e-Business & e-Commerce
ICS622- Internet Technologies & Applications
Trends & Technologies
April 21, 20231
Objectives
ICS622- Internet Technologies & Applications
To understand how the Internet and World Wide Web are revolutionizing business processes.
To introduce various business models used on the Web.
To explore the advantages and disadvantages of creating an online business.
To examine marketing, payment, security and legal issues that affect e-businesses.
April 21, 20232
Introduction
ICS622- Internet Technologies & Applications
We are in the Age of KnowledgeIn short history of e-business
&commerce; demonstrated that successful e-businesses are those that recognize needs of target audiences and match them with relevant content
The terms e-business and e-commerce, often used interchangeably, have different meanings
April 21, 20233
E-Commerce and E-Business
ICS622- Internet Technologies & Applications
E-commerce refers to aspects of online business involving exchanges among customers, business partners and vendors.
For example, suppliers interact with manufacturers, customers interact with sales representatives &shipment providers interact with distributors
E-business encompasses these elements, but also includes operations handled within the business itself
For example, production, development, corporate infrastructure and product management are aspects of e-business not included under the category of e-commerce.
April 21, 20234
ICS622- Internet Technologies & Applications
E-business &e-commerce have increased speed &ease with which business can be transacted, resulting in intense competition among online vendors
To remain viable, e-businesses must adjust to evolving technologies, continually integrate new systems and satisfy wide variety of consumers
Its customers do not have to go far to buy from competitors
Online medium enables people to pay bills, write &cash cheques, trade stocks, take out loans &mortgage homes
Money as we now know it has begun to be augmented by such technologies as smart cards and digital cash.
April 21, 20235
E-Commerce and E-Business
ICS622- Internet Technologies & Applications
Transition of business into e-business provides many benefits
An e-business can offer personalization, effective customer service and streamlined supply-chain management
Although “e-commerce” is relatively new, large corporations have used it for decades by networking their computing systems with those of business partners &clients
For example, banking industry uses EFT to transfer money
In addition, many companies employ EDIEDI facilitates standardization of business forms as
purchase orders and invoices allowing companies to share information with customers, vendors &business partners electronically
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e-Business Models
Storefront Model
ICS622- Internet Technologies & Applications
One of the most common models used in the Internet
Storefront model enables merchants to sell products online by providing a combination of transaction processing, security, online payment and storage
In this model buyers and sellers interact directlyTo conduct storefront e-commerce, merchants must:
organize online product catalogs, take orders through their Web sites, accept payments securely, send merchandise to customers and manage customer data
Must also market their sites to potential customers Examples include www.gap.com, www.restaurant.com,
www.walmart.com, www.barnesandnoble.com
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Shopping-Cart Technology
ICS622- Internet Technologies & Applications
Shopping Cart -most commonly used e-commerce enablers
Most web sites that conduct e-business over the Internet today use shopping-cart technology
Order-processing technology that allows customers to accumulate items they wish to buy as they browse
Support provided by a product catalog, which resides on the merchant server in the form of database
The merchant server is the data storage and management system employed by the merchant
Often, network of computers performs all functions necessary to run a Web site
April 21, 20238
Shopping-Cart Technology …
ICS622- Internet Technologies & Applications
A database is a section of the merchant server designed to store and report on large amounts of information
For example:database for online clothing retailer would
include product specifications as item description, size, availability, shipping information, stock level and on order information.
Databases also store customer information, including:names, addresses, credit-card data and
past purchases April 21, 20239
Auction Model
ICS622- Internet Technologies & Applications
Web offers wide variety of auction sites to pinpoint lowest prices on available items
Auction sites act as forums through which Internet users can assume role of either seller or bidder
Sellers can:post items they wish to sell, the minimum prices
to sell items and deadlines to close the auctions Bidders may:
Search site for items they are seeking, view current bidding activity and place bids—usually in designated increments.
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Auction Model…
ICS622- Internet Technologies & Applications
Reverse-auction model allows buyers to set prices that sellers compete to match, or beat.
Faster bidding option available to sellers willing to set reserve prices – minimum selling price
Auction unsuccessful if not bid meets reserve price
When auction complete, seller and winning bidder notified, and decide on methods of payment and delivery
April 21, 202311
Portal Model
ICS622- Internet Technologies & Applications
Portal sites give chance for visitors to find anything they are looking for in one place.
Provide news, sports, weather and ability to search Web
Search engines are horizontal portals - aggregate information on abroad range of topics.
Vertical portals - other portals more specific, offering information pertaining to a single area of interest
Online shopping popular feature of many major portals
Examples: About.com, Altavista.com and Yahoo.com
April 21, 202312
Name-Your-Price Model
ICS622- Internet Technologies & Applications
Empowers customers by allowing them to state price they are willing to pay for products and services
e-businesses that offer this service form partnerships with leaders of industries: travel, lending and retail etc
Online business passes customer’s price request to an appropriate industry partner, who decides whether to sell the product or service at stated price
Customer whose price is rejected can offer another price
If price accepted, customer obligated to make purchase
April 21, 202313
e-Marketing
ICS622- Internet Technologies & Applications
Competition is intense in e-business & commerce world
Solid e-marketing strategy can give a company an advantage
There are various components of marketing campaign such as:
Marketing research, Advertising, Promotions, Branding and Public relations (PR)
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Branding
ICS622- Internet Technologies & Applications
Brand is typically defined as a name, logo or symbol that identifies a company’s products or services
Should be unique, recognizable and easy to remember
Brand equity includes value of tangible and intangible items, such as:brand’s monetary value over time, customer
perceptions and customer loyalty to a company and its products or services
Businesses that already have a solid brand may find it easier to transfer their brand to the Internet
Internet-only businesses must strive to develop a brand that customers trust and value.
April 21, 202315
Marketing Research
ICS622- Internet Technologies & Applications
Can help company develop its marketing mix, includes: product/service details and development, effective
pricing, promotion and distribution. Traditionally, marketing research consisted of
focus groups, interviews, surveys, questionnaires & secondary research
Research can now be performed over the InternetA faster channel through which to find and
analyze industry, customer & competitor information
Internet also provides anonymous setting to hold focus group discussions and distribute questionnaires
April 21, 202316
e-Mail Marketing
ICS622- Internet Technologies & Applications
E-mail marketing provide an inexpensive and effective method of targeting potential customers
Marketer should define span of people they are targeting including geographic locations & demographic profiles
Should determine level of personalization of campaign
Personalized direct e-mail targets consumers: Using their names, offering right products at
the right time and sending special promotions on basis interests
April 21, 202317
e-Mail Marketing …
ICS622- Internet Technologies & Applications
Mailing lists can help marketers target customers through personalized e-mail
However, it is important to avoid flooding customers with promotional e-mail.
Excessive correspondence can decrease effectiveness of an e-mail campaign
April 21, 202318
Promotions
ICS622- Internet Technologies & Applications
Can attract visitors to a site & influence their purchasing
Promotions can also be used to increase brand loyalty through reward programs
Examples:Frequent-flyer miles, point based rewards,
discounts, sweepstakes, free trials, free shipping and e-coupons
Promotions are an effective way to establish contact with potential customers; but
Important to ensure customers are becoming loyal to company, rather than to promotion/rewards program
April 21, 202319
Electronic Advertising
ICS622- Internet Technologies & Applications
E-business advertising conducted through such media as television, movies, newspapers and magazines and online
Establishes & strengthens e-business brandingPublication of URLs on mailings, business cards,
billboards, printed materials & other media increase brand awareness, bringing more visitors to a site
Internet quickly becoming important medium through which to market companies, products and services
Online advertising include the placement of links and banners on other companies’ Web sites and registration of sites with search engines and directories
April 21, 202320
Search Engines
ICS622- Internet Technologies & Applications
Search engine is a program that scans Web sites for desired content, listing relevant sites on basis of keywords or other ranking criteria
Ranking an important way to bring new visitors to a site
Method used by a search engine to rank a site determine how close to the top a site appears on search results
Businesses can customize and register their sites to improve their positions in search-engine results
April 21, 202321
Online Payments
ICS622- Internet Technologies & Applications
Secure EFT is crucial to e-commerceMethods for conducting online
transactions include:Credit-card payments, Digital cash and e-wallets, Smart cards, Micropayments and Electronic bill presentment
April 21, 202322
Credit-Card Payment
ICS622- Internet Technologies & Applications
Credit cards are a popular form of online paymentMany people resist them because of security
concernsCustomers fear fraud by merchants and third
parties However, most cards, like Visa Master Card &
American Express, have features that allow secure online payments
To accept credit-card payments, a merchant must have an account with a bank
Traditional accounts accept only POS transactionsHowever, growth of e-commerce has resulted in
creation of specialized Internet merchant accounts that handle online credit-card transactions
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Credit-Card Payment
ICS622- Internet Technologies & Applications
These consist of card-not-present (CNP) transactions
For example:When users make credit-card purchases
through Internet, they can provide card numbers and expiration dates, but merchant does not see actual cards involved in transactions
Merchant account established through either a bank or a third-party service
April 21, 202324
Digital Cash and e-Wallets
ICS622- Internet Technologies & Applications
Digital cash is one example of digital currencyStored electronically & can be used to make
online electronic paymentsDigital-cash accounts are similar to traditional
bank accounts; consumers deposit money into digital-cash accounts for use in digital transactions
Often, digital cash used in conjunction with other payment technologies, such as digital wallets
Provides payment alternative for customers with security concerns regarding online credit-card transactions
Digital cash also allows people without credit cards to shop online
April 21, 202325
Micropayments
ICS622- Internet Technologies & Applications
Merchants required to pay fee for each card transaction
Costly when customers purchase inexpensive items
Sometimes, cost of item is lower than standard transaction fee, causing merchant to incur losses
Micropayments enable ways for nominally priced products and services to be sold profitably over the Web
Examples: music, pictures, texts or videos
To offer micropayment processing some companies form partnerships with telephone carriers & utility companies
April 21, 202326
Smart Cards
ICS622- Internet Technologies & Applications
Smart card generally looks like a credit card
Can serve many different functions, from authentication to data storage.
Most popular are memory cards & microprocessor cards
Memory cards are similar to floppy disksMicroprocessor cards are similar to small
computers, with operating systems, security and storage
April 21, 202327
Smart Cards
ICS622- Internet Technologies & Applications
Smart cards also have different interfaces with which they interact with reading devices
One type of interface is contact interface, in which a smart card is inserted into a reading device and physical contact between the device and the card is necessary.
Alternative is contactless interface: data transferred to a reader via an embedded wireless device in the card, without card and device having to make physical contact April 21, 202328
Legal Issues
ICS622- Internet Technologies & Applications
Internet has posed significant challenges to legal system of many counties
For example:file-sharing technology enables
widespread copyright infringement while
Website personalization mechanisms threaten consumers’ privacy
April 21, 202329
Privacy
ICS622- Internet Technologies & Applications
Internet companies collect personal information from users as they navigate through a site
Privacy advocates argue that such efforts violate individuals’ privacy rights
Online marketers and advertisers disagree, suggesting that recording of user behavior & preferences helps online companies to better serve customers
April 21, 202330
Privacy …
ICS622- Internet Technologies & Applications
Also affects companies’ relationships with employees
Many businesses are implementing systems that regulate employee efficiency in the workplace
One of the newest surveillance technologies, keystroke cops, monitors employee activities on corporate and communications equipment.
Keystroke software is loaded onto hard drive of an employee’s computer, or can be sent to an unsuspecting employee as an e-mail attachment.
Once activated, software registers each keystroke before it appears on the screen.
April 21, 202331
SPAM
ICS622- Internet Technologies & Applications
Spamming is sending mass e-mails to people who have not expressed interest in receiving such e-mails.
Today, typical Internet user or e-mailer may receive hundreds of spam e-mails per day
Work in progress to construct legislation that puts an end to these unsolicited e-mails
Spam has privacy concerns based not only on sheer volume but also the content of the e-mails
Consumers and businesses are affected by decrease in e-mail server productivity due to mass e-mails received
April 21, 202332
Copyright and Patents
ICS622- Internet Technologies & Applications
Copyright is protection given to author of an original work, including: “literary, dramatic, musical, artistic and
intellectual works” Whether the work has been published or
notCopyright protects only the expression
or form of an idea, not the idea itself.Copyright protection provides incentive
to creators of original material by guaranteeing them ownership of their work for a given time
April 21, 202333
Copyright and Patents
ICS622- Internet Technologies & Applications
Concerns raised regarding ability of traditional law to protect IP owners from online infringement
This is because of the ease with which material can be reproduced on the Internet.
To complicate the issue, digital copies are perfect duplicates of digital originals, making it difficult to differentiate authorized copies from pirated ones.
One of most heavily debated areas of infringement and protection lies in sharing and distribution of music files (MP3s) and movies over Internet
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