Designing Websites to Capture Global Customers

Designing and developing websites that reach out and spark the interest of multiple cultures is difficult. Because a website is the online “face” of an organization and regularly conducts e-commerce activities it is important to build sites that are both functional and effective. Research by Dr. Kirk St. Amant examines culture, website design and the international spread of online access for businesses that want to polish their global business designs. 

Cultures have an impact on how users frequent and interact with website elements. It is often beneficial to use local administers with key cultural knowledge to evaluate websites (Esselink, 2000). Providing materials, information, e-commerce, and page navigation through the eyes of the target culture can raise overall conversion rates and sales. 

According to World Internet Stats in 2012 there were approximately 2.4 billion Internet users with a market penetration of 34.3% (Internet Users in the World, 2012). Growth between 2000 and 2012 is 566% showing the market is growing at a significant rate. The large market highlights how businesses can have profound impact if they develop their systems appropriately.

The author discusses how symbols and pictures impact how viewers understand web sites. For example, electrical plugs may look different in some countries leading to a rejection of the product.  Different cultures also have diversified understandings of visual information that impact product impressions (Del Galdo, 1996). 

Cultures use different prototypes to understand information. In prototype theory customers scan information to find similarities to the ideal (prototype) image in their heads to determine how to understand and categorize information (Aitchison, 1994). When pictures and information are mentally categorized on a site it is better understood and acted on by customers. 

The author concludes that by using simple analysis mechanisms it is possible to improve the global appeal of websites. The report acknowledges that this is just a first step and additional research into visual perception and understanding issues will have a significant impact on sites in the future. Businesses can consider the following website features in their evaluations:

Menu Bar: Where, How many, Linked vs. Image

Buttons: Where, Shape, Text vs. Image

Color: Background and Foreground Color

Hyperlinks: How Many, Where, Visual Space, Design

Text: How Much, Size, Capitalization, Consistency, Formatting

Search Engine: Where, Color

Pictures: How Many, Where, Size, Resolution, Color Scheme, Pictures vs. Artistic Impressions, Human Pictures, Logos

Aitchison, J.  (1994). Bad birds and better birds: prototype theory. Language: introductory readings. Ed. Virginia P. Clark, Paul A. Eschholz and Alfred F. Rosa (4^th ed). NY: St. Martins.

Del Galdo, E. (1996). Culture and design. International User Interfaces. NY: Wiley

Esselink, B. (2000) A practical guid to localization. PA: John Benjamins.

Internet Users in the World (2012). World Internet States. Retrieved June 30^th, 2013 from http://www.internetworldstats.com/stats.htm

Integrating Manufacturing and Service Revenue Development

Manufacturing is often seen as selling a product but the competitive market indicates they must be more. As global competition increases, product innovation cycles become faster, and imitators copy products companies should seek to create beyond the product. Research by Ivanka Kastalli, Bart Van Looy and Andy Neely from the University of California Berkeley discussed how the concepts of service adoption and service coverage add value and competitiveness.  They analyzed a large international company with growing sales and significant revenue from manufacturing and service functions.

Manufacturing is not simply the building of products but also the raising of value and public interest. A service mentality helps executives understand where their value lays and what customers need in both current and future products to continue sales. The market must continue to drive the options, design, and utility of products.  

To create greater service oriented manufacturing paradigms requires the ability to develop stronger service measures that help influence the product design and development. Even though different metrics are used for manufacturing and service enhancement they have not been well integrated together. This creates two different mindsets when it comes to production and follow up that can damage long-term business. 

The concept of service adoption and service coverage can be seen as breadth and depth. Service adoption entails a quantitative understanding of the amount of customers buy services. Service coverage can be seen as qualitatively understanding the perceived benefits of the service to their customers. 

When customers purchase services they naturally raise value beyond the production of the unit. When that customer buys more services and is satisfied with that service they are engaging in a qualitative assessment with real financial consequences. If companies can encourage more customers to purchase services and higher levels of these services the organization has increased their earning potential beyond the product. 

Open innovation can encourage service development and effectiveness. It affords an opportunity for the customer to provide input on the product and service as well as be a co-creator. When this occurs, business has a better perspective on the overall needs of the customer in a way that is tangible and revenue producing. 

The researchers used Atlas Copco as their case study. The company is in 100 countries, has over 14,000 employees, annual revenues over $4 billion, 40% of revenue from service with rising sales. The first shift in thinking must entail the movement from thinking about service as a support function to an actual revenue generating investment. The second is that conflicting performance measures between product and service need to be bridged to give a better perspective of total organizational development. The customer and their needs should be the driver of the business and understanding what makes them motivated to purchase and willing to return is half the business battle. 

Kastalli, I. et. al. (2013). Steering Manufacturing Firms Towards Service Business Model Innovation. University of California, Berkeley, 56 (1).

International Sales as Factors of Distance and Knowledge

Organizations that work together naturally share information to maintain their business operations. Keller and Yeaple (2013) discuss the transactional costs associated with embodied (traded intermediates) and disembodied information (direct communication). Their research has implications for multinational firms that require efficient use of information and product transferrence to compete on the global market. Their model provides two ways of analyzing how increased distance reduces sales and why changing technology may influence the dynamics of trade. 

Modern advances in telecommunications have positively affected the ability to maintain homeostasis with market trends. Those organizations that engage in research-intensive products rely on  information transference to develop quality products that are well received in the market. The ease of information transference in either embodied or disembodied form impact the strength of operations of multinational firms.

For example, the farther away the sales outlet from the manufacturing organization, the less sales made. This trend appears to have similarities with the information transference throughout the economic chain and the inefficiencies created by increased spatial distance. As improvements in logics and communication capabilities increase there is likely to be a reduction in cost and decision lag time. 

As all decisions are from knowledge, all products are built on knowledge, all sales are based on knowledge and therefore the distance between two entities and the method of information transference will naturally have an impact on sales and profits. Just as the communication level between executives, managers, employees, and customers is important for proper business development the strength of communication across geographically dispersed areas is also important. 

The researchers used firm-level data of the international structure of U.S. multinational operations from the Bureau of Economic Analysis. A multinational firm was considered a U.S. legal entity that made direct investment in at least one foreign business. The total survey included 1,000 U.S. multinationals and 3,000 affiliates from 48 distinct industries.  They observed total R&D expenditures by year and by industry. This helped them determine a ratio of R&D expenditures to sales. 

Their analysis found that cost of transfer varied with the knowledge intensity and the destination. For each leg, and organizations gravitated toward those methods that reduced costs as much as possible. As disembodied knowledge costs are fixed, firms choose this method to maximize efficiency. As distance between entities grows, so does the knowledge intensity and the general costs associated with that knowledge.  

The research is important in the sense that distance and trade costs should not be viewed only in physical terms. Such trade costs should also take into account the general cost of knowledge transference between countries and cultures. As the distance between the home country and the subsidiary increases so does the general costs on multiple fronts. Likewise, as international shipping costs and information costs decline, economic activity is likely to increase due to improved sales opportunities. Those companies that integrate new communication technologies and knowledge are likely to have longer reaches for products/services and sales. 

Kellery, W. & Yeapler, S. (2013). The gravity of knowledge.  American Economic Review, 103 (4).