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What is Commerce
Commerce is a division of trade or productionwhich deals with the exchange of goods andservices from producer to final consumer
It comprises the trading of something ofeconomic value such as goods, services,information, or money between two or more
entities.
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What is E-Commerce Commonly known as Electronic Marketing.
It consist of buying and selling goods andservices over an electronic systems Such as theinternet and other computer networks.
E-commerce is the purchasing, selling andexchanging goods and services over computernetworks (internet) through which transactionor terms of sale are performed Electronically.
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Definition of Commerce
The exchange of goods and services formoney
Consists of:
Buyers - these are people with money whowant to purchase a good or service.
Sellers - these are the people who offergoods and services to buyers.
Producers - these are the people who createthe products and services that sellers offer tobuyers.
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Elements of Commerce
You need a Product or service to sell You need a Place from which to sell theproducts
You need to figure out a way to get people tocome to your place.
You need a way to accept orders. You also need a way to accept money. You need a way to deliver the product or
service, often known as fulfillment.
Sometimes customers do not like what theybuy, so you need a way to accept returns. You need a customer service and technical
support department to assist customers withproducts.
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TRADITIONAL BUSINESS
DIRECT SELLING
MANF. UNIT
20%
DISTRIBUTOR
10%
WHOLESALER
10%
RETAILER
10%
CUSTOMER
100%
ADVERTISEMENT
50%
CUSTOMERCOMPANY
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LOWENTRYCOST REDUCES TRANSACTION COSTS
ACCESSTOTHEGLOBALMARKET
SECUREMARKETSHARE
Why Use E-Commerce
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Facts & Statistics
Began in 1995 and grewat an annual rate of 16 %
Rapid growth led tomarket bubble
While many companiesfailed, many survivedwith soaring revenues
E-commerce is the fastest
growing form of retailtrade in U.S., Europe,Asia
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Electronic Commerce9
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1970s: Electronic Funds Transfer (EFT) Used by the banking industry to exchange accountinformation over secured networks
Late 1970s and early 1980s: Electronic DataInterchange (EDI) for e-commerce withincompanies Used by businesses to transmit data from one business
to another
1990s: the World Wide Web on the Internet
provides easy-to-use technology for informationpublishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope
Brief History Of E- commerce
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The ProcessOf
E-Commerce
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A consumer uses Web browser to connect to the
home page of a merchant's Web site on theInternet.
The consumer browses the catalog of products
featured on the site and selects items topurchase. The selected items are placed in theelectronic equivalent of a shopping cart.
When the consumer is ready to complete thepurchase of selected items, she provides a bill-toand ship-to address for purchase and delivery
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When the merchant's Web server receives this
information, it computes the total cost of theorder--including tax, shipping, and handlingcharges--and then displays the total to thecustomer.
The customer can now provide paymentinformation, such as a credit card number, andthen submit the order.
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When the credit card number is validated and
the order is completed at the Commerce Serversite, the merchant's site displays a receiptconfirming the customer's purchase.
The Commerce Server site then forwards theorder to a Processing Network for paymentprocessing and fulfillment.
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How a Transaction Takes Place?
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Consumer findssomething she wantsto buy at a shop onthe Net
Consumer sends onenciphered requestfor payment to herbank
The electronicbank sends back asecure packet ofe-cash
Consumersends the
e-cash tothe shop
Verification andremittance of actualfunds
ConsumerPublic Key
The shopsends thepacket ofcash to itsbank
Merchant Bank
MerchantServer
Shop
ConsumersBank
Shop
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Types
Of
E-Commerce
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Business-to-business (B2B) B2B stands for Business to Business. It consists of largest form
of Ecommerce. This model defines that Buyer and seller aretwo different entities. It is similar to manufacturer issuinggoods to the retailer or wholesaler.
E.g.:-Dell deals computers and other associated accessories online but it isdoes not make up all those products. So, in govern to deal those products,
first step is to purchases them from unlike businesses i.e. the producers ofthose products.
commodityindia.com , Indiaconstruction.com ,
clickforsteel.com etc.
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Business-to-consumer (B2C): It is the model taking businesses and consumers
interaction. The basic concept of this model is to sell theproduct online to the consumers.
B2c is the direct trade between the company andconsumers. It provides direct selling through online. For
example: if you want to sell goods and services to customerso that anybody can purchase any products directly fromsuppliers website.
Travelocity.doc, hotels.com, rediff.com, jaldi.com,indiatimes.com
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Business-to-Employee (B2E)
Business-to-employee (B2E) electroniccommerce uses an intrabusiness network
which allows companies to provide
products and/or services to theiremployees. Typically, companies use B2Enetworks to automate employee-relatedcorporate processes.
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Consumer-to-consumer (C2C) There are many sites offering free classifieds, auctions,
and forums where individuals can buy and sell thanks toonline payment systems like PayPal where people cansend and receive money online with ease.
eBay's auction service is a great example of whereperson-to-person transactions take place everyday since1995.
Baazee.com ,ICQ.com , MSN.com , ek.com.au
careeron.com.au , bidorbuy.com
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Four Categories of E-Commerce
B2B
B2C
C2B
C2CConsumers
Business
And selling
to...
Business originating from...
Business Consumers
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Convergence of e-Commerce Categories
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Business originating
fromBusiness Consumers
AndSelling
to
Consumer
s
Business
Publishers orderpaper supplies
from paper
companiesAmazon orders
frompublishers
Consumerssearch out
sellers, offersand initiate
purchases fromAmazon
Consumers resellcopies on eBay
Consumers buythousands ofHarry Potterbooks fromAmazon
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Mobile Commerce (M- Commerce)
A form of e-commerce Takes place over wireless
mobile devices such as
Handheld computers and cell
phones takes place in emerging
technologies such as dashtopcomputers embedded in
automobile dashboards Presents unique opportunities
and challenges
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Types of M-Commerce Applications
Methods for delivering m-commerce services Directly from cell phone service providers
Via mobile Internet or Web applications
Location-based m-commerce applications
Using Short Message Service (SMS) textmessaging or Multimedia Messaging Service(MMS)
Using short-range wireless technology, such asinfrared
Proximity payment system
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E-Commerce from the Buyers Perspective
Process of buying or acquiring goods or services
Realizing a need
Researching a product
Selecting a vendor
Providing payment
Accepting delivery Using product support
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E-Commerce from the Sellers Perspective
Sellers business practices
Providing a method for acquiring payments
Making arrangements for delivery of the product
Providing after-sales support Supply chain management
From the sellers perspective, the process ofproducing and selling goods
Involves three areas of focus: demand planning,supply planning, and demand fulfillment Demand fulfillment: process of getting the product or service to
the customer
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E-Commerce from the Sellers Perspective
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E-Commerce from the Sellers Perspective
Sellers business practices
Market research to identify customer needs
Manufacturing products or supplying services thatmeet customer needs
Marketing and advertising to make customersaware of available products and services
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Major components of E-COM
An application which helps the shopper to browsethrough the product list and place an order.
Application should be capable of maintaining the state
information about the shopper purchase details and hisID.
It should also be able to maintain the product list.
The components interact with the database fortransaction
Shopping Cart(commerce server)
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Major components of E-COM
Shoppers can make payments through credit cards.
Credit card No. is sent to the server which can be
stored in the database which can be verified against abank manually later.
Another method is to use payment servers whichallows on-line verification of credit card numbers withthe bank.
It also provides mechanisms for checksumverification.
Payment module(Payment server)
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PROS AND CONS
OFE-COMMERCE
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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 replacement37
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To society:
less human interaction,
social division,
reliance on technology,
wasted resources, JIT manufacturing
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Advantages
Faster buying/selling procedure, as well as easy to find products.
Buying/selling 24/7.
More reach to customers, there is no theoretical geographic limitations.
Low operational costs and better quality of services.
Customers can easily select products from different providers withoutmoving around physically.
No checkout queues
Reduce prices
You can shop anywhere in the world
Wide selection to cater for all consumers
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Disadvantages
Any one, good or bad, can easily start a business.
And there are many bad sites which eat up customers money.
There is no guarantee of product quality.
Mechanical failures can cause unpredictable effects on the totalprocesses.
Unable to examine products personally
Not everyone is connected to the Internet
There is the possibility of credit card number theft
On average only 1/9th of stock is available on the net
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A Logical Design for a Simple Web Site
Figure 4.3 (a), Page 202
Copyright 2004Pearson Education, Inc.
4-44
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A Physical Design for a Simple Web SiteFigure 4.3 (b), Page 202
Copyright 2004Pearson Education, Inc.
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IBM WebSphere Commerce Professional
Edition Set of software components that provides
software suitable for midsize to largebusinesses
Includes:
Catalog templates
Setup wizards Advanced catalog tools
Electronic Commerce,Seventh Annual Edition
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Microsoft Commerce Server 2002 Allows businesses to sell products or services on
the Web using the following tools:
User profiling and management Transaction processing
Product and service management
Target audience marketing
Provides many predefined reports for analyzingsite activities and product sales data
Electronic Commerce,Seventh Annual Edition
4-47
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Visitor Profile at Typical E-commerce
Sites
Copyright 2004Pearson Education, Inc.
4-48
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The Eight Most Important Factors in Successful E-
commerce Site Design
Copyright 2004Pearson Education, Inc.
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Future of E-commerce in India
According to business world estimate nearabout Sixty thousand new jobs will be createdfor the internet world alone in the next twoyears
e-Commerce transactions are expected to crossthe Rs. 3500 crore milestone in 2010-11, ajump of around 350 percent from the 2008-09figure of Rs. 1000 crore
eBay said that consumers were trading goodsworth almost three crore rupees everyday,across the globe.
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