BUSINESSTO

CONSUMER

Types of E-commerceClassified by nature of market relationshipBusiness-to-Consumer (B2C)Business-to-Business (B2B)Consumer-to-Consumer (C2C)

Classified by type of technology usedPeer-to-Peer (P2P)Mobile commerce (M-commerce)

Slide 1-3

Major Types of E-commerce

Business to Consumer CommerceBusiness-to-consumer electronic commerce (B2C) is a

form of electronic commerce in which products or services are sold from a firm to a consumer.

B2C e-commerce includes retail sales, often called e-retail (or e-tail) and other online purchases such as airline tickets, entertainment venue tickets, hotel rooms etc.

Electronic commerce on the Internet between businesses and consumers is accelerating the impact of information technology on consumer behavior , business processes and markets.

Technology is transforming consumer choices, which

in turn transform the dynamics of the marketplace and organizations themselves.

Business to Consumer Commerce

The interrelationship among e-commerce, consumer behavior, business processes and competition.

E-Commerce Technologies

Consumer Behavior and

Choice

Business processes and marketplace competition

Technology provides access to a variety of products and services.

Consumer choice dictates the marketing, distribution, and production of products and services.

Need to cut costs -drives the need for improved technology.

Classifications of B2C E-Commerce Direct Sellers

Companies that provide products or services directly to customers are called direct sellers. These types of B2C companies are the most well-known. There are two types of direct sellers: e-tailers and manufacturers.

E-tailers:

Upon receiving an order, the e-tailer ships products directly to the consumer or to a wholesaler or manufacturer for delivery. Example: Amazon.com 

Manufacturers:

The manufacturer sells directly to consumers via the internet. The goal is to remove intermediaries, through a process called disintermediation, and to establish direct customer relationships. Disintermediation is not a new idea as catalog companies have been utilizing this method for years. Example: Dell.com 

Classifications of B2C E-Commerce (cont.)

Online Intermediaries

Online intermediaries are companies that facilitate transactions between buyers and sellers and receive a percentage of the transaction’s value. These firms make up the largest group of B2C companies today. There are two types of online intermediaries: brokers and infomediaries.

Brokers

A broker is a company that facilitates transactions between buyers and sellers.

InfomediariesAn infomediary is a firm that acts as a filter between companies and consumers. Individuals provide infomediaries with personal information and in turn receive targeted ads. Companies pay these infomediaries for the information that they collect.

Advantages of B2C E-commerce

Inexpensive cost, big opportunities- once on the internet, opportunities are immense as companies can market their product to the whole world without much additional cost.

Globalization- Internet is accessed by millions of people around the world, and definitely they are all potential customers.

Reduced operational costs-Cutting down paper costs, customer support cost, and other processing costs.

Shopping can be faster and more convenient.Offerings and prices can change immediately.Call centers can be integrated with the website.

According to Bidgoli (2002, p.59) there are Five major activities involved in conducting B2C E-Commerce.

1.Information sharing: A B2C E-Commerce model may use some or all of the following applications and technologies to share information with customers:

Company Web site

Online catalogs

E-mail

Online advertisements

Message board system

Newsgroups and discussion groups

2.Ordering: A customer may use electronic forms similar to paper forms or e-mail to order a product or service.

3.Payment: There are a variety of options. These include:

Credit cards

Electronic cheques

Digital cash

4.Fulfillment: The fulfillment function could be very complex depending upon the delivery of

physical products (books, videos and CD's) or digital products (software, music, electronic documents). Fulfillment is responsible for physically delivering the product or service from the merchant to the customer.

5.Service and support: Is more important in E-Commerce than traditional business because E-Commerce

companies lack a traditional physical presence and need other ways to maintain current customers.

Examples include:

E-mail confirmationPeriodic news flashOnline surveysHelp deskGuaranteed secure transactions

Challenges Faced by B2C E-Commerce

The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive.

In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult.

Retailing on the WebA basic fact of Internet retailing is that all web sites

are created equal as far as the “location” imperative for success in retailing is concerned. No site is any closer to its customers. This makes it vital that businesses find ways to keep customers coming back to their stores.

Retailing on the WebThe key to this goal is to optimize factors such as

Performance and Service efficiency, Personalization, Socialization, The look and feel of the site, Offering incentives to purchase, and Security.

PersonalizationPersonalizing customers shopping experience

encourages them to make return visits. Many sites register customers by a personal interest

profile. Then when customers returns, they are welcomed and guided just to those parts of a site that they are interested in. some sites automatically record details of customers visits and build similar user interest profiles.

Performance and Service EfficiencyPeople don’t want to be kept waiting when browsing,

selecting, or paying for products in an electronic store. A site must be efficiently designed for ease of access, shopping and buying, with sufficient server power and telecommunications capacity.

Marketing, ordering, and customer service processes must also be friendly and helpful, as well as quick and easy.

SocializationGiving online customers with similar interests a

feeling of belonging to a unique group of like-minded individuals helps build customer loyalty and value.

Customer discussion forums.Chat roomsBulletin board systems Cross-links to related web sites and newsgroups.

Look and FeelWeb sites can offer an attractive virtual storefront.This may range from providing an exciting shopping

experience with audio, motion and striking graphics, to a more traditional look and feel

IncentivesWeb stores must offer shoppers incentives to buy

and return. e.g. Coupons, discounts, special offers, and

vouchers for other web services.Some site provide with an electronic wallet where

you can accumulate coupons for future use.

Security and ReliabilityMake customers feel confident that their credit card,

personal information, and details of their transactions are secure from unauthorized use.

Websites that are engaged in (B2C) e-commerce

Amazon.com, CompUSA.com, Travelocity.doc, hotels.com, chow.net, rediff.com, jaldi.com, indiatimes.com, indiaballs.com,