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Q1 Explain the evolution of E-Commerce and M-Commerce.

The evolution of e-commerce is traced back to 1970’s with the emergence of internet. E-
commerce was developed for the business community in the early 1970s to facilitate processing
high volume and high value transactions electronically. Electronic Data Interchange (EDI) was the
first business-to- business (B2B) application. Subsequently, internet added a prodigious new
dimension to e-commerce. The power of the internet as a global access was realized with the arrival
of the World Wide Web (WWW) in 1994. Never in the history of mankind has a popular
innovation spread as fast as internet. United States (US) has been considered the leader in the
application of e-commerce.
The quick spread of internet in US can be gauzed from the fact that it took 16 years for
telephones to be used by a quarter of all US households and 133 years for the cell-phones to be so
widely used, but Internet has made similar penetration in less than 5 years.
By 2006, the digital economy has overtaken the traditional economy in U.S. So far only 8 per cent
of manufacturing sector in US is applying e-commerce and, thus, remaining 92 per cent have yet
to realise its benefits. Further, e-commerce in US is taking place more in the service-oriented
activities than the product-oriented ones. This is because of the fact that no two products are the
same. But, services have a commonality that makes maxim for more general applicable whether it
is hospitality or airlines, transport services, banking, reading of books and alike. After its fast debut
in US, e-commerce is rapidly spreading beyond US boundaries and is growing speedily global.
Numerous e-commerce success stories abound in Europe.

The origin of e-commerce in India coincides with the introduction of Internet connectivity in the
country in 1989. As such, e-commerce in India is in its infancy. Historically, Rediff-on-the-net,
one of India’s leading online services, set up India’s first e-commerce on August 13, 1998. Then,
India entered the age of e-commerce the day the government deregulated the Internet Service
Provider (ISP) policy in November 1998.

Since then, there is no looking back and the country is proliferating in Internet. The rate of growth
of penetration of Internet has been spectacular. It took radio 50 years to have 50 million owners.
Tele Vision (TV) 16 years and personal computers 17 years. But it has taken Internet only 4 years
to reach that figure after the invention of WWW and browsers.

Till now, Internet penetration in India is about 0.5 per cent of the population against 50 per cent in
Singapore. Nevertheless, India is fast emerging as the largest country for registering domain names
in the entire Asia-Pacific region. According to the latest dotcom index for the year up-to February
2000, India occupies 11th place in it after US. UK, Korea, Canada, France, Germany, Japan, China,
Spain and Italy.
Presently, India has nearly 35 ISPs in various stages of operations. Added to these are 187 more
ISPs granted licences. The popular ISPs already providing access to internet in the country are the
Videsh Sanchar Nigam Limited (VSNL), Mahanagar Telephone Nigam Limited (MTNL). Satyam
Online. BT Internet, Intel India, Max India, Quark, HCL Perot, Infosys, Future Divices and
Dishnet. Satyam Online, India’s largest ISP mega corporation got over 1, 15,000 subscribers across
the country.
As of March 31, 2000, there were 7.5 lakh Internet connections in the country with 3.2 million
Internet users. According to Forrester Research, over 27 million households in India will access
the Internet by 2003. National Association of Software and Service Companies (NASSCOM), the
apex body and Chamber of Commerce of India’s software-driven IT industry, has recently released
findings of its survey to evaluate the E-Commerce scenario in India. As per the findings of the
survey, the total volume of e-commerce transactions in India was about Rs. 131 crore in the year

Out of this volume, about Rs. 12 crore were contributed by retail Internet or business-to- consumer
transactions and about Rs. 119 crore were contributed by business-to- business (B2B) transactions.
The figure for the year 1999-2000 was estimated to reach Rs. 450 crore.

Here, it is significant to note that India’s experience in e-commerce transactions is compatible with
that of US and other countries where percentage share of B2B remained much larger than that of
Business-to-Customer (B2C). This implies that businesses are more willing and able than
individuals to use e-commerce technology.

This is attributed to the fact that in B2B transactions, both buyers and sellers are known to each
other and enjoy sufficient mutual trust. Added to it is that B2B transactions are relatively of higher
value in nature and companies trading on Internet offer very high and attractive cost-saving
options. But, such a situation is not obtainable in case of B2C transactions.

Very possibly, the same explains why e-commerce in this area has still not taken off. That this
trend is also expected to continue in future as well is indicated by a serious study forecasting B2B
transactions’ share of the order of 79 per cent of the total e-commerce business in India during the
next five years.

Another point worth mentioning is that the expansion of e-commerce in India, so far, has been
uneven concentrating in a few metropolitan cities, namely. Bangalore, Hyderabad, Mumbai and
Delhi. The common man residing in rural areas of the country is, however, still unaware of
happening in Information Technology (IT) sector.

Obviously, much progress in e-commerce cannot be achieved until the country’s vast rural sector
is not brought within the folds of internet. Hence, hitherto untouched rural sector by Internet so far
offers a great potential for e-commerce in India.

The former US President, Bill Clinton during his visit to India in March 2000 also hailed India’s
remarkable progress in IT sector and also remarked that India has the potential to become the
world’s largest economy using the power of Internet.

It is a matter of great satisfaction that today India is the fifth largest market in the world in terms
of purchasing power. About 8 per cent of India’s population has a per capita income exceeding
US$ 3,500 which is 80 million people. In nutshell, e-commerce has set in but much is yet to be
tapped in this respect in the country.
Mobile Commerce is the subset of e-commerce, which includes all e- commerce transactions,
carried out using a mobile (hand held) device. This paper deals with the relevance and potential
role that m-commerce can play in the development of business environment. Today, in India, there
are more than 76 cores mobile users available. It is also increasing day by day Therefore, mobile
commerce has very vital role in modern business. In the today s technology world, we can say that,
without mobile, we could not live comfortably. Similarly, in business, without mobile commerce,
it is impossible to survive in the competitive commerce world. Mobile commerce was born in 1997
when the first two mobile-phones enabled Coca Cola vending machines were installed in the
Helsinki area in Finland. The machines accepted payment via SMS text messages. The first mobile
phone-based banking service was launched in 1997 by Merita Bank of Finland, also using SMS.
In 1998, the first sales of digital content as downloads to mobile phones were made possible when
the first commercial downloadable ringtones were launched in Finland by Radiolinja. Two major
national commercial platforms for mobile commerce were launched in 1999: Smart Money in the
Philippines, and NTT DoCoMo's i-Mode Internet service in Japan. I-Mode offered a revolutionary
revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users paid for content, and
returned 91 percent to the content owner. Mobile-commerce-related services spread rapidly in
early 2000. Norway launched mobile parking payments. Austria offered train ticketing via mobile
device. Japan offered mobile purchases of airline tickets. The first conference dedicated to mobile
commerce was held in London in July 2001. The first book to cover mobile commerce was Tomi
Ahonen's M-profits in 2002. The first university short course to discuss mobile commerce was
held at the University of Oxford in 2003, with Tomi Ahonen and Steve Jones lecturing. As of
2008, UCL Computer Science and Peter J. Bentley demonstrated the potential for medical
applications on mobile devices.
Q.2 What are the factors influencing success of E-Commerce?

E Commerce is always been a never ending race to earn and retain Consumers. To be successful
and profitable you need to continuously improve your Consumer’s Experience of Online
Shopping. But Business Owners must need to understand the focus factors, areas where if they
concentrate can convert a Visitor into a Buyer. The most important factor (56%) for influencing a
Visitor into a Buyer is the Quality Products and Quality Information. Being a Business Owner you
need to identify the products which are popular in:
Different Geographic/Regions
Different Occasions
Different Culture
Promoting/Selling Good Quality Products and at right time are the key to success.Product
Description (Long/Short), Specifications, Demo Videos, PDF Catalog (If it’s machinery) all
influence to consumer’s purchase decision, and well representation means better results. If you are
targeting Europe/Americas, better to have Multi Lingual Product Description.
With a contribution of almost 49%, Free Shipping is the second largest factor in influencing
eCommerce Consumer’s Purchase Decision. Free Shipping often attracts customers who purchase
very often from Online Shops, it is to them Shipping Costs matters most and Free Shipping can
retain these customers for a long time. You can add a fraction of these shipping costs into basic
Product Price, but remember your price need to be competitive too.
Defined and Easy return policy contributes 35% and the third largest factor in influencing
Buying Decision. Return Policy need to be well written in a very simple language, really helpful
if it’s in favor of the Consumers. It’s a must have if you are selling Apparels and Electronic
Goods/Computer Accessories, if you are selling Bike/Auto Parts. In a business where faulty goods
can often appear or size of the product can mismatch, Easy Return Policy makes the consumer feel
more trust to your website and brand.
Fourth Largest factor with almost 33% importance in influencing Buying Decision,
Customer Reviews often proved to be a good source depicting the trial results. Award Consumers
with Free Gifts who post positive reviews, resolve the problems of products for consumers who
post negative reviews, both will encourage them to most regular reviews and this motivation will
provide you positive results for sure.
E-commerce needs good marketing efforts such as sales promotion and advertisement to
introduce their websites to consumers. Additionally, after sales service is necessary to maintain
customer satisfaction. When clients are satisfied with the quality of the services, they are more
likely to be loyal to products or services of that particular website. Despite the fact that the sellers
and buyers do not actually meet and there is no proof of authentication, effective after sales service
helps businesses sustain customer trust and satisfaction. Besides, good targeting and expansion to
new markets are indispensable for the growth of e-businesses.Doing business via the Internet
frequently involves the transport of goods to customers at distant locations or in foreign countries.
Consequently, the entrepreneurs will have to consider the importance of packaging and
transporting their products. Research indicates that B2C e-commerce will be more successful if
the company can deliver the products in perfect shape and in a timely manner. Other websites
management includes human resource management and organizational restructuring. Website
owners will not fully benefit from e-commerce unless they have an appropriate structure to deal
with the changing way of doing business. It is also necessary that their employees learn
management know-how and how to give the best service to their clients. E-commerce owners
might want to have business alliance in order to reduce their management costs. An external factor
that can promote the long- term growth of e-commerce is the favourable policy of the government
to support online business and consumer’s protection. Government supports are among the most
crucial forces affecting adoption of electronic commerce by consumers. The government can
greatly contribute to e-commerce by the implementation of such facilitating measures and
regulations as legal infrastructure, consumer protection, taxation and other laws concerning e-
Q-3 What is organisational culture?

An organization is nothing but a common platform where individuals from different backgrounds
come together and work as a collective unit to achieve certain objectives and targets. The word
organization derived from the Greek work “organon” is a set up where people join hands to earn a
living for themselves as well as earn profits for the company. An organization consists of
individuals with different specializations, educational qualifications and work experiences all
working towards a common goal. Here the people are termed as employees.

The employees are the major assets of an organization and contribute effectively in its successful
functioning. It is essential for the employees to be loyal towards their organization and strive hard
in furthering its brand image. An organization can’t survive if the employees are not at all serious
about it and treat their work as a burden. The employees must enjoy whatever they do for them to
deliver their level best.

The attitude, traits and behavioral patterns which govern the way an individual interacts with others
is termed as culture. Culture is something which one inherits from his ancestors and it helps in
distinguishing one individual from the other.

Every human being has certain personality traits which help them stand apart from the crowd. No
two individuals behave in a similar way. In the same way organizations have certain values,
policies, rules and guidelines which help them create an image of their own.

Organization culture refers to the beliefs and principles of a particular organization. The culture
followed by the organization has a deep impact on the employees and their relationship amongst

Organisational culture is the way that things are done in an organisation, the unwritten rules that
influence individual and group behaviour and attitudes. Factors which can influence organisational
culture include: the organisation's structure, the system and processes by which work is carried
out, the behaviour and attitudes of employees, the organisation’s values and traditions, and the
management and leadership styles adopted.
Q-4 What is learning organization?
Although there is no clear and standard definition of learning organizations. Some of the
wellknown ones are listed below: Organizations where people continually expand their capacity
to create results they truly desire, where new and expansive patterns of thinking are nurtured,
where collective aspiration is set free, and where people are continually learning how to learn
together. An organization which facilitates the learning of all its members and continuously
transforms itself.
Learning organizations are characterized by total employee involvement in a process of
collaboratively conducted, collectively accountable change directed towards shared values or
principles. A type of organization that promotes continual organizational renewal by
weaving/embedding a set of core processes that nurture a positive propensity to learn, adapt, and
change. Grouping the definitions together, we can distinguish three core dimensions of the learning
Individual Dimension: At the individual level first of all, learning organizations have both an
environment and leadership that facilitate continuous learning among employees. The workplace
is in this respect almost a kind of school: employees pursue learning; managers support their
learning; and the organization supports managers in supporting employee learning. The learning
organization is a place of continuous learning. Learning becomes a conditioned reflex, a habit.
Group Dimension: At the group level, learning organizations look to create a fluid movement of
knowledge and experience across the organization. By “knowledge” here we mean not only
explicit knowledge – the kind that we can document in some way – but tacit knowledge as well,
understood as the stock of work‐related experience and judgment that each of us carries around in
our heads.
Team discussion is based on a form of open dialogue characterized by a firm respect for diversity
of opinion. Ideas are viewed as an opportunity to explore, and mistakes as an opportunity to learn.
Teams are encouraged to reflect on how they work, not only so that accomplishments can be
celebrated but so that needed improvements can be introduced.
Organisational Dimension: At the level of the organization, learning organizations connect
learning to organizational transformation; that is to say, learning is about developing the
organization itself. The learning organization is thus also an instrument of change, possibly
profound change. Learning organizations see learning as a driver of productivity and invest in it
accordingly. It is not something that happens at the margin of organizational life – in a classroom
somewhere for a few days.
Q-5 What is balanced score card?
balanced scorecard approach provides a clear prescription as to what companies should measure
in order to 'balance' the financial perspective. The balanced scorecard is a management system (not
only a measurement system) that enables organizations to clarify their vision and strategy and
translate them into action. It provides feedback around both the internal business processes and
external outcomes in order to continuously improve strategic performance and results. When fully
deployed, the balanced scorecard transforms strategic planning from an academic exercise into the
nerve centre of an enterprise
The Learning and Growth Perspective: his perspective includes employee training and corporate
cultural attitudes related to both individual and corporate self-improvement. In a knowledge-
worker organization, people -- the only repository of knowledge -- are the main resource. In the
current climate of rapid technological change, it is becoming necessary for knowledge workers to
be in a continuous learning mode. Government agencies often find themselves unable to hire new
technical workers and at the same time is showing a decline in training of existing employees. This
is a leading indicator of 'brain drain' that must be reversed. Metrics can be put into place to guide
managers in focusing training funds where they can help the most. In any case, learning and growth
constitute the essential foundation for success of any knowledge-worker organization.
6. What are the advantages and disadvantages of E- Commerce?
The possibility of the small companies to compete with the large companies. Due to small expenses
incurred by a virtual shop small companies are confronting with one less barrier in penetrating the
markets already dominated by the large companies.
More than this due to her flexibility and perception towards new the small company has a major
advantage in comparison with a large one dominated by bureaucracy and conservatism. Permanent
contact with customers for 24 hours and 7 days. Comparing with the common employees who
need salaries, a working time table, vacation, with a varying productivity and being subjective a
web site is offering information about the company and her products or she is taking and processing
orders for 24 hours of 24 and 7 days of 7 continuously with minim costs.
This is bringing an advantage, too in case of the expansion on the foreign markets when the hourly
difference making more difficult the contacts between the companies. It also improves the
communication with the customers that have not to observe a strict time table thus being able to
obtain information and place orders any time.
International markets penetration facilities. The world network is not limited by borders, it does
not belong to anyone and the access and publication costs are extremely low. The communication
with a customer positioned to the opposite pole of the world is as easy as the communication with
someone in the next room. Any producer now can sell his products in any country by the means
of the web site and no contacts with local companies or large investments are necessary anymore.
The decrease of the functioning costs. These costs may be drastically diminished by the automatics
of the orders process. There is also the possibility of a total automatics by the integration with the
administration system thus leading to the increase of the general productivity of the company. New
possibilities for performing a direct marketing (one-to-one).
Comparing with a human being the computer may retain not only the name and personal data of
all customers as well as their preferences being capable to adapt the offer and products presentation
according to each customer’s profile. Disadvantages to trader As in any other activity field, the
technology of internet created new fraudulent possibilities. In the lack of a direct contact a client
may cheat the trader regarding his identity or his real payment possibilities. Another important
problem is that regarding the security of the data.
A company that has not access to internet does not have too many worry reasons as regards the
integrity of her administration informatics systems. The connection to a public network that can
be accessed by anyone more or less authorized and the access to the confidential data of the local
network is raising serious problems. Therefore new risks occur these being not present before the
apparition of such type of commerce. Although the launch costs of a virtual shop are much lower
in comparison with those of a real one they may be incorrectly estimated. A company that has not
implemented yet an administration informatics system or those where the employees do not have
minimum technical knowledge may confront with an unexpected increase of the launch costs due
to the necessity of the acquisition of training systems for the employees. Advantages to the buyer
Availability for 24 hours of 24 and 7 days of 7. This availability independent on a certain program
represents a major advantage for the clients who can purchase during night too when they are not
busy with other urgent problems (job, household). Due to the electronic commerce there is no
need to go to the commercial places or to the shop next to corner .Everybody may place orders
from home sitting in front of the PC and thoroughly analysing and comparing different
products.The apparition of the electronic commerce gave a new meaning of the term
For example in order to buy handcrafted items from Madagascar it is not necessary to travel to that
destination but only to open the browser at the address of a shop that is trading such items (address
that can be found using the searching motors).
Before buying the product the potential future buyer has more free and cheap access to the offers
of the producers or trading companies.
Disadvantages to the buyer The most important reason for which some persons hesitate to use
internet for purchasesas resulted from most of the opinion polls – is that of being afraid to supply
on line information regarding the credit card. Another important problem is the attempt to the
personal intimacy. The potential buyers are afraid that by internet the traders or a bad will person
can collect thorough information and they will not realize this at all. Absence of human contact is
the obvious inconvenient generated by the electronic commerce. The low launching and
maintenance costs of a virtual shop derives of the advantages of the automatics of the processes
and there is no need to employ additional personal, on one hand. On the other hand the absence of
the seller, the human presence to which the buyer may appeal to in case he has doubts, represents
an obstacle in spreading this form of commerce. In this respect some companies created programs
that are permitting the vocal contact or visual one between the customer and one employee of the
company during his visit on the web site. The access to technology refers to both the internet
penetration degree and the spread of the computers and specialized knowledge.
As long as a site of electronic commerce will be accessible only to persons who at least know to
launch the browser and type the web address most of the potential customers will prefer the next
to corner shop.
Q-7 What are E-Business revenue models?
In business, revenue typically consists of the total amount of money received by the company for
goods sold or services provided during a certain time period.1) Therefore, revenue models are a
part of the business model. Many online companies generate revenues from multiple income
streams such as advertising, subscription, affiliate marketing etc. Online models not only sell
goods or services but also contacts (e.g. banner) and information (e.g. user-data).Five primary
revenue models are described below. Since there are possibilities of multiple variations, many
companies do not use one single revenue model. Advertising Revenue Model: Typically, fees are
generated from advertisers in exchange for advertisments, which is ultimately the classic principal
among the revenue models besides sales. Even if representatives of major media companies
complain about earning less money with online advertising than with advertising in print or TV,
the figures indicate steadily rising revenues. The advertising revenue model is based on contacts
making it one of the indirect sources of revenue. The conventional version is display-marketing -
for example wallpaper, super banner, and rectangle, skyscraper- which is paid according to traffic
(invoice per CPC/cost-per-click or CPX/cost-per-action). The main online advertising variations
are besides display-marketing, affiliate-marketing (advertising on many websites, CPX) and
search-engine-marketing (CPC). Special models are e-mail-marketing and social-media-
marketing. For advertisers with a lower budget for example the New York Times created a self-
booking-tool for display-ads on a CPM(Cost-per-mille)-basis. And there are still rising new
opportunities. Subscription Revenue Model Users are charged a periodic (daily, monthly or
annual) fee to subscribe to a service. Many sites combine free content with premium membership,
i.e. subscriber- or member-only content. Subscription fees do not depend on transactions.
Subscribers use the content as long and often as they want. Transaction Fee Revenue Model A
company receives commissions based on volume for enabling or executing transactions. The
revenue is generated through transaction fees by the customer paying a fee for a transaction to the
operator of a platform. The company is a market place operator providing the customer with a
platform to place his transactions. During this process the customer may be presented as a buyer
as well as a seller. To actively participate in this e-market, customers must register, so both parties
of a transaction taking place are identified. From a business perspective, the offer is determined
by others as customers offer their goods online and are acting as sellers. The amount of the
transaction fee can be both – fixed and percentage calculated. Sales Revenue Model Wholesalers
and retailers of goods and services sell their products online. The main benefits for the customer
are the convenience, time savings, fast information etc. The prices are often more competitive. In
terms of online sales there are different models such as market places as common entry points for
various products from multiple vendors. Affiliate Revenue Model The affiliate program is an
online distribution solution which is based on the principle of commission. Merchants advertise
and sell their products and services through links to partnerwebsites. It is a pay-for-performance
model: Commissions are only paid for actual revenue or measurable success. An affiliate-link
includes a code, which identifies the affiliate. That’s how clicks, leads or sales are tracked. The
affiliate therefore acts as the interface between merchants and customers. This model leads to a
win-win situation: the merchants sell their products or services and the affiliates get their
commissions. Variations include banner exchange, pay-perclick and revenue sharing programs.
The affiliate model is well-suited for the web and therefore very popular.
8. What is market segmentation on web?
A core component of any web-based business plan should be a market segment analysis.
Define the parameters of markets. These parameters will depend on specific product or service.
For example, if web product or service is designed for other businesses, then one may segment the
market based upon industry, number of employees or location. If business targets consumers, then
one segments by age or gender may be more appropriate.
Build a profile of ideal customer. The easiest way to accomplish this is through a series of
questions. Important questions for any web business to answer include: How much time does your
customer spend online? What websites does she visit? What websites does she purchase from?
Other more general questions that can help further target your customer include: How old is your
average customer? What is her yearly income? Why does she need or want to purchase your
product? Where does your customer base live? Study the competition. Understanding why
competitors are either successful or unsuccessful can help better understand customers’ buying
process. Important metrics to examine here include search engine rankings, product pricing, web
design and any other key factors that may cause a consumer to visit a competitor's site rather than
your own.
Analyze product's strengths and weaknesses. It is important to be as objective as possible during
this step. One need to determine where the web business has an advantage over competitors. Gather
as much information as possible. The Internet is a goldmine for information.
It is a constantly updated, current source of data. Best of all, much of the information is free! Many
market research firms will publish white papers, market studies and projections and market
analyses online through their own websites or through an industry publication. Implement a
marketing plan based on the findings. Once one have gathered all of the information one can,
studied competitors and built a customer profile, the market segment analysis should provide with
a well-defined target market and a strategy that helps drive both visitors and buyers to the website.
There are five major segments under the broader category of e-business. However, the following
are some popular e-commerce models used by companies engaged in ecommerce:-
Business to business e-commerce (B2B) Business to consumers e-commerce (B2C) Consumers
to consumers e-commerce (C2C) Business to employees e-commerce (B2E) Consumer to
business e-commerce (C2B) Business to Business E-commerce (B2B) Business to business e-
commerce is smart business. The opportunity for business to business e-commerce is even greater.
A wholesaler may sell products to the retailer. There are advanced e-commerce software which
support multi-tier pricing. This helps to set up online stores to offer preferred pricing to some
vendors and shared price to others. This includes internetenabled initiatives of an enterprise to
form commercial linkages with another enterprise, dealer, warehouse or manufacturer. In this form
of e-commerce, e paperwork and time-to-market get vastly reduced. Throughout the world, this
ecommerce mode is the biggest.
In a B2B transaction, the interaction is between businesses. For example, a website that is catching
for the steel industry might have facility for buyers and sellers to list their requirements and post
their products. It helps them in quickly closing the transactions and the buyer can get quality,
material and can choose from different suppliers. B2B commerce is a growing business in the e-
commerce arena- with the increasing use of the internet, more and more business are realizing the
commercial advantage of giving business clients a streamlined and easy manner to order products
or service online. It facilitates access to the ordering process to only those with whom a concern
has a commercial relationship. Business to Consumers E-commerce (B2C)
It is for the customers to buy stores from the web. The problem to be recognized in this is to secure
payment, using encryption, transaction integrity, quick response, time and reliability. B2C e-
commerce involves selling of goods and services to consumers or end users. It allows them to
browse the product catalogue, select products or services and complete the order online. In a B2C
transaction, the interaction is between a consumer and the preferred business. For example, the
most popular site is, which is the first online bookseller which has proved a potential
competitor to the traditional bricks and mortar booksellers such as Barrens and Noble. In this
category of e-commerce, businesses use the internet to offer to consumers sales and services
around the world 24 hours a day, seven days a week and 365 days a year,
The sites Amazon, Rediff and Uphar are among those belonging to this category. These websites
are meant for selling goods directly to consumers through the internet. The twoway accessibility
of the internet enables operating companies to directly ascertain customer preference and buying
trends. Businesses are using these consumer insights to formulate marketing strategies and offer
to the customers what they want and when they want. E-business in this mode significantly reduces
the costs associated with intermediaries, service centres and mass marketing campaigns. Since e-
commerce makes just in time delivery possible, the supplier does not have to store the goods. He
can procure them from the suppliers as and when he gets the order from the buyer through the
internet. B2C is the most popular form of ecommerce, wherein the individuals are directly involved
in B2C e-commerce, and businesses use the internet for offering their products or services 24 hours
a day through global access. The sites and Rediff are among these. These websites
spell goods directly to consumers over the Internet. The two way accessibility feature of the
internet enables operating companies to ascertain consumer preferences and buying trends directly.
Consumer to Consumer E-commerce (C2C) Here interaction is between consumer to consumer.
For example, in sites like e-Buy Bid or, which are auction sites, one can
virtually sell and buy any goods (either used or new ones). This form of e-commerce is nothing
but the cyber version of the good old auction houses. If anyone wants to sell anything, all one has
to do is post a message on the site, giving details of the product and the expected price and wait
for an interested customer to turn up and buy it. The buyer gets in touch with the seller through the
Internet and the deal is crossed once the amount is finalised. Online message boards and barters
are also examples of C2C ecommerce. Consumer-to-Business E-commerce (C2B) E-commerce,
by empowering the customer, has been strategically redefining business. An example of C2B
model of e-commerce is the site Price line.Com, which allows prospective airline travellers,
tourists in need of hotel reservations etc. to visit its websites and indicate their preferred price for
travel between any two cities. If an airline is willing to issue a ticket on the customers offered
price, the consumer can then travel to the mentioned destination at his terms. Business to
Employees E-commerce (B2E) This is concerned more with marketing a corporation's internal
processes more efficiently. Customer care and support activities also hold ground. The requirement
is that are all selfservice with applications on the web that the employees can use themselves. One
of the most common applications of customer segmentation for eCommerce businesses is with
lifecycle marketing.  All Customers (a.k.a. Everyone) Start with full customer list. Store all of
their contact information (namely emails) in one place. From here, you can start creating custom
segments.  Potential Customers (a.k.a. Prospects) These customers have never purchased before,
but have either submitted their email as part of their entry for a contest or giveaway, signed up for
email newsletter or created a shopping account.  First-Time Buyers (a.k.a. One-time buyers)
These are customers who have only completed a single purchase. With this customer segment, the
goal should be to turn them into repeat buyers. However, there are several reasons why they have
not yet made another purchase.  Repeat Customers Bundle shoppers who have made two or more
separate purchases. These are customers who enjoyed the product enough the first time to return
and place another order.  Active Repeat Customers (a.k.a. Loyal customers) Group customers
who have placed multiple orders in a short time frame. Calculate the average time each customer
waits between purchases. Then, label the ones who complete repeat purchases within that
timeframe as “active repeat customers.” Treat these as most valuable buyers.  Inactive Repeat
Customers (a.k.a. Idle, lapsed and latent customers) It is inevitable, but sometimes good things
come to an end. One may lose touch with some of most loyal customers. Either their needs change,
or brand and product change, or they simply forget. Inactive customers are shoppers who have
placed multiple orders before but they have not placed another order for more than three times the
average time customers spend between orders. Inactive customers can be unpredictable as any
number of factors may have caused them to go idle.

Q9. What is funnel model of customer acquisition conversion and retention?

Marketing managers need to have a good sense of how their companies acquire and retain
customers. They often must evaluate competing marketing strategies to determine which are the
most effective ways to attract and retain customers. The funnel model is used as a conceptual tool
to understand the overall nature of a marketing strategy, but it also provides a clear structure for
evaluating specific strategy elements. The funnel model is very similar to the customer life-cycle
model, however, the funnel model is less abstract and does a better job of showing the effectiveness
of two or more specific strategies. The funnel is a good analogy for the operation of a marketing
strategy because almost every marketing strategy starts with a large number of prospects and
converts fewer and fewer of those prospects into serious prospects, customers, and finally, loyal
In this funnel model, the steps that potential customers take as they become loyal, repeat customers
are listed on the left side of the figure. The right side of the figure explains the increasing level of
commitment that occurs in each step. Using market research and past history as a guide, the
marketing manager develops the numbers that show the effectiveness of the planned strategy. The
wider the bottom of the funnel, the better the strategy; that is, the more prospects are converted
into loyal customers. The funnel model can be used in planning marketing strategies by comparing
the projected results shown in the diagram with the results for alternative strategies shown in
separate diagrams. The funnel model can also be used to show results that can then be compared
with the costs of running the marketing campaign. Either way, the model gives marketing
managers a tool for conceptualizing and evaluating alternative strategies.
Q10. Explain use of Internet technologies in supply chain management.
Supply chain management can be defined as the planning as well as management of all activities
that are involved in sourcing as well as procurement, conversion, plus including all logistics
management activities. In addition, it is important to note that it also includes the coordination plus
collaboration with channel partners that may be intermediaries, suppliers or customers, etc. In
other words, supply chain management merges supply as well as demand management within and
across businesses or companies. And, it has an integrating function with the main responsibility of
linking primary business functions as well as processes within as well as across business firms into
a strong and high-performing model. Now the internet has revolutionized supply chain
management. There are at least five roles the internet has played when it comes to this. Below are
the different areas in which this has happened: Inventory Management: Definitely one aspect of
supply chains that is most costly is inventory management. And, the internet has made it possible
for business firms to quickly set up EDI information programs with their clients. Before the
emergence of the internet, EDI will usually take a longer time to be implemented in a supply chain.
Then, every channel member had to massively invest in software, equipment, as well as training
before EDI systems could be made operational. Purchasing: The internet has also made it possible
for cost associated with purchasing to be reduced. In the United States, business firms have been
able to make use of the internet to streamline the purchasing function. With it there is reduction in
paper-flows as well as ordercycle times- the time it takes for purchased order to be delivered.
Today, face-to-face negotiations, which might be considered the order of the day in the past, are
not frequently used as bargaining, re-negotiations, term and price agreements, etc. can now be
done via the internet. Transportation: Transport management is probably the most popular use of
the internet in supply chains. This is so important for any business since the tracking of shipments
to regional depots will provide the firm with data that shows how reliable or otherwise the
performance of its carriers is, making it possible for transport managers to confirm whether their
motor carriers are meeting the promised arrival time. And, it also enables them to inform carriers
about shipment delays as this occurs rather than wait for days or even longer before informing
them. Order processing: This critical role of order processing is one that the internet has helped to
dramatically reduce costs. And, reduction in paperwork is a major item of this cost saving when
compared to conventional practices. Okay another major benefit that the internet has bestowed on
this process is the increase in speed with which order processing is now done. Since there is now
a reduction in the time it takes for orders to be placed and received by clients. Vendor relationships:
A critical factor when it comes to vendor relations for a business is being able to rate the
performance of its vendors. This will be based on elements agreed by both parties (the company
and its vendors). And, such performances include factors like deliveries to the company’s
warehouses including depots; vendor raw material inventory among others. The internet has been
used to monitor these areas. Customer service: The internet has made it possible for customers to
have 24-hour access to a business firm’s customer service department making it possible for
companies to be notified of any problem or service issue. Now apart from providing another option
for customers to contact a company concerning service issues this has helped improve
communication flow between business firms and their customers.