8/10/2019 171344222-E-Commerce

1/54

Electronic Commerce

Meaning of E-Commerce: Electronic commerce is defined as the use of electronic datatransmission to implement or enhance any business process. E-Commerce is a new way ofconducting, managing, & executing business transactions using computer &telecommunications networks. Electronic commerce is expected to improve the productivity

& competitiveness of participating businesses by providing unprecedented access to an on-line global marketplace with millions of customer & thousands of products & services.re!uently people use ecommerce to refer commerce on the "nternet or #eb because they arethe most extensive data transmission networks. $he more generic definition includeselectronic funds transfers which most bank customer%s use at their $', as well as electronicdata interchange in business to business communications or intranet and extranet networks. "t

provides participating companies with new, more cost & time efficient means for workingwith customer, suppliers & development partners.

$he internet & related technologies & e-commerce websites on the world wide web &corporate intranets & extranets serve as the business & technology platform for e-commerce

marketplaces for customers & businesses in the basic categories of business to consumer()*C+, business to business ()*)+ and customer to customer (C*C+ ecommerce. $heessential processes that should be implemented in all ecommerce applications accesscontrol & security, personaliing & profiling, search management, payment system,workflow management, and collaboration & trading.

# Scope of Ecommerce: $he range of business process involved in marketing, buying,selling & servicing of products or services in companies that engage in e-commerce.Companies involved in e-commerce as either buyers or sellers rely on internet based

technologies & ecommerce applications & services to accomplish marketing, discovery,transaction processing, product & customer service processing. or e.g. electronic commercecan include interactive marketing, payment & customer support processes at e-commercecatalog & auctions sites on the www. )ut ecommerce also includes e-business process suchas extranet access of inventory databases by customer & suppliers (transactions processing+,intranet access of customer relationship management system by sales & customer servicereps (service & support+, & customer collaboration in product development via e-mailexchanges & internet newsgroups (marketingdiscovery+. 'any companies today are

participating in or sponsoring three basic categories of electronic commerce applications:

business to consumer ()*C+, business to business ()*)+ & customer to customer (C*C+ecommerce.

E-Commerce Process-:

[1] Access Control & Security: E-Commerce processes must establish mutual trust &secure access between the parties in an e-commerce transaction by authenticating users,authoriing access, & enforcing security features or e.g. these processes establish that acustomer & e-commerce site are who they say they are through user names & passwords,encryption keys, or digital certificates & signatures. $he ecommerce site must then authorie

access to only those parts of the site that an individual user needs to accomplish his or herparticular transactions. $hus, you usually will be given access to all resources of anecommerce site except for other peoples account, restricted company data & webmasteradministration areas.

/

8/10/2019 171344222-E-Commerce

2/54

8/10/2019 171344222-E-Commerce

3/54

[+] Colla,oration & ra.ing: $his ma5or category of ecommerce processes are those thatsupport the vital collaboration arrangements & trading services needed by customer,suppliers & other stakeholders to accomplish ecommerce transactions. $he essentialcollaboration among business trading partner in ecommerce may also be provided by internet

based trading system.

# Electronic Commerce "reats: Electronic commerce threats involve security throughout

the 6commerce chain,7 including the client computers, the messages travelingon the channel communication, both the #eb and commerce server, and anyhardware attached to those servers. ctive content refers to programs that areembedded transparently in a client%s #eb pages that engender some action tooccur such as moving graphics or downloads and play audio. 'alicious activecontent delivered by means of "nternet coolies can reveal the contents of client-side files. $he designer language of active contents called 8ava 4cript can beused maliciously to destroy the hard disk, disclose e-mail contents or sendsensitive information to a particular #eb server on the "nternet.

Cyber vandalism and mas!uerading pose serious integrity threats to #eb sites. $heformer violation involves electronic defacing of an existing #eb site while the latter is

pretending to be the #eb site of another entity to spread misinformation or fraud. 4lowingor disrupting a computer process such as an $' can render the service unusable orunattractive to consumers, which is a threat to the necessities of the system.

$he server is a vulnerable threat through its own software, or backend programscontaining data, or through common gateway interface programs or utility programs residingon the server. #eb servers can be structured to run at various privilege levels, which permitvarying degrees of flexibility and convenience to the user. 9igh privilege levels may be able

to execute all machine instructions and have unrestricted access to any part of the system. malevolent person trying to compromise the system could execute instructions in the high

privilege mode, which would be very costly to the organiation.

# Emergence of /nternet:$he internet originated in the early /;ater on this network is

came under the control of the =ational 4cience oundation (=4+, which originallyprohibited the commercial use of the network. 9owever by /?, the =4 permitted *commercial Email services, 'C" & Compu4erve to establish limited connection to theinternet for the sole purpose of exchanging Email transmission. @uring /A, the internetwas opened for full commercial use & the no. of internet hosts grew from A million in /Ato A< million in /. $his explosive growth of hosts to the internet created a vast marketing

potential for most businesses. $he www & html code, which make web service possible, wasthe necessary component to actualie this market potential. $he web represents a way oforganiing information storage & retrieval to make the internet easier to use.

10 Commercial use of /nternet: s personal computer became more powerful, affordableand available during the/?

8/10/2019 171344222-E-Commerce

4/54

their corporate networks for promoting business. )ut the national science foundation (=4+prohibited commercial network traffic on its networks and so businesses turned tocommercial email services providers to handle their email needs. >arge firms build their ownnetwork that used leased telephone lines to connect field offices to corporate head!uarters.

"n /?, the =4 permitted * commercial email services, 'C" mail and Compu4erveto establish limited connections to the internet for the sole purpose of exchanging email

transmission with users of the internet. $hese connections allowed commercial enterprises tosend email directly to internet addresses and allowed members of the research and educationcommittees on the internet to send email directly to 'C" mail and Compu4erve addresses.$he =4 5ustified this limited commercial use of internet as a service that would primarily

benefit the internet non commercial users.20 ro't" on /nternet: $he internet was a phenomenon that truly sneaked into aunsuspecting world. $he researcher who had been so involved in the creation and growth ofthe internet 5ust accepted it as a part of their working environment. 2eople outside theresearch community were largely unaware of the potential offered by a large interconnectedset of computer networks.

#ithin < years the internet became one of the most amaing technological and socialaccomplishments of the *

8/10/2019 171344222-E-Commerce

5/54

llow !uick delivery of products and services (in some case+ especially with digitied

products.

Consumers can receive relevant and defined information in seconds, rather than days or

weeks.

'akes it possible to participate in online auctions.

llows consumers to interact with other consumers in electronic communities and

exchange ideas as well as compose experiences. acilitates competition which results in substantial discounts.

C0 3enefits to Society:

Enables more individual to work at home and to do less traveling for shopping, resulting in

less traffic on the roads, and lower air pollution.

llows some merchandise to be sold at lower prices, benefiting less affluent people.

Enables people in third world countries and rural area to en5oy products and services which

otherwise are not available to them.

acilitates delivery of public services at a reduced cost, increases effectiveness and

improves !uality.

5isa.)antages of Electronic Commerce: 'ost of the disadvantages of e-commerce todayhowever, stem from the newness and rapidly developing pace of the underlying technologies.)usinessman often calculates the return on investment before commitment to any newtechnology. $his has been difficult to do with e-commerce, since the costs and benefit have

been hard to !uantify. Costs, which are a function of technology, can change dramaticallyeven during short lived e-commerce implementation pro5ects because the underlyingtechnologies are changing rapidly. 'any firms have had troubled in recruiting and retaining

employees with technological, design and business process skills needed to create aneffective e-commerce atmosphere. nother problem facing firms that want to do business onthe internet is the difficulty of integrating existing databases and transaction processingsoftware design for traditional commerce into a software that enables ecommerce.

"n addition to technology and software issue, many business face obstacles inconducting ecommerce. 4ome consumers are still somewhat fearful of sending their creditcard number over the internet. nother consumer are simply resistant to change and areuncomfortable viewing merchandise on a computer screen rather than in person. Customersare unable to inspect the product through ecommerce. Costbenefit of employing electronic

commerce is hard to !uantify in traditional accounting terms for managers and investors tograsp.

6478

9imitations5isa.)antages of E-Commerce:$he limitations of e-commerce are dividedinto * parts:A0 ec"nical limitations:

/. $here is a lack of universally accepted standards for !uality, security and reliability.*. 4oftware development tools are still evolving.. $here are difficulties in integrating the internet and EC software with some existing

(especially legacy+ applications and databases.. Especially web servers in addition to the network servers are needed (added costs+.A. "nternet accessibility is still expensive and inconvenient.30 *on-ec"nical 9imitations:

A

8/10/2019 171344222-E-Commerce

6/54

/. >ack of physical infrastructure.*. 3e!uirement of information technology. >anguage barriers. >acklimited financial transaction system.A. $rust- how to trust whether a website is authentic or not.;. E-Commerce can still be considered as expensive transaction process when we are looking

at it from the perspective of third world countries.F. Governmental rules and regulations not clear on electronic transactions.

ra.itional commerce s electronic commerce: $raditional commerce involvesaggregating business activities such as transferring funds, placing orders, sending invoices,shipping goods, and taking sales orders into elements such as market research, vendorselection, site planning, sales promotion, and payment processing. Electronic commerceemploys electronic data transmissions to implement, enhance or integrate any businessactivity.

Electronic Commerce )s0 Electronic 3usiness: Electronic Commerce is the use ofelectronic transmission mediums (telecommunications+ to engage in the exchange, including

buying and selling, of products and services re!uiring transportation, either physically ordigitally, from location to location. $he term electronic commerce is restricting. "t does notfully encompass the true nature of the many types of digital information exchanges.

$he term electronic business also includes the exchange of information not directlyrelated to the actual buying and selling of goods. "ncreasingly, businesses are usingelectronic mechanisms to distribute information and provide customer support.

3usiness Mo.els for Ecommerce:

3usiness Mo.els: )usiness model can be defined as architecture for product, service andinformation flow, including a description of business, player, their roles and revenue sources."t is the method of doing business by which a company can sustain itself, i.e. generaterevenue. )usiness model spell out how a company makes money by specifying where it is

positioned in the value chain. "n the new economy companies are creating new businessmodels and reinventing old models. 9owever a business model doesn%t discuss how the

business mission of the company will be realied. or e.g. some of the most popular revenue

generating model adopted are (i+ charge fees for advertising (ii+ sell goods & services (iii+sell digital contents and (iv+ charge for processing the transaction that occur between *

parties on the web. E-)usiness 'odel can be classified as follows:/. E-)usiness model based on relationship of transaction parties*. E-)usiness model based on relationship of transaction types. Classification by revenue model. Classification by distribution channel

E-3usiness mo.el ,ase. on relations"ip of transaction parties-:

10 3usiness to 3usiness ;323< E-Commerce: is that model where by a company conductsits trading and other commercial activity through the internet and the customer is anotherbusiness itself. $his category of electronic ecommerce involves both electronic businessmarketplaces & direct market links between businesses. $his is supposed to be the huge

;

8/10/2019 171344222-E-Commerce

7/54

opportunity area on the web. "t is the wholesale & supply side of the commercial process,where businesses buy, sell or trade with other businesses. )*) electronic commerce relies onmay different information technologies, most of which are implemented at eCommercewebsites on the www & corporate intranets & extranets. )*) application include electroniccatalog system, electronic trading system such as exchange & auction portals, electronic datainterchange, electronic funds transfer & so on. Companies need to setup a backbone of )*)

applications, which will support the customer re!uirements on the web. 'any )*) e-commerce portals are developed & operated for a variety of industries by third party makercompanies called info-mediaries, which may represent consortiums of ma5or companies.

=or e0g. many companies offer secure internet or extranet e-commerce catalogwebsites for their business customer & suppliers. lso very important are )*) e-commerce

portals that provide auction & exchange marketplaces for businesses. 0thers may rely onelectronic data interchange (E@"+ via the internet or extranets for computer to computerexchange of e-commerce documents with their business customer & suppliers.

Measure a.)antage of 323:1] 5irect interaction 'it" customers: $his is the greatest advantage of e-business. $heunknown and faceless customer including other businesses, buying the products of a large'=C like say 9>> or proctor and gamble through the distributors, channels, shops and thelike, now has name, face and profile. >arge '=Cs pay a fortune for this information oncustomer buying patterns.2] =ocuse. sales promotion: $his information gives authentic data about the likes, dislikesand preferences of clients and thus helps the company bring out focused sale promotiondrives which are aimed at the right audience.!] 3uil.ing customer loyalty: it has been observed that online customers can be more loyal

than other customers if they are made to feel special and their distinct identity is recogniedand their functions about privacy and respected. "t has also been found that once thecustomers develop a binding relationship with a site and its products, they do not like to shiftloyalties to another site or product.] Scala,ility: $his means that the web is open an offer round the clock access. $his

provides an access never known before, to the customer. $his access is across location andtime ones. $hus, a company is able to handle many more customers on a much widergeographical speed if it uses an e- business model. $he company can set up a generic parentsites for all location and make regional domains to suit such re!uirement. 'icrosoft is using

this model very successfully. $he additional cost of serving larger segment of customerscomes down drastically once a critical mass is reached.$] Sa)ing in .istri,ution cost: company can make huge saving in distribution, logisticand after sales support costs by using e-business models. $ypically examples are of customercompanies, airlines and telecom companies. $his is because the e-business models involvedthe customers in the business interaction to such a level that companies are able to avoidsetting of the huge backbone of sale and support force, which ordinarily would have to be setup.

ypes of 323 Mo.el:1: Maintenance> 7epair & 4perating ;M74< ?u,s: $hese hubs concentrate on goodswith low value. $he transaction cost is relatively higher. $hese hubs provide value byincreasing the efficiency in the procurement process. $hese hubs use third party logistics

F

8/10/2019 171344222-E-Commerce

8/54

supplier to deliver goods, thus enabling them to bypass existing middlemen in the channel.or examples of hubs operating in this category are mro.com, bibuyer.com.2: @iel. Managers: $his type of E-market creates spot markets for common operatingresource like manufacturing capacity, labor or advertising. $his functionality allows thecompanies to expand or contract their operations at a short notice. Hield managers add greatvalue in situations where there is high degree of price and demand volatility, and where fixed

assets can not be li!uidated or ac!uired !uickly. 1tility sector is one such example.!: Ec"anges: 0nline exchange allows purchasing managers to effectively manage peaksand ebbs in demand and supply by allowing them to exchange commodities or nearcommodities for production. $hese exchanges maintain relationships with buyer and sellers,making it very convenient for business to conduct over exchanges. "n many case buyers andsellers never see each other. 2aper exchange and e-steel are examples of this of E-market.: Catalog Bnits: $hese are industry specific hubs that bring many suppliers together at oneeasy-to-use web site. $hese hubs automate the sourcing of non-commodity manufacturinginputs and create value by reducing transaction costs. Catalog hubs can be either buyer orseller focused for examples some hubs would work as distributors for suppliers while others

would work for buyers in their negotiations with sellers.

20 3usiness to Consumer ;32C< E-commerce: "n this form of electronic ecommerce,businesses must develop attractive electronic marketplaces to entice & sell products &services to consumers. "t serves end consumers with products and or services. "t is oftenassociated with electronic commercebut also encompasses financial institutionsand othertypes of businesses. )*C relationships are often established and cultivated through someform of "nternet marketing. )*C includes retail sales often called e-retail and other online

purchases such as airline ticket, entertainment venue ticket, hotels room and shares of stock.

"t also provides high value contents to consumer for a subscription fees. )*C e-businessmodel includes virtual malls which are websites that hosts many online merchants. "t isinexpensive and also has big opportunity. "t reduces operational costs and is also customerconvenience.A.)antages of 32C e-commerce

4hopping can be faster and more convenient.

0fferings and prices can change instantaneously.

Call centers can be integrated with the website.

)roadband telecommunications will enhance the buying experience.

?o' .oes 32C 'or

)*C ecommerce is more than 5ust an online store. "t really is about managing theentire process, but 5ust using technology as a tool for order processing and customer support.$he )*C process is explained as follows:1] isiting t"e )irtual mall: $he customer visits the mall by browsing the online catalogue- vary organied manner of displaying products and their related information such as price,description and availability. inding the right product becomes easy by using a key wordsearch engine. Dirtual malls may include a basic to an advance search engine, product rating

system, content management, customer support system, bulletin boards, newsletters andother components which make shopping convenient for shoppers.2] Customer registers: the customer has to register become part of the site%s shopperregistry. $his allows the customer to avail of the shop%s complete services. $he customer

?

http://en.wikipedia.org/wiki/Electronic_commercehttp://en.wikipedia.org/wiki/Financial_institutionshttp://en.wikipedia.org/wiki/Internet_marketinghttp://en.wikipedia.org/wiki/Electronic_commercehttp://en.wikipedia.org/wiki/Financial_institutionshttp://en.wikipedia.org/wiki/Internet_marketing

8/10/2019 171344222-E-Commerce

9/54

becomes a part of the company%s growing database and can use the same for knowledgemanagement and data mining.!] Customer ,uys pro.ucts: $hrough a shopping cart system, order details, shippingcharges, taxes, additional charges and price total are presented in a organied manner. $hecustomer can even change the !uantity of a certain product. Dirtual mall have a verycomprehensive shopping system, complete with check-out form.

] Merc"ant processes t"e or.er: $he merchant then processes the order that is receiptfrom the previous stage and fills of the necessary forms.$] Cre.it car. is processe.: $he credit card of the customer is authenticated through a

payment gateway or a bank. 0ther payment methods can be used as well, such as debit card,prepaid cards, or bank to bank transfers.(] 4perations management: #hen the order is passed on the logistics people, thetraditional businesses operations will still be used. $hings like inventory management, total!uality management, warehousing, optimiation and pro5ect management should still beincorporated even through it is an e-business. Getting the product to the customer is still themost important expect of e-commerce.+] S"ipment an. .eli)ery: $he product is then ship to the customer the customer can tractthe order- delivery as a virtual mall have a delivery tracking module on the web sites whichallows a customer to check the status of a particular order.D] Customer recei)es: $he product is received by the customer, and it is verified. $hesystem should then tell the firm that the order has been fulfilled.] After sale ser)ice: fter the sale has been made, the firm has to make sure that itmaintains a good relationship with it customers. $his is done through customer relationshipmanagement or C3'.

7easons '"y one s"oul. opt for 32C are:1< /nepensi)e costs> ,ig opportunities: 0nce on the internet, opportunities are immense ascompanies can market their products to the whole world without much additional cost.2< lo,aliation: Even being in a small company, the #eb can make you appear to be a big

player which simply means that the playing field has been leveled by e-business. $heinternet is accessed by millions of people around the world, and definitely, they are all

potential customs.!< 7e.uce. operational costs: 4elling through the #eb means cutting down on paper costs,customer support costs, advertising costs, and order processing costs.

< Customer con)enience:4earchable content, shopping carts, promotions, and interactiveand user friendly interfaces facilitate customers convenience, thus generating more business.Customers can also see order status, delivery status and get their receipts online.$< Fno'le.ge management: $hrough database systems and information management, youcan find out who visited your site, and how to create, better value for customers.

# C"allenges face. ,y 32C E-commerce:$he two main challenges faced by )*C e-commerce are building traffic and sustaining customer loyalty. @ue to the winner-take-allnature of the )*C structure, many smaller firms find it difficult to enter a market and remain

competitive. "n addition, online shoppers are very price-sensitive and are easily lured away,so ac!uiring and keeping new customers is difficult. study of top )*C companies by McKinseyfound that:

http://en.wikipedia.org/wiki/McKinseyhttp://en.wikipedia.org/wiki/McKinsey

8/10/2019 171344222-E-Commerce

10/54

$op performers had over three times as many uni!ue visitors per month as the median. "n

addition, the top performer had *,A

8/10/2019 171344222-E-Commerce

11/54

have to check !uality of the products being offered. $he huge success of online auctions likee)ay, where consumer as well as business can buy & sell with each other in an auction

process at an auction websites, makes this e-commerce model an important e-commercealternative for )*C, C*), & )*) e-commerce. Electronic personal advertising of productsor services to buy or sell by consumers at electronic newspaper sites, consumer e-commerce

portals, or personal websites is also an important form of C*C e-commerce.

0 3usiness to o)ernment ;32

8/10/2019 171344222-E-Commerce

12/54

8/10/2019 171344222-E-Commerce

13/54

transactions and the mode of payment used for payments. nd all of these have had to adaptand change themselves according to the demands of the "nternet.

?o' S"oul. 3uyers Pay 4nline

$he marketplace, as usual, is responding !uickly to this concern. few basis models or

approaches to net-based sales transactions are beginning to come into focus. $hey are:/. $he consumer, responding to net-based marketing presentation, sends in a che!ue orcalls and verbally transmits a credit card number, over the merchant%s telephone. $his is afairly traditional approach, and financial transaction takes place on the "nternet.

*. $he consumer (/+ sets up an account with a merchant or a third party organiation,(*+>eaves his or her credit number by means other that the "nternet, and(+ gives themerchant the authoriation to bill the account, whenever the consumer chooses to buysomething.

. $he consumer leaves his or her credit card number on an unsecured online order from.#ith this approach, the consumer is put at some risk that the credit card number will be

compromised, but the risk is perhaps not much than giving it out over the phone.. $he consumer uses a secure client software program to transfer his or her encrypted

credit card number to a secure merchant server.A. $he consumer exchanges traditional currency for some form of digital currency, and

then spends units of the currency whenever and wherever he or she likes. $his re!uiressome from of 7electronic wallet7 to hold the currency and account set up between thecurrency provider and the participating merchants.

A.)antages of 4nline Mareting

/. 0nline marketing offers bottom-line benefits that tie in directly to the demands placedon the organiation trying to make transition into the new economy.

*. 0nline marketing can save money and help you stretch your marketing budget.Electronic various of catalogues, brochures, and specification sheets do not have to be

printed, packaged, store, or shipped. $hese can be updated online, and hence you need nothave to send them back to the printer for changes. $his saves a lot of money.

. 0nline marketing can save time and cut steps from the marketing process. 'arketersno longer have to wait for one of their sales representatives to give them the desiredinformation.

. 0nline marketing gives customers another way to buy, while enabling them to takecontrol of the purchasing process. $oday, customers want more. $hey want moreinformation about the products they buy, more input into the product itself, and supportafter the sale.

A. 0nline marketing can be information-rich and interactive. "t appeals to information-hungry buyers and analytical buyers.

;. 0nline marketing can offer you instant international reach and indeed, online networkshave created an instant global community.

F. 0nline marketing can lower barriers to entry and offer e!ual opportunity for access.

$he online world is a great leveler. nd online marketing helps to lower many of themarketplace barriers that have held some would-be entrepreneurs from full participation inthe free market system.

/

8/10/2019 171344222-E-Commerce

14/54

E-A.)ertising: dvertising is a message from a company (the advertiser+ to potentialcustomers that attempts to influence or reinforce the customersN attitudes andor behaviortoward purchasing the advertiserNs products or services, or towards obtaining moreinformation, including further marketing messages. dvertisers hoped that potential buyerswould remember their slogan or 5ingle long enough to make a trip to the store and purchasethe product.

Electronic advertising is probably the best method to advertise on the internet, aspeople visit sites & pages and download whatever materials is in them only if they want to.)anners ads are common on such free services, such as search engines and web based emailaccounts which is a service to internet community, as those free services would not withoutthe income from those advertisements.

$his has changed with the advent of interactivity. $he new concept of interactivity% hasoverpowered the traditional concept of advertising, by putting the buyer in the driver%s seat."nteractivity allows consumers to increase their control over the buying process. #e are alldeluged with an overflow of data. #e long for a sense of mastery over the information thatwashes over us. Given the opportunity, we will be more selective about the kind of

information we choose to receive. " interactivity give us that option. $hus, the audience is notcaptive any more, and the marketers would have to work harder than before to entice them.$he marketing efforts will have to be information-rich and user-friendly.

#eb-bases advertising has become an important part of a company%s media mix=umerous companies are committing large advertising budgets to the "nternet.ollowing are the reasons for the growing importance of e-a.)ertisements:/. 2eople increasingly prefer to surf the internet rather than watch $D.*. $he target audience goes to the advertising, rather than the other way around.. @evelopment of business search engines by companies such as C*) $echnologies,

which aim to link buyers with online bargain sites for over a million products forcomparison-shopping purposes.

. HahooO has a business unit which offers contests and pries to online participants,which drive players to the websites of different clients.

A. $he growth of e-business. @el computers, for example, estimate that by *

8/10/2019 171344222-E-Commerce

15/54

are visiting. $his type of advertising also gets higher click rates. 4ometimes, these can beintrusive and annoying.!0 Partners"ips: #hile many offline companies arrange partnerships, the use of partnershipis more pervasive un the =ew Economy. 4imilar to the manner in which complementarycompanies often collaborate to push a new technology, web companies often partner withcomplementary sites to !uickly provide a more value-enhanced service to site visitors. 0ne

prevailing strategy is to select a customer niche and provide services that encompass thecustomer%s entire needs in that area.0 Pro)i.ing /nformation: $he #eb allows sites to instantly offer information that isrelevant to their customer base. 'any sites provide instantly accessible information to theircustomers as form of marketing and product differentiation. $he e-commerce market fortravel is very competitive, with many well-funded players. 4ites try to differentiatethemselves by offering vast amounts of information to their customers. $ravel informationcan range from top restaurant and hotel information targeted towards expense account

business travelers, to time-sensitive travel information to budget-minded leisure travelers.$0 3anner S'apping: )anner swapping is nothing but a direct exchange of links between

websites. $o be precise, company may agree to display a banner of company ) inexchange for company ) displaying company %s banner

"e 3ro'sing 3e"a)ior Mo.el: $he customer behavior while interacting with anecommerce site has impact on the "$ resources of the site and on the revenue of the e-store.$hus, it is important to be able to characterie the behavior of customer or groups ofcustomers of an ecommerce site. $he customer model captures elements of user behavior interms of navigational patterns, e-commerce functions used, fre!uency of access to thevarious e-commerce functions, and times between access to the various services offered by

the site. customer model can be used for navigational and workload predication, so thatwebsites can be modeled.

3ro'sing 3e"a)ior Mo.el of an 4nline i.eo Store: >et us use an example of an onlinevideo store to give an informal introduction to the user behavior model of an e-commercesite. Consider an online video store in which customers can perform the following functionsB/. Connect to the home page and browse the site by following likes to bestseller videos

and promotions of the week per video category.*. 4earch for titles according to various criteria including keywords and title.

. 4elect one of the videos that results from a search and view additional informationsuch as a brief description of the products, price, shipping time, ranking and reviews.

. 3egister as a new customer of the virtual video store. $his allows the user to provide ausername and a password, payment information, mailing address, and e-mail address fornotification of order status and videos of interest.

A. >ogin with a username and password.;. dd items to the shopping cartF. 2ay for the items added to the shopping cart.

$hus, during a visit to the online video store, a customer issues re!uests that will cause

these functions to be executed. or example, a customer may cause a search to be executedby submitting a 13> that specifies the name of an application to be run the server through aserver pplication 2rogramming "nterface (2"+ and the keywords to be used in the search.

/A

8/10/2019 171344222-E-Commerce

16/54

$he application will then execute a search in the site database and return an 9$'> pagewith all the video that match the search criteria.

customer may be classified as being in different states, according to the type offunction re!uested during a session. or example, the customer may be browsing, searching,registering as a new customer, logging in, adding videos to the shopping cart, selecting theresult of a search, or paying for the order. $he possible transitions between states depend on

the layout of the site.

3ro'sing 3e"a)ior Mo.el rap" ;33M

8/10/2019 171344222-E-Commerce

17/54

!0 Music:4ince, it is recorded and stored digitallyB music as well as the other audio productis the perfect product for distribution over the internet. "nstead of buying cassettes or C@s,customer can simply download the recording from the sites. $he world%s top music levels aresetting up websites form which internet shopper can buy their favorite pieces. $hey are alsocreating customer involvement by setting up virtual communities of music aficionados whocan access sample, trivia, and other value added information, such as lyrics and scores,

directly through the internet.0 7etailing: $wo genres of online shopping mall are being setup by digital entrepreneurs.$he first consist of multimedia catalog which shopper can down load through the internetwithout taking physical delivery. $he second verity is a super market service that offergetaways to the websites of scores of other shops, acting as a single window for virtualsuppers. #ith electronic payment systems becoming secure, customer will soon completeentire retailing transaction on the internet.

Extras:/nternet Mareting: "nternet marketing, also referred to as online marketing, "nternet

advertising, or e-'arketing, is the marketingof products or services over the "nternet. #henapplied to the subset of website-based advertisement placements, "nternet marketing iscommonly referred to as #eb advertising (also #ebvertising+ and #eb marketing.KcitationneededL $he "nternet has brought many uni!ue benefits to marketing, one of which beinglower costs for the distribution of information and media to a global audience. $heinteractive nature of "nternet marketing, both in terms of providing instant response andeliciting response, is a uni!ue !uality of the medium. E-marketing is sometimes consideredto have a broader scope since it refers to digital media such as web, e-mail and wirelessmedia, but also includes management of digital customer data and electronic customer

relationship management systems (E-C3' systems+."nternet marketing ties together creative and technical aspects of the "nternet,

including design, development, advertising, and sales. "nternet marketing methods andstrategies encompass a wide range of services:

"nternet marketing does not simply entail building or promoting a website, nor does itmean placing a banner ad on another website. Effective "nternet marketing re!uires acomprehensive strategy that synergies a given companyNs business model and sales goalswith its website function and appearance, focusing on its target market through proper choiceof advertising type, media, and design.

"nternet marketing also refers to the placement of media along different stages of thecustomer engagement cycle through search engine marketing (4E'+, search engineoptimiation (4E0+, banner ads on specific websites, email marketing and #eb *.