Chapter 7

What are the types of electronic cards?

--Electronic Credit Cards --Virtual Credit Cards --Purchasing Cards --Stored-Value Money Cards --Smart Cards

Key Mechanisms of the Sell-Side Marketplace Model

--Forward auctions --Electronic catalogs customized for each large buyer --Third-Party Auction Sites (e.g., eBay)

Electronic Storefront

A Web site that represents a single store.

Reverse Auction

A major method of procuring goods and services in the buy-side model is the reverse auction.

Buy-Side Marketplaces Model

A model in which organizations attempt to procure needed products or services from other organizations electronically. Procurement is the overarching function that describes the activities and processes to acquire goods and services.

Channel Conflict

A situation in which clicks-and-mortar companies face a conflict with their regular distributors when they begin selling directly to customers online. These conflicts can arise in areas such as pricing, resource allocation (e.g., how much money to spend on advertising). The two most significant E-Tailing Issues are Channel Conflict and Fulfillment.

Virtual (or pure-play) Organizations

All dimensions of the organization are digital and they engage in pure electronic commerce only.

Virtual Credit Cards

Allow customers to shop online and can be used only once in order to thwart criminals by using a different, random card number every time you shop online.

Stored-Value Money Cards

Allow you to store a fixed amount of prepaid money and then spend it as necessary and each time you use the card, the amount is reduced by the amount you spent.

Pop-Under Ad

An Internet ad appears underneath the active window; when users close the active window, they see the ad.

Pop-Up Ad

An Internet ad that appears in front of the current browser window.

Digital Wallets

An application used for making financial transactions. These apps can be on users' desktops or on their smartphones.

Consumer-to-Consumer (C2C)

An individual sells products or services to other individuals.

Business-to-Employee (B2E)

An organization uses EC internally to provide information and services to its employees.

Purchasing Cards

Are the B2B equivalent of electronic credit cards and in some countries, purchasing cards are the primary form of payment between companies.

Permission Marketing

Asks consumers to give their permission to voluntarily accept online advertising and e-mail.

What are the 6 advertising methods?

Banners Pop-Up Ad Pop-Under Ad Spamming Permission Marketing Viral Marketing

Domain Names

Considered legal when the person or business who owns the name has operated a legitimate business under that name for some time.

Electronic Catalogs

Consist of a product database, a directory and search capabilities, and a presentation function. They are the backbone of most e-commerce sites.

Smart Cards

Contain a chip that can store a considerable amount of information: more than 100 times the amount contained on a stored-value money card and are frequently multipurpose. That is, you can use them as a credit card, a debit card, a stored-value money card, or a loyalty card.

Electronic Exchanges

Deal in both direct and indirect materials. *Direct Materials:* inputs to the manufacturing process, such as safety glass used in automobile windshields and windows. *Indirect Materials:* those items, such as office supplies, that are needed for maintenance, operations, and repairs (MRO).

Mobile Commerce (M-Commerce)

E-commerce that is conducted entirely in a wireless environment.

Public Exchanges

Electronic marketplaces that are independently owned by a third party, and they connect many sellers with many buyers which are open to all business organizations and frequently owned and operated by a third party.

Business-to-Consumer (B2C)

The sellers are organizations, and the buyers are individuals.

Group Purchasing

(e-coops) Small buyers aggregate demand to create a large volume; the group then conducts tendering or negotiates a low price.

What are the two types of Electronic Auctions?

*Forward Auctions:* sellers solicit bids from many potential buyers and prices tend to increase over time. *Reverse Auctions:* one buyer, usually an organization, wants to purchase a product or a service and buyer posts a request for quotation (RFQ) on its Web site or on a third party site. Prices tend to decrease over time.

Three Basic Types of Public Exchanges are;

*Vertical Exchanges:* connect buyers and sellers in a given industry. *Horizontal Exchanges:* connect buyers and sellers across many industries. *Functional Exchanges:* needed services such as temporary help/labor or extra office space are traded on an as-needed basis.

Legal and Ethical Issues Specific to E-Commerce

--Fraud on the Internet --Domain Names --Domain Tasting --Cybersquatting --Taxes and Other Fees --Copyright

Ethical Issues in E-Business

--Threats to Privacy --Potential Job Loss

E-Storefronts

A Web site that represents a single store.

Electronic Business (e-business)

A much broader concept than e-commerce, in addition to the buying and selling of goods and services, E-Business refers to servicing customers, collaborating with business partners, and performing electronic transactions within an organization.

Multichanneling (or Omni-Channeling)

A process in which companies integrate their online and offline channels creating the opportunity for 'showrooming.' *Showrooming:* occurs when shoppers visit a brick-and-mortar store to examine a product in person then conduct research about the product on their smartphones. In these situations, customers often purchase the product from the Web site of a competitor of the store they are visiting.

Business-to-Business (B2B)

Both the sellers and the buyers are business organizations. B2B comprises the vast majority of EC volume.

Government-to-Citizen (G2C)

Government to individual citizens.

Private Exchanges

Have one buyer and many sellers.

Copyright

Intellectual property is protected by copyright laws and cannot be used freely which is difficult to enforce online.

Bartering Online

Intermediary administers online exchange of surplus products and/or company receives points for its contribution, which it can use to purchase other needed items. *www.bbu.com*

Cyberbanking (or Electronic Banking)

Involves conducting various banking activities from home, at a place of business, or on the road instead of at a physical bank location. It includes capabilities ranging from paying bills to applying for a loan.

Domain Tasting

Lets registrars profit from the complex money trail of pay-per-click advertising. companies register domain names that are very similar to their competitor's domain names in order to generate traffic from people who misspell Web addresses. Domain tasters exploit this policy by claiming Internet domains for five days at no cost.

Group Purchasing in the Buy-Side Marketplaces Model

Multiple buyers combine their orders so that they constitute a large volume and therefore attract more seller attention and when buyers place their combined orders on a reverse auction, they can negotiate a volume discount.

Viral Marketing in Advertising Methods

Online word-of-mouth marketing including messages forwarded to friends, family members, and other acquaintances suggesting they check-this- out which enables companies to build brand awareness at a minimal cost without having to spam millions of uninterested users.

Viral Marketing

Recipients of your marketing notices send information about your product to their friends.

Electronic Commerce (EC or E-Commerce)

The process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet.

Electronic Cards

There are a variety of electronic cards, and they are used for different purposes. The most common types are electronic credit cards, virtual credit cards, purchasing cards, stored-value money cards, and smart cards.

Electronic Marketplaces and Exchanges

Transactions are conducted efficiently (more information to buyers and sellers, lower transaction costs) in electronic marketplaces (private or public)

E-Procurement

Uses reverse auctions, particularly group purchasing.

Affiliate Marketing

Vendors ask partners to place logos (or banners) on partners site. If customers click on logo, go to venders site, and make a purchase, then the vendor pays commissions to the partners.

Order Fulfillment

When a company sells directly to customers, it is involved in various order-fulfillment activities including: quickly finding the products to be shipped; packing orders; arranging for the packages to be delivered speedily to the customer's door; collect the money from each customer; handle the return of unwanted or defective products.

Disintermediation

a process whereby intermediaries are eliminated. Intermediaries (or middlemen) have two functions: *1.* They provide information, and this function can be fully automated and most likely will be assumed by e-marketplaces and portals that provide information for free. *2.* They perform value-added services such as consulting.

Benefits of E-Commerce

*Organization:* National and International markets are more accessible with lowers costs of processing, distributing, and retrieving information *Customer:* Provides access to a vast number of products and services 24/7 *Benefit to Society:* Deliver information, services, and products to people in cities, rural areas, and developing countries

Threats to Privacy of E-Business

--Business makes it easier to store and transfer personal information --To protect the buyer's identities businesses must frequently use encryption to provide this protection. --Tracking individual's activities on the Internet can be tracked by cookies that store a user's browsing history on their PCs hard drive. --Antivirus software packages must routinely search for potentially harmful cookies.

Technological Limitations of E-Commerce

--Lack of universally accepted security standards --In less-developed countries telecommunications bandwidth is often insufficient, and Web access is expensive

Non-Technological Limitations of E-Commerce

--Perceptions that e-commerce is insecure --EC has unresolved legal issues --EC lacks a critical mass of buyers and sellers

E-Marketplaces

A central, virtual market space on the Web where many buyers and many sellers can conduct e-commerce and e-business activities.

E-Malls (also known as a cybermall or an e-mall)

A collection of individual shops consolidated under one Internet address and they are closely associated with Business-to-Commerce electronic commerce.

Electronic Auctions

A competitive buying and selling process in which prices are determined dynamically by competitive bidding. Generally, increase revenues for sellers by broadening the customer base and shortening the cycle time of the auction. Buyers will benefit because they can bargain for lower prices. They do not have to travel to an auction at a physical location. Both individual consumers and corporations can participate in auctions.

Banners

Electronic billboards containing a short text, graphics, video clips, or sound to promote a product or a vendor. Characteristics of Banner Ads include; --the most common form of advertising on the Internet --customized to a target audience --convey only limited information because of their small size --many viewers simply ignore them

Electronic Payment Mechanisms

Enable buyers to pay for goods and services electronically, rather than writing a check or using cash.

Person-to-Person Payments

Enable two individuals, or an individual and a business, to transfer funds without using a credit card (e.g., PayPal).

Taxes and Other Fees

Federal, state, and local authorities are now scrambling to create some type of taxation policy for e-business within their jurisdictions. --Based on location, should electronic businesses pay business license taxes, franchise fees, gross receipts taxes, excise taxes, privilege taxes, and utility taxes? --How should tax collection be controlled?

Government-to-Business (G2B)

Government-to-Business E-Commerce is much like Business-to-Business E-Commerce, usually with an overlay of government procurement regulations.

Spamming

Indiscriminate distribution of electronic ads without the permission of the receiver.

Procurement

Involves the activities necessary to establish requirements, sourcing activities such as market research and vendor evaluation, and negotiation of contracts.

Online Direct Marketing

Manufacturers or retailers sell directly to customers. Very efficient for digital products and services. Can allow for product or service customization. *www.dell.com*

Membership

Only members can use the services provided, including access to certain information, conducting trades, etc. *www.egreetings.com*

Sell-Side Marketplace Model

Organizations attempt to sell their products or services to other organizations electronically from their own private e-marketplace Web site and/or from a third-party Web site. In the B2B sell-side marketplace the buyer is an organization.

Clicks-and-Mortar (or Clicks-and-Bricks)

Organizations that are partial electronic commerce (EC) combining both virtual and physical dimensions.

Brick-and-Mortar Organizations

Organizations that exist as purely physical organizations.

Degree of Digitization

The extent to which the commerce has been transformed from physical too digital which can relate to both the product or service being sold and the delivery agent or intermediary. In other words, the product can be either physical or digital, and the delivery agent can also be either physical or digital.

Cybersquatting

The practice of registering or using domain names for the purpose of profiting from the goodwill or the trademark that belongs to someone else. The Anti- Cybersquatting Consumer Protection Act (1999) permits trademark owners in the United States to sue for damages in such cases.

Online Advertising

The practice of using the Internet and WWW to disseminate information in an attempt to influence a buyer- seller transaction through the direct response approach which personalizes advertising and marketing making the advertising process media rich, dynamic, and interactive.

Purchasing

The process of ordering and receiving goods and services and it is a subset of the procurement process.

Potential Job Loss in E-Business

The use of EC may eliminate the need for some of a company's employees, as well as brokers and agents. --How should the company handle the layoffs? --Should companies be required to retrain employees for new positions? --Should the company compensate or otherwise assist the displaced workers?

Online Securities Trading

The use of computers to trade stocks, bonds, and other financial instruments. (e.g., E*Trade, Ameritrade, etc.) which is cheaper than a full- service or discount broker.

Travel Services

Use of the Internet and WWW to plan, explore, and arrange almost any trip economically allowing customers to purchase airline tickets, reserve hotel rooms, and rent cars.

Electronic Checks (e-checks)

Which are used primarily in B2B, are similar to regular paper checks.

E-Government

E-government is the use of Internet technology in general and e- commerce in particular to deliver information and public services to citizens.

Product Customization

Customers use the Internet to self-configure products or services. Sellers then price them and fulfill them quickly (build-to-order) *www.jaguar.com*

Electronic Mall

(also known as a cybermall or an e-mall) A collection of individual shops grouped under a single Internet address.

Electronic Tendering System

Businesses request quotes from suppliers. Uses B2B with a reverse auction mechanism.

Online Job Market

Companies and government agencies advertise available positions, accept resumes, and take applications via the Internet while job seekers use the online job market to reply online to employment ads, to place resumes on various sites, and to use recruiting firms (e.g., www.monster.com, www.simplyhired.com, www.linkedin.com, and www.truecareers.com).

Online Auctions

Companies run auctions of various types on the Internet. Very popular in C2C, but gaining ground in other types of EC as well. *Aalzmeer Flower Auction Fights the Clock* *www.ebay.com*

Deep Discounters

Company offers deep price discounts. Appeals to customers who consider only price in their purchasing decisions *www.half.com*

Name-Your-Own-Price

Customers decide how much they are willing to pay. An intermediary tries to match a provider *www.priceline.com*

Find-the-Best-Price

Customers specify a need; an intermediary compares providers and shows the lowest price. Customers must accept the offer in a short time, or they may lose the deal *www.hotwire.com*