Chapter 9 - Electronic Commerce

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Introduction to Information Technology, 2nd Edition

Turban, Rainer & Potter

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#ha$ter Pre*ie

In thi! cha$ter, e ill !tudy-orm! and u!e! of bu!ine!!.to.

con!umer electronic commerce

-orm! and u!e! of bu!ine!!.to.bu!ine!! electronic commerce

+e form! of E#

Technical and non.technicalre/uirement! needed to mae E# or1egal and ethical i!!ue! a!!ociated

ith E#


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E.#ommerce E.u!ine!!

Electronic #ommerce buying and!elling of $roduct!, !er*ice! andinformation *ia com$uter netor!,$rimarily the Internet

Electronic u!ine!! a broader de4nitionthat include! buying and !elling, $lu! !er*icing cu!tomer!

collaborating ith bu!ine!! $artner! conducting electronic tran!action! ithin anorgani5ation


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E# ene4t! to =rgani5ation!

Increa!ed cu!tomer ba!e roaden markets -ind niche markets6e"g" "dogtoy!"com7

Reduced co!t Reach a large number of customers at little co!t Procure material and servicesfrom other com$anie! at le!! cost

>llo lower inventoriesby facilitating [email protected]$e !u$$ly chainmanagement

Shortenmareting di!tribution channelsand reducemaretingcosts

(ecrea!e the co!t of creating, processing, distributing, storing,and retrieving paper-based information

1oer telecommunications costsbecau!e the Internet i! much

chea$er than *alue.added netor! 6A>+!7 Reduced cycle time

Procure material and servicesfrom other com$anie! rapidly Reduce the time beteen the outlayof ca$ital and the receiptof

$roduct! and !er*ice!

9el$! !mall bu!ine!!e! competeagain!t large com$anie!
http://www.dogtoys.com/http://www.dogtoys.com/http://www.dogtoys.com/http://www.dogtoys.com/


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E# ene4t! to #u!tomer!

#hoice #on!umer! can selectfrom many vendorsand many more

productsthan they could locate otheri!e

#on!umer! can get customized products, from P#! to car!, atcom$etiti*e or bargain $rice!

#on!umer! can 4nd unique productsand collectors items

through *irtual auction! that might otheri!e re/uire them to tra*ellong di!tance! to a $articular auction $lace at a !$eci4c time

#on*enience #on!umer! can conduct online quick comparisonsto 4nd le!!

eB$en!i*e $roduct! and !er*ice!

#u!tomer! can shopor mae other tran!action! 24 hours a day,year round,from almo!t any location

roduct informationimmediately a*ailable 24 hours a day,year round,from almo!t any location

#on!umer! can interact ith other con!umer! in electroniccommunitie! and can e!change ideasa! ell a! com$aree!periences


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E# ene4t! to ociety

#on*enience Enable! more indi*idual! to work at homeand to

do less traveling

>cce!!

>llo! !ome merchandiseto be !old at lowerprices. le!! aCuent $eo$le can buy more andincrea!e their !tandard of li*ing

Enable! $eo$le in le!! de*elo$ed countrie! and ruralarea! to en


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Technical 1imitation! of E#

> fe technical challenge! remain fororgani5ation! i!hing to conduct E# 1ac of uni*er!ally acce$ted !tandard! for /uality,

!ecurity, and reliability

In!uDcient telecommunication! bandidth

till.e*ol*ing !oftare de*elo$ment tool!

(iDcultie! in integrating the Internet and E# !oftareith !ome eBi!ting 6e!$ecially legacy7 a$$lication! anddataba!e!

+eed for !$ecial Web !er*er! in addition to the netor

!er*er! 6added co!t7 EB$en!i*e andor incon*enient Internet acce!!ibility for

many $eo$le

>ll of the!e ill dimini!h o*er time


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+on.Technical 1imitation! of E#

1egal and economic concern! 'any legal i!!ue! are yet unre!ol*ed

1ac of national and international regulation! and!tandard!

(iDculty in mea!uring bene4t! of E# and


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u!ine!!.to.#on!umer E#(continued)

er*ice! =nline aning 6"!fnb"com7 ecuritie! trading 6chab =nline7

Job maret! 6'on!ter oard7 Tra*el 6EB$edia"com7

Real e!tate 6Realtor"com7

>uction! 6eay"com7
http://www.sfnb.com/http://www.schwab.com/http://www.monster.com/http://www.expedia.com/http://www.realtor.com/http://www.ebay.com/http://www.ebay.com/http://www.ebay.com/http://www.realtor.com/http://www.expedia.com/http://www.monster.com/http://www.schwab.com/http://www.sfnb.com/http://www.sfnb.com/http://www.sfnb.com/


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Per!onali5ation F ability to cu!tomi5e$roduct, !er*ice, ad*erti!ement, orcu!tomer !er*ice

2# E# enable! $er!onali5ation at loco!t Internet enable! mareting re!earch Gue!tionnaire!

H )!ually in*ol*e !ome inducement (irect beha*ior ob!er*ation

H #ooie! or !ite tracing !er*ice!


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)!e of intelligent agent! 9el$ cu!tomer! determine hat to buy

earch for and com$are *endor $rice!

#ollect information and de*elo$ cu!tomer$ro4le!

=nline ad*erti!ing anner!

H eyord banner!H Random banner!

(irect email Po$.u$ indo!


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>d*erti!ing >$$roache! and I!!ue! Permi!!ion mareting F oer incenti*e! to con!umer!

to recei*e ad*erti!ing Airal 6ad*ocacy7 mareting F online ord of mouth

ad*erti!ing (send this ad to a friend and get)

#u!tomi5ing ad! F ba!e ad! on con!umer!K $ro4le

Interacti*e mareting F tailor ad! ba!ed on !toredcu!tomer data

>ttracting *i!itor! to a !iteH 'aing the to$ li!t of a !earch engine

H =nline e*ent!, $romotion!, and attraction!

Electronic catalog! cu!tomi5ed catalog! #ou$on! online


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Pro*iding #u!tomer er*ice 9el$ cu!tomer determine need!

9el$ cu!tomer ac/uire $roduct or

!er*ice u$$ort cu!tomer during oner!hi$

of $roduct or !er*ice

9el$ cu!tomer di!$o!e of $roduct or

!er*ice


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u!ine!!.to.u!ine!! E#

#om$o!e! the ma


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Electronic #ommerce Inno*ation!

E.8o*ernment F deli*er informationand $ublic !er*ice! to citi5en! andmember! of the $ublic !ector

'.#ommerce F u!e of irele!!de*ice! to deli*er mobile e.commerce

#on!umer.to.con!umer E# F directinteraction facilitated by auction!,cla!!i4ed!, and bartering


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Electronic #ommerceRe/uirement!

Electronic Payment 'echani!m! (continued) Electronic credit card!

H )nencry$ted $ayment!. the buyer e.mail! her or hi! creditcard number to the !eller on the Internet

H Encry$ted $ayment! . credit card detail! encry$ted for

!ecurity Electronic ca!h in P#

H ban $ro*ide! !$ecial !oftare to con!umerH cu!tomer buy! ?electronic money@ from the ban through

!oftareH the ban !end! electronic money note to thi! cu!tomer,

endor!ing it ith a digital !ignature

H the money i! !tored on the buyerK! P# and can be !$ent inany electronic !tore that acce$t! e.ca!h

H the !oftare i! al!o u!ed to tran!fer the e.ca!h from thebuyerK! com$uter to the !ellerK! com$uter

H the !eller either de$o!it! the e.ca!h in a ban or u!e! the e.ca!h to mae $urcha!e! el!ehere


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Electronic Payment 'echani!m! (continued) Electronic $ayment card! ith e.ca!h

H #redit card! u!ing magnetic !tri$!

H #ard hold! information about $re$aid ca!h hich canbe u!ed to mae $ayment!

mart card!H #ard! ith micro$roce!!or! can hold much more

information

Per!on.to.$er!on $ayment !y!tem!H Tran!fer of fund! beteen indi*idual! 6PayPal7

E-T

Electronic allet!

Purcha!ing card!
http://www.paypal.com/http://www.paypal.com/


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ecurity >uthentication. a!!urance regarding the identity of

the $artie! ho are in*ol*ed in the deal Integrity. a!!urance that data and information

6order!, re$ly to /uerie!, and $ayment authori5ation7are not accidentally or maliciou!ly altered orde!troyed during tran!mi!!ion

+on.re$udiation. Protection again!t the cu!tomerK!un


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ecurity (continued) Encry$tion . a $roce!! of maing me!!age!

indeci$herable eBce$t by tho!e ho ha*e anauthori5ed decry$tion ey

H ingle.ey encry$tionH Public$ri*ate ey encry$tion

H Public ey infra!tructure

Electronic #erti4cate!

ecure ocet 1ayer 617

ecure Electronic Tran!action Protocol6ET7


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Electronic #ommerce I!!ue!

uyer Protection loo for reliable brand name! at !ite! lie Wal.'art =nline,

(i!ney =nline, and >ma5on"com !earch any unfamiliar !elling !ite for com$anyK! addre!! and

$hone and faB number chec out the !eller ith the local #hamber of #ommerce

andor etter u!ine!! ureau in*e!tigate ho !ecure the !ellerK! !ite i! by reading the

$o!ted $ri*acy notice, and e*aluate ho ell the !ite i!organi5ed

eBamine the money.bac guarantee!, arrantie!, and !er*iceagreement!

com$are $rice! to tho!e in regular !tore! 6!u!$ect the toochea$ !ite!7

a! friend! hat they no about the *endor 4nd out hat your right! are in ca!e of a di!$ute con!ult the +ational -raud Information #enter chec "con!umerorld"orgfor a li!ting of u!eful re!ource!
http://www.consumerworld.org/http://www.consumerworld.org/http://www.consumerworld.org/http://www.consumerworld.org/


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eller Protection +eed $rotection again!t con!umer! ho

refu!e to $ay or $ay ith bad chec! andbuyer!K claim! that the merchandi!e did notarri*e

+eed $rotection again!t the u!e of theirname by other! a! ell a! u!e of their uni/ueord! and $hra!e!, !logan! and Web addre!!

+eed legal recour!e again!t cu!tomer! hodonload co$yrighted !oftare andornoledge and !ell it to other!


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Ethic! Pri*acy

H mo!t electronic $ayment !y!tem! no hothe buyer! areL therefore, it may be

nece!!ary to $rotect the buyer!K identity Web Tracing

H by u!ing !o$hi!ticated !oftare it i!$o!!ible to trac indi*idual mo*ement! onthe internet

(i!intermediationH the u!e of E# may re!ult in the elimination

of !ome of a com$anyK! em$loyee! a! ella! broer! and agent!


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1egal #oncern! (omain +ame!

H !e*eral com$anie! that ha*e !imilar or !amename! 6in dierent countrie!7 com$ete o*er adomain name that i! not a regi!teredtrademar

TaBe! and =ther -ee!H -ederal, !tate, and local taBing authoritie! are

trying to 4gure out ho to im$o!e taBe! on

Internet !ale! #o$yright

H intellectual $ro$erty i! $rotected by co$yrightla! and cannot be u!ed freely


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#ha$ter ummary

2# E# encom$a!!e! e.tailing, auction!,and online !er*ice!

2# E# $ro*ide! numerou! mareting andad*erti!ing o$$ortunitie! and challenge!

2 E# ha! the highe!t *olume, and$ro*ide! !e*eral bu!ine!! model!

Payment mechani!m! and !ecurity are

critical E# i!!ue! E# introduce! many legal and ethical

concern!


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Chapter 9 - Electronic Commerce