Contemporary Research in E-Marketing_11

250 Ortega and Recio • Currencies: Companies targeting foreign markets through the Internet will surely need to quote prices in local currencies (Guillén, 2002). Generally, customers realize if a product is cheap or expensive when the price is quoted in their local currency. When prices are shown in a foreign currency, a higher cognitive effort on the customer’s side is required, and this may jeopardize one of online shopping’s main advantages over other traditional channels: convenience. White (1997) argues that Internet sellers should not expect online shoppers to search for information on currency conversion rates. Customer identification through IP addresses could help companies quote prices in the customer’s local currency. If the local currency is not the one that the customer prefers, the Web site should offer the possibility to quote prices in alternative currencies. Customers’ preferences should be identified for future visits. Technologically easier solutions could be adding a link to a currency converter or providing approximate conversion rates for the different local currencies (White, 1997). Although the introduction of the euro softens price quoting problems for companies targeting the European market through the Internet, these barriers are expected to remain in the future and should be carefully addressed by online marketers. • Shipping charges: Companies delivering products in international e-markets should clearly indicate the applicable shipping charges and local taxes in each of the served countries (Hornby et al., 2002; Samiee, 1998a; White, 1997). Payment Systems There are significant differences in the commonly used payment systems in different countries: some payment methods are preferred by consumers from certain countries, and some payment methods may not be even available or safe enough in several countries (Guillén, 2002). For example, more recently devel-oped payment methods such as e-cash has only been introduced into certain local markets and few consumers already use these systems (Hornby et al., 2002). Credit cards are the most widely used payment system on the Internet, but online sellers should not offer only this payment possibility in all countries, as there are diverse limitations to credit card use in certain countries. Credit cards are widely accepted in the United States, while this payment method faces diverse problems in other countries: in Germany, credit cards have traditionally not been used; certain Japanese credit cards are not accepted worldwide; in China, credit cards are restricted to people who can use foreign currencies (Palumbo & Herbig, 1998); and very few Asians and Latin Americans have a credit card (Guillén, 2002). Credit card use for online payments raises important security concerns 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 251 among Internet users in different countries. Some Internet users are reluctant to provide their credit card information online for security reasons. Online shoppers from Western European countries tend to prefer alternative payment methods, such as cash on delivery (e.g., in Spain) and bank transfers (e.g., in Germany). The decision on the acceptable payment methods is crucial for companies conducting transactions over the Internet. E-sellers should be flexible with regard to the accepted payment systems in different national markets. Distribution In both domestic and global markets, distribution is a critical determinant of customer satisfaction with online shopping services. Based on the production country and the served markets, companies will have to develop an appropriate distribution channel (Samiee, 1998b): for example, online sellers may decide to keep their own product inventory, or make arrangements with suppliers that ship the products directly to the customers. Online Disintermediation The online channel is expected to introduce significant changes into the tradi-tional configuration of companies’ global distribution infrastructures. The Internet is expected to change the functions performed by traditional intermediaries in local markets. Rather than displacing local intermediaries through direct relation-ships between sellers and buyers, current intermediaries will have to perform new functions. A new kind of intermediary has also appeared on the Internet: infomediaries (Samiee, 1998b). The functions performed by these new intermediaries involve the specialized recollection, interpretation, and distribution of information to customers, both suppliers and consumers. Certain authors suggest that companies accessing foreign markets through the Internet will not need to rely on local intermediaries, because customers from those markets can find information about a wider variety of products on the Internet than in local markets (Javalgi & Ramsey, 2001; Quelch & Klein, 1996). The Internet channel, though, does not solve logistic problems associated with the distribution of tangible products to international markets. Due to these restrictions, companies will need to carefully manage logistics and transport issues in foreign markets (Ryans, 1999). Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. 252 Ortega and Recio Configuration of the International Distribution Channel Both “click-and-brick” and “born-global” companies will have to make relevant decisions on the configuration of their international distribution channels: 1. Should they rely solely on the Internet for distribution in foreign markets? 2. Should they establish their own local distribution offices or contract the services of local distributors? Samiee (1998b) argues that companies are not expected to close local sales offices in foreign countries and deal strictly through the Internet. Nevertheless, the successful experience of Dell™, relying only on the Web for global marketing and distribution, shows that such strategies are feasible. SMCs will particularly benefit from a global market reach on the Web, without investing in local distribution infrastructures in every national market. Foreign representatives may be needed in other markets: either companies’ own staff or contracted local distributors (Bennett, 1997). Most of global marketers are not likely to rely solely on their Web sites for global marketing; they should be regarded as an element of the company’s integral global marketing strategy. Local agents and local distribution infrastructures usually contribute to strengthen companies’ relationships in foreign markets. Finding the right agent or distributor overseas is especially critical for SMCs’ international market access over the Internet. Hamill (1997) points out that information about available local distribu-tors is readily available on the Web. Coordination Between Online and Off-Line Distribution Channels Established “brick-and-mortar” companies should take into account the risks involved in the integration of the online channel into their previous distribution strategy. Bypassing local distributors may be a source of significant conflicts. Therefore, managers should manage carefully the interrelations between online and traditional distribution channels and current relationships with local distribu-tors (Palumbo & Herbig, 1998). Distribution Fulfillment The fulfillment of international orders is one of the most important challenges faced by global e-sellers. Although U.S. online-selling companies receive a 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 253 significant number of international orders, between 40%–50% of such orders go unfulfilled (Guillén, 2002). Therefore, many e-companies are not seizing the opportunities offered by the Internet to increase their customer base internation-ally. Most of the problems related to international order fulfillment are associated with the required logistics to distribute tangible goods in foreign markets. Conversely, the Internet is a very suitable medium for the distribution of information and “digitizable” products. International customers not receiving or receiving late the products they have ordered and paid for online will surely not consider those companies for future purchases. The attitudes toward online purchasing could also be damaged, due to such unsatisfactory online shopping experiences. Global e-sellers should find logistical solutions, which ensure a smooth and cost-effective distribution to foreign customers. The Internet forces established multinationals and start-ups to adjust their current distribution infrastructures, as the Internet increases consumers’ expectations on issues such as speed of delivery and after-sales services. A satisfactory navigational experience on the Web is not enough for customer satisfaction with online shopping services. Companies should deal very carefully with distribution problems, as consumers may switch easily from one provider to another. Companies will have to decide whether it would be desirable to control global access to product information, as customers from countries where products are not distributed can be disappointed when they realize that they cannot purchase the products advertised on the Web site. The unavailability of worldwide delivery is likely to damage brand perceptions by foreign customers (Palumbo & Herbig, 1998). Other factors have been identified to influence the decision to purchase from international online sellers (Eid & Trueman, 2002; Samiee, 1998b; White, 1997): (1) clear shipping information, including delivery times to different countries and packaging procedures, (2) information on quality guarantees and possibility of international returns or refunds, (3) availability of 24-hour worldwide customer service, and so forth. Product Global online marketers should assess and emphasize the unique advantages of their own products and services in local markets, compared to those available through traditional channels (Quelch & Klein, 1996; White, 1997). On the Internet, international customers will benefit from a wider product variety. Some products, not distributed in certain local markets, will usually be available for purchase online. Consumers from such markets can access foreign Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. 254 Ortega and Recio Web sites for purchases. A clear example is Amazon, the leading online bookseller, with customers scattered across countries. While Amazon has established local Web sites in countries such as the United Kingdom (Amazon.co.uk) and Germany (Amazon.de), it still sells to foreign customers through its original Web site (Amazon.com). Prices for international customers are higher than for domestic U.S. customers, mainly due to higher shipping costs. Nevertheless, total prices are competitive in most cases and the wider product assortment is highly appreciated by Amazon’s customers. Niche Products Smaller companies with limited financial resources can gain easier access to international markets through the Internet. Quelch and Klein (1996) suggest that companies with specialized offerings, thanks to the Internet, will be able to gather the necessary number of customers. Product Development and Product Design Among the benefits provided by the Internet for product development, it leads to easier identification of customer needs, individual product customization, and global and faster product testing (Avlonitis & Karayanni, 2000; Eid & Trueman, 2002). The Internet helps in the design of products that match customers’ preferences like no other communications channel, by incorporating the views and tastes of global customers into the product design and product development phases. On the Internet, product design and product development can be improved by forming virtual teams, which integrate knowledge from different countries (Cavusgil, 2002). The use of Internet-based platforms can be very beneficial for product development processes involving specialization and modular product design, for example, modular software design, and decentralized research and development (R&D) functions in multinational companies (Rao, 2001). Accord-ing to Wymbs (2000), companies such as Cisco Systems are using the Internet for the coordination of product design processes from geographically disperse research centers. Services Service offerings need to be managed differently than physical products online, due to the defining characteristics of services: intangibility, simultaneity, hetero- Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. ... - tailieumienphi.vn