CHAPTER 5 AND MODULE B

ELECTRONIC COMMERCE: Strategies For The New Economy & THE WORLD WIDE WEB AND THE INTERNET

WWW AND THE INTERNET

World Wide Web Internet Web site Web page URL (uniform resource locator) Top-level domain

UNDERSTANDING ADDRESSES

Consider http://nfp.cba.utulsa.edu/bajaja/mis3003/http:// - defines the protocol default is http, others may be mailto:// or ftp:// or telnet:// etc. nfp – name of the machine that is the web server. Usually

www but may be something else. Here it is nfputulsa – the name of the organization usually. cba is a

subdomain within the utulsa domain. edu – top-level domain (organization type)bajaja – name of folder on the nfp server mis3003 – subfolder in the bajaja folder/ at end of mis3003 means refer to the default home page

which is usually default.htm or default.html or index.html.

TOP-LEVEL DOMAINS com – commercial or

for-profit business coop – cooperative edu – educational

institution gov – U.S.

government agency mil – U.S. military

organization net – Internet

administrative organization

int – International treaties organization

info – general information

biz – business museum – accredited

museum name – personal pro – Accountant,

doctor, lawyer, etc. Many more

http://data.iana.org/TLD/tlds-alpha-by-domain.txt

WEB 2.0

. In web 2.0, data is encapsulated in tags that allow programs to talk to each other. For example, a phone number can be encapsulated in a <phone> tag so the dialer on my phone will know it is a phone number and dial it.

Also, in web 2.0, focus is on on online collaboration, users as both creators and modifiers of content, dynamic and customized information feeds, etc. So, content is created by the common masses of people, using social interaction. WikisSocial networking sitesBlogsRSS feedsPodcastingMany others

THE INTERNET BACKBONE Internet backbone -- major set of computer

connections on Internet Network access point (NAP) Network service provider (NSP) Internet service provider (ISP)

INTERNET SERVERS: INTERNET IS NOT WWW! Internet server

computer – provides information and services on the Internet

Web server – provides information and services on the Web

Mail server – provides e-mail services

ftp (file transfer protocol) server – maintains files you download

IRC (Internet Relay Chat) server – supports discussion groups and chat rooms

COMMUNICATIONS PROTOCOLS

Information moves on the Internet according to communications protocols

Communications protocol (protocol)set of rules that every computer follows to

transfer information Most widely used

TCP/IP (transport control protocol / Internet protocol):

http (hypertext transfer protocol)ftp (file transfer protocol) SMTP or POP: email protocols

TELECOMMUNICATIONS HARDWARE

To access and use the Web, you also need hardware

Mainly, some sort of modem Telephone DSL Cable Satellite

OPENING CASE: ADVERTISING $$ GO WHERE THE EYES ARE

The InternetAdults spend 29% of their time thereAdvertisers spend only 8% of $$ thereNewspaperAdults spend only 8% of their time thereAdvertisers spend 20% of $$ there

OPENING CASE: ADVERTISING $$ GO WHERE THE EYES ARE

The Internet Adults spend 29% of their time there Advertisers spend only 8% of $$ there

Newspaper Adults spend only 8% of their time there Advertisers spend 20% of $$ there

ELECTRONIC COMMERCE E-commerce is changing everything

Electronic commerce (e-commerce)

Mobile commerce (m-commerce)

TYPES OF BUSINESSES

Brick-and-Mortar or retailers

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

Dot-Coms (or Pure Plays) or e-tailers

E-COMMERCE BUSINESS MODELS

B2B E-COMMERCE

Business to Business e-commerceWhere most of the money is transacted. Why?

Basically, it’s about businesses doing business with other businesses

Supply chain management (from Chapter 2) is a big part of B2B e-commerce

Examples: www.flightpath.com, www.imprivata.com, www.alibaba.com

B2C E-COMMERCE

Business to Consumer e-commerce Business sells product/service to consumer

B2C is the glitzy e-commerce like iTunes, eBay, netflix, etc.

C2B E-COMMERCEConsumer to Business e-commerce

True economic inversion of the B2C modelFotolia is a good example (www.fotolia.com)

There you can post photos and videos and businesses will pay you a royalty to use them (if they like what you offer)

You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites

C2C E-COMMERCE

Consumer to Consumer e-commerceYou selling to another person (or the reverse)Usually occurs through an intermediary such as eBay

or craigslist.

Is ebay only c2c?

GOVERNMENT E-COMMERCE

Business to Government (B2G) e-commerceLockheed providing products and services to DoDFairly large e-commerce model in terms of revenueMost U.S. government entities (especially at the federal

level) won’t do business with your business if you can’t do it electronically

Consumer to Government (C2G)e-commerceYou selling something to the governmentThis market is quite smallMost times, “you” must register as a business before

selling something to the government, which would then become B2G e-commerce

GOVERNMENT E-COMMERCEGovernment to Business (G2B) e-commerce

SBA providing surety guarantees, disaster assistance, etc to small businesses

TSA holding auctions and selling off confiscated items (most times, you must be a “business” to participate in these auctions)

U.S. Geological Survey (DOI) selling detailed survey data to businesses

Government to Consumer (G2C) e-commerceDoes not fit well at all within the traditional supply-and-demand

e-commerce notionPaying taxes, registering vehicles, etc

Government to Government (G2G) e-commerceMainly about information sharing, not commerce

E-COMMERCE RULES TO LIVE BY

1. Understand your business, products, services, and customers

2. Find customers and establish relationships

3. Move money easily and securely

1. UNDERSTAND YOUR BUSINESS, PRODUCTS, SERVICES, & CUSTOMERS

To be successful, you must answer the following:

What is my business’s added value to the marketplace?

Who will benefit from this added value? They are my customers! Is it other businesses, or general consumers or the government?

What do customers see when they interact with my company?

B2C: CONVENIENCE VERSUS SPECIALTY

ConvenienceLower pricedPurchased frequentlyExample: common

food itemsSpecialty

Higher pricedPurchased less

frequentlyExample: Stereos,

computers

Commoditylike Same no matter where

you purchase it Examples: books,

music, movies Price and ease of

ordering are important Digital

Purchased and delivered over the Internet

Best product type for B2C e-commerce

Examples: Music, software

B2C: Commoditylike

and Digital

B2C: MASS CUSTOMIZATION

Mass customizationthe ability of an organization to give its customers the

opportunity to tailor its products or services Dell – customized computer purchases Apple iTunes – only the music you want (not necessarily the

whole album)

B2B: MRO VERSUS DIRECT

Maintenance, repair, and operations (MRO) materials (indirect materials)

materials necessary for running a company but do not relate to the company’s primary business activities

Similar to convenience items in B2COffice supplies, repair parts, lubricating oils

B2B: HORIZONTAL VERSUS VERTICAL

B2B e-commerce takes advantage of e-marketplaces

Electronic marketplace (e-marketplace)interactive business providing a central market

where multiple buyers and sellers can engage in e-commerce

Horizontal e-marketplacesVertical e-marketplaces

E-MARKETPLACES

2. FIND CUSTOMERS AND ESTABLISH RELATIONSHIPS

You must first find customers Then establish relationships Otherwise, you can’t make a sale B2C and B2B techniques are very different

E-COMMERCE RULES TO LIVE BY

B2C MARKETING MIX TOOLS

Registering with search engines (SEO) Example: http://www.seo.com/

Online ads (google adwords)Example: http://www.google.com/adwords

Viral marketing (You-tube and games)https://www.youtube.com/watch?v=oMS23XGrQzM

Affiliate programs: websites direct traffic to you and get paid a percentage for each sale (conversion) or each click - through

B2B MARKETING

Much more personal. Need to contact only a few customers and establish a deep relationship with them.

Not usually done with generic ads designed for mass distribution. Often takes place in e-marketplaces

Once a contact is made, the relationship must be established; this often requires face-to-face meetings

Must also integrate the IT systems to the supplier business and customer business.

3. MOVE MONEY EASILY AND SECURELYIn e-commerce, most money moves

electronicallySecurity becomes very importantExample: Bitcoinshttps://www.youtube.com/watch?v=ultLPNj-a8Y

Other methods:Credit cardsFinancial cybermediaries (www.paypal.com)Electronic checks Electronic Bill Presentment and PaymentSmart cards with a chip that stores information on how much money you have.

B2B PAYMENT SYSTEMS

Business customers…

Make large purchasesWill not pay with credit card or

financial cybermediaryUse Financial EDIPay for many purchases at once

(perhaps the end of the month)

SECURITY: THE PERVADING CONCERN

Security is very important when moving money Some security measures…

Encryption Secure Sockets Layers Secure Electronic Transactions Many, many others

E-BUSINESS TRENDS

1. Crowdsourcing: when businesses provide enabling technologies that allow people to create, modify, and oversee the development of a product or service.

2. Virtual Goods: nonphysical object. What can be virtualized?

3. M-commerce: web everywhere.

4. Crowd funding: Getting a new startup fundedhttp

://www.forbes.com/sites/chancebarnett/2013/05/08/top-10-crowdfunding-sites-for-fundraising/

5. Wearable computing and augmented reality: Being able to see data on items or services that may be for sale.