International Internet Marketing Ethics

Should there be a difference in our internet marketing ethics in different Nations

Internet marketing ethics are the moral, principals that are associated with and that can be use in connection with your Internet marketing business. It mainly concerns the tactics, methods or techniques that you can use when promoting or advertising an online business. In other words, it is the difference of operating your internet business in either an honest or dishonest way. Applying good ethical standards to the online world is a direct reflection of your online business. Ethics affects all aspects of your business. First and foremost it affects your company’s brand image and subsequently your sales, marketing and advertising principles that are applied to the task of making your company profitable. Ethics may also affect your employees and how they are representing your company online, on the phone or in person.

Ethics is a branch of philosophy that studies morals and values. Interest in ethics and ethical codess has been around for a long time. Ethics studies the differences between right and wrong, and through these studies philosophers have developed several theories. Some major ethical theories are egoism, intuitionism, emotivism, rationalism, and utilitarianism. Egoism is the belief that people should look at how the consequences of an action will affect them. Intuitionism is the belief in an immediate awareness of moral value. Emotivism is the belief that ethical decisions are expressions of emotion. Rationalism focuses in the methaphysical aspects of ethics. And lastly, utilitarianism in ethics is considered on how moral actions produce the greatest overall good for everyone.

Ethical problems in Internet Marketing that may arise are bribery, which involves payment of small sums of money, typically to a foreign official in exchange for him/her violating some official duty or responsibility to speed routine government actions. Gifts/Favors/Entertainment includes a range of items such as lavish gifts, call girls, opportunities for personal travel at the company’s expense, gifts received after the completion of transaction, etc. Pricing includes unfair differential pricing and questionable invoicing. Products/Technology includes products and technology that are banned for use in the home country but permitted in the host country and appear unsuitable or inappropriate for use by the people of the host country. Tax Evasion Practices used specifically to evade tax such as transfer pricing including the use of tax havens, where any profit made is in low tax jurisdiction, adjusted interest payments on intra-firm loans, questionable management and service fees charged between affiliates and the parent company. Illegal/Immoral activities in the host country practices such as; polluting the environment, maintaining unsafe working conditions; product/technology copying where protection of patents has not been enforced. Questionable Commission to Channel Members unreasonably large commissions of fees paid to channel members such as agents, middlemen, consultants, dealers and importers.

Cultural Differences involving potential misunderstandings related to the traditional requirements of the exchange process may be regarded by one culture as bribes but be acceptable business practices in another culture. These practices include gifts, monetary payments, favors, entertainment and political contributions. A company might argue that not participating in these unethical practices might put them at an unfair advantage compared to their competition that is located in a country where these practices are considered acceptable. My opinion is that we need to stick to what our home country considers ethical so that the message is clear to all of our employees. In summary, I strongly believe that there should be no difference in our internet marketing ethics across different nations.

“Strategy & the Internet” - Porter

How the Internet has influenced the power each force has in his Industry Structure model.

The Internet has tremendous implications in strategy and strategic decisions. To gain sustainable competitive advantage companies tend to focus on operational effectiveness to achieve the low cost leadership or strategic positioning of the firm in its industry to create differentiation and unique value for customers. From the operational effectiveness paradigm, internet helps companies to offer fast, accuracy and reliability in operations. However this opportunity is for all in the market. Rivals can easily achieve the same operational effectiveness as the company has no propriety rights to the internet. Therefore, the internet cannot be a factor of creating sustainable competitive advantage in operational effectiveness paradigm in the long run. From the strategic positioning perspective of gaining sustainable competitive advantage, the internet provides a platform to create customized, unique, and integrated systems that help companies to create and maintain distinctiveness in their products and services. Companies need to use the internet as a complement to the traditional ways of competing.

Let's look at Porter's Five Forces:

Threat of Substitute Products and Services

The Internet influences the market to expand by making overall industry more efficient, which results in the new substitution threats. On one side the internet pushes a positive change of expanding the overall industry and creating new opportunities. On the other side it boosts the substitution threat caused by more efficient ways of operational activities.

Bargaining Power of Suppliers

Internet raises the bargaining power over suppliers through efficient procurement services which is an advantage to the companies. It also provides suppliers the chance to attract a wide range of customers. The Internet gives an opportunity to the suppliers in that they can directly deal with the end users and thereby eliminating the role of intervening companies. It also optimizes procurement efforts of companies which allow equal chances to access the suppliers which ultimately reduce the companies’ capability of differentiation.

Bargaining Power of Customers

The Internet improves bargaining power of customers and reduces their switching cost, which will negatively impact the company by making it easy to choose an alternative option.

Barriers to Entry

The emergence of the internet reduces the entry barriers for new entrants through minimizing the heavy costs like physical assets, access to channels and human resource requirement for sales because everyone now has access to internet applications and no one has proprietary rights to it. As a result of these reduced entry barriers the number of new entrants has been greatly increased in almost all of the industries.

Rivalry Among Existing Competitors

The Internet enhances the price competition as competitors face difficulty to keep proprietary rights which reduces the distinctiveness of products. It also widens the geographical boundaries of the market resulting in higher number of competitors.

In conclusion, do not depend solely on the internet and leave the traditional ways of competing but instead use the internet as a complement to traditional methods and focus on the strategy to differentiate and sustain competitive advantage.

To read the article yourself, click the link below:

http://hvass.nu/s2/artikler/teori/Misc/porter.pdf

Zero Moment of Truth

The internet and other information and communication technology has made it very difficult for companies to differentiate. Now everything is open to customers and they can check the details of all competitive products in an industry, its prices and the difference if any. The trend of online shopping and availability of all the details has made buyer behavior change. Company’s marketing efforts are not keeping pace with these changes due to the complete access to the product range in a specific industry. This is the time of real differentiation and no one can compete based on the difference in outlook or marketing campaigns. So company’s survival is differentiation in the real sense. In this digital world customers seek out online ratings, price comparisons, social media reviews, in-depth details about features of different products, checkout videos and many other ways of using the internet to make a buy decision. Marketing strategies have to evolve in accordance with changing shopping behavior.

The marketing personnel, CEO, sales representatives and entrepreneurs need to understand this shift in marketing strategies. Winning the zero moment of truth, an ebook from google’s managing director discusses how to succeed in this changing environment based on exclusive market research. Zero moment of truth or simply ZMOT is a buying approach as the new search in America reveals that 70% of buyers look at product reviews before buying, 79% use a smart phone to help with buying and 83% of moms do online research for a product of interest in TV commercial. Online presence works to affect the customers’ buying decisions when they are searching on the Internet, social media, and other online sources of obtaining product information. Now, everyone uses their search devices to get information and product reviews, before a purchase decision, as they do not have time to waste at markets. This is the zero movement of truth when they decide what to buy. Companies need to realize this marketing shift and strategies should be there to cope with the new trends of buying decisions. Winning the zero moment of truth discusses the strategies for companies in this new paradigm.

To learn more about ZMOT click the link below:

http://www.zeromomentoftruth.com/#utm_campaign=en&utm_medium=et&utm_source=us-

en-et-bizsol

Science of Persuasion

In the article, “Harnessing the Science of Persuasion,” Cialdini talks about 6 basic laws of persuasion. Choose one and discuss how that impacts Internet marketing and/or commerce.

I ended my last post talking about Steve Job's gift of persuasion, so it's only fitting that I now discuss Robert Cialdini's article “Harnessing the Science of Persuasion”. A select few are born with the gift of persuasion. They're charisma is effortless and with little ease they captivate a room, generate followers and convince others to do as they ask.

The article provides 6 persuasion principles and how they can be applied in any organization. I decided to choose the Law of Social proof.

This principle focuses on how we look to our peers for guidance. We look to them to give us their opinion on which is the fastest growing, the largest selling, and the best or favored course of action. We also look to them to support our decision. This emphasizes that if enough people are doing something, then it must be true. And since everyone is buying your idea, the person considering your product will also believe it.

One way your clients/prospects can decide what they should do under uncertainty conditions, is to see what others are doing and as a result jump on the bandwagon. So, when you adopt this law in the Internet marketing and/or commerce, you can become more successful. Adopting this law is not about being manipulative but rather it is about being more successful at getting the support from the people to achieve the most positive and desired outcomes.

One example of this is the use of Facebook in the purchasing process. We've all seen when our friends have liked a page. How do you react to that? Well when I see that my best friend just liked the Salon Denice Hair salon, it tells me that I can trust them with my hair. I see that her hair is always impeccable, so I know I can trust her judgement. Another example is when my sister shares a groupon purchase on twitter. I think well if she bought it, then it must have been a good deal. It might not instantly influence me to purchase the groupon but it will influence me to at least open the page and see the offer details.

To read the article and to see a list of the principles click the link below:

http://www.annbadillo.com/leadership/files/harnessing_science_of_persuasion_2.pdf

Apple iPOD/iTune Canvas

Here is a business model canvas I created for Apple's iPod and iTunes Business Model.

I look at all of the resources and partnerships Steve Jobs was able to convince and it's truly incredible what a great persuasive force he was. He told the music industry how to solve their problem before they even knew what to do. RIP Steve Jobs.

Click the image to maximize to your screen.

Inbound/Outbound Marketing

Can a company today survive on inbound marketing alone? Why or why not? What is the role of outbound marketing?

Should we pull customers in or push our message out?

I believe in today's market inbound marketing is the best package among marketing methods. It is generated by the onset of internet such as free tools and trials, blogs, search engine optimization (SEO) and social media sites, such as Linkedln, Facebook and YouTube. Inbound marketing produces better results because of the relationship factor, which results in higher client conversion.

The loyalty factor results in repeat sales and the implementing methods are far less expensive than outbound methods. It is highly trackable which allows you to easily adjust your method to improve results. Furthermore, there are lots of easy to use, ready-made tools for technical challenges.

Outbound marketing includes things like telemarketing, direct mail, print advertising, TV and radio and other traditional forms of marketing. The success of this marketing depends on its ability to effectively interrupt consumers. Outbound marketing doesn't work as well as it used to. That is probably because the average consumer is bombarded with anywhere from 250 to 3000 messages a day depending on how much time they spend watching TV, being online, listening to the radio or reading magazines and newspapers. Consumers are so used to these interruptions that they are already prepared to dodge them. For example, as soon as we see a popup ad, we close it or look away. Very rarely do consumers actually sit there and read them.

HOWEVER, even though I think Inbound marketing is superior, I do not feel that it can stand alone. If we rely on inbound marketing alone, we will sacrifice the traditional consumers that best respond to traditional forms. In any marketing campaign we need to decide what target market we want to focus on. Once they are identified, we need to understand how they behave as consumers and what forms of marketing are appropriate for those specific consumers.

Also there are some instances where inbound marketing will not work at all. For example, with a brand new product that no one has ever heard of, people are not going to be searching for it and therefore the keywords used in SEO will not be used.

Here's a website with a ton of links to great articles on inbound marketing, click away:

http://www.hubspot.com/inbound-marketing-hub/