Electronic Commerce

A modern business methodology ... to cut costs while improving the quality of goods and services and increasing the speed of service delivery.

Definition of Marketing

Philip Kotler

Social and Managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Definition of Commerce
The exchange of goods and services for money Consists of: Buyers - these are people with money who want to purchase a good or service. Sellers - these are the people who offer goods and services to buyers. Producers - these are the people who create the products and services that sellers offer to buyers.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Elements of Commerce

You need a Product or service to sell You need a Place from which to sell the products You need to figure out a way to get people to come to your place. You need a way to accept orders. You also need a way to accept money. You need a way to deliver the product or service, often known as fulfillment. Sometimes customers do not like what they buy, so you need a way to accept returns. You need a customer service and technical support department to assist customers with products.
Mrs. Hiyashini Tanwani, SYBFM, CHM College

History of The Internet

Started as a US government project in 1969. The purpose was to create a net that can function even if one center is destroyed in a military attack. Effective in 1971 with computers on both coasts of the US.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

In the 1980s
Personal computers or terminals were connected to a server. The server was a mainframe, or connected to a mainframe computer.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Today
Connections across countries and continents made through dedicated fast lines. A company may have one local network (LAN) in NY, which is connected to the Internet through a Regional network. Well established in N.A., Europe and certain Asian countries.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Computer classifications

Mainframes: - term for very large computers - used to handle large amount of data or complex processes - main advantage is reliability Midrange: - medium sized, less expensive and smaller - usually a server Micro-computer: - work stations with computing capabilities - single-users systems linked to form a network
Mrs. Hiyashini Tanwani, SYBFM, CHM College

What is a network
Series of points or nodes interconnected by communication paths Node is a connection point for transmitting data Network can interconnect with other networks to form global networks

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Benefits of a network
Facilitates resource sharing Provides reliability Cost effective Provide a powerful medium geographical divide

across

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Geographical Distance
Local area network (LAN): small area, share a single server Metropolitan area network (MAN): a wider network, can bridge several LANs Wide area network (WAN): a broader area covered, can include several MANs Internet: a network of networks that covers the entire globe

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Introduction to E-commerce
E-Commerce, Web, Networks, Internet The evolution of new businesses The adoption of Brick and Mortar companies to the new economy Market failures and economic explanations for the new economy

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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E-Commerce Mechanisms

Transformation of economic activity into digital media

- Exchange information, content, agreements, and services among parties that are connected to through the Internet.

Enables new ways of creating, delivering and capturing value to customers.

- Availability - Convenience
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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World Wide Web (WWW)

World Wide Web (Web):

- A collection of documents that reside on computers, and that can be accessed by other computers on the Internet.

Multimedia documents:
- Text - Images - Sounds - Drawings - Video

Hypertext:
- Links to other documents - Can begin execution of a program
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Web Browsers

Computer programs that can:

- Display Web documents - Follow links - Execute other programs - Enhance applications such as real-time audio or video

Netscape and Internet Explorer The Microsoft legal trouble due to the Explorer.

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Web Servers

Computers that run server software. A server waits for request to arrive from a user.
- The request is typically for a document.

The server sends (serves) the document to the requesting computer. Sometimes the server allows a user to fill in information on a document, and the then transfers the information to another program or a server.
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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WWW and Internet

The World Wide Web (WWW) is not the Internet Access to the Internet doesnt mean you have e-commerce WWW works in HTTP Web pages works in HTML Web browser provide access to information on the WWW

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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What is E-commerce
Distributing, buying, selling and marketing products and services over electronic systems E-business for commercial transactions Involves supply chain management, e-marketing, online marketing, EDI Uses electronic technology such as: - Internet - Extranet/Intranet - Protocols

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Forces Shaping the Digital Age

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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E-commerce Today

The Internet is the perfect vehicle for e-commerce because of its open standards and structure. No other methodology or technology has proven to work as well as the Internet for distributing information and bringing people together. Its cheap and relatively easy to use it as a medium for connecting customers, suppliers, and employees of a firm. No other mechanism has been created that allow organizations to reach out to anyone and everyone like the Internet.
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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E-commerce Today

The Internet allows big businesses to act like small ones and small businesses to act big. The challenge to businesses is to make transactions not just cheaper and easier for themselves but also easier and more convenient for customers and suppliers. Its more than just posting a nice looking Web site with lots of cute animations and expecting customers and suppliers to figure it out Web-based solutions must be easier to use and more convenient than traditional methods if a company hopes to attract and keep customers.
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Four Categories of E-Commerce

Business originating from... Business

Consumers

Business And selling to...

B2B

C2B

Consumers

B2C

C2C

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Mrs. Hiyashini Tanwani, SYBFM, CHM College

Distinct Categories of E-Commerce

Business to Business (B2B) refers to the full spectrum of e-commerce that can occur between two organizations. This includes purchasing and procurement, supplier management, inventory management, channel management, sales activities, payment management &service and support. Examples: FreeMarkets, Dell and General Electric Business to Consumer (B2C) refers to exchanges between business and consumers, activities tracked are consumer search, frequently asked questions and service and support. Examples: Amazon, Yahoo and Charles Schwab & Co
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Distinct Categories of E-Commerce

(contd)

Peer to Peer (C2C) exchanges involve transactions between and among consumers. These can include third party involvement, as in the case of the auction website Ebay. Examples: Owners.com, Craiglist, Monster Consumer to Business (C2B) involves when consumers band together to present themselves as a buyer in group. Example: www.planetfeedback.com

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Convergence of e-Commerce Categories

Business originating from
Business
Publishers order paper supplies from paper companies

Consumers
Consumers search out sellers, offers and initiate purchases from Amazon

And Selling to

Business

Amazon orders from publishers

Consumers

Consumers buy thousands of Harry Potter books from Amazon

Consumers resell copies on eBay

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Key Drivers of E-commerce

Technological degree of advancement of telecommunications infrastructure Political role of government, creating legislation, funding and support Social IT skills, education and training of users Economic general wealth and commercial health of the nation

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Web based technology

Websites E-mail Search engines Interactive communications

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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E-commerce vs. E-business

E-commerce is about doing business electronically E-commerce conducting financial transactions electronically

E-business is conducting business on the Internet E-business is the transformation of business processes through the Internet

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Setting up for E-Marketing Options

Creating Placing

Corporate

websites

websites

online ads and promotions Creating or using Web communities

Using

Build goodwill and relationships; generate excitement

Marketing

websites

E-mail

Engage consumers and attempt to influence purchase

Website

design

7 Cs of effective website design

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Conducting E-Commerce
Seven Cs of Website Design
Context Content Communication

Connection
Commerce

Community

Customization

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Setting up for E-Marketing Options

forms of ads and Creating websites promotions Banner ads/tickers Placing online ads and Skyscrapers promotions Interstitials Creating or using Web Content sponsorships communities Microsites Viral marketing Using E-mail Future of online ads Mrs. Hiyashini Tanwani, SYBFM, CHM College 33
Online

Web Advertising

Banner ads: allows for more targeted advertising

Pop-up ads: pop-under ads are displayed in a separate browser window beneath your main browser window and remain there until you close them

This is a pop-up ad
Click here to close me

Skyscrapers: An advertisement on a Web site that is vertically oriented on the page and larger than the typical banner ad
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Web Advertising

Interstitials: are usually full-page ads displayed while a user is in

transit from one page to another, triggered by code included in the link

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Mrs. Hiyashini Tanwani, SYBFM, CHM College

Setting up for E-Marketing Options

communities allow Creating websites members with special interests to exchange views Placing online ads and Social communities promotions Work-related Creating or using Web communities communities Marketers find well-defined demographics and shared Using E-mail interests useful when marketing Mrs. Hiyashini Tanwani, SYBFM, CHM College 36
Web

Setting up for E-Marketing Options

Creating Placing

websites

E-mail

marketing

online ads and promotions Creating or using Web communities

Using

E-mail

Key tool for B2B and B2C marketing Clutter is a problem Enriched forms of e-mail attempt to break through clutter Spam is a problem 37

Mrs. Hiyashini Tanwani, SYBFM, CHM College

Benefits of E-commerce
To consumers: 24/7 access, more choices, price comparisons, improved delivery, competition To organizations: International marketplace (global reach), cost savings, customization, reduced inventories, digitization of products/services To society: flexible working practices, connects people, delivery of public services

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Benefits to Consumers
Convenience Buying is easy and private Provides greater product access and selection Provides access to comparative information Buying is interactive and immediate
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Benefits to Organizations
Powerful tool for building customer relationships Can reduce costs Can increase speed and efficiency Offers greater flexibility in offers and programs Is a truly global medium
Mrs. Hiyashini Tanwani, SYBFM, CHM College

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Benefits to Society
More individuals can work from home Benefits less affluent people Third world countries gain access Facilitates delivery of public services

Mrs. Hiyashini Tanwani, SYBFM, CHM College

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