978-0134741086 Chapter 10 Part 2

Chapter 10, Page 166

Conclusion

Planning for an Internet presence can make all the difference. Entrepreneurs will benefit by

1. What advantages does an “online–only” strategy offer a company? Why do

many start-up companies use this strategy? (LO 4) (AACSB: Reflective

2. What advantages do retail stores offer a company? Disadvantages? (LO 4)

(AACSB: Reflective thinking)

3. Why are many companies shifting to a multichannel strategy that involves both

physical stores and an online presence? (LO 4) (AACSB: Application of

knowledge)

1. Why are cybercriminals increasingly targeting small businesses with their

attacks? (LO 6) (AACSB: Reflective thinking)

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2. What are the risks and dangers to a small company that is the victim of a

cyberattack?(LO 6) (AACSB: Reflective thinking)

3. Use the information in this chapter and resources of the Internet to develop a list

of at least five suggestions that small business owners can act on to strengthen

the computer security in their companies and reduce the threat of a cyberattack.

Part 4: Chapter Discussion Questions

10-1. In what ways has the Internet and e-commerce changed how companies do

business? (LO 1)

10-2. Discuss the factors entrepreneurs should consider before launching an e–

commerce site. (LO 1)

Before launching an e-commerce effort, entrepreneurs should consider the following

strategic issues:

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 An ongoing investment of resources is required to create a meaningful

presence on the Internet.

 How to measure the success of its Internet-based sales effort.

Six factors are essential to achieve e-commerce success: acquiring customers; optimizing

conversion of visitors into paying customers; maximizing Web site performance; ensuring

a positive user experience; retaining customers; use Web analytics as part of a cycle of

continuous improvement.

10-3. What are the 11 myths of e-commerce? (LO 2)

The 11 myths of e-commerce are:

Myth 1: If I launch a site, customers will flock to it.

Myth 2: Online customers are easy to please.

Myth 3: Launching an e-commerce site is free – or at least really inexpensive

10-4. What can an entrepreneur do to avoid falling victim to these 11 myths? (LO 2)

Myth 1: If I Launch a Site, Customers Will Flock to It

Myth 4: Making Money on the Web Is Easy

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Making money online requires an up-front investment of time, money, and energy.

meaningful privacy policies. Trust is the foundation on which the long-term customer

needs, wants, likes and dislikes. Online customers only have to make a mouse click or

two to go to a rival Web site.

Myth 7: The Most Important Part of Any E–Commerce Effort Is Technology

Technology advances have reduced significantly the cost of launching an e-ecommerce

business. Having the right technology is not the most crucial ingredient; instead a

The customer service experience on the Web is vitally important and directly affects

buyer behavior. Customers say convenience is more important than getting the lowest

prices when shopping online. Customers still expect high levels of service. When

shoppers abandon their online shopping cart some companies immediately send an e-

mail message offering free shipping if they will complete their purchase.

orders on a Web site, is just as important as designing the site itself. According to

Daryl Plummer, “The companies with warehouses, supply-chain management, and

solid customer service are going to be the ones that survive.” Virtual order

fulfillment (or drop shipping) is utilized once a customer places an order; the

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company forwards the order to a wholesaler or distributor who then ships the product

to the customer with the online merchant’s label on it. There can be problems for the

online company related to the loss of control over delivery times and service quality.

Myth 11: My Business Doesn’t Need a Web Site

Today’s shoppers prefer to purchase from companies that offer a multichannel

approach, particularly those that offer in-store pick-up for online orders and in-store

returns for online purchases. When looking to purchase products locally, most

shoppers go online to conduct research first, and customers routinely share their

opinions online about products and their shopping experience. Successful

10-5. What strategic advice would you offer an entrepreneur about to start an e-

company? (LO 3)

10-6. What design characteristics make for a successful Web page? (LO 4)

 Include an E-Mail Option, a Physical Address, and a Telephone Number.

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 Create a Fast, Simple Checkout Process.

 Provide Customers Multiple Payment Options.

 Assure Customers That Their Online Transactions Are Secure.

 Establish Reasonable Shipping and Handling Charges and Post Them Up

 Consider Hiring a Professional to Design Your Site.

10-7. Explain the characteristics of an ideal domain name. (LO 4)

10-8. Give an example of a company with a good domain name and an example of a

company with a poor domain name.

10-9. What advantages does each e-commerce metric offer? (LO 5)

There are many Web analytics software packages, but effective ones offer the following

types of information:

 Commerce metrics. These are basic analytics, such as sales revenue generated,

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 Cost per acquisition – measures the cost that a company incurs to generate

each purchase (for customer registration).

 Average number of page views per visit – measures how much time visitors

spend on a site (visit duration).

 Bounce rate – measures the percentage of visitors to a company’s Web site

who view a single page and leave without viewing other pages.

 Cart abandonment rate – measure the percentage of shoppers who place at

10-10. What steps should e-businesses take to ensure the privacy of the information

they collect and store from the Web? (LO 6)

10-11. What techniques can e-companies use to protect their banks of information

and their customers’ transaction data from hackers? (LO 6)

10-12. What challenges does evaluating the effectiveness of a Web site pose for

online entrepreneurs? (LO 6).

Part 5: Case Studies

The following text cases may be used for lecture and assignments for topics presented in

this chapter.

 Case 8: Gitman Brothers

 Case 10: Nuts.com

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Part 6: Online Videos and Podcasts

These online videos may enhance class discussion and provide additional insight for the

chapter topics.

 How to Market Your Ecommerce Site to Niche Markets 2:20 minutes

http://www.youtube.com/watch?v=pj81F8LrFkw

 Five Major Don’ts of Building an Ecommerce Site 2:53 minutes

http://www.youtube.com/watch?v=Or8ZQ0TSCLo

 Five Basic Ways to Market Your Site 2:33 minutes

http://www.youtube.com/watch?v=za7NdRtRIwY

 Six Website Elements That Impact Customers in 3 Seconds or Less 2:39 minutes

http://www.youtube.com/watch?v=Ze-g2rNBIFc

 Five Ecommerce Trends to Make an Impact in 2014 2:26 minutes

http://www.youtube.com/watch?v=icouqKSDspA

 Humphry Slocombe: Promote Using Free Online Marketing 2:45 minutes

http://www.sba.gov/tools/sba-learning-center/video/humphry-slocombe-promote-

using-free-online-marketing

 The 5 Most Epic Fails of SEO 2:23 minutes

http://www.youtube.com/watch?v=nXTk4xg3d74

Links to additional online resources are available on the companion Web site at