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MIS 111: Computers and the Inter-networked Society

Class 4: E-Commerce

July 14th, 2011

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Today’s Learning Objectives

List one or two current events in technology news Define e-commerce List at least 4 different ways e-commerce can make money Explain the difference between Business-to-Customer and

Business-to-Business e-commerce List the components of an online store Discuss how the “long tail” is implemented in e-commerce and

why it makes e-commerce successful Discuss a few ways you can make money online

Survey

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When was the last time you used a physical store to buy… MusicBookSoftwareDVD

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E-Commerce: An Example

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E-Commerce: A Definition

“The process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet.”

Pure vs. Partial E-Commerce

Bricks and mortar (not e-commerce)

Virtual (pure e-commerce)

Clicks and mortar (partial e-commerce)

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A Word on Nomenclature

Business and technology people are fairly simple people.

Hence, the names they choose mean exactly what they say (for example, management information systems? The world wide web?)

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Types of E-Commerce

Business-to-Consumer Business-to-Business Consumer-to-Consumer Business-to-Employee E-Government Mobile Commerce

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More details

Business-to-Consumerand

Business-to-Business

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Business-to-Consumer EC (B2C)

Means of Access (E-Tailing)– Direct sale through Electronic Storefronts

Like www.officedepot.com

– Direct sale through Electronic Malls May include thousands of vendors

Benefits of E-Tailing:– Can buy from home 24/7– Wider variety of products at lower prices (text

books?)

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Business-to-Consumer Services

Online Service Industries (in addition to goods)– Cyberbanking (paying bills, applying for loans)– Online Securities Trading (E*Trade)– Online Job Market (www.monster.com)– Travel Services (www.hotels.com)

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Business-to-Consumer Ads

Online Advertising Methods– Banners (electronic billboards)– Pop-ups/Pop-unders (annoying!!)– Spamming vs. Permission Marketing

(Will you please sign up for our newsletter?)

– Viral Marketing “Word of Mouth” marketing

Addwords (not as good as search engine optimization)

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Business-to-Business (B2B)

Sell-Side Marketplaces– Organizations sell products to others

Buy-Side Marketplaces– Organizations buy products from others

Electronic Exchanges– One buyer, many sellers

Some E-Commerce Business Models

Online direct marketing– Manufacturers/Retailers sell directly to customers

Deep discounters– Appeals to customers who consider only price

Viral marketing– Receivers send info about product to friends

Group purchasing– Small buyers aggregate demand to get low price

Online auctions– Like regular auction, but online

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How do they make money?

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Amazon.com

Pandora.com

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Ebay.com

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iTunes

http://www.barnesandnoble.com/

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Google

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Facebook

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CNN

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ESPN

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NCN.com

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go.disney.com

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www.arizona.edu

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Woot.com

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Where to start?

Q1. how are you going to make money Adverting Selling a product Selling a service Selling digital media Affiliate program Selling sort of you own program Subscriptions Hybrid

DO YOUR RESEARCH!

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Example, I’m going to be selling a digital product

Tomorrow, we will do an affiliate program so today we are going to be selling videos and music

Q2. how much work am I willing to put into Web development?

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Option 1

Online solutions– http://shopping-cart-review.toptenreviews.com/– https://www.bigcommerce.com/ecommerce-soluti

on-features.php

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e-commerce - Michael McDonnell

Online Stores:Components & Processes

Customer Catalogue

ShoppingCart

CheckoutPayment

Collection

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Catalogue• List of Products• Descriptions• Prices• Options, size, etc.• Pictures

11Shopping Cart• A temporary list of

item to be purchased

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Checkout• Billing Info• Shipping Address• Shipping Cost• Record Order• Process Payment

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Electronic Payments

Electronic Checks Electronic Credit Cards Purchasing Cards

Do you know what that little lock means in the upper right hand corner of the browser?

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Electronic Payments (cont’d)

Electronic Cash– Stored-Value Money Cards (calling cards)– Smart Cards (like the CatCard)– Person-to-Person Payments (PayPal)– Digital Wallets (stores financial info of buyer so no

reentry is needed)

Option 2

Content Management System– Blog– Google sites– Word press– Joomla– Drupal

Plugins – http://extensions.joomla.org/

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Option 3

Completely program it Why?

– Complete flexibility– Your platform doesn’t support content

management systems http://govollow.appspot.com/ Free and lots of traffic (great for facebook, iphone

integration)

– You’re a geek

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With option 2 and 3

You usually need to find you own place to host the Web site (they are just software)– Install software– Create a database

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The Long Tail

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“The Long Tail”

What happened to Touching the Void? What does it mean that we have a “market of

hits?” (anyone listen to the Top 40 station?) Why aren’t obscure products in the market? What is the 20/80 principle and why doesn’t it

apply to the market for music and videos?

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The Long Tail: Power Law Distribution

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The Rules of The Long Tail

Rule 1: Make Everything Available– Why can sellers sell everything online?

Rule 2: Cut the Price in Half; Now Lower it.– Is any price too low?

Rule 3: Help Me Find it.– How do recommendations work?

You: A Money Maker

Affiliate Programs (http://www.amazon.com/) Advertising (www.google.com/adsense/) Create Products (http://www.spreadshirt.com/) I want to sell my own product …

– Don’t want to handle order fulfillment– http://www.amazonservices.com/content/fulfillment-

by-amazon.htm?id=hm2

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Tomorrow

No reading Meet in McClelland Hall 214 We’re going to make a business!!!

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Quiz

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