SOCIAL FACTOR

Social Factor

 Include the influence of consumer perceptions in determining usage of the Internet for
different activities.
Factors Governing Internet
Adoption

 Cost of access
 Value proposition
 Ease of use
 Security
 Fear of the unknown
Figure 4.2 Applications of using the Internet
Source: EuroStat (2012). Applications of using the Internet
Source: EuroStat (2012).
The influence of different information sources on purchase.
ZMOT = Zero Moment of Truth (before visiting store), FMOT
= First Moment of Truth (in-store)
Source: Google Shopper Sciences (2011).
Variation in number of sources on information used
to inform buying decision by sector
Source: Google Shopper Sciences (2011).
Enterprises adopting technologies for digital
business, by size class,
EU27, 2012
Source: EuroStat (2013).
Privacy and trust in ecommerce
Ethical standards

Ethical standards are personal or business practices or behaviour generally considered

acceptable by society
Privacy legislation

 Privacy refers to a moral right of individuals to avoid intrusion into their personal affairs by
third parties.
 identity theft is The misappropriation of the identity of another person without their
knowledge or consent.
Types of identity fraud
Ethical issues concerned with personal
information ownership

 According to Mason (1986) Ethical issues concerned with personal information ownership
have been summarised into four areas:
● Privacy – what information is held about the individual?
● Accuracy – is it correct?
● Property – who owns it and how can ownership be transferred?
● 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:
● Transparency – who is collecting what information and how do they disclose the collection
of data and how it will be used?
● Security – how is information protected once it has been collected by a company?
● Liability – who is responsible if data are abused?
To prevent the leak of Privacy

 Anti-spam legislation
 Regulations on privacy and electronic communications
 Worldwide regulations on privacy and electronic communications
 Viral email marketing
Other E-Commerce Legislation
Eight areas of law and frameworks

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

2. Forming an electronic contract

- Country of origin principle
- Distance-selling law
Eight areas of law and frameworks

3. Making and accepting payment

4. Authenticating contracts concluded over the internet
5. Email risks
6. Protecting intellectual property (IP)
7. Advertising on the internet
8. Data protection
Environmental and green issues related to
internet usage

”The future of our planet is widely held social concern. Technology is generally seen as
detrimental to the environment, but there are some arguments that e-commerce and digital
communications can have environmental benefits. Companies can sometimes also make
cost savings while positioning themselves as environmentally concerned.”
6 reasons why Go Online Campaign
believe e-commerce is green

1. Fewer vehicle miles

2. Lower inventory requirements
3. Fewer printed materials
4. Less packaging
5. Less waste
6. Dematerilisation
Taxation

 How to change tax laws to reflect globalisation through the Internet is a problem that
many governments have grappled with. The fear is that the Internet may cause significant
reductions in tax revenues to national or local governments if existing laws do not cover
changes in purchasing patterns.
 Basu (2007) notes that around a third of government taxation revenue is from domestic
consumption tax, with revenue from import taxation around 17%. Governments are clearly
keen that this revenue is protected.
Tax jurisdiction

 Tax jurisdiction determines which country gets tax income from a transaction. Under the
pre- electronic commerce system of international tax treaties, the right to tax was divided
between the country where the enterprise that receives the income is resident (‘residence
country’) and that from which the enterprise derives that income (‘source country’).
The OECD also agreed that a simplified online registration scheme, as now adopted by the
European Council, is the only viable option today for applying taxes to e-commerce sales by non-
resident traders. The tax principles are as follows in the UK interpretation of this law implemented in
2003 for these electronic services:
 downloaded software (including updates of software);
 supply of websites or web- hosting services;
 downloaded images, text or information, including making databases available;
 digitised books or other electronic publications;
 downloaded music, films or games;
 electronic auctions; or
 Internet service packages.
The UK VAT Rules

 The UK VAT rules are as follows:

 if the supplier (residence) and the customer (source) are both in the UK, VAT will be
chargeable;
 exports to private customers in the EU will attract either UK VAT or local VAT;
 exports outside the EU will be zero- rated (but tax may be levied on imports)
 imports into the UK from the EU or beyond will attract local VAT, or UK import tax when
received through customs (for which overseas suppliers need to register);
 services attract VAT according to where the supplier is located. This is different from
products and causes anomalies if online services are created. This law has since been
reviewed.
Freedom- restrictive legislation

Although governments enact legislation in order to protect consumer privacy on the Internet,
some individuals and organisations believe that legislation may also be too restrictive. In the
UK, a new Telecommunications Act and Regulation of Investigatory Powers Act (RIP) took
several years to enact since it involved giving security forces the ability to monitor all
communications passing through ISPs.
This was fiercely contested due to cost burdens placed on infrastructure providers and in
particular ISPs, and of course many citizens and employees were not happy about being
monitored either!
Economic and competitive factors

The economic health and competitive environment in different countries will determine their
e-commerce potential. Managers developing e-commerce strategies in multinational
companies will initially target the countries that are most developed in the use of the
technology.
Political Factor

 The political environment is shaped by the interplay of

 government agencies,
 public opinion,
 consumer pressure groups such as CAUCE (Coalition Against Unsolicited Email) and
industry- backed organisations such as TRUSTe that promote best practice amongst
companies.
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 organisations with guidelines and assistance for compliance with legislation;
 setting up international bodies to coordinate the Internet
Quayle (2002) summarises six strands of the UK government strategy for e-commerce which
are intended to increase industry competitiveness:
 Establish a brand in e-commerce both domestically and internationally.
 Transform existing businesses.
 Foster e-commerce creation and growth.
 Expand the e-commerce talent pool (skills).
 Provide leadership in international e-commerce policy development. 6 Government
online should be a priority.
 Internet governance

Internet governance describes the control put in place to manage the growth of the
Internet and its usage
(Dyson (1998) describes the different layers of jurisdiction. These are:
 Physical space comprising each individual country where its own laws hold.
 ISPs – the connection between the physical and virtual worlds.
 Domain name control ( www.icann.net ) and communities.
 Agencies such as TRUSTe ( www.truste.org ).

The organisations that manage the infrastructure also have a significant role in governance.
E-government

 E-government is distinct from Internet governance to achieve the potential cost savings,
some governments have set targets for both buy and sell side e-government
In Australia, the National Office for the Information Economy NOIE has created a strategic
framework which has the following themes.
 Access, participation and skills
 Adoption of e-business
 Confidence, trust and security
 E-government strategies and implementation
 Environment for information economy firms
 International dimensions
Technological innovation and technology
assessment

One of the great challenges of managing e-commerce is the need to be able to assess
which new technological innovations can be applied to give competitive advantage – what
is ‘the next big thing’? The truth is no one can predict the future, and many companies have
misunderstood the market for products:
 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 –
 There is no reason for any individual to have a computer in their home. -Ken Olson
(President of Digital Equipment Corporation) at the Convention of the World Future
Society in Boston in 1977 -
Approaches to identifying emerging
technology

 PMP (2008) describes four contrasting approaches to identifying new technologies, which
may give a company a competitive edge:
 Technology networking
 Crowdsourcing
 Technology hunting
 Technology mining