Chapter 7: E-Business and E-Commerce

E-Commerce Organizational Benefits

- National and International markets are more accessible - Lower costs of processing, distributing and retrieving info

E-Marketplaces

- a central virtual market space on the web where many buyers and sellers can conduct e-commerce and e-business activities - associated with B2B e-commerce ex: amazon

E-Malls/Cyber Malls

- a collection of individual shops under one internet address - associated with B2C e-commerce ex: etsy

Reverse Auction

- buyer posts a request for quotation (RFQ) with info on the desired purchase - suppliers study RFQ and submit bits electronically

Banner Ads

- electronic billboards containing short test, graphics, video clips or sound. Features: 1. most common form of ad over internet 2. customized to target audience 3. convert only limited info because of small size 4. many viewers simply ignore them

E-Commerce Tech Limitations

- lack of universally accepted security standards - less developed countries bandwidth is insufficient and web access expensive

Viral Marketing Model

- online word of mouth marketing - receiver forwards messages to friends "check this out' which enables company to build brand awareness at low cost without spamming

B2B Buy-Side Marketplace

- organizations attempt to procure needed products/services from other organizations - key mechanism: reverse auction and group purchasing

B2B Sell-Side Marketplace

- organizations attempt to sell to other organizations electronically from their own private e-marketplace and/or from a third party website - key mechanisms: forward auctions, electronic catalogs, third party auction sites

E-Commerce Non-Tech Limitations

- perceptions its insecure - unresolved legal issues - tax - lacks critical mass of buyers and sellers

Types of E-Commerce

1. B2C 2. B2B: majority of e-commerce volume 3. C2C: craigslist 4. B2E: business internally provide to employees 5. E-Government/G2C/G2B: deliver info about public services 6. Mobile Commerce (Mcommerce): conducted in a wireless environment - itunes

E-Card Process

1. CC info are encrypted when you place order to ensure safe travel over internet to store 2. when store gets info its transferred to clearinghouse where its decrypted for verification and authorization 3. clearinghouse has bank verify info 4. bank verifies and reports back to clearinghouse 5. clearinghouse reports results back to store 6. store reports successful purchase and amount to you 7. card issuer bank sends funds to stores bank 8. card issuer notifies you of debit to credit card 9. store bank notifies the store of funds credited to the account

E-Tailing 2 Significant Issues

1. Channel Conflict: situation in which clicks and mortar companies face conflict with their regular distributors when they begin selling directly to customers (pricing, resource allocation) 2. Order Fulfillment: quickly finding products to be shipped, packaging, preparing for delivery speedily, collecting money from customers and handling returns

3 Types of Public Exchanges

1. Vertical Exchanges: in given industry 2. Horizontal Exchanges: across many industries, mainly for MRO material 3. Functional Exchanges: needed services are traded on a "as needed' basis

Intermediaries Functions

1. provide info which can be automated for free 2. perform value-added services such as consulting

Issues of E-Business

1. threats to privacy 2. potential job loss 3. fraud on internet 4. domain names/cybersquatting 5. taxes and fees 6. copyright

Purchasing Cards

B2B equivalent of electronic credit cards, primary form of payment between companies

Bartering Online

Intermediary administers online exchanges of surplus products and/or company receives points for its contribution which can be used to buy other products

Online Advertising

Process of using internet and WWW to disseminate info in attempt to influence a buyer-seller transaction through direct response approach which personalized advertising making the marketing process media rich, dynamic and interactive

Electronic Business

a broader definition of e-commerce - buying and selling of goods and services, servicing customers, collaborating with business partners, conducting e-learning and electronic transactions within an organization

Electronic Auctions

a competitive buying and selling prices which prices are determined by bidding

Multichanneling (Omni-Channeling)

a process in which company's integrate their online and offline channels creating an opportunity for showrooming

E-Commerce Customer Benefit

access to vast products and services 24/7

Virtual Organizations (Pure Play)

all dimensions are digital and e-commerce only

Virtual Credit Cards

allow customers to shop online and can be used only once in order to thwart criminals

Store-Value Money Cards

allow you to store a fixed amount of prepaid money and spend as necessary

Digital Wallet

application used for making financial transactions can be on desktop or smartphone

Permission Marketing

asks consumer to voluntarily accept online ads/emails (opt in vs opt out)

Electronic Catalog

backbone of most e-commerce, includes product database, directory, search and presentation capabilities

Electronic Tendering System Model

businesses request quotes from suppliers. uses B2B with reverse auction mechanism

When organizations request for bids for contracts on their own Web site for procurement, such business is classified as a(n):

buy-side market place

E-Commerce Benefit to Society

deliver to cities, rural areas and developing countries

Electronic Checks

e-checks which are used primarily in B2B are similar to paper checks

Person-to-Person Payments

enable 2 individuals or business and individual to transfer funds without using a credit card -venmo, PayPal, chase pay

In general, e-commerce Web sites of click-and-mortar companies carry the same variety of merchandise as their brick-and-mortar stores. (T/F)

false

Spamming

indiscriminate distribution of electronic ads without permission of receiver

Copyright Issue

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

Procurement

involves activities necessary to establish requirements, sourcing activities, such as market research and vendor evaluation, and negotiation of contracts e-procurement: uses group purchasing and reverse auctions

Online Direct Marketing Model

manufacturers or retailers sell directly to customers, efficient for digital products/services and can allow for product/service customization

Clicks and Mortar

mix of physical and digital dimensions, e-commerce activities

Group Purchasing (e-coops)

multiple buyers combine their orders to constitute a large volume and attract seller attention; can negotiate a volume discount

Webrooming

occurs when shoppers research product online before buying at physical store

Showrooming

occurs when shoppers visit brick and mortar store to examine a product in person then conduct research on their smart phone - usually leads to customer buying from competitor

Pop-Up vs Pop-Under Ad

pop-up = ad infront of browser window pop-under = ad behind browser window

Disintermediation

process that eliminates the intermediaries - amazon

Brick and Mortar

purely physical organization

Cybersquatting

registering domain names to: 1. sell them for more 2. domain tasting: using 5 day grace period at beginning of domain registration to profit from pay-per-click advertising 3. make similar to competitor names to generate traffic when people misspell the name

When organizations come to a company's Web site for procurement, such business is classified as a(n):

sell-side marketplace

Forward Auction

sellers place items at site and buyers bid continuously - ebay

Electronic Retailing (E-Tailing)

the direct sale of products and services through store fronts or electronic malls usually designed around an electronic catalog format and/or auctions

Degree of Digitization

the extent to which the commerce has been transformed from physical to digital which can relate both to the product/service and the delivery agent/intermediary

Electronic Commerce

the process of buying, selling, transferring or exchanging goods and services or info via computer networks (internet)

Information is the major component of the e-commerce offerings of service industries. (T/F)

true

Online Securities Trading

use of computer to trade stocks, bonds and other financial instruments - cheaper than full service or discount broker ex: e-trade

Affiliate Marketing Model

vendors ask partners to place logos/banners on partner's site in exchange for commission if they click and buy off it

E-Store Fronts

website that represents a single store ex: macys

Online Job Market

companies and govt. advertise various positions, accept resumes and take apps via the internet. ex: linked in

Cyberbanking/Electronic Banking

conducting various banking activities from home, at business or on road instead of at physical bank

Domain Names

considered legal when the person/business who owns the name has operated a legitimate business under that name for some time

Smart Cards

contain a chip that can store a considerable amount of info, frequently multipurpose

Name-Your-Own-Price Model

customer decide how much they want to pay and intermediary tries to match a provider

Find-the-Best-Price Model

customers specify a need and intermediaries compare providers and show lowest cost - must accept fast