Growth, volume and dispersion of electronic markets Ellis-Chadwick et al. (2002) found size to be an important indicator of whether a company would a) have a website and b) have developed a fully transactional web site. They posited, the larger the retail organization in terms of number of outlets the more likely they are to have both a) and b) in place. They suggested this may be because those retailers with the largest network of outlets might have most to lose should they be left as observers, rather than active participants, in a vibrant Internet marketplace. Alternatively, it could be that those retailers with the largest numbers of outlets are most likely to have the investment resources, skilled personnel, scale and sophistication of logistical and technical infrastructure necessary to successfully support e-commerce. The DTI's International benchmarking study (2004) also found size to have an effect on web site adoption, with almost 95% of large companies having active sites. It should be noted however, that in recent years, small and medium sized enterprises (SMEs) have begun to take advantage of the falling costs of going online. In the UK, the rate of adoption of the Internet by SMEs is surpassing official targets and the UK government continues to invest in comprehensive programmes designed to get UK businesses online (Simpson and Docherty, 2004). Many SMEs are taking advantage of easier-to-use web applications and lower-cost outsourcing of web development and site hosting particularly to serve marketing communications objectives. Therefore, size may well continue to be a useful predictor of the level and extent of Internet adoption but as the Internet becomes more accessible a wider range of companies are looking to benefit from becoming involved with the online trading environment to serve an increasing range of business objectives.

Page 3 of 23

MKTG 5512/FEB 2022 The Department of Trade and Industry has been specifically monitoring the dispersion of use of ITC among UK and International Businesses and in doing so the eighth study has concluded there is a strong link between effective use of ITC and productivity. The study looked at a range of industries (see Table 11.2) in 11 different countries.

Table 11.2 Industrial sector analysis

Major trends potentially affecting the growth rate of adoption of Internet technologies identified by the study are: More businesses are measuring the impact of technology in order to determine how to deploy resources effectively. More businesses are discriminative, selective and focused on the use of the technology in order to facilitate more efficient usage.

Page 4 of 23

MKTG 5512/FEB 2022 Businesses are becoming more responsive to customer needs and in doing so are concentrating on the needs and expectations of the markets they serve. The growth rate of e-commerce is slowing as businesses seek to realize a wider range of benefits from technology adoption including initiatives focusing on improved efficiency, speed of access and customer communications. In the UK 19% of the total sales of businesses selling online are made through the online channel, up just 5% from 2003. Major trends relating to the dispersion of Internet technologies identified by the study are: Significant differences in general levels of technology adoption across industry sectors: 96% of UK financial services businesses have a web site compared with 80% of construction businesses and 74% of UK primary businesses. This level of uptake is slightly higher than the average of the other ten nations surveyed - Australia, Canada, France, Germany, Italy, Japan, the Republic of Ireland, South Korea, Sweden and the USA - where the figures were 88%, 60% and 68% for each of the sectors respectively. The number of companies with Internet access is reaching saturation. Some 95% of all companies in countries surveyed had Internet access (see Figure 11.6.). In most countries the proportion of companies with websites remains stable between 55% and 85% (see Figure 11.7).

Page 5 of 23

MKTG 5512/FEB 2022 Figure 11.6 Proportion of business with

Internet access

Figure 11.7 Proportion of business with

a web site

Significant variation across industries in levels of uptake of e-commerce. On the buy side, retail businesses are making the most significant amount of online purchases: 36% in the UK and an average of 38% across other surveyed nations. The construction sector was the lowest in terms of uptake with 17% of businesses in the UK and 21% in other nations. On the sell side, of companies that enable customers to order online, the percentage varies across sectors from 28% to 10% (see Figure 11.8). Sweden, Ireland and the UK remain ahead in terms of levels of sophistication (see Figure 11.9). This case has focused on the growth and dispersion of Internet adoption and e- commerce and in doing so has identified varying levels of uptake and usage of web technologies across the nations surveyed. Academic researchers (Doherty et al., 1999, Teo and Pian, 2003) have produced various models of the ways organizations

Page 6 of 23

MKTG 5512/FEB 2022 use Internet technologies and how usage can be influenced by various factors, for example, levels of maturity, business integration, marketing applications and the category of the adopter. Teo and Pian (2003) suggest that such different levels of adoption are likely to confer different degrees of competitive advantage, which they have found to be a key driver of Internet adoption (see Table 11.3) and which ultimately will affect the types of goals an organization aims to achieve through the application of Internet technologies. The level of adoption affects the extent to which Internet technologies impact on an organization's practical operations. In doing so it provides a context for digital strategy formulation and ultimately the objectives pursued.

Figure 11.8 Adoption of buying and selling online

Page 7 of 23

MKTG 5512/FEB 2022

Figure 11.9 Levels of sophistication of technology adoption

Table 11.3 Levels of web site development

Source: Internet Marketing Strategy,Implementation and Practice, 3rd Edition, Dave

Chaffey

Questions

1 Suggest three different marketing objectives that an organization operating in the B2B sector might identify to guide the company's use of Internet technologies. ( 15 marks )

2 Choose one of the objectives proposed in your answer to question 1 and develop an argument as to why an organization might make this particular choice.

Particularly, focus on the factors that might influence the choice of marketing objectives. ( 15 marks )

3 Apart from organizational size, suggest other factors that might influence the level and extent of Internet and web adoption. ( 10 marks )

4 Suggest ways a market-orientated B2B company operating in industrial printing markets might be using Internet technologies ( 10 marks )