Question One. With help of suitable examples, distinguish between E-Commerce and E-Business.

E -business and e-commerce are terms that are sometimes used interchangeably, and sometimes they are used to differentiate one vendor's product from another. In both cases, the e stands for "electronic networks" and describes the application of electronic network technology; including Internet and electronic data interchange (EDI), to improve and change business processes. E-commerce implies business transactions over the internet where the parties involved are either selling or buying. The transactions conducted in e-commerce basically involve the transfer or handing over ownership and rights to products or services. Technically, e-commerce is only a part of e-business because, by definition, e-business refers to all online business transactions including selling directly to consumers (e-commerce), dealing with manufacturers and suppliers, and conducting interactions with partners. Information exchange via centralized database is also done in e-commerce. Business functions are only limited to the companies’ technological resources. E-commerce principally involves money exchanges in the transactions. In e-business, as it is broader, it is not limited to monetary transactions. All aspects in business are included like marketing, product design, and supply management. E-business is more about making great products, brainstorming and giving quality service, planning about product exposure and executing it. Well, of course, e-commerce is an integral part of the e-business process but in strict terms, it is the activity of selling and buying. E-commerce covers outward-facing processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating expense items, such as office supplies. It involves new business models and the potential to gain new revenue or lose some existing revenue to new competitors. It is ambitious but relatively easy to implement because it involves only three types of integration; which are vertical integration of front-end Web site applications to existing transaction systems, cross-business integration of a company with Web sites of customers, suppliers or intermediaries such as Web-based marketplaces and integration of technology with modestly redesigned processes for order handling, purchasing or customer service. E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes and aimed at cost savings and improvements in efficiency, productivity and cost savings. An e-business strategy is also more difficult to execute, with four directions of integration: vertically, between Web front-systems and back-end systems; laterally, between a company and its customers, Page | 1

business partners, suppliers or intermediaries; horizontally, among e-commerce, enterprise resource planning (ERP), customer relationship management (CRM), knowledge management and supply-chain management systems; and downward through the enterprise, for integration of new technologies with radically redesigned business processes. But e-business has a higher payoff in the form of more efficient processes, lower costs and potentially greater profits. E-commerce and e-business both address these processes, as well as a technology infrastructure of databases, application servers, security tools, systems management and legacy systems. And both involve the creation of new value chains between a company and its customers and suppliers, as well as within the company itself. In e-commerce, information and communications technology (ICT) is used in inter-business or interorganizational transactions (transactions between and among firms/organizations) and in business-toconsumer transactions (transactions between firms/organizations and individuals). In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a business organization (either a for-profit, governmental or non-profit entity) conducts over a computermediated network.

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Question Two. Outline three cases where E-Commerce it not a recommended option, giving reasons for each case.

1. Perishable goods. E-commerce is not suitable for perishable commodities like food items such as fruits and vegetables. This is because these products have a smell, taste or touch component. People prefer to shop in the conventional way than to use e-commerce for purchasing these products. The consumer of the product would want to select the appropriate food items as well as physically see the product before purchase. So e-commerce is not suitable for such business sectors. The time period required for delivering physical products can also be quite significant in case of e-commerce.

2. Government documents. You can’t sell any government documents or personal documents such as identification card, passport, and car license online. Applications for most of these government documents can be initiated online; however, the process cannot be fully online. The reason is to avoid issuing those documents to the wrong people and also to avoid instances of people getting more that one related document.

3. Illegal items. One would want to avoid items that are illegal to sell over the Web. These include obvious things such as illegal drugs and explosives that are forbidden almost everywhere. Some states allow you to sell alcoholic beverages over the Web, while in other states doing so is a felony. The laws on gun and ammunition sales also vary from state to state, in addition to a variety of federal rules on these items. A few states also prohibit the sale of certain animals and food products. So when dealing with such items that are going to provoke the legal authorities, then you will not do it online.

4. Replica market. This involves selling items that have been copied from the original without the express permission from the owners of the items. Such includes sale of pirated copies of computer software or games, bootlegs (recording of an audio and/or video performance that was not officially released by the artist or under other legal authority). This also includes distribution of stolen copyrights.

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Question Three. Briefly describe ANY THREE internet protocols, which are used in the implementation of E-Commerce.

1. TCP/IP TCP/IP (Transmission Control Protocol/Internet Protocol) is the basic communication language or protocol of the Internet. It can also be used as a communications protocol in a private network (either an intranet or an extranet). When you are set up with direct access to the Internet, your computer is provided with a copy of the TCP/IP program just as every other computer that you may send messages to or get information from also has a copy of TCP/IP. TCP/IP is a two-layer program. The higher layer, Transmission Control Protocol, manages the assembling of a message or file into smaller packets that are transmitted over the Internet and received by a TCP layer that reassembles the packets into the original message. The lower layer, Internet Protocol, handles the address part of each packet so that it gets to the right destination. Each gateway computer on the network checks this address to see where to forward the message. Even though some packets from the same message are routed differently than others, they'll be reassembled at the destination. TCP/IP uses the client/server model of communication in which a computer user (a client) requests and is provided a service (such as sending a Web page) by another computer (a server) in the network. TCP/IP communication is primarily point-to-point, meaning each communication is from one point (or host computer) in the network to another point or host computer. TCP/IP and the higher-level applications that use it are collectively said to be "stateless" because each client request is considered a new request unrelated to any previous one (unlike ordinary phone conversations that require a dedicated connection for the call duration). Being stateless frees network paths so that everyone can use them continuously. (Note that the TCP layer itself is not stateless as far as any one message is concerned. Its connection remains in place until all packets in a message have been received

2. HTTP Short for HyperText Transfer Protocol, the underlying protocol used by the World Wide Web. Appearing at the beginning of every web page address, HTTP defines the standard mechanism for the exchange of application-level messages between devices on the web. All the web services run over this protocol. HTTP defines how messages are formatted and transmitted, and what actions Web servers and browsers should take in response to various commands. For example, when you enter a URL (Universal Resource Locater) in your browser, this actually sends an HTTP command to the Web server directing it to fetch and transmit the requested Web page. . It is a communications protocol that facilitates the transfer of information on the Internet. It is a request-response protocol between clients and servers. Clients are web Page | 4

users or web browsers, while the responding server that stores or creates the resources requested is known as the origin server. HTTP can be implemented on any of the Internet protocols. However, the TCP/IP (Transmission Control Protocol/Internet Protocol) protocol suite is most popularly used. An HTTP client establishes a TCP connection with the host.

3. FTP. File Transfer Protocol (FTP), a standard Internet protocol, is the simplest way to exchange files between computers on the Internet. Like the Hypertext Transfer Protocol (HTTP), which transfers displayable Web pages and related files, and the Simple Mail Transfer Protocol (SMTP), which transfers e-mail, FTP is an application protocol that uses the Internet's TCP/IP protocols. FTP is commonly used to transfer Web page files from their creator to the computer that acts as their server for everyone on the Internet. It is also commonly used to download programs and other files to your computer from other servers. As a user, you can use FTP with a simple command line interface (for example, from the Windows MSDOS Prompt window) or with a commercial program that offers a graphical user interface. Your Web browser can also make FTP requests to download programs you select from a Web page. Using FTP, you can also update (delete, rename, move, and copy) files at a server.

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Question Four. Outline four E-Commerce revenue models, giving the advantage of each.

1. Business-to-Business (B2B) Business-to-business marketing (B2B) is the development and marketing of services and products to business, governmental, and institutional markets at the local, national, or international level, rather than private retail consumers. It consists of largest form of e-commerce. This model defines that buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler. Some of the advantages of business-to-business e-commerce include; Outsourcing the unprofitable parts of your business, speeding up the product development activities, thus reducing time to market, improving the speed of communication thereby facilitating communication between customers and suppliers, reducing wastage through additional sales channels, higher customer retention rates, lower customer acquisition costs and reduced costs can be passed on in favorable pricing.

2. Business-to-Consumer (B2C) B2C is the indirect trade between the company and consumers. It is the model taking businesses and consumers interaction. Online business sells to individuals. The basic concept of this model is to sell the product online to the consumers. Direct interaction with the customers is the main difference with other business model. As B2B it manages directly relationship with consumers, B2C supply chains normally deal with business that are related to the customer. The advantages of business-to-consumer e-commerce include; Convience in that consumers can shop at any time of day, from the privacy of their own home, it offers many choices, less hassle (Consumers can shop online without dealing with annoying sales people, fighting the congestion of shopping malls, and driving 10 different places to find one thing), widens the market by reaching worldwide market with unlimited volume of customers, advertisement costs are reduced since business can display information, pictures, and prices of products or services without spending a fortune on colorful advertisements, in some cases, makes order processing an easier task than before and the business can operate on decreased, little, or even no overhead.

3. Consumer-to-Consumer (C2C) Consumer-to-consumer e-commerce is simply commerce between private individuals or consumers. This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers. C2C perhaps has the greatest potential for developing new markets. C2C has the following advantages; Broader market, eliminates intermediary, constantly changing or updating is easier and it is always available so that consumers can use it whenever they want. Page | 6

4. Consumer-to-Business (C2B) This is a process of selling and buying product between consumer and company. Consumer-to-Business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (Business-toConsumer). The main advantage of this model is that consumer has the opportunity of fixing the price.

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Question Five. Discuss the following concepts, with relation to E-Commerce;

a. Web Marketing. Web marketing is the general term for marketing done on the Internet. It is basically a computer-based version of traditional marketing objectives that involve a product, price, packaging, promotion and place. Marketing is ultimately about propelling a product or service through the proper channels and web marketing uses the Internet as that channel. The umbrella term of web marketing covers a comprehensive range of business activities such as generating sales leads, selling products or services and supporting other business through affiliate marketing. Affiliate marketing on the Internet works by driving traffic to affiliates' or partners' websites through links and advertising. The affiliate marketer receives rewards for helping to bring visitors to the website. The typical reward is a certain amount of income that varies depending on the company. Just as traditional marketers work to gain the interest of their target market, web marketing works to attract target customers to marketer's websites. These sites may be company websites, web magazines or e-tail catalog sites. Publishing-based web marketing contains informational material with advertising much like print magazines. Corporate or business websites generate sales leads to add value to their marketing goals. E-tail or e-commerce websites market products or services directly to customers.

b. Borders and Jurisdictions. Jurisdiction is basically the ability of a legal body, such as a court, to assume control and enforce its decisions over you. The Internet is international. Therefore, when doing e-commerce you have to think about which laws may apply to you. This is a complex area, but the fundamental concept to keep in mind is that foreign courts may take jurisdiction over you, generally on a sliding scale depending on how your website is set up, and how active you are in the other jurisdiction. When a court in another jurisdiction decides to exercise authority over you, that court’s decisions may be recognized by other jurisdictions, including your own. If you are sued in a foreign jurisdiction, you may find that, if you ignore that lawsuit, it may become a judgment, which can then be registered in your jurisdiction and executed against you. Therefore, you should not ignore the laws of other jurisdictions or any lawsuits filed against you in such a jurisdiction. So, how can you manage all this risk when doing e-commerce? It is advisable that you get good advice on which jurisdictions pose the greatest threat to you legally. Then, you can decide if the rewards of even dealing with individuals or businesses there are worth the risk. At the same time, it is sometimes possible to enter into a contract by which you and the other parties agree on the law that will apply and the court system in which disputes must be decided. You should obtain legal advice on the details before proceeding. Page | 8

c. Intellectual Property Rights.
Copyrights, Trademarks and Patents make up most of the area of law known as Intellectual Property. The Internet has been defined as a global network of networks through which computers communicate by sending information in packets, and each network consists of computers connected by cables or wireless links. It is the Intellectual Property laws of Copyright, Trademark and Patents that are attempting to harmonize the effects that e-commerce and the internet have had on the individual's ability to access and use this information. While e-commerce is largely based in contract and commercial law, intellectual property law plays an important role in the success of e-commerce. The various forms of intellectual property protection; copyrights, trademarks and patents, each contribute to the success of e-commerce by protecting intangible assets valuable to business. Copyrights protect the content of both websites and the material transmitted over those websites. Trademarks protect the valuable symbols and phrases that distinguish businesses and increase loyalty. Patents protect the functionality of the software and the methods underlying much of e-commerce.

d. Cybersquating. Cybersquatting is registering, selling or using a domain name with the intent of profiting from the goodwill of someone else's trademark. It generally refers to the practice of buying up domain names that use the names of existing businesses with the intent to sell the names for a profit to those businesses.

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Question Six. Outline four options in promoting goods and services on an E-Commerce platform, giving the strength of each option.

Capturing online search traffic is a part of any ecommerce promotion platform. Natural organic traffic is free traffic delivered to a website from search engine listings. It is the goal for every company to structure their website according to the search terms that best define its business activity and to seek top ten rankings for each of those terms. The competitive nature of search engine rankings requires the skills of search engine optimization experts to target and build a linking campaign that will help to raise a company’s website listings. This is an area of expertise that requires a dedicated approach.

Pay per click traffic is the quickest way to deliver quality traffic to an e commerce promotion or site. By opening an account with Google, MSN or Yahoo, companies can bid on search terms that correspond to their business, create text advertisements and bid on search placements inside the search engines listings. You can use metrics to measure the conversions on site traffic and eliminate terms that do not convert to sales. This is a great way to deliver quality traffic that pays dividends.

Online banners displayed on a search network can bring significant traffic to a site. By placing banner advertisements on high volume and relevant sites, a company can increase exposure and deliver targeted traffic to a site. This should be part of every of a company’s internet promotion strategy.

Email campaign marketing is a very effective e commerce promotion strategy. By delivering highly relevant and targeted traffic to an existing or potential customer base, you can promote your products and build a loyal customer base. It is a strategy that every online business should consider.

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Bonnett, Kendra (2000), An IBM Guide to Doing Business on the Internet, McGraw-Hill, U.S.A.

DLM Instructional material

Emerald Insight Staff (2005), E-Commerce. Emerald Group Publishing Limited, UK.

Kenneth C. Laudon, Carol Guercio Traver (2009), E-Commerce 2010: Business, Technology, Society. Pearson College Div., Canada.

Loshin, Pete (1997), TCP/IP Clearly Explained. Academic Press, USA.

Naugle, Matthew (1999), Network Protocols. McGraw Hill, New York.

Smith, Dayle (2001), The E-business Book: A Step-by-Step Guide to E-commerce and Beyond, Bloomberg Press, Princeton.

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