me project e-commerce- epgdim 14

PROJECT REPORTon

“E-Commerce”In fulfillment of the requirements for

Executive Post Graduate Diploma in Industrial Marketing(2012-2014)

UNDER THE GUIDENCE OF:Dr. Pratap C. Mohanty

(M.E. Faculty)

SUBMITTED TO: SUBMITTED BY:

Prof.Dr. Pratap C. Mohanty Hitesh Bharti- Roll No. 24

INDIAN INSTITUTE OF FOREIGN TRADE(DEEMED UNIVERSITY)

B-21, QUTAB INSTITUTIONAL AREA,IIFT BHAWAN,

NEW DELHI - 110016www.iift.edu

E Commerce Project, Group 2, EPGDIM 14

http://www.iift.edu/

Acknowledgement

We would like to extend our special gratitude to our professor, Dr. Pratap C. Mohanty, for his tremendous support and guidance all through the first Semester of EPGDIM 2014. We would like to thank him once again for his dedication and commitment that ensured all our concepts were cleared. We would not have been able to finish this project without his guidance and encouragement.

Thank you very much Sir.

You have been the inspiration and support for us aspiring ‘Marketers’.


Table of Contents

S No. Contents Page Number1 Objectives 5

2 Introduction 5

3 E Commerce History 7

4 Types of E Commerce 11

5 E-Commerce from the Buyer’s Perspective 10

6 E-Commerce from the Seller’s Perspective 11

7 Benefits and Challenges of E-Commerce 13

8 E Commerce Applications 14

9 E Commerce Security Issues 24

18 Conclusion 25

19 Bibliography 26


E-commerce as Marketing Communications

Objectives of the Project:

To define e-commerce and understand its role as a transaction processing system

To list the three types of e-commerce, and explain how e-commerce supports the stages of the buying process and methods of marketing and selling

To discuss several examples of e-commerce applications and services To Define m-commerce, and describe several m-commerce services To list the components of an e-commerce system, and explain how they function

together to provide e-commerce services.

Introduction:

Electronic commerce (e-commerce)Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service is conducted over electronic systems such as the Internet and other computer networks. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, processing, electronic (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices social media, and telephones as well.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions.


E-commerce can be divided into:

E-tailing or "virtual storefronts" on websites with online catalogs, sometimes

gathered into a "virtual mall"

The gathering and use of demographic data through Web contacts and social

media

Electronic Data Interchange (EDI), the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospective and established

customers (for example, with newsletters)

Business-to-business buying and selling

The security of business transactions

Figure 1 : Top 10 E commerce development in the past decade

The Above figure gives a glimpse of the Development of E Commerce as an Industry. Various players all over the world are in the fight for that dominant position.

A lot of Online trading or online Supermarkets have evolved with the time, these companies include a wide range of products and services in their portfolio ranging from household to Kids section to Kitchen Section to apparels to etc etc.


http://en.wikipedia.org/wiki/Business-to-business

Figure 2: U.S E commerce values in Billion Dollars

The Above Figure denotes the amount of market share (U.S markets) e commerce industry has over the period of years.

E-Commerce History• EDI

– Uses private communications networks (VANs) to transmit standardized transaction data between business partners and suppliers

• Automating transactions using EDI

– Drastically reduced the amount of paperwork and the need for human intervention

• Internet

Provided the ideal platform for conducting EDI transactions


Figure 3: E-Commerce History

Transaction Processing

• Transaction

– An exchange involving goods or services

• Transaction processing system (TPS)

– Information system used to support and record transactions such as paying for products or paying an employee (e.g. payroll system that calculates an employee’s pay and cuts a check)

– transaction processing systems share a common set of activities called the transaction processing cycle

• Batch processing

– Transactions are collected over time and processed together in batches

– useful in situations where transactions take place away from the computer system

• Online transaction processing

– Takes place at the point of sale

Critical to time-sensitive transactions such as selling concert tickets and making flight reservations


The Transaction Processing Cycle

• Data collection

– The process of capturing transaction related data

• Data editing

– Checking the validity of data entered

• Data correction

– Implemented if an error is found in the entered data

• Data manipulation

– Processing transaction data

• Data storage

– Altering databases to reflect the transaction

• Data output

– Receipts, picking lists, and other documents


Figure 4 : Transaction Processing System

Different Transaction Processing for Different Needs

• Order processing system

– Supports the sales of goods or services to customers

– Arranges for shipment of products

• Purchasing system

– Supports the purchase of goods and raw materials from suppliers


Types of E-Commerce

• Business-to-consumer e-commerce (B2C)

– Connects individual consumers with sellers , cutting out the middleman

– E.g. Amazon.com

• Business-to-business e-commerce (B2B)

– Supports business transactions on across private networks, the Internet, and the Web

• Consumer-to-consumer e-commerce (C2C)

– Connects individual sellers with people shopping for used items

– E.g. ebay.com

E-Commerce from the Buyer’s Perspective

• Process of buying or acquiring goods or services

– Realizing a need

– Researching a product

– Selecting a vendor

– Providing payment

– Accepting delivery

– Using product support

Consumer review Web Sites like Epions.com help shopper’s avoid purchasing mistake and pressure manufacturers to produce better products.


E-Commerce from the Seller’s Perspective

• Sellers business practices

– Market research to identify customer needs

– Manufacturing products or supplying services that meet customer needs

– Marketing and advertising to make customers aware of available products and services

• Sellers business practices

– Providing a method for acquiring payments

– Making arrangements for delivery of the product

– Providing after-sales support

• Supply chain management

– From the seller’s perspective, the process of producing and selling goods

– Involves three areas of focus: demand planning, supply planning, and demand fulfillment, Demand fulfillment is a process of getting the product or service to the customer


Figure 5: Supply Chain Management

Figure 6: E Commerce from the seller’s point of view


Benefits and Challenges of E-Commerce1. Buyers enjoy the convenience of shopping from their desktop

2. B2C e-commerce

a. Levels the playing field between large and small businesses

3. Challenges

a. Established businesses must alter systems and business practices

b. Security, privacy, reliability: E-commerce can survive only if all involved can trust the system

c. Social concerns

Figure 7: E Commerce can dramatically extend a business’s market


E-Commerce ApplicationsThe Major applications of e-commerce are listed below:

• E-Commerce

– Playing an increasingly important role in our personal and professional lives

– Allows us to discover new and interesting products

– Allows us to find better deals

– Used to monitor bank accounts and transfer electronic funds

Retail E-Commerce: Shopping Online

E-tailing provides customers with

– Product information

– The ability to comparison shop

E-tailing options

– Set up an electronic storefront

– Lease space in a cybermall

• Web site that allows users to browse through a wide variety of products offered by several different retailers

The mySimon site provides the product price quotations from numerous e-retailers to help find out best deal on many different products


Figure 9: The mySimon site provides the product price quotations from numerous e-retailers to help find out best deal on many different products


Online Clearing Houses, Web Auctions and Marketplaces

• Provide a platform for businesses and individuals to sell their products and belongings

– www.ubid.com

• Provides a method for manufacturers to liquidate stock and consumers to find a good deal

– eBay.com

• Most popular auction/marketplace

B2B Global Supply Management and Electronic Exchanges

• Global supply management (GSM)

– Businesses can find the best deals for raw materials and supplies needed to manufacture their products on the global market

• Electronic exchange

– an industry-specific Web resource created to provide a convenient centralized platform for B2B e-commerce among manufacturers, suppliers, and customers

Promotes cooperation between competing companies

Marketing

• Web is used for

– Unsolicited advertising

• Banner: A rectangular area embedded in the Web page content for advertising, often across the top of the page

– Access to product information through business Web sites

• Get better deals and make informed decisions

– Market research

• Traditionally done by interviewing customers


• Market segmentation divides customer opinions based on various criteria

• E-commerce allows market segmentation to take place on an individual level

Figure 10: Consumer Reports advertise unbiased product testing and reviews. Many consumers find it worth the subscription fee to access its vehicle rating.

Banking, Finance, and Investment

• Online banking provides

– Convenient access to bank balance information

– Ability to transfer funds, pay bills, and obtain account histories

• Electronic funds transfer

– Popular for paying bills and receiving paychecks


• Online brokerages

– Able to execute trades fast, within seconds

Mobile Commerce (M- Commerce)

• A form of e-commerce

• Takes place over wireless mobile devices such as

– Handheld computers and cell phones

– takes place in emerging technologies such as dashtop computers embedded in automobile dashboards

• Presents unique opportunities and challenges

Figure 11: Most online services provide a simple form to buy and sell stocks


M-Commerce Technology

• Technologies and standards

– Wireless Application Protocol (WAP)

• a communication standard used by developers to create m-commerce applications

– Wireless Markup Language (WML)

– Infrared or Bluetooth wireless networking technology

• Near Field Communications (NFC)

• Open Mobile Alliance (OMA)

– Hundreds of mobile operators, device and network suppliers and companies have joined together to create standards and interoperability between mobile devices

Types of M-Commerce Applications

• Methods for delivering m-commerce services

– Directly from cell phone service providers

– Via mobile Internet or Web applications

• Location-based m-commerce applications

– Using Short Message Service (SMS) text messaging or Multimedia Messaging Service (MMS)

– Using short-range wireless technology, such as infrared

• Proximity payment system

E-Commerce Implementation

• Implementing e-commerce

– Requires large investment and expertise

• E-Commerce host

– A company that takes on some or all of the responsibility of setting up and maintaining an e-commerce system for a business or organization

Infrastructure


• E-Commerce requires significant infrastructure changes

• Businesses must have employees who are technically savvy

• B2C e-commerce

– Often connects manufacturers directly with consumers, cutting out the middleman

– Requires shipping individual products directly to consumers

Figure 12: Office Depot: A Large e-commerce system


Building Traffic

• Marketing

– Online advertising methods include banner ads, pop-up ads, and e-mail

– market segmentation: customer opinions are divided into demographic variables such as race, gender, income, education, and age to determine which segment a product appeals to most

– Offline advertising methods include magazines, newspapers, radio, and television

Electronic Payment System

• proximity payment system

– allows customers to transfer funds wirelessly between their mobile device and a point-of-sale terminal

• Electronic cash (e-cash or digital cash)

– Provides a private and secure method of transferring funds from a bank account or credit card to online vendors or individuals

– PayPal

• Best-known e-cash provider

• E-cash benefits

– Privacy - hides account information from vendors

– Convenient if seller cannot process a credit card

• Smartcards

– Credit cards with embedded microchips that can store and process data and can be used as electronic wallets


Figure 12: Online Credit card Transaction

E-cash systems such as PayPal allow users to purchase product online without the vendor with a credit card number. You can also use e-cash to transfer funds between individuals.


Figure 13: Pay pal Service

International Markets

• Internet users of all nationalities will have access to your products

• First consideration of a global e-commerce strategy

– Visitors of all nationalities and cultures should feel comfortable while viewing your Web content

• Costly approach

– Create multiple versions of your Web site, each in a different language

• Once the international market is won over, e-tailer faces other challenges

– Foreign Currency, shipping, national taxes


E-Commerce Security IssuesSecurity is another important aspect which was not a concern in an offline commercial market but since the number of threats, virus, hackers have grown so the protection of e-commerce platforms have just changed and new software’s are used with firewall protection to completely safeguard the security of the commerce online. The transaction and payment systems too are secured and governed by cyber law and privacy as per company guidelines. The data security is difficult to control on the internet. As there are no specific cyber laws and varies from one state to another so implementation of data tasks can cause private data hampering.

• There are significant privacy and security concerns

– Public network

– No buyer or seller identity verification

– Hacker attacks

E-Commerce Security Issues

• Digital certificate

– A type of electronic business card

– Attached to Internet transaction data

– Verifies the sender of the data

– Provided by certification authorities

– Encryption

• Uses high-level mathematical functions and computer algorithms to transform data so that it is unintelligible to all but the intended recipient

• Securing data in transit

– Secure Sockets Layer (SSL)

• Digital certificates combined allows for encrypted communications to occur between Web browser and Web server

– Transport Layer Security (TLS)

• A URL associated with this begins with https• Allow for encrypted communication to occur between browsers and servers• Secures usernames, passwords, credit card information


Business Resumption Planning

• Great pains are taken to ensure that transaction processing systems remain in working order

• Business resumption planning (BRP)

– Takes into account every possible disaster and provides courses of action to minimize negative effects

– The goal is to protect data and keep key systems operating until order is resume

Conclusion:With the study conducted with this project, we came to understand what actually is e-commerce and what is its importance in our lives, in today`s world where no one has time, e commerce proves to be the best solution as it provides ease of transaction and minimal engagement time, because of these two major advantages e-commerce has made its footprints strong in the world economy.

E-commerce has taken the technology resource by storm by enabling the business to grow wide and reach further audiences. E-commerce have made global communication better and fused the energies in the right direction. After several years technology has made the world come close and exchange trade secrets. E-commerce has surpassed the geographical boundaries.

Decrease in operational cost:

E-commerce is breath taking which has lead significant impact on every process. The operation cost earlier which involved many systems, documents and all is free from materials and it has now only been limited to Intel mini case which stands out as perfect e-commerce gadget.

Customization is another aspect which has been affected greatly as now personalization after e-commerce is just at your finger clicks and no one connecting emotionally to someone is just part which has changed the thought process of buying and selling of products on the web. Earlier e-commerce during the emergence was not safe but now has shredded new aspects. E-commerce has really improved sales, organized the company process and helped in drawing fruitful results.


There are inventory storage problems, stack issues and calculation problems which were pertinent before when only the manually valuation of things was done. The e-commerce solutions have reduced all these shortcomings and made processing, distribution of all expensive goods from electronics to other valuables easy.

The listing is done on the website portals of the order released. The components use has now been counted and authentication of every step is quite possible which was unlike earlier. There are stocks which are obsolete have taken the place in listing and status is always being updated. E-commerce solutions have been are not only part of the technology sector but finance, marketing and many allied professions today. Life has changed with e-commerce solutions as every step using online methods are well guarded. Every company has so many products the technology oriented e-commerce trade has really simplified various aspects including the features and characteristics of customer products. E-commerce is climbing the popularity charts rapidly.

E-commerce is now new to the entire world but the increase in its dynamics has certainly made it the best mode of communication and. E- commerce solution also have affordable rather cheap telecommunications cost. Internet communication is quite cheap and reliable too when compared to VAN’s. The internet does not comprise of leasing the cables unlike other communication media. The laying down of cables is difficult rather sending any fax, mail, message or the direct calling.

It is because of e-commerce the world trading is possible at such extensive level and people have come closer.

Bibliography: Internet Online e commerce websites Kotler, P., Wong, V., Saunders, J. and Armstrong, G. (2005),

"Principles of Marketing," 4th European ed., Pearson Education Limited, Essex.
