rate of change
🞑 Which new technologies should we adopt?
 Monitoring for new techniques
 Evaluation – are we early adopter
 Re-skilling and training
 Are our systems secure?
Figure 4.10 Diffusion–adoption curve
Figure 4.11 Example of a Gartner hype cycle
Source: Gartner (2005) Gartner’s Hype Cycle Special Report for 2005
Figure 4.12 Alternative responses to changes in technology
Slide 4.49
Activity
 4.1
List all the social, legal and ethical issues that the
manager of a sell-side e-commerce web site needs
to consider to avoid damaging relationships with
users of his or her site or which may leave the
company facing prosecution.
 You can base your answer on issues which
may concern you, your friends or your family
when accessing a web site.
Slide 4.50
Activity answer – this

 lecture
Cookies – laws and consumer perception on placing these
 Are we limiting access to information from certain sections
of society (social exclusion)?
 Privacy of personal information entered on a web site
 Sending unsolicited e-mail
 Replying promptly to e-mail
 Copyright
 Site content and promotional offers/adverts are in keeping
with the different laws in different countries
 Providing text, graphics and personality in keeping with social
mores of different countries
Slide 4.51
Summar
y
1. Environmental scanning and analysis are
necessary in order that a company can respond
to environmental changes and act on legal and
ethical constraints on its activities
2. Environmental constraints are related to the
micro- environment variables reviewed in chapter
5 and the macro-environment variables in this
chapter using the SLEPT mnemonic
Slide 4.52
Summar
y
3. Social factors that must be understood as part
of the move to the Information Society include
buyer behaviour characteristics such as access
to the Internet and perceptions about it as a
communications tool
4. Ethical issues include the need to safeguard
consumer privacy and security of personal
information. Privacy issues include collection and
dissemination of customer information, cookies
and the use of direct e-mail
Slide 4.53
Summar
y
5. Legal factors to be considered by e-
commerce managers include: accessibility,
domain name registration, copyright and
data protection legislation
6. Economic factors considered in the chapter are
the regional differences in the use of the Internet
for trade. Different economic conditions in
different markets are considered in developing
e-commerce budgets
Slide 4.54
Summar
y
7. Political factors involve the role of governments
in promoting e-commerce, but also trying to
control it
8. Rapid variation in technology requires
constant monitoring of adoption of the
technology by customers and competitors and
appropriated responses
Slide 4.55
Tuga
s
 Di Indonesia, undang-undang apa saja yang
berhubungan dengan pemanfaatan ICT?
Mengatur apa sajakan hukum2 tersebut?

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Slide 4.

SLEPT: Legal and

Factors governing Internet

Consumers influenced by using the

🞑 Cautious shoppers 14%

🞑 Bargain hunters 21%

Why personal data are

Ethical issues and data

The eight principles for

Regulations on privacy and electronic

Regulations on privacy and electronic

What are cookies used

Legal – Sparrows eight

1.Marketing your e-commerce

 Are our systems secure?

Activity answer – this

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