E-environment

E-ENVIRONMENT
UNIT - 7
BBA 6th Semester
PRIME COLLEGE
NAYABAZAR, KATHMANDU
NEPAL
© Hem Sagar Pokhrel

INTRODUCTION
 Every business organizationis a part of the business environment, within which it operates.
 No entity can function in isolation because there are many factors that closely or distantly surrounds
the business, which is known as a business environment.
 It is broadly classified into two categories, i.e. microenvironment,and macro environment.
 The former affects the working of a particular business only, to which they relate to, while the latter
affects the functioning of all the business entities.
 E-Environmentcan be defined as the use and promote Information and Communication
Technology(ICT) as an instrument for environment and sustainableuse of resources.
 It includes the implementation of ICT based systems to store, access, manage and disseminatethe
environmental data and information.
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MACRO-ENVIRONMENT
VS
MICRO-ENVIRONMENT
3

MICRO ENVIRONMENT
 Micro environment refers to the environment which is in direct contact with the business
organizationand can affect the routine activities of business straight away.
 It is associated with a small area in which the firm functions. It is also known by the name Internal
Environmentor Task Environment.
 Micro environment is a collection of all the forces that are close to the firm. These forces are very
particular for the said business only.
 They can influence the performance and day to day operations of the company, but for a short term
only.
 Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself.
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ELEMENTS OF MICRO-ENVIRONMENT
 Suppliers are the ones who provide inputs to the business like raw material, equipment and so
on.
 Competitors are the rivals, which compete with the firm in the market and resources as well.
 Marketing intermediaries may include wholesalers, distributors, and retailers that make a link
between the firm and the customers.
 Customers / Consumers are the ones who purchase the goods for their own consumption. They
are considered as the king of business.
 The firm itself is an aggregateof a number of elements like owners like shareholders or
investors, employees and the board of directors.
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MACRO ENVIRONMENT
 The general environment within the economy that influences the working, performance,
decision making and strategy of all business groups at the same time is known as Macro
Environment.
 It is dynamic in nature. Therefore it keeps on changing.
 It constitutes those outside forces that are not under the control of the firm but have a powerful
impact on the firm’s functioning.
 That is why, it is also termed as an external environment which consists of individuals, groups,
organizations, agencies and others with which the firm deals during the course of its business.
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MACRO ENVIRONMENT
• The study of Macro Environment is known as PESTLE Analysis.
• PESTLE stands for the variables that exist in the environment,
• Population & Demographic,
• Economic,
• Socio-Cultural,
• Technological,
• Legal & Political,
• Environmental
• These variables, consider both economic and non-economic factors like social concerns,
government policies, family structure, population size, inflation, GDP aspects, income
distribution, ethnic mix, political stability, taxes, and duties, etc.
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9
BASIS FOR COMPARISON MICRO (INTERNAL) ENVIRONMENT MACRO (EXTERNAL)
ENVIRONMENT
Meaning Micro environment is defined as the
nearby environment, under which
the firm operates.
Macro environment refers to the
general environment, that can affect
the working of all business
enterprises.
Alternatively knownas Internal Environment External Environment
Elements COSMIC, i.e. Competitors,
Organizationitself, Suppliers,
Market, Intermediaries and
Customers.
PESTLE, i.e. Population &
Demographic, Economic, Socio-
Cultural, Technological, Legal &
Political and Environmental.
Nature of elements Specific General
Are these factors controllable? Yes No
Influence Directly and Regularly Indirectly and Distantly
MICRO & MACRO ENVIRONMENT | COMPARISION

MACRO & MICRO ENVIRONMENT | KEY DIFFERENCES
 Micro environment is the environment which is in immediate contact with the firm. The environment
which is not specific to a particular firm but can influence the working of all the business groups is
known as Macro Environment.
 Micro Environment is also known as internal environment of business, whereas Macro Environment is
the external environment.
 The factors of the micro environment affect the particular business only, but the macro
environmental factors affect all the business entities.
 The micro environmental factors are controllable by the business. However, the macroeconomic
variables are uncontrollable.
 The elements of the micro environment affect directly and regularly to the firm which is just opposite
in the case of the macro environment.
 The study of the micro environment is described as COSMIC analysis. Conversely, PESTLE Analysis is a
study of the macro environment.
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SLEPT ANALYSIS
 SLEPT analysis is a framework to assess an organization'sexternal environmental influenceon it. It
considers five factors affecting the macro-environment- Social, Legal, Economic,Politicaland
Technological(hence the mnemonic SLEPT)
 The outcome of SLEPT analysisis an overallpicture of the macro environmentto identify threats and
opportunitiesthat can be used in SWOT analysis. SWOT further adds on the internalfactors affecting
the organization.
 SLEPT helps to identify and hence take advantageby maximizing opportunities and minimizing threats.
 It gives an understandingof the broad and long term trends and makes the firm in a better positionfor
strategic decision making.
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MACRO ENVIRONMENT
12
 Often these factors are known as the PEST factors,but we use SLEPT since it is useful to stress the
importance of the law in influencing internet marketingpractices.

SLEPT ANALYSIS
 Social Factors: Includes health consciousness, education level, population growth rate,
sex distribution,social classes etc.
 Legal Factors: Includes laws such as anti-trust law, discrimination law, intellectual property
laws, consumer protection laws, employment laws, regulatory mechanism etc.
 Economic Factors: Includes growth rates, inflation rates, interest rates, exchange rates,
fiscal policies, monetary policies, credit availability etc.
 Political Factors: includes government policies and intervention in the economy such as
corruption level, government stability, trade control, competition regulation, involvement
in Trade Unions, consumer protectionlaws, employment laws etc.
 Technological Factors: includes technological aspects such as R&D activity, technology
incentives, rate of technologicalchange, infrastructurelevel, access to technology etc.
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FACTORS GOVERNING E-COMMERCE SERVICE
ADOPTION | SOCIAL FACTORS
 It is useful for e-business managers to understand the different factors that affect how
many people actively use the Internet. If these are understood for customers in a target
market, action can be taken to overcome some of these barriers.
 For example, marketing communications can be used to reduce fears about the value
proposition, ease of use and security.
 Chaffey et al. (2009) suggest that the following factors are important in governing adoption
of any e-commerce services
1. Cost of access
2. Value Proposition
3. Ease of use
4. Security
5. Fear of the unknown
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SOCIAL FACTORS
1. Costof access
Includes:
 Cost of home computers(for those who do not already own the one)
 Cost of using an ISPs to connect to internet
 Cost of using media to connect(Telephone or cable charges)
Free access will certainly increase adoption and charges
2. ValueProposition
 Customers need to perceive a need to be online – what can the Internet offer that
other media cannot?
 Examples of value propositions include access to more supplier information and
possibly lower prices.
 In 2000, company advertisementsstarted to refer to ‘Internet prices’.
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SOCIAL FACTORS
3. Ease of use.
 This includes the ease of first connecting to the Internet using the ISP and the ease of using
the web once connected.
4. Security.
 While this is only, in reality, a problem for those who shop online, the perception generated
by news stories may be that if you are connected to the Internet then your personal details
and credit card details may not be secure.
 It will probably take many years for this fear to diminish as using the Internet slowly
becomes established as a standard way of purchasing goods.
5. Fear of the unknown.
 Many will simply have a general fear of the technology and the new media, which is not
surprising since much of the news about the Internet non-adopters will have heard will
concern pornography, fraud and privacy infringements.
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SOCIAL FACTORS
An attempt has been made to quantify the magnitude of barriers to access in a UK
government-sponsoredsurvey (Booz Allen Hamilton, 2002) of differentcountries.
Barriers for individuals noted by the survey included:
 No perceived benefit
 Lack of trust
 Security problems
 Lack of skills
 Cost.
There is a strong correlation between Internet use and PC penetration. Countries such as
Sweden have encouraged home use most actively through government initiatives, in this
case the ‘PC REFORM’ programme. This appears to exert more influence than reduction in
lower costs of access, since in leading countries such as Sweden and Australia, cost is
relatively high
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SOCIAL FACTORS
 To fully understand online customer propensity to use online service we also need to
consider the user’s access location, access device and ‘webographics’, which can help
target certain types of customers and are an important constrainton site design.
 ‘Webographics’ is a term coined by Grossnickle and Raskin (2001). According to these
authors webographics includes:
 Usage location (in most countries, many users access either from home or from work, with
home being the more popular choice)
 Access device (browser and computer platform including mobile devices)
 Connection speed – broadband versus dial-up connections
 ISP Experience level
 Usage type
 Usage level.
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LEGAL FACTORS
 Introduction of new technologies and changes in their popularity tend to be frequent too
and need to be assessed.
 Governmental and legal changes tend to happen over longer timescales. The trick for
managers is to identify those factors which are important in the context of e-commerce
which are critical to competitiveness and service delivery and monitor these.
 Legal factors are most important issues for the e-commerce manager to address. The six
most importantlegal issues for managers to assess are
1. Data Protection and PrivacyLaw
2. Disability and Discriminating Law
3. Brand and Trademark Protection
4. IntellectualProperty Rights
5. Contract Law
6. Online Advertising Law
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ETHICAL FACTORS
 Ethical standards are personal or business practices or behavior which are generally
considered acceptable by society. ( i.e. acceptable ethics can be described as moral or
just and unethical practices can be described as immoral or unjust.
 Ethical issues and the associated laws developed to control the ethical approach to
Internet marketing constitute an important consideration of the Internet business
environment for marketers.
 Privacy of consumers is a key ethical issue on which we will concentrate since many laws
have been enacted and it affects all types of organization regardless of whether they
have a transactional e-commerceservice.
 A further ethical issue for which laws have been enacted in many countries is providing
an accessible level of Internet services for disabled users.
 Another important ethical factor we have to consider is managing commerce and
distance selling products. 22

ETHICAL FACTORS
INFORMATION GOVERNED BY ETHICS AND LEGISLATIONS
 Effective e-commerce requires a delicate balance to be struck between the benefits the
individual customer will gain to their online experience through providing personal
information and the amount and type of information that they are prepared for
companies to hold about them.
 The main information types used by the Internet marketer which are governed by ethics
and legislation are
1. Contact information.
2. Profile information.
3. Platform usage information.
4. Behavioral information (on a single site).
5. Behavioral information (across multiple sites).
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ETHICAL FACTORS
INFORMATION GOVERNED BY ETHICS AND LEGISLATIONS
1. CONTACTINFORMATION:name, postaladdress, e-mail address and, for B2B companies, web site address.
2. PROFILE INFORMATION: information about a customer’s characteristics that can be used for segmentation.
They include age, sex and social group for consumers, and company characteristics and individual role for
business customers.
3. PLATFORM USAGE INFORMATION: Through web analytics systems it is possible to collect information on
type of computer, browser and screen resolution used by site users. Many Internet users will not realize that
their visits are tracked on virtually all sites, but the important point to know is that it is not possible to
identify an individual unless they have agreedto give informationthrough a web form.
4. BEHAVIORAL INFORMATION (ON A SINGLE SITE): This is purchase history, but also includes the whole buying
process. Web analyticscan be used to assess the web and e-mail content accessed by individuals.
5. BEHAVIORAL INFORMATION (ACROSS MULTIPLE SITES): This can potentially show how a user accesses
multiple sites and responds to ads across sites. Typically these data are collected and used using an
anonymous profile based on cookie or IP addresses which is not related to an individual.
24

Table alongside summarizes how
these different types of customer
information are collectedand
used through technology. The
main issue to be considered by
the marketer is disclosureof the
types of information collection
and tracking data used.
25
Note: Malware
- Malicioussoftware or toolbars,
typicallydownloadedvia the
Internet, which acts as a ‘trojan
horse’ by executing other
unwantedactivites such as
keylogging of user passwords or
viruses which may collect e-mail
addresses.

 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?
 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 and how do they disclose the collection of data and how
it will be used?
2. Security – how is information protected once it has been collected by a company?
3. Liability – who is responsible if data are abused?
 According to UK Data Protection Act 1984, 1998 (DPA) which is typical of what has evolved in many countries to
help protect personal information, any company that holds personal data on computers or on file about customers
or employees must be registered with the data protection registrar (although there are some exceptions which may
exclude small businesses). This process is known as notification.
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27
“Data Controller” in figure
alongside are person who
collects personal
information, store,
disseminate, use , edit those
data from “Data Subjects”.
On doing so, they must
follow some personal data
protection guidelines that
are defined under UK
Personal Data Protection Act
1998 described on next
slide.
Fig: Information flows that need to be understoodfor compliancewith data protection

EIGHT PRINCIPLES FOR PERSONAL DATA PROTECTION
UK DATA PROTECTION ACT 1998
1. Fairly and lawfully processed. ‘Personal data shall be processed fairly and lawfully and, in particular, shall not be
processed unless – at least one of the conditions in Schedule 2 is met; and in the case of sensitive personal data, at
least one of the conditionsin Schedule 3 is also met.’
2. Processed for limited purposes. ‘Personal data shall be obtained only for one or more specified and lawful purposes,
and shall not be further processed in any manner incompatiblewith that purpose or those purposes.’
3. Adequate, relevant and not excessive. ‘Personal data shall be adequate, relevant and not excessive in relation to the
purpose or purposes for which they are processed.’
4. Accurate. ‘Personal data shall be accurate and, where necessary, kept up to date.’
5. Not kept longer than necessary. ‘Personal data processed for any purpose or purposes shall not be kept for longer
than is necessary for that purpose or those purposes.’
6. Processed in accordance with the data subject’s rights. ‘Personal data shall be processed in accordance with the
rights of data subjects under this Act.’
7. Secure. ‘Appropriate technical and organizational measures shall be taken against unauthorised or unlawful
processing of personal data and against accidental loss or destruction of, or damage to, personal data.’
8. Not transferred to countries without adequate protection. ‘Personal data shall not be transferred to a country or
territory unless that country or territory ensures an adequate level of protection of the rights and freedoms of data
subjects in relationto the processing of personal data.’ 28

ECONIOMICS AND COMPETITIVE FACTORS
• E-economy is the dynamic system of interactions between a nation’s citizens, the businesses and
government that capitalize upon online technology to achieve a social or economic good.
• The economic health and competitive environment in different countries will determine the e-commerce
potential of each.
• A review of how different governments have tried to improve the health of their e-economies is presented
in the sections later in this chapter on political factors and e-government. Knowledge of different economic
conditions is also part of budgeting for revenue from different countries. In China there is regulation of
foreign ownership of Internet portals and ISPs which could hamper development. User access to certain
content is also restricted.
• In Asia and the Middle East, governments frequently cite protection of morality and local values as reasons
for censorship. Countries where Internet access is mostlyor totally controlled by the authorities include
Azerbaijan, Belarus, Burma, China, Cuba, Iran, Iraq, Kazakhstan, Kyrgyzstan, Libya, North Korea, Saudi
Arabia, Sierra Leone, Sudan, Syria, Tajikistan, Tunisia, Turkmenistan, Uzbekistan and Vietnam.
• Managers developing e-commerce strategies in multinational companies will initially target the countries
that are mostdeveloped in the use of the technology.
29

ECONIOMICS AND
COMPETITIVE
FACTORS
A comprehensive framework
for assessing an ‘e-economy’
has been developedby Booz
Allen Hamilton(2002).
The framework is based upon
four layersof environment,
readiness, uptake and use,
and impact, and three major
stakeholder groups: citizens,
businesses and government,
as shown in figure alongside.
30
Fig: A framework describing the e-economy

E-COMMERCE AND GLOBALIZATION
 Globalization refers to the move towards international trading in a single global marketplace and also to
blurring of social and cultural differences between countries.
 Some perceive it as ‘Westernization’ or even ‘Americanization’. As we know that larger organizations such
as easyJet and Cisco, electronic communications gives the opportunity for increasing the reach of the
company to achieve sales around the world.
 Quelch and Klein (1996)point out some of the obvious consequences for organizations that wish to
compete in the global marketplace; they say a companymust have:
 a 24-hour order taking and customer service response capability;
 regulatory and customs-handling experience to ship internationally;
 in-depth understanding of foreign marketing environments to assess the advantages of its own
products and services.
31

 Language and cultural understanding mayalso present a problem and a smaller or medium sized company is
unlikely to possess the resources to develop a multi-language version of its site or employ staff with sufficient
language skills.
 Tailoring e-commerce services for individual countries or regions is referred to as localization. A web site may
need to support customers from a range of countries with:
 different product needs;
 language differences;
 cultural differences.
 This mayarise additional needs and maynecessary to be vary:
 The language that content is provided in.
 Tone and style of copy.
 Site design – certain colors or images may be unsuitableor less effective in some countries.
 Range of product offerings and Product pricing.
 Promotional offers used to encourage acquisitionof customer e-mail address. This may be affected by local data
protection, taxationandtrading laws.
 Local contact pointsetc.
32

 Localization will address all these issues. It may be that products will be similar in different
countries and localization will simply involve providing a local-language version of a web site.
 However, in order to be effective, this often needs more than translation, since different
promotion concepts may be needed for different countries.
 An example of a business-to-consumer site with extensive localization is Durex (www.durex.com)
and a business-to-business site is 3M (www.3m.com). Durex localizes content for many countries
since language and the way in which sexual issues can be discussed will vary greatly between
different countries. 3M, however, only localizes content in local language for some countries such
as France, Germany and Spain.
 Consider large multinational companies such as 3M, Ford and GlaxoSmithKline for which
localization is a significant strategic issue for e-commerce.
 The decision on the level of localization will need to be taken on a regional or country basis to
prioritize different countries according to the size of the market and the importance of having
localization. Since the cost of localization is high it may only generate a return on investment for
the largest markets.
33

Singh and Pereira (2005)provide an evaluation framework for the level of localization:
1. Standardized web sites (not localized). A single site serves all customer segments (domestic and
international).
2. Semi-localized web sites. A single site serves all customers; however, there will be contact information
about foreign subsidiaries available for international customers. Many sites fall into this category.
3. Localized web sites. Country-specific web sites with language translation for international customers,
wherever relevant. 3M (www.3m.com)has adapted the web sites for manycountries to local language
versions. It initially focused on the major web sites. Localization Tailoring of web site information for
individual countries or regions.
4. Highly-localized web sites.Country-specific web sites with languagetranslation; they also include other
localization efforts in terms of time, date, postcode, currency formats, etc. Dell (www.dell.com) provides
highly localized web sites.
5. Culturally customized web sites. Web sites reflecting complete ‘immersion’ in the culture of target
customer segments; as such, targeting a particular country may mean providing multiple web sites for that
country depending on the dominant cultures present. Durex (www.durex.com) is a good exampleof a
culturally customized web site.
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POLITICAL FACTORS
 The political environment is shaped by the interplay of government agencies, public opinion, consumer
pressure groups such as CAUCE (the Coalition againstUnsolicited E-mail), www.cauce.org, and industry-
backed organizations such as TRUSTe (www.truste.org) that promote best practice amongstcompanies.
 The political environment is one of the drivers for establishing the laws to ensure privacy and to achieve
taxation.
 Political action enacted through government agencies to control the adoption of the Internet can include:
 promoting the benefits of adopting the Internet for consumers and business to improve a country’s
economic prosperity;
 enacting legislation to protect privacy or control taxation;
 providing organizations with guidelines and assistancefor compliance with legislation
 setting up international bodies to coordinate the Internet such as ICANN (the Internet Corporation for
AssignedNames and Numbers, www.icann.com) and other independent organizations controlling
Internet technology. 35

POLITICAL FACTORS
 Political involvement in many of these activities is intended to improve the economic competitiveness of
countries or groups of countries.
 Quayle (2002)summarizes six strands of the UK government strategy for e-commerce which are intended to
increase industry competitiveness:
1. Establisha brand in e-commerce both domesticallyand internationally.
2. Transform existing businesses.
3. Foster e-commerce creation and growth.
4. Expand the e-commerce talent pool (skills).
5. Provide leadership in international e-commerce policydevelopment.
6. Government online should be a priority.
 These goals are typical for many countries and specific targets are set for the proportion of people and
businesses that have access, including public access points for those who cannot currently afford the
technology.
 Managers who are aware of these initiatives can tap into sources of funding for development or free training
to support their online initiatives. Alternatively, there may be incentives such as tax breaks for business or
consumer adoption of the Internet and technology companies can also take advantageof these.
36

E-GOVERNMENT
 Electronic governance or e-governance is the application of information and
communicationtechnology (ICT) for delivering government services, exchange of
information communicationtransactions, integration of various stand-alone systems and
services between government-to-customer (G2C), government-to-business(G2B),
government-to-government(G2G) as well as back office processes and interactions within
the entire government framework.
 It is the use of information and communicationstechnologies (ICT) to transform the
traditional government by making it accessible, transparent, effective and accountable.
 E-government does not mean putting more computers on the desks of government
officials and is more than just a government website on the Internet. In a simple way ‘e-
governance’ is viewed in the perspective of two major shifts in socio-economicarena –
governance and information revolution. It uses electronic means to support and stimulate
good governance. The emergence of ICTs along with a strong wave of globalization, and
has a profound impact in the development of e-governance notion. 37

E-GOVERNMENT | NEPAL’S SCENARIO
 The introduction of e-governance in Nepal has not a long history. One of the key functions
of developing the e-governance is introducing IT Policy in 2000 in Nepal .
 The IT Policy specifies its broader objectives as:
 To make information technology accessible to the general public and increase employment
through this means,
 To build a knowledge-based society, and
 To establish knowledge-based industries.
 In addition a number of legal instruments created to develop IT sector for augmenting e-
governance in Nepal. Some of them are among:
IT Policy, 2000 | Electronic Transaction and Digital Signature Act (ETADSA), 2057 (2000) |
Copyright Act, 2059 (2000) | Telecommunications Policy, 1999 | Telecommunication Act, 1997 |
Telecommunication Regulations 1997 | National Communication Policy, 1992 | National Strategy
Paper on ICT (National Planning Commission) etc. 38

E-GOVERNMENT | NEPAL’S SCENARIO
 Some of the important institutions created towards ICT sector are among Ministry of
Science and Technology (MoST), High Level Commission for Information Technology
(HLCIT), and Nepal Telecom Authority(NTA).
 In addition to these governmentalentities, a number of private organizations which offer
tele-services including telephone, and internet services. There are more than 40 Internet
Service Providers (ISPs) and around 10 VSATs (Very Small Aperture Terminal) operating.
 According to the United Nation survey for world e-Government leaders, the Republic of
Korea stands on the top of the EGDI Ranking where as Nepal is at 165 th position.
 Ongoing e-government projects of Nepal government includes National Portal, Inland
Revenue Department (e-VAT, e-PAN, e-Filling, e-TDS), Office of Company Registrar,
Department of Foreign Employment, Machine Readable Passport, Government Accounting
System (FCGO) , Personal Information System (MOGA) (pis.gov.np), Public Service
Commission etc. 39

TECHNOLOGY INNOVATION AND TECHNOLOGY ASSESSMENT
 One of the great challenges of managing e-commerce is the need to be able to assess which new
technologicalinnovationscan be applied to give competitive advantage.
 Includes technologicalaspects such as Research and Development(R&D) activity, technology incentives, rate
of technologicalchange, infrastructure level, access to technologyetc.
 I’m often asked what is ‘the next big thing’ or to predict changes in e-commerce over the next 5 years. The
truth is no one can predict the future, there are lots of examples of companies that have misunderstood the
market for products.
LET’SSEESOME 
‘This “telephone” has too many shortcomings to be seriously considered as a means of communication. The
device is inherently of no value to us.’ - Western Union internal memo, 1876
‘Who the hell wants to hear actors talk?’ H. M. Warner, Warner Brothers, 1927 ‘I think there is a world market for
maybe five computers.’ - Thomas Watson, chairman of IBM, 1943
‘There is no reason for any individualto have a computer in their home’. - Ken Olson (President of Digital
Equipment Corporation) at the Conventionof the World Future Society in Boston in 1977 40

 The business manager may have read several articles in the trade and press which have
highlighted the issue and then faces a difficult decision as to whether to:
 ignore the use of the technique, perhaps because it is felt to be too expensive or untried, or
the manager simply doesn’t believe the benefits will outweigh the costs;
 enthusiastically adopt the technique without a detailed evaluation since the hype alone
convinces the manager that the technique should be adopted;
 evaluate the technique and then take a decision whether to adopt it according to the
evaluation.
 Depending on the attitudeof the manager, this technologyadoptionbehaviorcan be summarized as:
1. Cautious, ‘wait-and-see’ approach.
2. Risk-taking, early-adopter approach.
3. Intermediate approach.
41

 Rogers (1983) defined the
technology adoption behavior
using bell curve graph. This
diffusion–adoption process
classified those trialing new
technology products as innovators,
early adopters, early majority, late
majority, or laggards.
42
The above figure can be used in two main ways as an analytical tool to help business managers. First, it
can be used to understand the stagecustomers have reached in adoption of a technology, or any
product. For example, the Internet is now a well established tool and in manydeveloped countries we
are into the late majority phase of adoption with larger numbers of users of services. This suggests it is
essential to use this medium for marketing purposes. But if we look at 3G or mobile services, it can be
seen that we are in the innovator phase, so investmentnow may be wasted since it is not clear how
many will adopt these services.
Fig: Roger’s bell curve | diffusion–adoption process of technology innovation

 Second, managers can look at adoption of a new technique by other businesses – from
an organizational perspective. For example, an online supermarket could look at how
many other e-tailers have adopted personalization to evaluate whether it is worthwhile
adopting the technique.
43
 An alternative graphic representation of diffusion of innovation has been specifically
developed by technology analyst Gartner(2005) for assessing the maturity, adoption
and business application of specific technologies is hype cycle.
 Hype cycle is graphic representationof the maturity, adoption and business application
of specific technologies.

 Trott (1998) looks at this organizational perspective to technology adoption. He identifies
different requirements that are necessary within an organization to be able to respond
effectively to technological change or innovation.
 These are:
 Growth orientation – a long-term rather than short-term vision
 Vigilance – the capability of environment scanning
 Commitment to technology – willingness to invest in technology
 Acceptance of risk – willingness to take managed risks
 Cross-functional cooperation – capability for collaboration across functional areas
 Receptivity – the ability to respond to externally developed technology
 Slack – allowing time to investigate new technological opportunities
 Adaptability – a readiness to accept change
 Diverse range of skills – technical and business skills and experience. The pro
44

CONTENTS THAT MIGHT HELP YOU TO
TACKLE VERY SHORT QUESTIONS..
45

TIMELINE OF WEB SITES
INDICATING INNOVATION IN
BUSINESS MODEL OR
MARKETING
COMMUNICATIONS
APPROACH
46

FIG: RELATION BETWEEN INTRANET, EXTRANET &
INTERNET
47

FIGURE:
SUMMARY AND EXAMPLESOF
TRANSACTION ALTERNATIVES
BETWEEN BUSINESSES,
CONSUMERS AND
GOVERNMENTAL
ORGANIZATIONS
48

Buy-side e-commerce
E-commerce transactions between a
purchasing organizationand its suppliers.
Sell-side e-commerce
E-commerce transactions between a supplier
organizationand its customers.
Buy-side e-commerce refers to transactions
to procure resources needed by an
organizationfrom its suppliers.
Sell-side e-commerce refers to transactions
involved with selling products to an
organization’s customers.
So e-commerce transactions between
organizations can be considered from two
perspectives: sell-side from the perspective
of the selling organizationand buy-side from
the perspective of the buying organization.
49
Fig: The distinctionbetween buy-side and sell-side e-commerce

CONSUMER BARRIERS TO ADOPTION OF THE INTERNET IN NEPAL
INCLUDED(BUT NOT LIMITED TO):
 No perceived benefit
 Lack of trust
 Security problems
 Lack of skills / Digital Divide / Digital Literacy
 Cost / Affordability
 Inadequate infrastructure
 Poor mobile Internet coverage or network access
 Unreliable electricity supply
 lack of relevant local-language content may also limit use.
 lack of incentives: Internet service providers are unlikely to reach rural areas without
clear incentives like government support or high profit margins. Advertisers are not
interested in reaching such markets as well.
50

E-COMMERCE RELATED KEYWORDS COLLECTIONS
NOT ONLY FOR VERY SHORT QUESTIONS.. WILL HELP YOU TO USE KEYWORDS WISELY
WHILE ANSWERING SHORT & LONG QUESTIONS AS WELL. THIS LIST IS SUPPOSED TO HELP
YOU IN IMPROVING YOUR ANSWERING STANDARD.
51

Social network
A site that facilitates peer to-peer communication within a group or between individuals through providing
facilities to develop user-generated content (UGC) and to exchange messages and comments between
different users.
Virtual worlds
An electronic environment which simulates interactions between online characters known as avatars. Also
known as Massively Multiplayer Online Roleplaying Games (MMORPG)
Blog
Personal online diary, journal or news source compiled by one person, an internal team or external guest
authors. Postings are usually in different categories. Typically comments can be added to each blog posting to
help create interactivity and feedback.
Rich media
Digital assets such as ads are not static images, but provide animation, audio or interactivity as a gameor
form to be completed.
Mobile commerce(m-commerce)
Electronic transactions and communications conducted using mobile devices such as laptops, PDAs and
mobile phones, and typically with a wireless connection.
52

Electronicbusiness (e-business)
All electronically mediated information exchanges, both within an organizationand with external
stakeholders supporting the range of business processes.
Informationand communicationtechnology (ICT or IT)
The software applications, computer hardware and networks used to create e-business systems.
Digital marketing
This has a similar meaning to ‘electronic marketing’ – both describe the managementand execution of
marketing using electronic media such as the web, e-mail, interactive TV and wireless media in conjunction
with digital data about customers’ characterstics and behaviour.
Feed or RSS feed Blog,
News or other content is published by an XML standardand syndicated for other sites or read by users in RSS
reader services such as Google Reader, personalized home pages or e-mail systems.RSS stands for ‘really
simple syndication’.
53

Podcasts
Individuals and organizations post online media (audio and video) which can be viewed in the appropriate
players (including the iPod which first sparked the growth in this technique). The latest podcast updates can
be automatically delivered by really simple syndication(RSS).
Multi-channel marketing
Customer communications and product distribution are supported by a combination of digital and traditional
channels at different points in the buying cycle .
Multi-channel marketing strategy
Defines how different marketing channels should integrate and support each other in terms of their
proposition development and communications based on their relative merits for the customer and the
company.
Customer journey
A description of modern multi-channel buyer behaviour as consumers use different media to select suppliers,
make purchases and gain customer support.
54

Customer-centricmarketing
An approach to marketing based on detailed knowledge of customer behaviour within the target audience
which seeks to fulfil the individual needs and wants of customers.
Customer insight
Knowledge about customers’ needs, characteristics, preferences and behaviours based on analysis of
qualitative and quantitative data. Specific insights can be used to inform marketing tactics directed at groups
of customers with shared characteristics.
Web 2.0 concept
A collection of web services that facilitate interaction of web users with sites to create usergenerated content
and encourage behaviors such as community or social network participation, mashups, content rating, use of
widgets and tagging.
Web 3.0 concept
Next-generation web incorporating high-speed connectivity, complex cross-communityinteractions, full range
of digital media (text, voice, video) and an intelligent or semantic web where automated applications can
access data from different online services to assist searchers perform complex tasks of supplier selection.
55

Supply chain management (SCM)
The coordination of all supply activities of an organizationfrom its suppliers and partners to its customers.
Value chain
A model for analysis of how supply chain activities can add value to products and services delivered to the
customer
E-government
The application of e-commerce technologies to government and public services for citizens and businesses.
Soft lock-in
Customers or suppliers continue to use online services because of the switching costs. This means that a
customer or supplier continues to use a service since they find the service valuable and they have also
invested a lot of time in learning the service or integrating it with their systems and there are some costs in
switching.
56

Brochureware
Brochureware describes a web site in which a company has migrated its existing paper-based promotional
literature on to the Internet without recognizing the differences required by this medium.
Total cost of ownership (TCO)
TCO refers to the total cost for a company operating a computer system or other investment. This includes
not only the purchase or leasing cost, but also the cost of all the services needed to maintainthe system and
support the end-user.
Stage models
Used to review how advanced a company is in its use of information and communications technology (ICT) to
support different processes.
Online value proposition (OVP)
A statementof the benefits of online services reinforces the core proposition and differentiates from an
organization’s offline offering and those of competitors.
57

Destinationsite
Typically a retailer or manufacturer site with sales and service information. Intermediaries such as media sites
may be destination sites for some.
Online intermediaries
Web sites which help connect web users with content they are seeking on destination sites. Include new
online intermediaries such as search engines and shopping comparison sites and traditional brokers,
directories and newspaper and magazinepublishers that now have an online presence.
Aggregators
An alternative term for price comparison sites. Aggregatorsinclude product, price and service information
comparing competitors within a sector such as financial services, retail or travel. Their revenue models
commonly include affiliate revenues (CPA), pay per click advertising (CPC) and display advertising (CPM).
Affiliate
A company promoting a merchant typically through a commissionbased arrangement either direct or
through an affiliate network.
58

Online value proposition (OVP)
A statementof the benefits of e-commerce service that ideally should not be available in competitor offerings
or offline offerings.
Disintermediation
The removal of intermediaries such as distributors or brokers that formerly linked a company to its
customers.
Electronic marketplace
A virtual marketplace such as the Internet in which no direct contact occurs between buyers and sellers.
While traditional marketplaces have a physical location, an Internet-based market has no physical presence –
it is a virtual marketplace.
Infomediary
A business whose main source of revenue derives from capturing consumer information and developing
detailed profiles of individual customers for use by third parties.
59

Metamediaries Intermediaries providing information to assistwith selection and discussion about different
products and services.
Search engines, spiders and robots
Automatic tools known as ‘spiders’ or ‘robots’ index registered sites. Users search this by typing keywords and
are presented with a list of pages.
Directories or catalogues Structured listings of registered sites in different categories.
CPA (cost per acquisition) The cost to the advertiser (or the revenue received by the publisher) for each
outcome such as a lead or sale generated after a click to a third-party site.
Digital rights management(DRM) The use of different technologies to protect the distribution of digital
services or content such as software, music, movies or other digital data.
E-economy The dynamic system of interactions between a nation’s citizens, the businesses and government
that capitalize upon online technology to achieve a social or economic good.
60

Bricks and mortar:A traditional organizationwith limited online presence.
Clicks and mortar:A business combining an online and offline presence.
Churn rate The proportion of customers (typically subscribers) that no longer purchase a company’s products
in a time period.
Internet The Internet refers to the physical network that links computers across the globe. It consists of the
infrastructure of network servers and communication links between them that are used to hold and transport
information between the client computers and web servers.
Internet service provider (ISP) A provider providing home or business users with a connection to access the
Internet. They can also host web-based applications.
Backbones High-speed communications links used to enable Internet communications across a country and
internationally.
Hosting provider A service provider that manages the server used to host an organizationweb site and its
connection to the Internet backbones.
Content management system(CMS) Software used to managecreation, editing and review of web-based
content. Eg. PrestaShop, OSCommerce, Magento
Firewall A specialized software application mounted on a server at the point where the company is connected
to the Internet. Its purpose is to prevent unauthorized access into the company from outsiders.
61

Web browsers Browsers such as Mozilla Firefox or Microsoft Internet Explorer provide an easy method of
accessing and viewing information stored as web documents on different servers.
Web servers Store and
Web analytics system Information on visitor volumes, sources and pages visited are analysed through web
analytics systems present the web pages accessed by web browsers.
Uniform (universal) resource locator (URL) A web address used to locate a web page on a web server.
Domain name registration The process of reserving a unique web address that can be used to refer to the
company web site.
Wiki A collaborative interactive web service which enables users to modify content contributed by others.
Microblogging Publishing of short posts through services such as Twitter.com and Tumblr.com.
Bandwidth Indicates the speed at which data are transferred using a particular network medium. It is
measured in bits per second (bps).
Cloud computing The use of distributed storage and processing on servers connected by the Internet,
typically provided as software or data storage as a subscription service provided by other companies.62

Electronic data interchange (EDI) The exchange, using digital media, of structured business information,
particularly for sales transactions such as purchase orders and invoices between buyers and sellers.
Financial EDI Aspect of electronic payment mechanism involving transfer of funds from the bank of a buyer to
the bank of a seller.
Electronic funds transfer (EFT) Automateddigital transmission of money between organizations and banks.
Internet EDI Use of EDI data standards delivered across non-proprietary IP networks.
Value-added network (VAN) A secure wide-area network that uses proprietary rather than Internet
technology.
Virtual private networks (VPN) A secure, encrypted (tunnelled) connection between two points using the
Internet, typically created by ISPs for organizations wanting to conduct secure Internet trading.
Mobile commerce or m-commerce Electronic transactions and communications conducted using mobile
devices such as laptops, PDAs and mobile phones, and typically with a wireless connection.
Wi-Fi (‘wireless fidelity’) A high-speed wireless local-area network enabling wireless access to the Internet for
mobile, office and home users.
Bluetooth A wireless standard for transmissionof data between devices over short ranges (less than 100 m).63

Identity theft The misappropriation of the identity of another person without their knowledge or consent.
Opt-in A customer proactively agrees or consents to receive further communications.
Opt-out A customer declines the offer to receive further information.
Cookies It is important for e-commerce managers to understand the privacy implications of using cookies to
identify returning visitors. Cookies are small text files stored on an end-user’s computer to enable web sites
to identify and track them.
Viral marketing In an online context, ‘Forward to a friend’ e-mail used to transmit a promotional message
from one person to another. ‘Online word of mouth. It’s one of the widespread business practice.
Pay-per-click (PPC) search marketing A company pays for text adverts to be displayed on the search engine
results pages when a specific key phrase is entered by the search users. It is so called because the marketer
pays for each time the hypertext link in the ad is clicked on.
Intellectual property rights (IPR) Protect the intangible property created by corporations or individuals that is
protected under copyright, trade secret and patent laws.
Trademark A trademark is a unique word or phrase that distinguishes your company. The mark can be
registered as plain or designed text, artwork or a combination. In theory, colours, smells and sounds can also
be trademarks.
64

THANK YOU !!!
65
© HEM SAGAR POKHREL
FACULTY MEMBER
PRIME COLLEGE
KATHMANDU, NEPAL
www.facebook.com/geeksagar
www.twitter.com/nepalisagar
www.linkedin.com/in/geeksagar
I’M SOCIAL

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