Going On-line -
E-exporting
by Lauren Saadat and Damon
Greer
Office of Information
Technology and Electronic
Commerce, Trade Development
As appearing in November,
2003 Export America
The Internet's worldwide
reach has made marketing
products and services abroad a
low-cost alternative to
traditional international
business. Today, corporate Web
sites offer portals to the
global marketplace previously
unavailable or too expensive
for a small or medium-sized
firm. Whether a firm's site
publicizes its products and
services via an electronic
catalog that features on-line
ordering and tracking or it
provides an electronic
inventory of a company's
business segments, product
applications, and technical
specifications with on-line
technical support, the
company's Web presence is a
valuable marketing tool to
build customer awareness,
advertise the firm's technical
prowess in a particular
business segment, and alert
on-line visitors to authorized
representatives and dealers
found in their localities. Web
site construction and
maintenance costs vary widely,
which allows a small or
medium-sized enterprise to
invest in e-business
internationally without
incurring significant
marketing expenses
characterized in "brick
and mortar" marketing
processes. Thus, a small or
medium-sized company can
marshal its available
resources to broaden its
market presence
internationally by employing
electronic business practices.
As with traditional commerce,
international e-business
includes categories such as
business to consumer (B2C)
marketing or e-retailing,
business to business (B2B),
government to business (G2B),
and peer to peer (P2P) or
e-marketplaces. By far, B2C
activities surpass the
activities of all the other
categories on an international
level. Commercial and
industrial e-marketplaces have
been established and have had
some success in countries such
as Brazil, Mexico, and the
United States.
WHY USE
ELECTRONIC COMMERCE FOR
INTERNATIONAL BUSINESS?
Today, more
than 600 million people
throughout the world are
connected to the Internet.
This global interconnectedness
offers a tremendous potential
customer base for
entrepreneurs. B2B e-commerce
is rising significantly as
well. Increasingly,
corporations in Europe, Asia,
Latin America, and Africa are
migrating many of their
marketing programs on-line to
seek new business in regions
and countries they had
heretofore thought beyond
their resources. They also
seek new supply sources,
services to meet their
internal needs, and partners
to share manufacturing and
marketing responsibilities.
For certain industries,
products and services, going
on-line reduces variable costs
associated with international
marketing. Tasks such as order
processing, payment,
after-sales service, marketing
(direct e-mail), and
advertising on various sites,
may lower an enterprise's
international market
development costs that would
be incurred if the firm
employed conventional market
penetration strategies. One
important caveat: although
English is spoken in many
countries around the world, it
is still important to consider
using the languages prevalent
in the countries targeted in a
company's e-business strategy.
A firm's marketing department
or executive should study
electronic commerce as an
innovative approach to
exporting beyond the
traditional commercial model.
E-commerce influences
marketing, production, and
consumption. Information
gathered from customers via
on-line stores is used to
customize products, forecast
demand, and develop business
strategies. Consumers not only
pay on-line for products and
services, but also search for
information about products,
negotiate with vendors, and
reveal their preferences via
their purchasing patterns.
However, the marketing
executive should be familiar
with the steps necessary to
make the firm's Web site
e-export capable. Many U.S.
companies have Web sites that
fulfill one or more marketing
functions tailored to their
business specialties. These
sites feature one or more of
the following characteristics:
Transactional site:
Transactional sites are
full-service and allow clients
to search for, order, and pay
for products on-line as well
as allowing them to contact
the company for after-sales
service. The most
sophisticated sites create
efficiencies by integrating
the transaction process with
back-office systems such as
accounting, inventory, and
sales administration.
Information delivery site:
This type of site generates
sales by promoting awareness
of a company rather than
facilitating on-line
transactions. Its function is
similar to a brochure,
providing information about
products or services, as well
as contact information on how
to proceed with a purchase. An
information delivery site is
ideal for companies that
market products and services
that cannot be delivered
on-line or goods that cannot
be sold on-line.
E-marketplaces: These sites
are market makers; they bring
buyers and sellers together to
facilitate transactions.
Participation in a brokerage
often provides an efficient
way of finding a customer
without the expense of
building a proprietary
transactional Web site. Types
of brokerages include
auctions, virtual malls, and
business partner matching
services.
MARKETING ON
THE WEB
-
Building
an On-line Image - An
on-line exporter may
choose domain names
localized for his target
markets. Locally branded
domain names can increase
brand awareness, promote
Web site address recall,
and stimulate brand
loyalty. Most local search
engines only display
locally relevant content
by filtering the search
results to include local
country-code domains only.
A company that wants to
have a local domain name
must research the rules by
country, as registration
requirements vary.
-
Register
Your Site with Search
Engines - On-line
exporters should register
with search engines
popular with their target
audiences in target
markets.
-
Choose a
Web Host - Web hosting
services often go beyond
Web site maintenance to
include domain name
registration, Web site
design, and search engine
registration. For some
on-line exporters, it may
be most feasible to use a
Web host in their target
markets to take advantage
of all of these localized
services.
-
Web Site
Content - As with the
physical world, companies
that market on-line to
foreign countries should
be concerned with local
preferences, client
tastes, and historical
consumption and usage
trends (consumer,
commercial, and industrial
market segments). It is
important to research
local commercial codes,
standards, and import
requirements to assure
that foreign products and
services comply with local
laws. Adapting one's Web
site to meet the
linguistic, cultural, and
commercial requirements of
a targeted market may be
incorporated into the
enterprise's strategy for
Web site and business
development.
The
U.S. Department of
Commerce has created
two tools to assist
companies with IT
assessment. Both tools
are available for free
on the Internet. The
IT Management Planning
Tool helps companies
determine how IT can
improve their business
operations and helps
identify technologies
that can lower costs,
increase
competitiveness, or
improve service
delivery. The eScan
Security Assessment is
a diagnostic tool
designed to assess the
electronic security
infrastructure of a
small business and
provide an action plan
for improving it. See
the IT Management
Planning Tool at www.myinfotech.org
and the eScan Security
Assessment at http://escan.nist.gov/sat/index.nist.
For more guidance on
doing business with
consumers
internationally, see
the OECD Guidelines on
Consumer Protection in
the Context of
Electronic Commerce at
www.ftc.gov/opa/1999/12/oecdguide.htm.
|
CODES OF CONDUCT AND BUSINESS
PRACTICES FOR THE ON-LINE
EXPORTER
Essential to building a
strong consumer base in the
on-line world is establishing
a strong sense of consumer
confidence. It is especially
important to the e-exporting
firm because its competition
is much more intense and
consumer choices are far more
extensive than in the physical
world. The Council of Better
Business Bureaus and its
subsidiary BBBOnLine have
found that many on-line
studies have revealed common
consumer reservations about
doing business on-line. Many
of these apply to e-business
as well. These concerns range
from uncertainty that one's
personal information including
credit card or payment
mechanisms are secure,
deceptive commercial
practices, misrepresentation
of products or services,
incomplete guidance on return
policies, warranties, and
independent verification that
a company is legitimate. These
studies also found that it was
critical to have an adequate
means of resolving disputes
with between the buyer and the
seller in order to build a
high degree of trust in a
vendor's enterprise.
BBBOnLine offers a Web
business guide, Code of Online
Business Practices, which
delineates five principles for
ethical "business to
customer" conduct. These
principles encompass sound,
prudent commercial practices
that reputable companies have
followed for years:
- Truthful and accurate
communications
- Disclosure (information
about the business,
products, and
transactions)
- On-line security and
privacy policies
- Customer satisfaction
(provide a means for
resolving disputes that is
impartial, prompt, and
courteous)
- Protection of children
The guide may be obtained
at www.bbbonline.org.
Additionally, the Better
Business Bureau system offers
alternative dispute resolution
services for some foreign
markets as part of its
Reliability seal. Privacy is
of great concern for many
consumers; some seals or
"trustmarks"
guarantee privacy and
mediation of complaints.
In partnership with the U.S.
Department of Commerce, the
Council of Better Business
Bureaus has developed the
Global Trustmark Alliance,
which establishes partnerships
with comparable organizations
in several regions of the
world to design and implement
a global trustmark. When
awarded and displayed on a
company's Web site, this
trustmark will give consumers
confidence that the company
has adopted a code of conduct
to protect its customers'
privacy and individual
transactions, as well as
enacted business practices to
guarantee Web site security.
For more information, see http://www.bbbonline.org/reliability/
and www.export.gov.
Related articles:
- Building
a Web Presence -
Even
if you choose not to sell
your goods or services
on-line, a business Web
site can be a virtual
marketing brochure that
you can update on demand
with little or no cost.
- The
Most Common Web Sins -
There are many flat-out
"ugly" websites.
Some estimates are as high
as 70% of the web.
This article attempts to
identify some of the more
common problems and give
you some practical
guidance to correct the
problems.
- Web
Site Localization -
The use of Web sites
continues to grow in leaps
and bounds. In business,
these sites typically
address marketing, sales,
and information management
for shared data across
corporate Intranets.
What you say and how you
say it may be crucial to
your future success.
Date Updated: March 27, 2007
|
