1. Define electronic commerce (EC) and describe its various categories. A process of buying, selling, transferring or exchanging products, services, and/or information via electronic networks and computers. Delivery of goods, services, information, or payments over computer networks or any other electronic means Two major types of e-commerce: business-to-consumer (B2C) : online transactions are made between businesses and individual consumers business-to-business (B2B): businesses make online transactions with other businesses

Intra - business EC: EC conducted inside an organization (e.g., business-to-employees B2E)

2. Describe and discuss the content and framework of EC.

Content: - Let's look at some of the more successful e-commerce sites on the Web and seehow they balance content with marketing and sales techniques to get people to not only return to the site, but buy. A Huge Ecommerce Site: Amazon.com At first glance, it appears that this site is very focused on selling (as they should be), but if you notice, there is much more there than simply "Click here to buy this book". There are: y y y y y y y Excerpts from the books for sale A list of the 100 "hot" books, updated hourly The top video and audio sellers for the day Reviews both by other customers and professional reviewers Author interviews Contests Reading groups and much more...

Amazon.com relies heavily on content to promote return visits and sales. They encourage their customers to review the products and provide live testimonials. Some customers will return to this site, simply because of the reviews and other resources.

Framework: People Public policy Marketing and advertising Support services Business partnerships

3. Describe the major types of EC transactions. y y y y y

business-to-consumer (B2C) : online transactions are made between businesses andindividual consumers

y y y y y

y y y y

business-to-business (B2B): businesses make online transactions with other businesses 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 seek sellers to bid on products or services they need consumer-to-consumer (C2C): e-commerce model in which consumers sell directly to other consumers peer-to-peer (P2P): technology that enables networked peer computers to share data and processing with each other directly; can be used in C2C, B2B, and B2C e-commerce mobile commerce (m-commerce): e-commerce transactions and activities conducted in a wireless environment location-based commerce (l-commerce): m-commerce transactions targeted to individuals in specific locations, at specific times intra - business 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 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 exchange (electronic): a public electronic market with many buyers and sellers

4. Describe some EC business models.

yy

Online direct marketing Electronic tendering systems tendering (reverse auction): model in which a buyer requests would-be sellers to submit bids, and the lowest bidder wins Name your own price: a model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price Affiliate marketing: Affiliate marketing is that it is a way of making money online whereby you as a publisher are rewarded for helping a business by promoting their product, service or site. Viral marketing: word-of-mouth marketing in which customers promote a product or service to friends or other people Group purchasing: quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased SMEs: small to medium enterprises

y y

y y y

y y

y y y y y y y y

Online auctions Product and service customization customization: creation of a product or service according to the buyer s specifications Electronic marketplaces and exchanges Value-chain integrators Value-chain service providers Information brokers Bartering Deep discounting Membership Supply chain improvers:- Business models can be independent or they can be combined amongst themselves or with traditional business models.

5. Describe the benefits of EC to organizations, consumers, and society.

Benefits to organizations: Global reach Cost reduction Supply chain improvements Extended hours: 24/7/365 Customization New business models

Vendors specialization Rapid time-to-market Lower communication costs Efficient procurement Improved customer relations Up-to-date company material No city business permits and fees

Benefits to consumers Ubiquity More products and services Cheaper products and services Instant delivery Information availability Participation in auctions Electronic communities Get it your way No sales tax

Benefits to society Telecommuting Higher standard of living Hope for the poor Availability of public services

6. Describe the limitations of EC.

7. Describe the role of the digital revolution in EC. 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 A global platform over which people and organizations interact, communicate, collaborate, and search for information Includes the following characteristics: A vast array of digitizable products Consumers and firms conducting financial transactions digitally

Customers are becoming more powerful Created due to advances in science occurring at an accelerated rate Results in more and more technology Rapid growth in technology results in a large variety of more complex systems

8. Define e-marketplaces and list their components. Virtual, online environment (a website, for example) that allows individuals or firms to conduct business electronically. Greater information richness Lower information search costs for buyers Ability of buyers and sellers to be in different locations

Market space components Customers Sellers Products and services Digital products:-Goods that can be transformed into digital format and delivered over the Internet Infrastructure

Market space components 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-taking. It includes fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery Intermediary: - A third party that operates between sellers and buyers. Other business partners Support services

9. List the major types of electronic markets and describe their features. y Electronic Storefronts Storefront:- A single company s Web site where products or services are sold e.g. www.walmart.com, www.dell.com. e-mall (online mall):-An online shopping center where many online stores are located e.g. www.hawaii.com Types of Stores and Malls General stores/malls large market spaces that sell all types of projects. Amazon.com Specialized stores/malls sell only one or few types of products. 1800flowers.com

y

y

Regional versus global stores serve customers that live nearby, such as e-grocer. Parknshop.com Pure online organizations versus click-and-mortar stores

private e-marketplaces :- Online markets owned by a single company Sell-side e-marketplace:-A private e-marketplace in which a company sells either standard or customized products to many companies. eg. Cisco sells products to many qualified companies (one to many) buy-side e-marketplace:-A private e-marketplace in which a company purchases from many suppliers or many organizations sell products to a single organization (many to one)

y

Public e-marketplaces:- B2B marketplaces, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges. e.g. Stock exchange, open to the public, regulated by government.

10. Describe the types of intermediaries in EC and their roles. E-distributor: - An e-commerce intermediary that connects manufacturers (suppliers) with business buyers by aggregating the catalogs of many suppliers in one place the intermediary s Web site Role:1. Gives Information of the products, Sellers, manufacturers etc to the buyer. 2. Gives information about the buyer to the seller.

Intermediaries can perform the following functions: reduce search costs, increase or create privacy, provide more complete information, reduce contract risk, and reduce pricing inefficiencies.11. Describe electronic catalogs, shopping carts, and search engines. Electronic catalogs:- The presentation of product information in an electronic form,the backbone of most e-selling sites Features: Ease of updating Ability to be integrated with the purchasing process Coverage of a wide spectrum of products Interactivity Customization Strong search capabilities

y

Two approaches to creating customized catalogs Let the customers identify the parts of interest to them from the total catalog Let the system automatically identify customer characteristics based on the customer s transaction records

y y

Search engine:- A computer program that can access a database of Internet resources, search for specific information or keywords, and report the results

Electronic Shopping Card:- An electronic shopping cart is an order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop.

12. Describe the various types of auctions and list their characteristics. Auction:- A competitive process in which a seller asks consecutive bids from buyers (forward auctions) or a buyer asks bids from sellers (backward auctions). Prices are determined dynamically by the bids

Types: One Buyer, One Seller Negotiation Many Sellers, Many Buyers Stock Exchanges double auction:- Auctions in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides One Seller, Many Buyers One Buyer, Many Sellers eBay Auction name-your-own-price model:- Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com

Forward auction:- An auction in which a seller entertains bids from buyers Reverse auction (bidding or tendering system):- Auction in which the buyer places an item for bid (tender)

13. Discuss the benefits, limitations, and impacts of auctions.

Auctions provide a wide variety of benefits to buyers, sellers and auctioneers. Auctions provide several advantages to buyers because they allow them to purchase goods from a wide variety of sellers without the constraint of time or place. The wide variety of different auctions styles meets the needs of a wide variety of different purchasers. Auctions benefit sellers by allowing them to sell to a huge potential marketplace not constrained by time or place. Additionally, it allows them to sell goods that may only have a very small target market. Sellers are also able to sell their goods at the prevailing global market price. Auctioneers benefit from auctions because it provides a business model that allows their firms to stay in business. They are able to benefit from usage by both buyers and sellers. Limitations include: lack of security, possibility of fraud limited participation. Auctions can have an impact by acting as a coordinating mechanism, acting as a social mechanism to determine a price, acting as a visible distribution mechanism and acting as a portion of the EC system.

14. Describe bartering and negotiating online. y

Bartering is an exchange of goods and services. E-bartering has the advantage over traditional bartering because it transcends its limitations of location and variety. Online negotiatingThree factors may facilitate online negotiation: 1. Bundling and customization of the products and services. 2. The computer technology that facilitates the negotiation process 3. The software (intelligent) agents that perform searches and comparisons, thereby providing quality customer service and a base from which prices can be negotiated

15. Define m-commerce and explain its role as a market mechanism

Mobility computing is defined by having fully portable, real-time access to information applications and tools that in the past were only accessible from a desktop computer. Mobile commerce (m-commerce) is electronic commerce that is conducted using wireless devices. Mobile commerce transcends some of the limitations of traditional electronic commerce, specifically the limitations of location. Reduced the barriers to enter the business as in case of traditional method Internet ecosystem:- The business model of the Internet economy Differentiation:- Providing a product or service that is unique Personalization:-The ability to tailor a product, service, or Web content to specific user preferences

16. What are the fundamental requirements for initiating an online business.

y Identify customer or business need y Investigate the opportunity y Determine ability to meet the need of the customer and other need relating to supply, manufacturing, delivering, promotion etc. Online business formation must consider the unique online aspects of the business as well as appropriate products and services. In e-business planning the major difference is the understanding of the unique aspects of the Internet and the sales channel.17. Describe the funding options available to startup businesses.

y y

y

Venture capital (VC):- Money invested in a business by an individual or a group of individuals (venture capitalists) in exchange for equity in the business Angel investors:- A wealthy individual who contributes personal funds and expertise at the earliest stage of business development for getting higher return which they wouldnt see in traditional investment. Incubators:- A company, university, or not-for-profit organization that supports businesses in their initial stages of development

18. Evaluate the options for hosting Web sites.A web hosting service is a type of Internet hosting service that allows individuals and organizations to make their own website accessible via the World Wide Web. Web hosts are companies that provide space on a server they own or lease for use by their clients as well as providing Internet connectivity, typically in a data center. Web hosting options are:-

Storebuilder service: A hosting service that provides disk space and services to help small and micro businesses build a Web site quickly and cheaply ISP hosting service: A hosting service that provides an independent, standalone Web site for small- and medium-sized businesses Web hosting service: A dedicated Web site hosting company that offers a wide range of hosting services and functionality to businesses of all sizes Mirror site: An exact duplicate of the original Web site, but it is physically located on a Web server on another continent Co-location: A Web server owned and maintained by the business is placed in a Web hosting service that manages the server s connection to the Internet Self-hosting: When a business acquires the hardware, software, staff, and dedicated telecommunications services necessary to set up and manage its own Web site

19. What are the processes and business decisions associated with managing Web site development? 20. What is the importance of providing content that meets the needs and expectations of the intended audience? 21. Evaluate Web sites on design criteria such as appearance, navigation, consistency, and performance. Site navigation: Aids that help visitors find the information they need quickly and easily The simplest navigation aid is a navigation bar at the top and bottom of each page Frame: An HTML element that divides the browser window into two or more separate windows

Consistency: Look and feel: The elements that visually distinguish a site from any other, including layout, typeface, colors, graphics, and navigation aids

Appearance: Colors and graphics rules: Match the expectations of the target audience Use standard colors Follow color standards Use complementary colors Specify the background color

22. What are the techniques of search engine optimization to obtain high placement in search engines.

SEO the application of strategies intended to position a Web site at the top of Web search engines. It is important because search engines can be a marketing tool. The key to SEO is understanding the algorithms the search engines use to determine the ranking of the results returned to the searcher Create keywords the target audience is most likely to use Use specific phrases, not general keywords Optimize the title

Use meta tags Meta tag: An HTML element that describes the contents of a Web page

Use keywords early and often in page content Include keywords in ALT tags Avoid spider-hostile features Do not spam search engines

23. What are the benefits of customer relationship management through customer self-service, listening to customers, and increasing trust? Customer self-service: FAQ page: A Web site page that lists questions that are frequently asked by customers and the answers to those questions

Listening to customers: Mine e-mail for information Survey customers quickly and frequently Create an e-mail list E-mail discussion list: A group of people who share a common interest and who communicate with each other via e-mail messages managed by e-mail list software Create a discussion forum:-Electronic discussion forum: A portion of the Web site where visitors can post questions, comments, and answers Create a chat group:-Chat group:- A portion of the Web site where visitors can communicate synchronously

Increasing trust:Trust: A psychological state-of-mind when two or more parties are willing to pursue further interactions to achieve a planned goal Ways to increase trust: Tell the customer about the company Include testimonials from loyal, satisfied customers Provide numerous opportunities for feedback Answer customer e-mail promptly Provide information to the customer about an order

24. Describe e-tailing and its characteristics. y Electronic retailing (e-tailing): Retailing conducted online, over the Internet E-tailers: Those who conduct retail business over the Internet

Characteristics of e-tailing high brand recognition (Lands End) guarantee provided by highly reliable or well-known vendors (Dell) digitized format (software) relatively inexpensive items (office supplies) frequently purchased items (groceries) commodities with standard specifications (books), physical inspection unimportant well-known packaged items that cannot be opened even in a traditional store (vitamins)

25. Define and describe the primary business models of electronic retailing ( e-tailing ). y Direct sales by manufacturers Sellers understand their markets better because of the direct connection to consumers, and consumers gain greater information about the products through direct connection to the manufacturers Example: Dell Computers build-to-order approach of customization

y y y y y y y y y y y y y

Virtual (pure-play) e-tailers: Firms that sell directly to consumers over the Internet without maintaining a physical sales channel. Examples: cattoys.com Click-and-mortar retailers: Brick-and-mortar retailers with 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: Describes a company that sells in multiple marketing channels simultaneously (e.g., both physical and online stores) Other B2C business models Transaction brokers Information portals Community portals Content creators or disseminators Viral marketing Market makers Build-to-order Service providers

26. Describe how online travel and tourism services operate and their industry impact. y Unique services travel tips (a visa problem) electronic travel magazines fare comparisons currency conversion calculators worldwide business and place locators outlet for travel accessories and books experts opinions major international and travel news detailed driving maps and directions chat rooms and bulletin boards frequent-flier deals online travel auctions

Wireless services check flight status, update frequent flyer miles, and book flights through cell phones

Direct marketing sell electronic tickets over the Internet airlines are able to build customer profiles and target specific customers with tailored offers

Alliances and consortia aggregate participants Internet-only fares

Impact of EC on the travel industry Consumers who used to order accommodations directly from a hotel are now using the Internet to compare prices and frequently are buying from an intermediary (Hotwire.com)

27. Discuss the online employment market, including its participants, benefits, and limitations. 28. Describe online real estate transactions. 29. Discuss cyber banking and online personal finance.

30. Describe on-demand delivery by e-grocers. 31. Describe the delivery of digital products and online entertainment. 32. Describe the B2B field. 33. Describe the major types of B2B models. 34. Discuss the characteristics of the sell-side marketplace, including auctions. Sell-side e-marketplace: A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet Three major direct sales methods: selling from electronic catalogs selling via forward auctions one-to-one selling

35. Describe the sell-side intermediary models. 36. Describe the characteristics of the buy-side marketplace and e-procurement. y Buy-side e-marketplace: A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method

Procurement methods Buy from manufacturers, wholesalers, or retailers from their catalogs, and possibly by negotiation Buy from the catalog of an intermediary that aggregates sellers catalogs or buy at industrial malls Buy from an internal buyer s catalog in which company-approved vendors catalogs, including agreed upon prices, are aggregated Conduct bidding or tendering (a reverse auction) in a system where suppliers compete against each other Buy at private or public auction sites in which the organization participates as one of the buyers Join a group-purchasing system that aggregates participants demand, creating a large volume Collaborate with suppliers to share information about sales and inventory, so as to reduce inventory and stock-outs and enhance just-in-time deliver

e-procurement: The electronic acquisition of goods and services for organizations Benefits of e-procurement Increasing the productivity of purchasing agents Lowering purchase prices through product standardization and consolidation of purchases Improving information flow and management Minimizing the purchases made from noncontract vendors. Improving the payment process Establishing efficient, collaborative supplier relations Ensuring delivery on time, every time Reducing the skill requirements and training needs of purchasing agents Reducing the number of suppliers Streamlining the purchasing process, making it simple and fast Reducing the administrative processing cost per order Improved sourcing Integrating the procurement process with budgetary control in an efficient and effective way Minimizing human errors in the buying or shipping process Monitoring and regulating buying behavior

37. Explain how reverse auctions work in B2B. One of the major methods of e-procurement is through reverse auctions (tendering or bidding model) The reverse auction method is the most common model for large MRO purchases as it provides considerable savings Thousands of companies use the reverse auction model They may be administered from a company s Web site or from an intermediary s site The bidding process may last a day or more Bidders may bid only once, but bidders can usually view the lowest bid and rebid several times

38. Describe B2B aggregation and group purchasing models.

39. Describe infrastructure and standards requirements for B2B. 40. Define e-marketplaces and exchanges and describe their major types. 41. Describe the various ownership and revenue models of exchanges. 42. Describe B2B portals. y Vortals: B2B portals that focus on a single industry or industry segment; vertical portals

43. Describe third-party exchanges. y Third-party exchanges are characterized by two contradicting properties they are neutral, not favoring either sellers or buyers they do not have a built-in constituency of sellers or buyers and sometimes have a problem attracting enough buyers and sellers to attain financial viability

44. Distinguish between purchasing (procurement) and selling consortia. 45. Define dynamic trading and describe B2B auctions. y y Dynamic trading: Exchange trading that occurs in situations when prices are being determined by supply and demand (e.g., in auctions) Matching supply and demand quantity, delivery times, and locations

46. Describe the operation and benefits of networks of exchanges. 47. Discuss exchange management 48. Describe the features of traditional payment systems Inefficiencies in traditional procurement management Procurement management: The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization Maverick buying: Unplanned purchases of items needed quickly, often at non-prenegotiated, higher prices

49. Discuss the current limitations of online credit card payment systems

y

Security Neither the merchant not the consumer can be fully authenticated

y

Merchant Risk Consumers can repudiate charges

y

Cost Roughly 3.5% of purchase plus transaction fee

y

Social Equity Young adults do not have credit cards Almost 100 million adult Americans cannot afford cards or are considered poor risks

50. Understand the features and functionality of digital wallets Also known as an e-wallet, allows users to make electronic commerce transactions quickly and securely. Functions much like a physical wallet. A method of storing various forms of electronic money, but with little popularity of such e-cash services, the digital wallet has evolved into a service that provides internet users with a convenient way to store and use online shopping

51. Describe the features and functionality of the major types of digital payment systems in the B2B arena 52. Describe the features and functionality of electronic billing presentment and payment systems 53. Describe the factors that influence consumer behavior online. Response time Site availability Download time Timeliness Security and privacy On-time order fulfillment Return policy Navigability

y

Roles people play in the decision making process Initiator Influencer Decider Buyer User

54. Describe the decision-making process of consumer purchasing online. need identification information search evaluation of alternatives purchase and delivery after-purchase evaluation

55. Describe how companies are building one-to-one relationships with customers. 56. Explain how personalization is accomplished online.

Personalization of goods and services for unique individuals requires information from the individual and the ability to match that information to appropriate products. There are several different ways to obtain information from individuals. These methods include soliciting the information from the individual directly, using cookies or other methods to observe online behavior, performing market research or extrapolating from previous purchasing patterns. Once a firm has information about an individuals preferences, they can then use a software system to match those preferences to available products and services.57. Discuss the issues of e-loyalty and e-trust in EC.

Trust is very important in EC because of the lack of direct human interaction between the customer and the merchant. Merchants are able to increase the amount of trust their customers have through brand recognition, security mechanisms and business transparency. Or Trust is vital and many customers cite it as a reason for avoiding or curtailing EC purchases.Trust must be developed in order for transactions to take place. Market

research can help a firm identify their customers preferences, and thus indicate methods to increase their trust in the firm.

58. Describe consumer market research in EC.

The objective of market research is to find information that describes the relationships between customers, products, marketing methods and marketers. Market research assists a firm in both their marketing and product mix decisions.Or

Online market research is very similar to the research that would be done offline. Online marketing research is conducted online, and the Internet can make the process quicker and easier. Researchers go through the same steps online in determining what needs to be researched and validating results. Researchers can gain access to a large variety of secondary research available online. The major methods include Web surveys, focus groups, direct feedback, customer scenarios, customer tracking, and analysis of click stream data.59. Describe CRM, its methods, and its relationship with EC.

CRM is customer relationship management. This is a customer service approach that focuses on building long-term and sustainable customer relationships that add value both to the customer and for the company. CRM is practiced online through a variety of different methods that use the advantages of enabling Internet technology to provide the service. ECRM is CRM activities conducted electronically. CRM helps a firm keep its customers happy by understanding their needs and quickly reacting to their problems. CRM is limited by its integration into other IT systems, which can be very difficult. CRM can be difficult to implement because of the required customizations for a company. These specifications may vary depending on who is consulted and it is vital they be correct. The integration itself can be very difficult because of the age and diversity of a companys MIS. CRM service does not generally create new revenue, but attempts to hold existing customers. This retention is difficult to quantify to justify the expense of a CRM system. A customer service metric is a way for a firm to analyze their customer service. There are a variety of metrics that can be used including: response time, site availability, downloads time, timeliness, security/privacy, on-time order fulfillment, return policy and navigability.

60. Explain the implementation of customer service online and describe its tools. 61. Describe Internet marketing in B2B, including organizational buyer behavior.