E-commerce

Today

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What is
Marketing?

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Marketing is
Social and Managerial
process by which individuals
and groups obtain what they
need and want through
creating, offering, and
exchanging products of value
with others.
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 Needs – exist in biology they are not
created by marketers – i.e. shelter,
food, clothing, safety, belonging,
esteem

 Wants – Need food want hamburger,

fries, coke.

 Desire– Wants for specific products

backed by an ability and willingness to
buy them 4
 Marketing Process
 You need a Product or service to sell
 You need a Place from which to sell the
products
 You need to figure out a way to get
people to come to your place.
 You need a way to accept orders.
 You also need a way to accept money.

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 Marketing Process
 You need a way to deliver the product or
service, often known as fulfillment.
 Sometimes customers do not like what
they buy, so you need a way to accept
returns.
 You need a customer service and
technical support department to assist
customers with products.
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What is
E-Commerce
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E-Commerce - The exchange
of goods and services for
money
It Consists of:
Buyers
Sellers
Producers
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Buyers - these are people with
money who want to purchase a good
or service.

Sellers - these are the people who

offer goods and services to buyers.

Producers - these are the people

who create the products and services
that sellers offer to buyers. 9
The Internet

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 In the 1980´s
 Personal computers or terminals were
connected to a server.
 The server was a mainframe, or connected to
a mainframe computer.
 The mainframe was connected to another
mainframe of the company in another
location via dedicated lines.
 Only large companies could afford the
expense and investment in equipment.
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 Today
 Connections across countries and
continents made through dedicated fast
lines.
 A company may have one local network
(LAN) in NY, which is connected to the
Internet through a Regional network.

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Computer classifications

 Mainframes:
- term for very large computers
- used to handle large amount of
data or complex processes
- main advantage is reliability
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Computer classifications
 Midrange:
- medium sized, less expensive
and smaller
- usually a server

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Computer classifications
 Micro-computer:
- work stations with computing
capabilities
- single-users systems linked to
form a network

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 What is a network?
 Seriesof points or nodes interconnected by
communication paths
 Node is a connection point for transmitting
data
 Network can interconnect with other
networks to form global networks

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Benefits of a network
 Facilitatesresource sharing
 Provides reliability
 Cost effective
 Provide a powerful medium
across geographical divide

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 Geographical Distance
 Local area network (LAN):
small area, share a single server
 Metropolitan area network (MAN):
a wider network, can bridge several
LAN’s
 Wide area network (WAN):
a broader area covered, can include
several MAN’s 19
 Internet addressing
system
 Internet uses TCP/IP, therefore every
computer on the Internet has an IP address
 IP address is numerical, separated by dots
 Works with DNS:
- com: for commercial purposes
- net: for Internet Service Providers
- org: for non-commercial groups
- gov: reserved for government
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Assimilation of Technology
 Technology first adopted to increase
efficiency – doing the same tasks faster e.g.
word processing instead of typing

 Technology next adopted to increase

effectiveness – doing tasks not only faster but
better e.g. spreadsheets transformed finance
and accounting (as well as science and other
fields)
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E-Commerce Mechanisms
 Transformation of economic activity into
digital media
- Exchange information, content, agreements,
and services among parties that are connected
to through the Internet.
 Enables new ways of creating, delivering
and capturing value to customers.
- Availability
- Convenience

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World Wide Web (WWW)
 World Wide Web (Web):
- A collection of documents that reside on
computers, and that can be accessed by other
computers on the Internet.
 Multimedia documents:
- Text
- Images
- Sounds
- Video
 Hypertext:
- Links to other documents
- Can begin execution of a program 24
 Web Browsers
 Computer programs that can:
- Display Web documents
- Follow links
- Execute other programs
- Enhance applications such as real-
time audio or video
 Netscape and Internet Explorer
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 Web Servers
 Computers that run server
software.
 A server waits for request to arrive
from a user/client.
 The server sends (serves) the
document to the requesting
computer.

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 WWW and Internet
 The World Wide Web (WWW) is not the
Internet
 Access to the Internet doesn’t mean you
have e-commerce
 WWW works in HTTP
 Web pages works in HTML
 Web browser provide access to
information on the WWW 28
 What is E-commerce
 Distributing, buying, selling and marketing
products and services over electronic systems
 E-business for commercial transactions
 Involves supply chain management,
e-marketing, online marketing, EDI
 Uses electronic technology such as:
- Internet
- Extranet/Intranet
- Protocols 29
Forces Shaping the Digital Age

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Forces Shaping the Digital Age

 Digitalization & Connectivity

– Intranets : connect people within a
company.
– Extranets : connect a company with its
suppliers, distributors, and outside
partners.
– Internet : connects users around the
world. 31
Forces Shaping the Digital Age

 Internet Explosion
– Explosive worldwide growth forms the
heart of the New Economy.
– Increasing numbers of users each
month.
– Companies must adopt Internet
technology or risk being left behind.
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 Definitions
Internet:
- A collection of computers
that speak a common
language – protocol

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 Definitions
 Intranet:
- Private version of the Internet
- Main purpose to share
company information and
computing resources among
employees

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 Definitions
 Extranet:
- Private network that users
outside the company can access
- Requires security and privacy
- Collaborate with other
companies
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Forces Shaping the Digital Age
 New Types of Intermediaries:
– Direct selling via the Internet bypassed
existing intermediaries
(disintermediation).
– “Brick-and-mortar” firms became “click-
and-mortar” companies.
– As a result, some “click-only” companies
have failed.
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Forces Shaping the Digital Age

 Customization and Customerization:

– With customization, the company custom
designs the market offering for the
customer.
– With customerization, the customer designs
the market offering and the company
makes it.
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 E-commerce as the
Networked Economy
 Create value largely through gathering,
synthesizing and distribution of information
 Formulate strategies that make management
of the enterprise and technology
convergent
 Compete in real time rather than in “cycle
time”
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 E-commerce as the
Networked Economy
- Operate in a world characterized by low
barriers to entry, near-zero variable costs of
operation and shifting competition

- Organize resources around the demand side

rather than supply side

- Manage better relationships with customers

through technology
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 E-commerce Today
 The Internet is the perfect vehicle for e-
commerce because of its open standards
and structure.
 No other methodology or technology has
proven to work as well as the Internet for
distributing information and bringing
people together.
.
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 E-commerce Today
 It’s
cheap and relatively easy to use it as a
medium for connecting customers,
suppliers, and employees of a firm.

 No other mechanism has been created

that allow organizations to reach out to
anyone and everyone like the Internet
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 E-commerce Today
 The Internet allows big businesses to
act like small ones and small
businesses to act big.
 The challenge to businesses is to
make transactions not just cheaper
and easier for themselves but also
easier and more convenient for
customers and suppliers. 42
 E-commerce Today
 It’smore than just posting a nice looking
Web site with lots of cute animations and
expecting customers and suppliers to
figure it out
 Web-based solutions must be easier to
use and more convenient than traditional
methods if a company hopes to attract
and keep customers.
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Four Categories of E-
Commerce Business originating from...

Business Consumers

Business B2B C2B

And selling
to...

Consumers B2C C2C

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Distinct Categories of E-Commerce
 Business to Business (B2B) refers to the full
spectrum of e-commerce that can occur between
two organizations.
This includes purchasing and procurement,
supplier management, inventory management,
channel management, sales activities, payment
management &service and support.

Examples: FreeMarkets, Dell and General Electric

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 Distinct Categories of E-Commerce

 Business to Consumer (B2C) refers to

exchanges between business and
consumers, activities tracked are
consumer search, frequently asked
questions and service and support.

Examples: Amazon, Yahoo and Charles

Schwab & Co
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Distinct Categories of E-Commerce

 Peer to Peer (C2C) exchanges

involve transactions between and
among consumers. These can
include third party involvement, as
in the case of the auction website
Ebay.
Examples: Owners.com, Craiglist,
Monster
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Distinct Categories of E-Commerce

Consumer to Business (C2B)

involves when consumers band
together to present themselves as a
buyer in group.

Example: www.planetfeedback.com
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Convergence of e-Commerce Categories
Business originating from…
Business Consumers
Publishers order
paper supplies from Consumers search
Business

paper companies
And Selling to…

out sellers, offers

and initiate
Amazon orders purchases from
from publishers Amazon
Consumers

Consumers buy
Consumers resell
thousands of Harry
copies on eBay
Potter books from
Amazon
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 What is a web-based business
 Business that uses the WWW to
fulfill it’s business process
 Four basic business processes:
- information dissemination
- data capture
- promotions and marketing
- transacting with stakeholders 50
Key Drivers of E-commerce
 Technological – degree of advancement of
telecommunications infrastructure
 Political – role of government, creating
legislation, funding and support
 Social – IT skills, education and training of users
 Economic – general wealth and commercial
health of the nation

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 Key Drivers of E-business
 Organizational culture- attitudes to R&D,
willingness to innovate and use technology
 Commercial benefits- impact on financial
performance of the firm
 Skilled/committed workforce- willing and able to
implement and use new technology
 Requirements of customers/suppliers- in terms of
product and service
 Competition- stay ahead of or keep up with
competitors
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 Limitations of E-commerce
 To organizations: lack of security, reliability,
standards, changing technology, pressure to
innovate, competition, old vs. new
technology
 To consumers: equipment costs, access costs,
knowledge, lack of privacy for personal data,
relationship replacement
 To society: less human interaction, social
division, reliance on technology, wasted
resources, JIT manufacturing 57
 Technical limitations
 There is a lack of universally accepted standards
for quality, security, and reliability
 The telecommunications bandwidth is insufficient
 Software development tools are still evolving
 There are difficulties in integrating the Internet and
EC software with some existing (especially legacy)
applications and databases.
 Special Web servers in addition to the network
servers are needed (added cost).
 Internet accessibility is still expensive and/or
inconvenient 58
 Web based technology
Websites
E-mail
Search engines
Interactive communications

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End of presentation

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