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Chapter7.pptCHAPTER 7
E-Commerce: Applications and Issues
CHAPTER OUTLINE
7.1 Overview of E-Business & E-Commerce
7.2 Business-to-Consumer (B2C) E-Commerce
7.3 Business-to-Business (B2B) E-Commerce
7.4 Electronic Payments
7.5 Ethical and Legal Issues in E-Business
7.1 Overview of E-Business and E-Commerce
The dot-com era
Over 3 billion people are now connected to the
Internet
More than 130 million people are buying online
E-commerce began in 1995
Marketplace → Marketspace
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Overview of E-Business and E-Commerce
E-Commerce (EC): describes the process of buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.
E-business: is a broader definition of EC, including
buying and selling of goods and services
servicing customers
collaborating with partners
conducting e-learning
conducting electronic transactions within an organization.
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Pure versus Partial EC depends on the degree of digitization involved:
- The product can be physical or digital.
- The process can be physical or digital.
- The delivery agent can be physical or digital
Brick-and-mortar: purely physical organizations
Click-and-mortar: organizations are those that conduct some EC activities, yet their business is primarily done in the physical world [multichannneling]
Pure Play: organizations that are engaged only in EC
Overview of E-Business and E-Commerce
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Bricks and Mortar, Partial EC, and Pure EC
Buy books at Family Bookshop
bricks and mortar
Order physical book from Amazon:
partial EC
Order and download book from Amazon: pure EC
Types of E-Commerce
Business-to-Consumer (B2C): the sellers are organizations and the buyers are individuals
Business-to-Business (B2B): both the sellers and buyers are business organizations
Consumer-to-Consumer (C2C): both the sellers and buyers are individuals
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Types of E-Commerce
Business-to-Employee (B2E): An organization uses e-commerce internally to provide information and services to its employees.
E-Government (E-Gov.): the use of Internet technology to deliver information about public services to citizens (Government-to-Citizen [G2C]), business partners and suppliers (called government-to-business [G2B]) and between governments [G2G].
Mobile Commerce (m-commerce): e-commerce that is conducted using a mobile phone
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E-Commerce Business Models
- Online Direct Marketing: manufacturers sell directly to
customers
- Electronic Tendering System: businesses (or governments) request quotation from suppliers [uses B2B or G2B] -[Example: e-tendering The Tender Board ]
- E-auction – an auction which is held over the Internet
Forward Auction: the highest bidder wins the auction
Reverse Auction: the lowest bidder wins the auction
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E-Commerce Business Models
- Name-your-own-price: customers decide how much they want to pay www.priceline.com
- Find-the-best-price: customers specify a need and an intermediary compares providers and shows the lowest price
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E-Commerce Business Models
- Affiliate marketing: Vendors ask partners to place logos or banners on partner’s site. If customers click on logo, go to the vendor’s site, and buy, then the vendor pays commission to partners.
Note the Sony logo at the top of this Web page
www.howstuffworks.com
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E-Commerce Business Models
- Viral marketing: receivers send information about your product to their friends.
- Group purchasing: small buyers aggregate demand to get a large volume discount [E-Coops]
- Product customization: customers use the Internet to self-configure products or services. Sellers then price them and fulfill them quickly.
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E-Commerce Business Models
- Deep discounters: company offers deep price discounts. Appeals to customers who consider only price in their purchasing decisions
- Membership: only members can use the services provided, including access to certain information, conducting trade, etc.
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Benefits of E-Commerce
- Benefits to organizations
- Makes national and international markets more accessible
- Lowering costs of processing, distributing, and retrieving information
- Benefits to customers
- Access a vast number of products and services around the clock (24/7/365)
- Benefits to Society
- Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries
Limitations of E-Commerce
- Technological Limitations
- Lack of universally accepted security standards
- Insufficient telecommunications bandwidth
- Expensive accessibility
- Non-technological Limitations
- Perception that EC is unsecure
- Unresolved legal issues
- Lacks a critical mass of sellers and buyers
7.2 Business-to-Consumer B2C
Electronic retailing (E-tailing): the direct sale of products and services through the Internet
E-marketplace: a central, virtual market space on the Web where many buyers and sellers can conduct E-commerce and E-Business activities
E-storefront: a Web site that represent a single store
E-mall/ Cybermall: a collection of individual shops under one Internet address http://www.e-mall.com.sa/
- Referral Mall www.bing.com/shopping
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Online Service Industries
A key issue is disintermediation
The removal of intermediaries in a supply chain
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Online Service Industries
Cyberbanking: involves conducting banking activities from home, a place of business or on the road instead of at a physical bank location.
E-Bank / virtual Bank/ Cyber Bank: a bank that is dedicated only to Internet transactions
Online securities trading
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Online Service Industries
Online job market
The internet offers promising new environment for job seekers and for companies searching for hard-to-find employees.
Travel services
The internet is an ideal place to plan, explore and arrange almost any trip economically
Real Estate http://www.findaproperty.com /
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Issues in E-Tailing
Channel conflict: occurs when manufacturers disintermediate their channel partners such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers, usually over the Internet through e-commerce.
[Ford allows customers to configure a car online but requires them to pick it up from a dealer, where they arrange financing, warranties and services]
Multichanneling: is a process in which a company integrates its offline and online channels.
Order fulfillment: finding the product to be shipped; packaging the product; arrange for speedy delivery to the customer; and handle the return of unwanted or defective products.
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Online Advertising
Advertising : an attempt to disseminate information in order to influence a buyer-seller transaction.
Online Advertising methods
- Banner: simply electronic billboard [can be customized]
- Pop-up ad : appears in front of the current browser window.
- Pop-under ad: appears underneath the active window.
- Permission marketing: asks consumers to give their permission to voluntarily accept online advertising and e-mail.
[sometimes customers are paid to view online advertisements]
- Viral marketing: refers to online “word-of-mouth” marketing.
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7.3 Business-to-Business (B2B)
In B2B e-commerce, the buyers and sellers are organizations
There are several business models for B2B applications:
B2B Sell-Side Marketplace
B2B Buy-Side Marketplace
Electronic Exchanges
B2B Sell-Side Marketplace
Key mechanisms: electronic catalogs and forward auctions
In the sell-side marketplace, organizations sell their products or services to other organizations electronically from their own Web site and/or from a third-party Web site.
This model is similar to the B2C model in which the buyer comes to the seller’s site, views catalogs, and places an order. In the B2B sell-side marketplace, the buyers are organizations.
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B2B Buy-Side Marketplace
Key mechanism: reverse auctions
The buy-side marketplace is a model in which organizations buy needed products and services from other organizations electronically.
- E-procurement
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Electronic Exchanges
Exchanges independently own by a third party and connect many buyers and many sellers
Vertical Exchanges: connects buyers and sellers in a given industry
www.plasticsnet.com www.papersite.com
Horizontal Exchanges: connects buyers and sellers across many industries, and are used mainly for MRO materials
Functional Exchanges: needed services
such as temporary help or extra office
space are traded on an “as-needed” basis
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7.4 Electronic Payments
- Implementing EC typically requires E-payment
- E-payment systems enable you to pay for goods and services electronically.
E-check: encrypted check with digital signature that is similar to a paper check, and is used mostly in B2B.
E-credit card: allows customers to charge online payments to their credit card account, and is used mostly in B2C.
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How E-Credit Cards Work
Electronic Payments
Purchasing card: is the B2B equivalent of electronic credit cards and is typically used for unplanned B2B purchases.
Electronic cash
- Stored-value money cards allow you to store a fixed amount of prepaid money and then spend it as necessary.
- Smart cards contain a chip called a microprocessor that can store a considerable amount of information and are multipurpose – can be used as a debit card, credit card or a stored-value money card.
- Person-to-person payments are a form of e-cash that enables two individuals or an individual and a business to transfer funds without using a credit card.
- E-wallet
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7.5 Ethical and Legal Issues
- Privacy: ecommerce provides opportunities for businesses to track online consumers using cookies or special spyware
- Fraud on the Internet
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Ethical and Legal Issues
- Domain Name Competition
www.delta.com
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- Cybersquatting refers to the practice of registering domain names solely for the purpose of selling them later at a higher price.
The original owner of www.tom.com received $8 million for the name
- Taxes and other Fees: when and where (and in some cases whether) electronic sellers should pay taxes
- Copyright: protecting intellectual property in e-commerce and enforcing copyright laws is extremely difficult
Ethical and Legal Issues
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http://www.registry.om/
What you may buy Online?
Male 6 month old – R.O 400
Replica GUCCI Handbag
High Quality – R.O. 24
6 seater dining table in very good condition 30rial.
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