Contemporary Research in E-Marketing_10

224 Ortega and Recio information, digital and network resources, technological integration of global operations, and relationships with consumers and businesses. • Technology will be key to competitive advantage more than size: The recent success of companies offering file-sharing services, based on peer-to-peer technology (P2P), has shown the potential of technology to provide competitive advantage in Internet markets. While technological innovations will be more accessible to smaller companies online, multinationals havemore resources for internal technological innovation (Quelch & Klein, 1996). • Lower costs and higher efficiency of global marketing communica-tions (Hornby et al., 2002; Javalgi & Ramsey, 2001). Global SMCs The activities of SMCs account for a significant share of most countries’ economies. Therefore, increasing research is being carried out into the implica-tions of the Internet and the Web for SMCs’ marketing and business practices (Bennett, 1997; Hamill & Gregory, 1997; Hornby et al., 2002; Lewis & Cockrill, 2002; Moen, 2002). The Internet offers special benefits to SMCs, as the establishment of a global business requires fewer efforts, both in terms of time and investments, than in traditional physical markets (Bennett, 1997; Hornby et al., 2002). Several authors have referred to the emergence of a new kind of company on the Internet, born-global companies (Deshpandé, 2000, 2002; Quelch & Klein, 1996), which enjoy access to global markets at early stages. On the Internet, activities such as international market access, global sourcing, global promotion, development of international relationships, or global coordination are more affordable to companies of different sizes (Hamill, 1997; Melewar et al., 2001; Samiee, 1998a). Small producers of “niche products” can serve small and geographically dispersed customer groups over the Internet, which may significantly increase the profitability and sustainability of their businesses (Martin & Matlay, 2003; Moen, 2002). Despite all of its potential benefits, certain companies, especially SMCs, may not properly recognize the strategic relevance of an online presence. Online companies may select between active versus passive approaches to Internet use in marketing: while certain companies actively seek to serve international customers over the Internet, others may regard potential foreign customers as an added “bonus,” deriving from the Internet global characteristics (Lituchy & Rail, 2000; Hornby et al., 2002). Recent empirical research shows that few Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. The Internet and Global Markets 225 SMCs can be classified as proactive Internet users (Hamill & Gregory, 1997; Lewis & Cockrill, 2002). Most SMCs are not fully seizing the opportunities afforded by Internet technolo-gies for global marketing communications. Important deficiencies can be found in SMCs’ global e-marketing strategies, for example, Website’s contents offered only in English. Perceived barriers to Internet uptake are also expected to be higher among smaller companies, including financial constraints, lack of previous experience in foreign markets, suitability of companies’ offerings for interna-tional markets, time constraints, availability and requirements of skilled staff, IT expertise, and so forth. These complexities are likely to reduce the market reach of these companies, targeting only their domestic markets through the Internet (Lewis & Cockrill, 2002). Differential Characteristics of B2B Markets Most of previous international Internet marketing research has focused on B2C e-markets. Relatively little research has been conducted on the global implica-tions of B2B Internet markets (Karayanni & Baltas, 2003; Klein & Quelch, 1997). Although most of the issues reviewed in this study are valid for both market types, it will be useful to offer a brief overview of B2B e-markets’ differential characteristics. Market analysts predict that the impact of Internet technologies will be more pronounced on B2B rather than B2C transactions (Klein & Quelch, 1997; Samiee, 1998b). Forrester Research (2001) estimates that by 2006, B2B online exchanges will account for around 53% of worldwide e-commerce. B2B e-commerce is currently growing at higher rates than B2C markets. According to estimations by the Gartner Group, there are currently around 500 B2B markets worldwide, and 10,000 new markets will appear in the next few years. Network relationships are critical for success in B2B markets. Wymbs (2000) suggests that the value of B2B business grows consistent with Metcalfe’s Law: “the value of the network is equivalent to the square of the number of nodes connected to it.” The Internet global nature increases both the number of potential B2B relationships and a company’s customer base, which may contrib-ute to achieving a sustainable competitive advantage (Eid, 2002; Leek et al., 2003). Samiee (1998b) argues that both structural and functional issues are expected to have greater impact in B2C business settings than in B2B transactions. Common barriers to growth in B2C e-commerce, such as credit card security or online shopping enjoyment, are not likely to be relevant in B2B contexts (Klein & Quelch, 1997). The main purposes of B2B e-shopping are in most cases related Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. 226 Ortega and Recio to cost efficiency. Nevertheless, in a study by Forrester Research (2000, cited in Guillén, 2002), it was found that 60% of B2B e-companies experienced difficulties arising from differences in business practices across countries. Therefore, B2B online enterprises should not underestimate the potential com-plexities (e.g., geographic, infrastructural, political, cultural, etc.) for success in the Internet global markets. Internationalization of E-Commerce Corporations Diverse products and services industries are undergoing significant internation-alization processes (e.g., music, books, banking, or technological products). The Internet is expected to increase the internationalization of companies in diverse sectors. Several authors agree that, on the Internet, the critical decision to be made by managers will not be whether or not to go global. Much more important will be selecting the most suitable global strategy for the firm (Singh & Kundu, 2002). Market entry strategies should be selected according to the product/ service characteristics: when pressures for local responsiveness are high (e.g., costly worldwide distribution is involved, or language and cultural differences are critical factors), foreign markets should be entered on a country-by-country basis; on the other hand, online companies should pursue a fast global presence if transactions are not involved, or “winner-takes-all” advantages are high. Fist-mover advantages are expected to be especially important for potential B2B market makers (Klein & Quelch, 1997). Previous research suggests that new international marketing paradigms may be needed to account for the internationalization processes on the Internet (Bennett, 1997; Hamill, 1997; Kim, 2003). Due to improved information flows and lower costs of information collection and transmission on the Internet, the gradual, incremental approach to business internationalization (Jatusripitak, 1986) may no longer be relevant to describe e-firms’ internationalization processes. In this regard, Kim (2003) showed that the internationalization of e-commerce corpo-rations supports the gradual and sequential internationalization of firms, under consideration of a sociocultural index to account for the “psychic distance” between national markets. According to these results, Internet firms (1) tend to enter strategically important countries first, (2) may enter multiple markets in a shorter period of time, and (3) in some cases, firms may follow business networks rather than psychic distance or market potential as a basis for the international-ization decision. Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. The Internet and Global Markets 227 Internationalization of Service Industries on the Internet Service industries have been traditionally much less internationalized than physical product industries. Diverse factors have contributed to this situation, such as the special characteristics of services or protection by national govern-ments (Wymbs, 2000). Nevertheless, several factors have contributed to an increasing internationalization of service industries (Berthon et al., 1999): (1) exponential growth of world trade in services, (2) increasing role played by services in international trade negotiations, (3) importance of international services as a determinant of a nation’s economic development and societal welfare, and (4) governmental deregulation worldwide. The Internet promises to accelerate significantly the internationalization pro-cesses of diverse service sectors. Kim (2003) points out that the international-ization of online service firms has been faster than for online providers of physical products. Logistics and problems involved in worldwide distribution of tangible products are not barriers to the global expansion of online service providers. Internet-Based Technologies and Traditional Media for Cross-Border Communications Although Internet uptake among businesses has not yet reached the penetration levels of more traditional communication channels (e.g., telephone or fax), the usefulness of online services is expected to increase substantially in the near future (Leek et al., 2003). While certain communication methods will be gradually replaced by more efficient online methods, Internet communications are not likely to become a substitute for all older communication technologies. Rather, online and off-line communication systems are expected to coexist in the future. Diverse technolo-gies are available to develop global Internet marketing strategies: • The Web and related services, such as e-mail, online forums, newsletters, chat services, search engines, and so forth, are powerful vehicles for global marketing communications. E-mail is currently the world’s most widely used online service among businesses and consumers (Hamill, 1997; Wei, Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. 228 Ortega and Recio Ruys, van Hoof, & Combrink, 2001), and it is expected to become the most useful method for global business communication (Leek et al., 2003). • Other technological applications are currently being used, such as elec-tronic data interchange (EDI), enterprise resource planning (ERP), cus-tomer relationship management (CRM), work flow and groupware sys-tems, intranets, extranets, and other data transfer systems (Cavusgil, 2002; Rao, 2001). • Peer-to-peer (P2P) software applications offer great potential for global e-marketing communications. File-sharing software’s underlying technology (e.g., Napster, Kazaa, and eMule), leaving aside legal concerns, can become a valuable source of competitive advantage in the future. These diverse technological possibilities have a great potential to improve several business areas of global e-commerce companies, both in B2B and B2C business contexts. Possible global applications of the Internet include global supply chain management (SCM), e-procurement, e-fulfillment, knowledge portals for knowledge management, global knowledge repositories, horizontal communities, global talent pools, e-learning, and e-training (Cavusgil, 2002). The relevance of the Internet as a global marketing channel will depend on the added value that it provides compared to traditional media. It should generate revenue and reduce costs (Quelch & Klein, 1996). These authors also suggest that the impact of the Internet will be more significant in countries with less developed traditional distribution channels. Role of Mobile Technologies (M-Commerce) M-commerce applications enable transactions and information distribution, regardless of the user’s geographical location. The following market trends point to an increasing potential of these mobile technologies across countries: • While in 2001 there were around 180 million PCs, there are currently around 400 million users of cellular phones worldwide. By 2004 the number of mobile phones will surpass that of fix telephone lines. By 2005 there will be more than 1,000 million users of mobile phones worldwide (Accenture, 2002). Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. ... - tailieumienphi.vn