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CHAPTER 5 AND MODULE B
ELECTRONIC COMMERCE: Strategies For The New Economy & THE WORLD WIDE WEB AND THE INTERNET
WWW AND THE INTERNET
World Wide Web Internet Web site Web page URL (uniform resource locator) Top-level domain
UNDERSTANDING ADDRESSES
Consider http://nfp.cba.utulsa.edu/bajaja/mis3003/http:// - defines the protocol default is http, others may be mailto:// or ftp:// or telnet:// etc. nfp – name of the machine that is the web server. Usually
www but may be something else. Here it is nfputulsa – the name of the organization usually. cba is a
subdomain within the utulsa domain. edu – top-level domain (organization type)bajaja – name of folder on the nfp server mis3003 – subfolder in the bajaja folder/ at end of mis3003 means refer to the default home page
which is usually default.htm or default.html or index.html.
TOP-LEVEL DOMAINS com – commercial or
for-profit business coop – cooperative edu – educational
institution gov – U.S.
government agency mil – U.S. military
organization net – Internet
administrative organization
int – International treaties organization
info – general information
biz – business museum – accredited
museum name – personal pro – Accountant,
doctor, lawyer, etc. Many more
http://data.iana.org/TLD/tlds-alpha-by-domain.txt
WEB 2.0
. In web 2.0, data is encapsulated in tags that allow programs to talk to each other. For example, a phone number can be encapsulated in a <phone> tag so the dialer on my phone will know it is a phone number and dial it.
Also, in web 2.0, focus is on on online collaboration, users as both creators and modifiers of content, dynamic and customized information feeds, etc. So, content is created by the common masses of people, using social interaction. WikisSocial networking sitesBlogsRSS feedsPodcastingMany others
THE INTERNET BACKBONE Internet backbone -- major set of computer
connections on Internet Network access point (NAP) Network service provider (NSP) Internet service provider (ISP)
INTERNET SERVERS: INTERNET IS NOT WWW! Internet server
computer – provides information and services on the Internet
Web server – provides information and services on the Web
Mail server – provides e-mail services
ftp (file transfer protocol) server – maintains files you download
IRC (Internet Relay Chat) server – supports discussion groups and chat rooms
COMMUNICATIONS PROTOCOLS
Information moves on the Internet according to communications protocols
Communications protocol (protocol)set of rules that every computer follows to
transfer information Most widely used
TCP/IP (transport control protocol / Internet protocol):
http (hypertext transfer protocol)ftp (file transfer protocol) SMTP or POP: email protocols
TELECOMMUNICATIONS HARDWARE
To access and use the Web, you also need hardware
Mainly, some sort of modem Telephone DSL Cable Satellite
OPENING CASE: ADVERTISING $$ GO WHERE THE EYES ARE
The InternetAdults spend 29% of their time thereAdvertisers spend only 8% of $$ thereNewspaperAdults spend only 8% of their time thereAdvertisers spend 20% of $$ there
OPENING CASE: ADVERTISING $$ GO WHERE THE EYES ARE
The Internet Adults spend 29% of their time there Advertisers spend only 8% of $$ there
Newspaper Adults spend only 8% of their time there Advertisers spend 20% of $$ there
ELECTRONIC COMMERCE E-commerce is changing everything
Electronic commerce (e-commerce)
Mobile commerce (m-commerce)
TYPES OF BUSINESSES
Brick-and-Mortar or retailers
Click-and-Mortar (or Bricks-and-Clicks)
Dot-Coms (or Pure Plays) or e-tailers
E-COMMERCE BUSINESS MODELS
B2B E-COMMERCE
Business to Business e-commerceWhere most of the money is transacted. Why?
Basically, it’s about businesses doing business with other businesses
Supply chain management (from Chapter 2) is a big part of B2B e-commerce
Examples: www.flightpath.com, www.imprivata.com, www.alibaba.com
B2C E-COMMERCE
Business to Consumer e-commerce Business sells product/service to consumer
B2C is the glitzy e-commerce like iTunes, eBay, netflix, etc.
C2B E-COMMERCEConsumer to Business e-commerce
True economic inversion of the B2C modelFotolia is a good example (www.fotolia.com)
There you can post photos and videos and businesses will pay you a royalty to use them (if they like what you offer)
You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites
C2C E-COMMERCE
Consumer to Consumer e-commerceYou selling to another person (or the reverse)Usually occurs through an intermediary such as eBay
or craigslist.
Is ebay only c2c?
GOVERNMENT E-COMMERCE
Business to Government (B2G) e-commerceLockheed providing products and services to DoDFairly large e-commerce model in terms of revenueMost U.S. government entities (especially at the federal
level) won’t do business with your business if you can’t do it electronically
Consumer to Government (C2G)e-commerceYou selling something to the governmentThis market is quite smallMost times, “you” must register as a business before
selling something to the government, which would then become B2G e-commerce
GOVERNMENT E-COMMERCEGovernment to Business (G2B) e-commerce
SBA providing surety guarantees, disaster assistance, etc to small businesses
TSA holding auctions and selling off confiscated items (most times, you must be a “business” to participate in these auctions)
U.S. Geological Survey (DOI) selling detailed survey data to businesses
Government to Consumer (G2C) e-commerceDoes not fit well at all within the traditional supply-and-demand
e-commerce notionPaying taxes, registering vehicles, etc
Government to Government (G2G) e-commerceMainly about information sharing, not commerce
E-COMMERCE RULES TO LIVE BY
1. Understand your business, products, services, and customers
2. Find customers and establish relationships
3. Move money easily and securely
1. UNDERSTAND YOUR BUSINESS, PRODUCTS, SERVICES, & CUSTOMERS
To be successful, you must answer the following:
What is my business’s added value to the marketplace?
Who will benefit from this added value? They are my customers! Is it other businesses, or general consumers or the government?
What do customers see when they interact with my company?
B2C: CONVENIENCE VERSUS SPECIALTY
ConvenienceLower pricedPurchased frequentlyExample: common
food itemsSpecialty
Higher pricedPurchased less
frequentlyExample: Stereos,
computers
Commoditylike Same no matter where
you purchase it Examples: books,
music, movies Price and ease of
ordering are important Digital
Purchased and delivered over the Internet
Best product type for B2C e-commerce
Examples: Music, software
B2C: Commoditylike
and Digital
B2C: MASS CUSTOMIZATION
Mass customizationthe ability of an organization to give its customers the
opportunity to tailor its products or services Dell – customized computer purchases Apple iTunes – only the music you want (not necessarily the
whole album)
B2B: MRO VERSUS DIRECT
Maintenance, repair, and operations (MRO) materials (indirect materials)
materials necessary for running a company but do not relate to the company’s primary business activities
Similar to convenience items in B2COffice supplies, repair parts, lubricating oils
B2B: HORIZONTAL VERSUS VERTICAL
B2B e-commerce takes advantage of e-marketplaces
Electronic marketplace (e-marketplace)interactive business providing a central market
where multiple buyers and sellers can engage in e-commerce
Horizontal e-marketplacesVertical e-marketplaces
E-MARKETPLACES
2. FIND CUSTOMERS AND ESTABLISH RELATIONSHIPS
You must first find customers Then establish relationships Otherwise, you can’t make a sale B2C and B2B techniques are very different
E-COMMERCE RULES TO LIVE BY
B2C MARKETING MIX TOOLS
Registering with search engines (SEO) Example: http://www.seo.com/
Online ads (google adwords)Example: http://www.google.com/adwords
Viral marketing (You-tube and games)https://www.youtube.com/watch?v=oMS23XGrQzM
Affiliate programs: websites direct traffic to you and get paid a percentage for each sale (conversion) or each click - through
B2B MARKETING
Much more personal. Need to contact only a few customers and establish a deep relationship with them.
Not usually done with generic ads designed for mass distribution. Often takes place in e-marketplaces
Once a contact is made, the relationship must be established; this often requires face-to-face meetings
Must also integrate the IT systems to the supplier business and customer business.
3. MOVE MONEY EASILY AND SECURELYIn e-commerce, most money moves
electronicallySecurity becomes very importantExample: Bitcoinshttps://www.youtube.com/watch?v=ultLPNj-a8Y
Other methods:Credit cardsFinancial cybermediaries (www.paypal.com)Electronic checks Electronic Bill Presentment and PaymentSmart cards with a chip that stores information on how much money you have.
B2B PAYMENT SYSTEMS
Business customers…
Make large purchasesWill not pay with credit card or
financial cybermediaryUse Financial EDIPay for many purchases at once
(perhaps the end of the month)
SECURITY: THE PERVADING CONCERN
Security is very important when moving money Some security measures…
Encryption Secure Sockets Layers Secure Electronic Transactions Many, many others
E-BUSINESS TRENDS
1. Crowdsourcing: when businesses provide enabling technologies that allow people to create, modify, and oversee the development of a product or service.
2. Virtual Goods: nonphysical object. What can be virtualized?
3. M-commerce: web everywhere.
4. Crowd funding: Getting a new startup fundedhttp
://www.forbes.com/sites/chancebarnett/2013/05/08/top-10-crowdfunding-sites-for-fundraising/
5. Wearable computing and augmented reality: Being able to see data on items or services that may be for sale.