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Summary of the Electronic Commerce Life Cycle 111810

Summary of the Electronic Commerce Life Cycle 111810

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Published by Andy Marsiglia

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Published by: Andy Marsiglia on Nov 18, 2010
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Summary of theElectronic CommerceLife Cycle
 Andrew Marsiglia, PhD, CCP
 Electronic Commerce is the use of the Internet or non-traditional forms of electronic marketing betweena company and its customers, suppliers, or other business partners. Through e-commerce we can use aPC or smartphone to connect to the Internet and conduct business, manage email, purchase a plethoraof products, and acquire research information virtuallyanywhere in the world. This powerful capability isubiquitous and dependable but has had a problem- plagued growth that was overcome in only about thelast five years. E-commerce, however, has gained consumer trust and global usage, and businesses areinvesting heavily in its future. 
November 2010
Summary of the Electronic Commerce Life CycleExecutive Summary
Electronic Commerce is “The use of the Internet or non
-traditional forms of electronicmarketing
 between a company and its customers, suppliers, or other business partners”
(Ruppel,2003) p. 33. Electronic Commerce is also known as e-commerce or e-business but for thepurpose of this paper it will be referred to as e-commerce or EC. Through e-commerce we canuse a PC or smartphone to connect to the Internet and conduct business, manage email, purchasea plethora of products, and acquire research information virtually anywhere in the world. Thispowerful capability is ubiquitous and dependable but has had a problem-plagued growth that wasovercome in only about the last five years. E-commerce, however, has gained consumer trustand global usage, and businesses are investing heavily in its future.
Fundamental Considerations of Electronic Commerce
Electronic commerce is a relative recent phenomenon in the history of business with the termfirst appearing in business vocabulary in the 1970s (Wigand, 1997). EC became possible by theproliferation of inexpensive information technology (hereafter IT) devices and reliabletelecommunication systems but despite the new technology, businesses had to change their ideaof the retail business paradigm. Businesses had to realize that EC does not only have potential togenerate new business, but rather, it changes the point of purchase (Wigand, 1997).Some of the macro-level considerations that should be addressed before launching an ECproject, especially a retail project, is that customers need to trust the purchase mechanism orwebsite, there must be an adequate product or service mix, the shopping experience must beconvenient to customers, and there must be satisfaction with the purchase (Freedman, 1998).
Summary of EC Life Cycle, 2Trust is a particularly important issue because if customers feel that the EC system isunreliable or perceived to be too risky for monetary transactions, they will refrain from using it(Ruppel, 2003)
. As shown in Figure 1, the higher an EC system’s reliability and the lower the
perceived risk,
the higher the customer’s level of trust and the greater the success of the EC site.
 Figure 1
  Relationship of Reliability and Risk to Customer Trust 
In addition to having access to an electronic delivery system, businesses had to clearly definehow they planned to incorporate the new business channel into their existing operations. The ECdelivery system, whether based on telephony or Internet, had be designed relative to theorganization
s goals in order to ensure it interacted well with the way the organization was doingbusiness; i.e. form fits function (Jutla, 1999). Rupple (2003) suggested that the purposes of asuccessful
EC site are, “. .
. 1) promotion of product and service, 2) provision of data and
information, and 3) processing business transactions” p. 28. With these purposes in mind, the
successful EC site will satisfy the business need for electronically promoting a product,providing information, and providing appropriate transactions in a secure, reliable, andtrustworthy manner as presented in Figure 2.

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