Download - Chapter 5 and Module B
Chapter 5 and Module BChapter 5 and Module B
ELECTRONIC COMMERCE: ELECTRONIC COMMERCE: Strategies For The New Strategies For The New
Economy Economy &&
THE WORLD WIDE WEB AND THE WORLD WIDE WEB AND THE INTERNETTHE INTERNET
WWW and the InternetWWW and the Internet
World Wide WebWorld Wide Web InternetInternet Web siteWeb site Web pageWeb page URL (uniform resource locator)URL (uniform resource locator) Link (hyperlink)Link (hyperlink) Top-level domainTop-level domain
Understanding AddressesUnderstanding Addresses
Consider Consider www.uts.edu.au (University of (University of Technology in Sydney)Technology in Sydney) http:// - starts most addresses but may be http:// - starts most addresses but may be
left offleft off www – World Wide Webwww – World Wide Web uts – the organizationuts – the organization edu – edu – top-level domaintop-level domain (organization type) (organization type) au – country location (if none, then current au – country location (if none, then current
country) country)
Top-Level DomainsTop-Level Domains
com – commercial or com – commercial or for-profit businessfor-profit business
coop – cooperativecoop – cooperative edu – educational edu – educational
institutioninstitution gov – U.S. government gov – U.S. government
agencyagency mil – U.S. military mil – U.S. military
organizationorganization net – Internet net – Internet
administrative administrative organizationorganization
int – International int – International treaties organizationtreaties organization
info – general info – general informationinformation
biz – businessbiz – business museum – accredited museum – accredited
museummuseum name – personalname – personal pro – Accountant, pro – Accountant,
doctor, lawyer, etc.doctor, lawyer, etc. Many moreMany more
WEB 2.0WEB 2.0 Web 2.0 (Live Web)Web 2.0 (Live Web) – second generation of the – second generation of the
Web; focuses on online collaboration, users as Web; focuses on online collaboration, users as both creators and modifiers of content, dynamic both creators and modifiers of content, dynamic and customized information feeds, etc.and customized information feeds, etc. WikisWikis Social networking sitesSocial networking sites BlogsBlogs RSS feedsRSS feeds PodcastingPodcasting Many othersMany others
The Internet BackboneThe Internet Backbone Network access point (NAP)Network access point (NAP)
Network service provider (NSP)Network service provider (NSP)
Internet service provider (ISP)Internet service provider (ISP)
INTERNET TECHNOLOGIESINTERNET TECHNOLOGIES
Internet backboneInternet backbone – major set of – major set of computer connections on Internetcomputer connections on Internet
Internet ServersInternet Servers
Internet ServersInternet Servers
Internet server computerInternet server computer – provides – provides information and services on the Internetinformation and services on the Internet
Web serverWeb server – provides information and – provides information and services on the Webservices on the Web
Mail serverMail server – provides e-mail services – provides e-mail services ftp (file transfer protocol) serverftp (file transfer protocol) server – –
maintains files you downloadmaintains files you download IRC (Internet Relay Chat) serverIRC (Internet Relay Chat) server – –
supports discussion groups and chat rooms supports discussion groups and chat rooms
Communications ProtocolsCommunications Protocols Information moves on the Internet Information moves on the Internet
according to communications according to communications protocolsprotocols
Communications protocol Communications protocol (protocol)(protocol) – set of rules that every – set of rules that every computer follows to transfer computer follows to transfer informationinformation
Most widely usedMost widely used TCP/IPTCP/IP httphttp ftpftp
Telecommunications Telecommunications HardwareHardware
To access and use the Web, you also To access and use the Web, you also need hardwareneed hardware
Mainly, some sort of modemMainly, some sort of modem TelephoneTelephone DSLDSL CableCable SatelliteSatellite
WHAT’S REPLACING THE DAY AFTER WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING THANKSGIVING FOR SHOPPING
SALES?SALES?Black Friday Black Friday is traditionally a big day is traditionally a big day for retailersfor retailers
But Black Friday may soon be But Black Friday may soon be replaced by Cyber Mondayreplaced by Cyber Monday
Cyber Monday Cyber Monday is the Monday after is the Monday after Thanksgiving when people go back to Thanksgiving when people go back to work and buy products onlinework and buy products online
WHAT’S REPLACING THE DAY AFTER WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING THANKSGIVING FOR SHOPPING
SALES?SALES? The “e” in e-commerce changes a lot of The “e” in e-commerce changes a lot of
thingsthings For example, Black Friday is a brick-and-For example, Black Friday is a brick-and-
mortar concept; Cyber Monday is an “e” mortar concept; Cyber Monday is an “e” (electronic) concept(electronic) concept
No matter, any kind of commerce is still No matter, any kind of commerce is still just commercejust commerce
And all businesses must execute well to And all businesses must execute well to survive and thrivesurvive and thrive
Electronic CommerceElectronic Commerce E-commerce is changing everythingE-commerce is changing everything
Electronic commerce (e-commerce)Electronic commerce (e-commerce)
Electronic business (e-business)Electronic business (e-business)
Mobile commerce (m-commerce)Mobile commerce (m-commerce)
Types of BusinessesTypes of Businesses
Brick-and-MortarBrick-and-Mortar
Click-and-Mortar (or Bricks-and-Click-and-Mortar (or Bricks-and-Clicks)Clicks)
Dot-Coms (or Pure Plays)Dot-Coms (or Pure Plays)
E-COMMERCE BUSINESS E-COMMERCE BUSINESS MODELSMODELS
B2B E-CommerceB2B E-Commerce
Business to Business (B2B) e-Business to Business (B2B) e-commercecommerce Where all the e-commerce money isWhere all the e-commerce money is Basically, it’s about businesses doing Basically, it’s about businesses doing
business with other businessesbusiness with other businesses Supply chain management (from Chapter Supply chain management (from Chapter
2) is a big part of B2B e-commerce2) is a big part of B2B e-commerce
B2C E-CommerceB2C E-Commerce
Business to Consumer (B2C) e-Business to Consumer (B2C) e-commerce commerce B2C is the glitzy e-commerce like iTunes, B2C is the glitzy e-commerce like iTunes,
eBay, etceBay, etc
C2B E-CommerceC2B E-CommerceConsumer to Business (C2B) e-Consumer to Business (C2B) e-commerce commerce True economic inversion of the B2C modelTrue economic inversion of the B2C model Fotolia is a good example (Fotolia is a good example (www.fotolia.com)) There you can post photos and videos and There you can post photos and videos and
businesses will pay you a royalty to use them (if businesses will pay you a royalty to use them (if they like what you offer)they like what you offer)
You can also advertise businesses on your You can also advertise businesses on your personal Web site (called an personal Web site (called an affiliate programaffiliate program) ) and receive monies for visitors who jump from and receive monies for visitors who jump from your site to the business’ Web sitesyour site to the business’ Web sites
C2C E-CommerceC2C E-Commerce
Consumer to Consumer (C2C) e-Consumer to Consumer (C2C) e-commercecommerce You selling to another person (or the You selling to another person (or the
reverse)reverse) Usually occurs through an intermediary Usually occurs through an intermediary
such as eBaysuch as eBay
B2G E-CommerceB2G E-Commerce
Business to Government (B2G) e-Business to Government (B2G) e-commercecommerce Lockheed providing products and services to Lockheed providing products and services to
DoDDoD Fairly large e-commerce model in terms of Fairly large e-commerce model in terms of
revenuerevenue Most U.S. government entities (for sure at Most U.S. government entities (for sure at
the federal level) won’t do business with the federal level) won’t do business with your business if you can’t do it electronicallyyour business if you can’t do it electronically
C2G E-CommerceC2G E-Commerce
Consumer to Government (C2G) Consumer to Government (C2G) e-commercee-commerce You selling something to the governmentYou selling something to the government This market is quite smallThis market is quite small Most times, “you” must register as a Most times, “you” must register as a
business before selling something to the business before selling something to the government, which would then become government, which would then become B2G e-commerceB2G e-commerce
G2B E-CommerceG2B E-Commerce
Government to Business (G2B) e-Government to Business (G2B) e-commercecommerce SBA providing surety guarantees, disaster SBA providing surety guarantees, disaster
assistance, etc to small businessesassistance, etc to small businesses TSA holding auctions and selling off TSA holding auctions and selling off
confiscated items (most times, you must be confiscated items (most times, you must be a “business” to participate in these auctions)a “business” to participate in these auctions)
U.S. Geological Survey (DOI) selling detailed U.S. Geological Survey (DOI) selling detailed survey data to businessessurvey data to businesses
G2C E-CommerceG2C E-Commerce
Government to Consumer (G2C) Government to Consumer (G2C) e-commercee-commerce Does not fit well at all within the Does not fit well at all within the
traditional supply-and-demand e-traditional supply-and-demand e-commerce notioncommerce notion
Paying taxes, registering vehicles, etcPaying taxes, registering vehicles, etc
G2G E-CommerceG2G E-Commerce
Government to Government Government to Government (G2G) e-commerce(G2G) e-commerce Mainly about information sharing, not Mainly about information sharing, not
commercecommerce
E-COMMERCE RULES TO E-COMMERCE RULES TO LIVE BYLIVE BY
1.1. Understand your business, Understand your business, products, services, and customersproducts, services, and customers
2.2. Find customers and establish Find customers and establish relationshipsrelationships
3.3. Move money easily and securelyMove money easily and securely
1. UNDERSTAND YOUR BUSINESS, 1. UNDERSTAND YOUR BUSINESS, PRODUCTS, SERVICES, & PRODUCTS, SERVICES, &
CUSTOMERSCUSTOMERS To be successful, you must…To be successful, you must…
Define your products and servicesDefine your products and services Define your target customersDefine your target customers
B2B (other businesses)B2B (other businesses) B2C (individuals)B2C (individuals)
Define your customers perception of the Define your customers perception of the value of your products and servicesvalue of your products and services
Who Are Your Customers?Who Are Your Customers?
Business to BusinessBusiness to Business Other businessesOther businesses
Business to ConsumerBusiness to Consumer IndividualsIndividuals
Each is different and has different Each is different and has different needs and wantsneeds and wants
B2C: Convenience Versus B2C: Convenience Versus SpecialtySpecialty
ConvenienceConvenience Lower pricedLower priced Purchased frequentlyPurchased frequently Example: common food itemsExample: common food items
SpecialtySpecialty Higher pricedHigher priced Purchased less frequentlyPurchased less frequently Example: Stereos, computersExample: Stereos, computers
B2C: Commoditylike and B2C: Commoditylike and DigitalDigital
CommoditylikeCommoditylike Same no matter where you purchase itSame no matter where you purchase it Examples: books, music, moviesExamples: books, music, movies Price and ease of ordering are importantPrice and ease of ordering are important
DigitalDigital Purchased and delivered over the InternetPurchased and delivered over the Internet Best product type for B2C e-commerceBest product type for B2C e-commerce Examples: Music, softwareExamples: Music, software
B2C: Mass CustomizationB2C: Mass Customization
Mass customizationMass customization – the ability of – the ability of an organization to give its customers an organization to give its customers the opportunity to tailor its products the opportunity to tailor its products or servicesor services Dell – customized computer purchasesDell – customized computer purchases Apple iTunes – only the music you want Apple iTunes – only the music you want
(not necessarily the whole album) (not necessarily the whole album)
B2B: MRO Versus DirectB2B: MRO Versus Direct
Maintenance, repair, and Maintenance, repair, and operations (MRO) materials operations (MRO) materials (indirect materials)(indirect materials) – materials – materials necessary for running a company but necessary for running a company but do not relate to the company’s primary do not relate to the company’s primary business activitiesbusiness activities Similar to convenience items in B2CSimilar to convenience items in B2C Office supplies, repair parts, lubricating oilsOffice supplies, repair parts, lubricating oils
B2B: Horizontal Versus B2B: Horizontal Versus VerticalVertical
B2B e-commerce takes advantage of e-B2B e-commerce takes advantage of e-marketplacesmarketplaces
Electronic marketplaceElectronic marketplace (e-(e-marketplace)marketplace) – interactive business – interactive business providing a central market where multiple providing a central market where multiple buyers and sellers can engage in e-buyers and sellers can engage in e-commercecommerce Horizontal e-marketplacesHorizontal e-marketplaces Vertical e-marketplacesVertical e-marketplaces
2. FIND CUSTOMERS AND 2. FIND CUSTOMERS AND ESTABLISH RELATIONSHIPSESTABLISH RELATIONSHIPS
You must first find customersYou must first find customers Then establish relationshipsThen establish relationships Otherwise, you can’t make a saleOtherwise, you can’t make a sale B2C and B2B techniques are very B2C and B2B techniques are very
differentdifferent
B2C Marketing Mix ToolsB2C Marketing Mix Tools
Registering with search enginesRegistering with search enginesOnline adsOnline adsViral marketingViral marketingAffiliate programsAffiliate programs
Registering with Search Registering with Search EnginesEngines
Some search engines will list your site Some search engines will list your site for freefor free
Others charge a feeOthers charge a fee For an additional fee, your site can For an additional fee, your site can
appear at top of a search list (every appear at top of a search list (every time)time)
Online AdsOnline Ads
Online ads (banner ads)Online ads (banner ads) – small – small advertisements that appear on other advertisements that appear on other sitessites
Two variations are:Two variations are: Pop-up adPop-up ad – small Web page – small Web page
advertisement that appears on your screen advertisement that appears on your screen outside the current Web siteoutside the current Web site
Pop-under adPop-under ad – pop-up ad you do not see – pop-up ad you do not see until you close your current browser until you close your current browser windowwindow
Viral MarketingViral Marketing
Viral marketingViral marketing
Blue Mountain Arts (Blue Mountain Arts (www.bluemountain.com))
Send a cardSend a card Card has link so the other person can Card has link so the other person can
send you a card backsend you a card back
Affiliate ProgramsAffiliate Programs
Affiliate programAffiliate program
If viewers buy at the second site, the If viewers buy at the second site, the second site pays a small fee to the first second site pays a small fee to the first sitesite
Usually a percentage of the saleUsually a percentage of the sale Click-throughClick-through Conversion rateConversion rate
B2B MarketingB2B Marketing Much more personalMuch more personal Not usually done with generic ads Not usually done with generic ads
designed for mass distributiondesigned for mass distribution Often take place in e-marketplacesOften take place in e-marketplaces Once a contact is made, the Once a contact is made, the
relationship must be established; this relationship must be established; this often requires face-to-face meetingsoften requires face-to-face meetings
Must also integrate the IT systems to Must also integrate the IT systems to the supplier business and customer the supplier business and customer businessbusiness
3. MOVE MONEY EASILY 3. MOVE MONEY EASILY AND SECURELYAND SECURELY
In e-commerce, most money In e-commerce, most money moves electronicallymoves electronically
Security becomes very importantSecurity becomes very important
B2C Payment SystemsB2C Payment Systems
Credit cardsCredit cards Financial cybermediariesFinancial cybermediaries Electronic checksElectronic checks Electronic Bill Presentment and Electronic Bill Presentment and
PaymentPayment Smart cardsSmart cards
B2B Payment SystemsB2B Payment Systems
Business customers…Business customers… Make large purchasesMake large purchases Will not pay with credit card or Will not pay with credit card or
financial cybermediaryfinancial cybermediary Use financial EDIUse financial EDI Pay for many purchases at once Pay for many purchases at once
(perhaps the end of the month)(perhaps the end of the month)
B2B Payment SystemsB2B Payment Systems
Electronic data interchange (EDI)Electronic data interchange (EDI)
Financial EDIFinancial EDI
Security: The Pervading Security: The Pervading ConcernConcern
Security is very important when Security is very important when moving moneymoving money
Some security measures…Some security measures… EncryptionEncryption Secure Sockets LayersSecure Sockets Layers Secure Electronic TransactionsSecure Electronic Transactions Many, many othersMany, many others
E-BUSINESS TRENDSE-BUSINESS TRENDS
““E” is certainly changing many thingsE” is certainly changing many things Many trends in every part of your lifeMany trends in every part of your life Three important onesThree important ones
1.1. YouthYouth
2.2. M-commerceM-commerce
3.3. The Long TailThe Long Tail
E-Business Trend - YouthE-Business Trend - Youth Screenager Screenager – person who spends a lot – person who spends a lot
of time in front of a screen – TV, iPod, of time in front of a screen – TV, iPod, computer, cell phonecomputer, cell phone
Digital native Digital native – personal ushered into – personal ushered into this world alongside the digital revolutionthis world alongside the digital revolution
Most young people are screenagers and Most young people are screenagers and digital nativesdigital natives
They readily embrace technology and They readily embrace technology and therefore are most suited to running a therefore are most suited to running a business in the “e” worldbusiness in the “e” world
E-Business Trend – M-E-Business Trend – M-CommerceCommerce
M-commerceM-commerce – e-commerce – e-commerce conducted over a wireless deviceconducted over a wireless device
Mobility is key for the next generation Mobility is key for the next generation of e-commerce that will rely onof e-commerce that will rely on1.1. Knowing where we areKnowing where we are
2.2. Our ability to do anything from anywhereOur ability to do anything from anywhere
E-Business Trend – Long TailE-Business Trend – Long Tail
Long Tail Long Tail – first offered by Chris – first offered by Chris Anderson; explains e-commerce Anderson; explains e-commerce profitability in terms of a sales curveprofitability in terms of a sales curve
Brick-and-mortar businesses carry Brick-and-mortar businesses carry limited inventory, inventory that is limited inventory, inventory that is popularpopular
E-businesses can carry huge amounts E-businesses can carry huge amounts of “niche” inventory that may only sell of “niche” inventory that may only sell a couple of times a yeara couple of times a year