E-Business & e-Commerce ICS622- Internet Technologies & Applications Trends & Technologies September...

e-Business & e-Commerce

ICS622- Internet Technologies & Applications

Trends & Technologies

April 21, 20231

Objectives


To understand how the Internet and World Wide Web are revolutionizing business processes.

To introduce various business models used on the Web.

To explore the advantages and disadvantages of creating an online business.

To examine marketing, payment, security and legal issues that affect e-businesses.

April 21, 20232

Introduction


We are in the Age of KnowledgeIn short history of e-business

&commerce; demonstrated that successful e-businesses are those that recognize needs of target audiences and match them with relevant content

The terms e-business and e-commerce, often used interchangeably, have different meanings

April 21, 20233

E-Commerce and E-Business


E-commerce refers to aspects of online business involving exchanges among customers, business partners and vendors.

For example, suppliers interact with manufacturers, customers interact with sales representatives &shipment providers interact with distributors

E-business encompasses these elements, but also includes operations handled within the business itself

For example, production, development, corporate infrastructure and product management are aspects of e-business not included under the category of e-commerce.

April 21, 20234


E-business &e-commerce have increased speed &ease with which business can be transacted, resulting in intense competition among online vendors

To remain viable, e-businesses must adjust to evolving technologies, continually integrate new systems and satisfy wide variety of consumers

Its customers do not have to go far to buy from competitors

Online medium enables people to pay bills, write &cash cheques, trade stocks, take out loans &mortgage homes

Money as we now know it has begun to be augmented by such technologies as smart cards and digital cash.

April 21, 20235

E-Commerce and E-Business


Transition of business into e-business provides many benefits

An e-business can offer personalization, effective customer service and streamlined supply-chain management

Although “e-commerce” is relatively new, large corporations have used it for decades by networking their computing systems with those of business partners &clients

For example, banking industry uses EFT to transfer money

In addition, many companies employ EDIEDI facilitates standardization of business forms as

purchase orders and invoices allowing companies to share information with customers, vendors &business partners electronically

April 21, 20236

e-Business Models

Storefront Model


One of the most common models used in the Internet

Storefront model enables merchants to sell products online by providing a combination of transaction processing, security, online payment and storage

In this model buyers and sellers interact directlyTo conduct storefront e-commerce, merchants must:

organize online product catalogs, take orders through their Web sites, accept payments securely, send merchandise to customers and manage customer data

Must also market their sites to potential customers Examples include www.gap.com, www.restaurant.com,

www.walmart.com, www.barnesandnoble.com

April 21, 20237

Shopping-Cart Technology


Shopping Cart -most commonly used e-commerce enablers

Most web sites that conduct e-business over the Internet today use shopping-cart technology

Order-processing technology that allows customers to accumulate items they wish to buy as they browse

Support provided by a product catalog, which resides on the merchant server in the form of database

The merchant server is the data storage and management system employed by the merchant

Often, network of computers performs all functions necessary to run a Web site

April 21, 20238

Shopping-Cart Technology …


A database is a section of the merchant server designed to store and report on large amounts of information

For example:database for online clothing retailer would

include product specifications as item description, size, availability, shipping information, stock level and on order information.

Databases also store customer information, including:names, addresses, credit-card data and

past purchases April 21, 20239

Auction Model


Web offers wide variety of auction sites to pinpoint lowest prices on available items

Auction sites act as forums through which Internet users can assume role of either seller or bidder

Sellers can:post items they wish to sell, the minimum prices

to sell items and deadlines to close the auctions Bidders may:

Search site for items they are seeking, view current bidding activity and place bids—usually in designated increments.

April 21, 202310

Auction Model…


Reverse-auction model allows buyers to set prices that sellers compete to match, or beat.

Faster bidding option available to sellers willing to set reserve prices – minimum selling price

Auction unsuccessful if not bid meets reserve price

When auction complete, seller and winning bidder notified, and decide on methods of payment and delivery

April 21, 202311

Portal Model


Portal sites give chance for visitors to find anything they are looking for in one place.

Provide news, sports, weather and ability to search Web

Search engines are horizontal portals - aggregate information on abroad range of topics.

Vertical portals - other portals more specific, offering information pertaining to a single area of interest

Online shopping popular feature of many major portals

Examples: About.com, Altavista.com and Yahoo.com

April 21, 202312

Name-Your-Price Model


Empowers customers by allowing them to state price they are willing to pay for products and services

e-businesses that offer this service form partnerships with leaders of industries: travel, lending and retail etc

Online business passes customer’s price request to an appropriate industry partner, who decides whether to sell the product or service at stated price

Customer whose price is rejected can offer another price

If price accepted, customer obligated to make purchase

April 21, 202313

e-Marketing


Competition is intense in e-business & commerce world

Solid e-marketing strategy can give a company an advantage

There are various components of marketing campaign such as:

Marketing research, Advertising, Promotions, Branding and Public relations (PR)

April 21, 202314

Branding


Brand is typically defined as a name, logo or symbol that identifies a company’s products or services

Should be unique, recognizable and easy to remember

Brand equity includes value of tangible and intangible items, such as:brand’s monetary value over time, customer

perceptions and customer loyalty to a company and its products or services

Businesses that already have a solid brand may find it easier to transfer their brand to the Internet

Internet-only businesses must strive to develop a brand that customers trust and value.

April 21, 202315

Marketing Research


Can help company develop its marketing mix, includes: product/service details and development, effective

pricing, promotion and distribution. Traditionally, marketing research consisted of

focus groups, interviews, surveys, questionnaires & secondary research

Research can now be performed over the InternetA faster channel through which to find and

analyze industry, customer & competitor information

Internet also provides anonymous setting to hold focus group discussions and distribute questionnaires

April 21, 202316

e-Mail Marketing


E-mail marketing provide an inexpensive and effective method of targeting potential customers

Marketer should define span of people they are targeting including geographic locations & demographic profiles

Should determine level of personalization of campaign

Personalized direct e-mail targets consumers: Using their names, offering right products at

the right time and sending special promotions on basis interests

April 21, 202317

e-Mail Marketing …


Mailing lists can help marketers target customers through personalized e-mail

However, it is important to avoid flooding customers with promotional e-mail.

Excessive correspondence can decrease effectiveness of an e-mail campaign

April 21, 202318

Promotions


Can attract visitors to a site & influence their purchasing

Promotions can also be used to increase brand loyalty through reward programs

Examples:Frequent-flyer miles, point based rewards,

discounts, sweepstakes, free trials, free shipping and e-coupons

Promotions are an effective way to establish contact with potential customers; but

Important to ensure customers are becoming loyal to company, rather than to promotion/rewards program

April 21, 202319

Electronic Advertising


E-business advertising conducted through such media as television, movies, newspapers and magazines and online

Establishes & strengthens e-business brandingPublication of URLs on mailings, business cards,

billboards, printed materials & other media increase brand awareness, bringing more visitors to a site

Internet quickly becoming important medium through which to market companies, products and services

Online advertising include the placement of links and banners on other companies’ Web sites and registration of sites with search engines and directories

April 21, 202320

Search Engines


Search engine is a program that scans Web sites for desired content, listing relevant sites on basis of keywords or other ranking criteria

Ranking an important way to bring new visitors to a site

Method used by a search engine to rank a site determine how close to the top a site appears on search results

Businesses can customize and register their sites to improve their positions in search-engine results

April 21, 202321

Online Payments


Secure EFT is crucial to e-commerceMethods for conducting online

transactions include:Credit-card payments, Digital cash and e-wallets, Smart cards, Micropayments and Electronic bill presentment

April 21, 202322

Credit-Card Payment


Credit cards are a popular form of online paymentMany people resist them because of security

concernsCustomers fear fraud by merchants and third

parties However, most cards, like Visa Master Card &

American Express, have features that allow secure online payments

To accept credit-card payments, a merchant must have an account with a bank

Traditional accounts accept only POS transactionsHowever, growth of e-commerce has resulted in

creation of specialized Internet merchant accounts that handle online credit-card transactions

April 21, 202323

Credit-Card Payment


These consist of card-not-present (CNP) transactions

For example:When users make credit-card purchases

through Internet, they can provide card numbers and expiration dates, but merchant does not see actual cards involved in transactions

Merchant account established through either a bank or a third-party service

April 21, 202324

Digital Cash and e-Wallets


Digital cash is one example of digital currencyStored electronically & can be used to make

online electronic paymentsDigital-cash accounts are similar to traditional

bank accounts; consumers deposit money into digital-cash accounts for use in digital transactions

Often, digital cash used in conjunction with other payment technologies, such as digital wallets

Provides payment alternative for customers with security concerns regarding online credit-card transactions

Digital cash also allows people without credit cards to shop online

April 21, 202325

Micropayments


Merchants required to pay fee for each card transaction

Costly when customers purchase inexpensive items

Sometimes, cost of item is lower than standard transaction fee, causing merchant to incur losses

Micropayments enable ways for nominally priced products and services to be sold profitably over the Web

Examples: music, pictures, texts or videos

To offer micropayment processing some companies form partnerships with telephone carriers & utility companies

April 21, 202326

Smart Cards


Smart card generally looks like a credit card

Can serve many different functions, from authentication to data storage.

Most popular are memory cards & microprocessor cards

Memory cards are similar to floppy disksMicroprocessor cards are similar to small

computers, with operating systems, security and storage

April 21, 202327

Smart Cards


Smart cards also have different interfaces with which they interact with reading devices

One type of interface is contact interface, in which a smart card is inserted into a reading device and physical contact between the device and the card is necessary.

Alternative is contactless interface: data transferred to a reader via an embedded wireless device in the card, without card and device having to make physical contact April 21, 202328

Legal Issues


Internet has posed significant challenges to legal system of many counties

For example:file-sharing technology enables

widespread copyright infringement while

Website personalization mechanisms threaten consumers’ privacy

April 21, 202329

Privacy


Internet companies collect personal information from users as they navigate through a site

Privacy advocates argue that such efforts violate individuals’ privacy rights

Online marketers and advertisers disagree, suggesting that recording of user behavior & preferences helps online companies to better serve customers

April 21, 202330

Privacy …


Also affects companies’ relationships with employees

Many businesses are implementing systems that regulate employee efficiency in the workplace

One of the newest surveillance technologies, keystroke cops, monitors employee activities on corporate and communications equipment.

Keystroke software is loaded onto hard drive of an employee’s computer, or can be sent to an unsuspecting employee as an e-mail attachment.

Once activated, software registers each keystroke before it appears on the screen.

April 21, 202331

SPAM


Spamming is sending mass e-mails to people who have not expressed interest in receiving such e-mails.

Today, typical Internet user or e-mailer may receive hundreds of spam e-mails per day

Work in progress to construct legislation that puts an end to these unsolicited e-mails

Spam has privacy concerns based not only on sheer volume but also the content of the e-mails

Consumers and businesses are affected by decrease in e-mail server productivity due to mass e-mails received

April 21, 202332

Copyright and Patents


Copyright is protection given to author of an original work, including: “literary, dramatic, musical, artistic and

intellectual works” Whether the work has been published or

notCopyright protects only the expression

or form of an idea, not the idea itself.Copyright protection provides incentive

to creators of original material by guaranteeing them ownership of their work for a given time

April 21, 202333

Copyright and Patents


Concerns raised regarding ability of traditional law to protect IP owners from online infringement

This is because of the ease with which material can be reproduced on the Internet.

To complicate the issue, digital copies are perfect duplicates of digital originals, making it difficult to differentiate authorized copies from pirated ones.

One of most heavily debated areas of infringement and protection lies in sharing and distribution of music files (MP3s) and movies over Internet

April 21, 202334

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