E lectronic commerce (EC) : The process of buying, selling, or exchanging products, services, or information via computer.
e-business : A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers,
collaborating with business partners, and conducting electronic transactions within an organization.
Pure Versus Partial EC:EC can take several forms depending on the degree of digitization (the transformation from physical to digital) of: the
product (service) sold,the process (e.g., ordering, payment, fulfillment),the delivery method
EC Organizations :brick-and-mortar (old economy) organizations: Old-economy organizations (corporations) that perform their primary business
offline, selling physical products by means of physical agents.
virtual (pure-play) organizations: Organizations that conduct their business activities solely online.
click-and-mortar (click-and-brick) organizations: Organizations that conduct some e-commerce activities, usually as an additional marketing
channel.
Electronic Markets and Networks: electronic market (e-marketplace):An online marketplace where buyers and sellers meet to exchange goods,
services, money, or information.
Intranet:An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols.
Extranet:A network that uses the Internet to link multiple intranets.
business-to-business (B2B):E-commerce model in which all of the participants are businesses or other organizations.
business-to-consumer (B2C):E-commerce model in which businesses sell to individual shoppers.
e-tailing:Online retailing, usually B2C.
business-to-business-to-consumer (B2B2C) :E-commerce model in which a business provides some product or service to a client business that
maintains its own customers.
consumer-to-business (C2B) :E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals
who seek sellers to bid on products or services they need.
intrabusiness EC:E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or
information among various units and individuals in an organization.
business-to-employees (B2E) :E-commerce model in which an organization delivers services, information, or products to its individual employees.
consumer-to-consumer (C2C) :E-commerce model in which consumers sell directly to other consumers.
collaborative commerce (c-commerce) :E-commerce model in which individuals or groups communicate or collaborate online.
e-learning :The online delivery of information for purposes of training or education.
e-government :E-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or
individual citizens.
social computing :An approach aimed at making the human–computer interface more natural.
Web 2.0 :The second generation of Internet-based services that lets people collaborate and share information online in new ways, such as social
networking sites, wikis, communication tools, and folksonomies.
social network :A category of Internet applications that help connect friends, business partners, or individuals with specific interests by providing
free services such as photos presentation, e-mail, blogging, and so on using a variety of tools.
social network service (SNS) :A service that builds online communities by providing an online space for people to build free homepages and that
provides basic communication and support tools for conducting different activities in the social network.social networking:The creation or
sponsoring of a social network service and any activity, such as blogging, done in a social network (external or internal).
business-oriented networks:Social networks whose primary objective is to facilitate business. Xing.com
ENTERPRISE SOCIAL NETWORKS:Carnivalconnections.com
virtual world :A user-defined world in which people can interact, play, and do business. The most publicized virtual world is Second Life.
digital economy :An economy that is based on digital technologies, including digital communication networks, computers, software, and other
related information technologies; also called the Internet economy, the New economy, or the Web economy. Chracteristics: Globalization, Digital
System, Speed, Information overload and intelligent search Markets, Digitization, Business Models and processes, Inovation, Obsolescence,
Opportunities, Fraud, Wars, Organizations
digital enterprise:A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage
customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing
technology in a way that improves business processes.
corporate portal :A major gateway through which employees, business partners, and the public can enter a corporate Web site.
THE DIGITAL SOCIETY : The final, and perhaps most important, element of the digital world is people and the way they live and interact.
Contributions to the EC: Efficient Transactions, global reach, anytime/anywhere convenience, fast dissemination of information, easy to find
product/vendor information, price comparison for customers, personalization/customization, productivity booster, rich media/entertainment/social
networking, knowledge/advice/collaboration.
business model :A method of doing business by which a company can generate revenue to sustain itself.
value proposition :The benefits a company can derive from using EC.
Revenue Models :Sales,Transaction Fees,Subscription Fees,Advertising Fees,Affiliate Fees
Functions of a Business Model :Describe the major business processes of a company,Describe the business models’ positioning within the value
network linking suppliers and customers,Formulate the venture’s competitive strategy and its long-range plans,Articulate a customer value
proposition,Identify a market segment,Define the venture’s specific value chain structure,Estimate the cost structure and profit potential
TYPICAL EC BUSINESS MODELS : Online direct marketing,Electronic tendering systems:tendering (bidding) system,Model in which a buyer
requests would-be sellers to submit bids; the lowest bidder wins. ,Electronic marketplaces and exchanges,Viral marketing,Social networking and
Web 2.0 tools
Benefits of EC: to organizations: global reach, cost reduction, facilitate problem solving, supply chain improvements, business always open,
customization/personalization, seller’s specialization, ability to innovate, use new business models, rapid time to market and increased speed, lower
communication costs, efficient procurement, improved customer service and relationship, fewer permits and less tax, up-to-date company material,
help SME to compete, lower inventories, lower cost of distributing digitizable product, provide competitive advantage
To consumers: ubiquity, more products/services, customized products, cheaper, instant delivery, information availability convenient auction
participation, no sales tax, enable telecommuting, electronic socialization, unique item
To society: enable telecommuting, more public services, improved homeland security, increased standard of living, close the digital divide.
Limitations of EC: lack of universal standards for quality/security/reliability, the telecommunications bandwidth is insufficient, especially for m-
commerce/videos/graphics, software development tools are still evolving, difficulty to integrate Internet and EC software with some existing
applications/databases, special web servers are needed in addition to the network servers, which add to the cost of EC, Internet accessibility is still
expensive and invonvenient, order fulfillment of large-scale B2C requires special automated warehouses
e-marketplace :An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are
private, public, and consortia.
Marketspace : A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do so
electronically.
E-MARKETPLACE COMPONENTS ; Customers,Sellers,Products and services,Infrastructure
front end :The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a
shopping cart, a search engine, and a payment gateway.
back end :The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging,
and delivery.
Intermediary :A third party that operates between sellers and buyers.
Disintermediation :Elimination of intermediaries between sellers and buyers.
TYPES OF E-MARKETPLACES : Private E-Marketplaces:sell-side e-marketplace:A private e-marketplace in which one company sells either
standard and/or customized products to qualified companies.
buy-side e-marketplace:A private e-marketplace in which one company makes purchases from invited suppliers.
Public E-Marketplaces
Webstore (storefront) :A single company’s Web site where products or services are sold and usually has an online shopping cart associated with it.
Many Webstores target a specific industry and find their own unique corner of the market.
e-mall (online mall) :An online shopping center where many online stores are located.
TYPES OF STORES AND MALLS :General stores/malls,Specialized stores/malls,Regional versus global stores,Pure-play versus click-and-
mortar stores
Web (information) portal :A single point of access, through a Web browser, to critical business information located inside and outside (via
Internet) an organization.
How a portal works: 1Intergrating and processing data from external and internal sources.2Aggregating of content in a dynamic format per user ’s
request. 3.user sees one integrated,personalized,uptodate web page.
Types of Portals :Commercial (public) portals,Corporate portals,Publishing portals,Personal portals,mobile portal:A portal accessible via a mobile
device.,voice portal:A portal accessed by telephone or cell phone, Knowledge portals
THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES:1Brokers:Buy/sell fulfillment,Virtual
mall,Metamediary,Comparison agent,Shopping facilitator,Matching services 2infomediaries:Electronic intermediaries that provide and/or control
information flow in cyberspace, often aggregating information and selling it to others. 3.e-distributor: An e-commerce intermediary that connects
manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site.
electronic catalogs (e-catalogs) : The presentation of product information in an electronic form; the backbone of most e-selling sites.
NETWORK SERVICES
Avatars :Animated computer characters that exhibit humanlike movements and behaviors.
BUSINESS ACTIVITIES AND VALUE IN VIRTUAL WORLDS :1.Creating and managing a virtual business2.Conducting regular business
activities 3.Providing services for those who build, manage, or make money with virtual properties
electronic retailing (e-tailing):etailing conducted online, over the Internet.
e-tailers:etailers who sell over the Internet.
CHARACTERISTICS AND ADVANTAGES OF SUCCESSFUL E-TAILING :1.Sound business thinking, visionary leadership, thorough
competitive analysis and financial analysis, and the articulation of a well-thought-out EC strategy are essential. 2.Ensure appropriate infrastructure,
particularly a stable and scalable technology infrastructure to support the online and physical aspects of EC business operations.
CLASSIFICATION OF MODELS BY DISTRIBUTION CHANNEL:1Direct marketing by mail-order retailers that go online,2Direct marketing
by manufacturers3.Pure-play e-tailers4.Click-and-mortar retailers5.Internet (online) malls
direct marketing :Broadly, marketing that takes place without intermediaries between manufacturers and buyers; in the context of this book,
marketing done online between any seller and buyer.
virtual (pure-play) e-tailers :Firms that sell directly to consumers over the Internet without maintaining a physical sales channel.
click-and-mortar retailers :Brick-and-mortar retailers that offer a transactional Web site from which to conduct business.
brick-and-mortar retailers :Retailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores.
multichannel business model :A business model where a company sells in multiple marketing channels simultaneously
Retailing in Online Malls :Referring Directories,Malls with Shared Services
SPECIAL SERVICES ONLINE :Wireless services,Direct marketing,Alliances and consortia,Travel-Oriented Social Networks
BENEFITS OF ONLINE TRAVEL SERVICES :Free information ,Accessible at any time from any place,Substantial discounts
LIMITATIONS OF ONLINE TRAVEL SERVICES :Many people do not use the Internet,The amount of time and the difficulty of using virtual
travel agencies can be significant,Complex trips or those that require stopovers might not be available online
Parties in Internet job market:Job seekers,Employers seeking employees,Classified ads,Job agencies,Government agencies and
institutions,Online Job Markets on Social Networking,Global Online Portals
e-banking :Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking,
online banking, and home banking.
ONLINE banking ISSUES:Securing Financial Transactions,Imaging Systems,Fees Online vs Fees for Offline Services,Risks
ON-DEMAND DELIVERY OF PRODUCTS :1 e-grocer:A grocer that takes orders online and provides deliveries on a daily or other regular
schedule or within a very short period of time.2on-demand delivery service:Express delivery made fairly quickly after an online order is received.
ONLINE ENTERTAINMENT :Adult Entertainment,Internet Gaming,Online Dating Services
shopping portals :Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented.
shopping robots (shopping agents or shopbots):Tools that scout the Web on behalf of consumers who specify search criteria.:‘‘Spy”
Services,Wireless Shopping Comparisons
Issues in e-tailing: 1.disintermediation:The removal of organizations or business process layers responsible for certain intermediary steps in a
given supply chain. 2.Reintermediation:The process whereby intermediaries (either new ones or those that had been disintermediated) take on new
intermediary roles. 3.channel conflict:Situation in which an online marketing channel upsets the traditional channels due to real or perceived
damage from competition. 4.DETERMINING THE RIGHT PRICE 5.PRODUCT AND SERVICE CUSTOMIZATION AND
PERSONALIZATION 6.FRAUD AND OTHER ILLEGAL ACTIVITIES
Lessons in e-tailing: Speak with one voice,Leverage the multi-channels,Empower the customer
A GENERIC PURCHASING-DECISION MODEL :1.Need identification 2.Information search:a.product brokering:Deciding what product to
buy. B.merchant brokering:Deciding from whom (from what merchant) to buy products. 3.Evaluation of alternatives 4.Purchase decision and
delivery 5.Postpurchase behavior
PLAYERS IN THE CONSUMER DECISION PROCESS :Initiator,Influencer,Decider,Buyer,User
Personalization :The matching of services, products, and advertising content with individual consumers and their preferences.
user profile :The requirements, preferences, behaviors, and demographic traits of a particular customer.
M ajor strategies used to compile user profiles : 1Solicit information directly from the user2.Observe what people are doing online 3. Build
from previous purchase patterns 4.Perform marketing research 5. Make inferences:behavioral targeting:The use of information collected on an
individual’s Internet browsing behavior to select which advertisements to display to that individual.
e-loyalty :Customer loyalty to an e-tailer or loyalty programs delivered online or supported electronically.
TRUST IN EC : The psychological status of willingness to depend on another person or organization.
MARKET RESEARCH FOR ONE-TO-ONE : 1.Direct Solicitation of Information:Implementing Web-Based Surveys,Online Focus
Groups,Hearing Directly from Customers 2.Data Collection in the Web 2.0 Environment:Discussion forums, polling, blogging, chatting, live chat,
chatterbots, collective wisdom for intelligence, find expertise, folksonomy, data in videos, photos, and other rich media 3. Observing Customers’
Movements Online:a.transaction log:A record of user activities at a company’s Web site. B. clickstream behavior:Customer movements on the
Internet.
Web bugs : Tiny graphics files embedded in e-mail messages and in Web sites that transmit information about users and their movements to a Web
server.
Spyware :Software that gathers user information over an Internet connection without the user’s knowledge.
clickstream data:Data that occur inside the Web environment; they provide a trail of the user’s activities (the user’s clickstream behavior) in the
Web site.
Web mining :The use of data mining techniques for discovering and extracting information from Web documents and Web usage.
collaborative filtering :A market research and personalization method that uses customer data to predict, based on formulas derived from
behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles.
Biometrics :An individual’s unique physical or behavioral characteristics that can be used to identify an individual precisely
interactive marketing :Online marketing, facilitated by the Internet, by which marketers and advertisers can interact directly with customers, and
consumers can interact with advertisers/vendors.
ad views :The number of times users call up a page that has a banner on it during a specific period; known as impressions or page views.
Button :A small banner that is linked to a Web site. It can contain downloadable software.
click (click-through or ad click) :A count made each time a visitor clicks on an advertising banner to access the advertiser’s Web site.
click-through rate:The percentage of visitors who are exposed to a banner ad and click on it.
click-through ratio :The ratio between the number of clicks on a banner ad and the number of times it is seen by viewers; measures the success of a
banner in attracting visitors to click on the ad.
conversion rate :The percentage of clickers who actually make a purchase.
CPM (cost per thousand impressions) :The fee an advertiser pays for each 1,000 times a page with a banner ad is shown.
Hit :A request for data from a Web page or file.
Page:An HTML (Hypertext Markup Language) document that may contain text, images, and other online elements, such as Java applets and
multimedia files. It can be generated statically or dynamically.
Stickiness :Characteristic that influences the average length of time a visitor stays in a site.
unique visits :A count of the number of visitors entering a site, regardless of how many pages are viewed per visit.
Visit :A series of requests during one navigation of a Web site; a pause of a certain length of time ends a visit.
Advantages of online advertising: Cost,Richness of format,Personalization,Timeliness,Location-basis,Linking,Digital branding
Advertising method: 1.banners :On a Web page, a graphic advertising display linked to the advertiser’s Web page.
keyword banners:Banner ads that appear when a predetermined word is queried from a search engine.
random banners:Banner ads that appear at random, not as the result of the user’s action.
Benefits of Banner Ads:1.The major benefit of banner ads is that, by clicking on them, users are directly transferred to the shopping page of an
advertiser’s site. 2.The ability to customize them for individual surfers or a market segment of surfers.
Limitations of Banner Ads:1The major disadvantage of banners is their cost 2A limited amount of information can be placed on the banner
2pop-up ad:An ad that appears in a separate window before, after, or during Internet surfing or when reading e-mail.
3pop-under ad:An ad that appears underneath the current browser window, so when the user closes the active window the ad is still on the screen.
4E-MAIL ADVERTISING:E-Mail Hoaxes,Fraud,E-Mail Advertising Methods and Successes
5.CLASSIFIED ADS
6.SEARCH ENGINE ADVERTISEMENT:URL Listing,Keyword Advertising,search engine optimization (SEO)
7viral marketing:Word-of-mouth method by which customers promote a product or service by telling others about it.
social network advertising :Online advertising that focuses on social networking sites.
Types of Social Network Advertising:1Direct advertising that is based on your network of friends 2Direct advertising placed on your social
network site 3.Indirect advertising by creating “groups” or “pages”
Advertising Strategies: 1affiliate marketing:A marketing arrangement by which an organization refers consumers to the selling company’s Web
site.2ADS AS A COMMODITY (PAYING PEOPLE TO WATCH ADS) 3SELLING SPACE BY PIXELS 4.PERSONALIZED ADS AND OTHER
PERSONALIZATION:Webcasting:A free Internet news service that broadcasts personalized news and information, including seminars, in
categories selected by the user. 5. ONLINE EVENTS, PROMOTIONS, AND ATTRACTIONS:Live Web Events
Spamming :Using e-mail to send unwanted ads (sometimes floods of ads).
permission advertising (permission marketing) :Advertising (marketing) strategy in which customers agree to accept advertising and marketing
materials (known as “opt-in”).
localization :The process of converting media products developed in one environment (e.g. country) to a form culturally and linguistically
acceptable in environments outside the original target market.
business-to-business e-commerce (B2B EC) :Transactions between businesses conducted electronically over the Internet, extranets, intranets, or
private networks; also known as eB2B (electronic B2B) or just B2B.
Types of B2B: 1One-to-Many and Many-to-One: Private E-Marketplaces:company-centric EC:E-commerce that focuses on a single company’s
buying needs (many-to-one or buy-side) or selling needs (one-to-many or sell-side). 2.Many-to-Many: Exchanges:a.exchanges (trading
communities or trading exchanges):Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers
and many sellers meet electronically to trade with each other. B.public e-marketplaces:Third-party exchanges open to all interested parties (sellers
and buyers). 3.Supply Chain Improvers and Collaborative Commerce
B2B CHARACTERISTICS :Parties to the Transaction: Sellers, Buyers, and Intermediaries:online intermediaryAn online third party that brokers a
transaction online between a buyer and a seller; may be virtual or click-and-mortar.
Types of Transactions:1.spot buying:The purchase of goods and services as they are needed, usually at prevailing market prices. 2,strategic
(systematic) sourcing Purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers.
BENEFITS OF E-LEARNING :Time reduction,Large volume and diversity,Cost reduction,Higher content retention,Flexibility,Updated and
consistent material,Fear-free environment
DRAWBACKS OF E-LEARNING :Need for instructor retraining,Equipment needs and support services,Lack of face-to-face interaction and
campus life,Assessment,Maintenance and updating,Protection of intellectual property,Computer literacy,Student retention
distance learning :Formal education that takes place off campus, usually, but not always, through online resources.
virtual university :An online university from which students take classes from home or other offsite locations, usually via the Internet.
Advantages of E-Books :Lower cost,Portability,Easy search capabilities and links,Easy downloading,Ability to quickly and inexpensively copy
material,Easy integration of content with other text,Easy updating,No wear and tear on a physical book,Ability to find out-of-print books,Books can
be published and updated quickly so they can be kept current
Limitations of E-Books :They require hardware and software that may be too expensive for some readers,Some people have difficulty reading large
amounts of material on a screen,Batteries may run down,There are multiple competing standards
knowledge management (KM) :The process of capturing or creating knowledge, storing it, updating it constantly, disseminating it, and using it
whenever necessary.KM TYPES AND ACTIVITIES :Create knowledge,Capture knowledge,Refine knowledge,Store knowledge
Manage knowledge,Disseminate knowledge,Knowledge Sharing