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9 - 1Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
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9 - 2Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Electronic CommerceSystems
Chapter
9
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9 - 3Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
1. Identify the major categories and trendsof e-commerce applications.
2. Identify the essential processes of an e-commerce system, and give examples ofhow they are implemented in e-
commerce applications.
Learning Objectives
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Learning Objectives
3. Identify and give examples of several keyfactors and Web store requirements needed tosucceed in e-commerce.
4. Identify and explain the business value ofseveral types of e-commerce marketplaces.
5. Discuss the benefits and trade-offs of severale-commerce clicks and bricks alternatives.
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9 - 5Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
What is Electronic Commerce?
Electronic commerce encompasses theentire online process of developing,marketing, selling, delivering, servicing,
and paying for products and servicestransacted on internetworked, globalmarketplaces of customers, with thesupport of a worldwide network of
business partners.
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9 - 6Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Scope of e-Commerce
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e-Commerce Technologies
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Categories of e-Commerce
Business-to-Consumer (B2C) businessesdevelop attractive electronic marketplaces tosell products and services to consumers
Business-to-Business (B2B) involves bothelectronic business marketplaces and directmarket links between businesses
Consumer-to-Consumer (C2C) includesauction websites and electronic personaladvertising
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Categories of e-Commerce
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Essential e-Commerce Processes
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Access Control and Security
Definition: E-commerce processes must establish
mutual trust and secure access between
the parties in an e-commerce transactionby authenticating users, authorizingaccess, and enforcing security features
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Profiling and Personalizing
Definition: Processes that gather data on you and
your website behavior and choices, and
build electronic profiles of yourcharacteristics and preferences. Theseprofiles are then used to recognize you asan individual user and provide you with apersonalized view of the contents of thesite, as well as product recommendationsand personalized Web advertising
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Search Management
Definition: Efficient and effective search processes
provide a top e-commerce website
capability that helps customers find thespecific product or service they want toevaluate or buy
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Content and Catalog Management
Content Management software thathelps e-commerce companies develop,generate, deliver, update, and archive text
data and multimedia information at e-commerce websites
Catalog Management software thathelps generate and manage catalogcontent
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Workflow Management
Definition: Software that helps employees
electronically collaborate to accomplish
structured work tasks within knowledge-based business processes
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Event Notification
Definition: Software that notifies customers,
suppliers, employees, and other
stakeholders of their status in atransaction based on events initiated byone of the parties
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Collaboration and Trading
Definition: Processes that support the vital
collaboration arrangements and trading
services needed by customers, suppliers,and other stakeholders
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Electronic Payment Processes
Web Payment credit card payment processes
Electronic Funds Transfer (EFT) use IT tocapture and process money and credit transfersbetween banks and businesses and theircustomers
Secure Electronic Payments securitymeasures including encrypting data passing
between customer and merchant, encryptingdata passing between customer and companyauthorizing the credit card transaction, andtaking sensitive information off-line
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e-Commerce Trends
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Business-to-Consumer e-Commerce
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e-Commerce Success Factors
Selection and Value attractive productselections, competitive prices, satisfactionguarantees, and customer support afterthe sale
Performance and Service fast, easy
navigation, shopping, and purchasing, andprompt shipping and delivery
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9 - 22Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Success Factors
Look and Feel attractive web storefront,website shipping areas, multimediaproduct catalog pages, and shoppingfeatures
Advertising and Incentives targeted web
page advertising and e-mail promotions,discounts and special offers, includingadvertising at affiliate sites
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9 - 23Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Success Factors
Personal Attention personal web pages,personalized product recommendations,Web advertising and e-mail notices, andinteractive support for all customers
Community Relationships virtual
communities of customers, suppliers,company representatives, and others vianewsgroups, chat rooms, and links torelated sites
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9 - 24Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Success Factors
Security and Reliability security ofcustomer information and websitetransactions, trustworthy productinformation, and reliable order fulfillment
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9 - 25Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Web Store Requirements
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Developing a Web Store
Build website using simple website designtools
Market website to attract visitors andtransform them into loyal Web customers
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Serving Customers
Serve customers by creating user profiles,customer files, personal Web pages andpromotions that help develop a one-to-onerelationship
Transact with customers by providingdynamically changing catalog, fast catalogsearch engine, and convenient shopping cartsystem integrated with promotions, payment,
shipping, and account information
Support customers with help menus, tutorials,FAQs and e-mail correspondence with customerservice representatives
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9 - 28Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Managing a Web Store
Manage both the business and thewebsite
Operate twenty-four hours a day, sevendays a week
Protect Web store transactions andcustomer records, and repel hackerattacks and other security threats
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9 - 29Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Business-to-Business e-Commerce
B2B e-commerce is the wholesale andsupply side of the commercial process,where businesses buy, sell, or trade withother businesses.
All factors for building a successful retail
website also apply to wholesale websitesfor B2B e-commerce.
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9 - 30Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Marketplaces
One to Many sell-side marketplaces host onemajor supplier who dictates product catalogofferings and prices
Many to One buy-side marketplaces attractmany suppliers that flock to these exchanges tobid on the business of a major buyer
Some to Many distribution marketplaces unitemajor suppliers who combine their productcatalogs to attract a larger audience of buyers
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9 - 31Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Marketplaces
Many to Some procurementmarketplaces unite major buyers whocombine their purchasing catalogs toattract more suppliers and thus morecompetition and lower prices
Many to Many auction marketplacesused by many buyers and sellers that cancreate a variety of buyers or sellers
auctions to dynamically optimize prices
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9 - 32Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
e-Commerce Portals
Definition: Websites developed and hosted by third-
party market-maker companies who serve
as infomediaries that bring buyers andsellers together in catalog, exchange, andauction markets.
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B2B e-Commerce Web Portal
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Infomediaries
Definition: Companies that serve as intermediaries in
e-business and e-commerce transactions
Provide e-commerce marketplacesoftware products and services to power
business Web portals for e-commercetransactions
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Clicks and Bricks in e-Commerce
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E-Commerce Channel
Definition: The marketing or sales channel created
by a company to conduct and manage its
chosen e-commerce activities
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9 - 37Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Checklist for Channel Development
What audiences are we attempting to reach?
What action do we want those audiences totake?
Who owns the e-commerce channel within theorganization?
Is the e-commerce channel planned alongsideother channels?
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9 - 38Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Checklist for Channel Development
Do we have a process for generating,approving, releasing, and withdrawingcontent?
Will our brands translate to the newchannel or will they require modification?
How will we market the channel itself?
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9 - 39Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Summary
Electronic commerce encompasses theentire online process of developing,marketing, selling, delivering, servicing,and paying for products and services.
The basic categories of e-commerce
include B2C, B2B and C2C.
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9 - 40Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Summary
Many e-business enterprises are movingtoward offering full service B2C and B2Be-commerce portals supported byintegrated customer-focused processes
and internetworked supply chains.
Companies must evaluate a variety of e-
commerce integration or separationalternatives and benefit trade-offs whenchoosing a clicks and bricks strategy ande-commerce channel.
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9 - 41Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.
Summary
Businesses typically sell products andservices to consumers at e-commercewebsites that provide attractive Webpages, multimedia catalogs, interactiveorder processing, secure electronicpayment systems, and online customersupport.
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Summary
Business-to-business applications of e-commerce involve electronic catalog,exchange, and auction marketplaces thatuse Internet, intranet, and extranetwebsites and portals to unite buyers andsellers.
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End of Chapter
Chapter
9
