ECommerce Fundamentals

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E-Commerce Fundamentals

• Management Information Systems
• BUS 391
• Lecture 3
• Professor Barry Floyd

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Questions

• Internet purchases
• What have you bought over the internet?
• If nothing, what would you buy?
• If something, why did you use the internet?
• What wont you buy over the internet? Why?

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Agenda

• How the Internet works
• Business to Consumer Building a site
• Types
• Trends

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Internet Infrastructure

• http//computer.howstuffworks.com/internet-infrast
  ructure.htm

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Internet Infrastructure
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Map of ones companys network

• http//computer.howstuffworks.com/framed.htm?paren
  tinternet-infrastructure.htmurlhttp//www.dynte
  x.com/our_network/uunet-map.html
• These networks rely on
• NAPs Network access points
• Backbones high volume network lines
• And Routers specialized computers

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Routers

• A computer with two tasks
• It ensures that information doesn't go where it's
  not needed. This is crucial for keeping large
  volumes of data from clogging the connections of
  "innocent bystanders."
• It makes sure that information does make it to
  the intended destination.
• http//computer.howstuffworks.com/internet-infrast
  ructure3.htm

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Backbones

• NSF created the first backbone in 1987
• Connected 170 smaller networks
• Called a T1 it operated at 1.544 million bits per
  second (mbps)
• T3s operate at 45 mbps
• OC-48

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Internet Protocol IP Addresses

• Every computer on the internet has an IP address
• Example IP address
• 216.27.61.137
• http//whatismyipaddress.com

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Domain Name System

• A system (set of computers with databases) that
  map domain names (like www.calpoly.edu) to an IP
  address

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URL Uniform Resource Locator

• The URL http//www.calpoly.edu contains the
  domain name www.calpoly.edu.

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Clients and Servers

• Clients Computers that ask for stuff (like web
  pages
• Servers Computers that provide stuff (like web
  pages) or email services or ftp services
• Servers deliver different services via different
  ports (like a door to a computer).

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How organizations access internet

• Intranet a subset of the internet set up for
  internal use only. Can also create a VPN (virtual
  private network)
• Extranet similar in nature to an intranet but
  designed to allow key partners (suppliers and/or
  customers) to access company information
• Portals a singular point of access to allow
  members to access information and other
  organizational resources
• Kiosks an open terminal allowing users
  access to specific information (e.g., the kiosk
  at the airport showing hotels and restaurants in
  SLO county)

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E-Commerce in a nutshell
http//ecommerce.internet.com/how /build/article/0
,,10362_867521,00.html
1Find a Domain Name2Build The Site3Find a
Host4Accept Payments5Secure The Site6Promote
The Site7Maintain The Site8Keep
Customers9Globalize The Site10Stay Educated
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Find a domain name

• Choose one no one else has
• Makes sense for your business
• Purchase from various folks
• http//www.godaddy.com

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Build the site

• Web designers
• Storefront builders
• Auction Builder
• For example, look at
• http//www.bizhosting.com/

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Find a host

• Find someone reliable
• Low cost
• Good support
• Check out
• http//webhost.thelist.com/

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Service Providers

• Internet Service Providers
• Gives you access to the internet (e.g., Charter,
  ATT)
• Online Service Providers
• Provides access and an array of services (e.g.
  AOL)
• Application Service Providers
• Provides access to specific software applications
  (e.g. SalesForce.com provides access to software
  to support the sales agents in your organization)

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Accept payments

• Credit card
• Paypal
• http//www.paypal.com
• Cybermoola
• http//ecommerce.internet.com/reviews/article/0,33
  71,10412_426631,00.html

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Secure the site

• Allows folks to know who you are and to provide
  encryption of data transfers between client and
  server
• Encryption scrambles data
• Secure Socket Layer secure private connection
• Secure Electronic Transmission customer
  authenication

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Promote the site

• Make certain that customers can find you!
• Need to show up on search engines
• http//www.1stsearchranking.com/index.htm?1427
• Align with other partners
• Place ads on their pages

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Maintain the site

• Track whos using it
• See what pages are being viewed and for how long
• http//www.thecounter.com/

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Measure Success

• Web Site Metrics
• Cookie
• Click Through
• Online ad
• Clickstream data metrics
• Clickstream data is the pattern of a consumers
  navigation through a site
• Visitor metrics Unique, unidentified, identified
• Exposure metrics page, site
• Visit metrics stickiness, raw visit, depth visit
• Hit metrics hits, qualified hits

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Keep customers

• Assess who your customers are
• Determine what information you can collect about
  them
• Use the information to assist them use your site
• Dont lose customers ..
• http//ecommerce.internet.com/how/customers/articl
  e/0,,10363_3066271,00.html

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Globalize the site

• Language
• Hire a translator to inspect a foreign language
  site to assure correct meaning. Translate into
  other language and then translate back.
• Culture
• Choice of colors, images are important, tone are
  very important and can lead to success or failure
  in a global marketplace.

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Stay educated

• What are the trends?
• M Commerce, E Government
• Demographics of users?
• What will customers buy?

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E Business Models

• B2C Business to consumer
• E shop, E mall
• B2B Business to business
• What Manufacturing inputs, Operating inputs
• How Systematic sourcing, Spot sourcing
• C2B Consumer to business
• Priceline.com
• C2C Consumer to consumer
• Ebay, Kazaa

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Organizational Strategies for E Business

• Marketing / SalesDirect
• eBay, Barnes and Noble, etc
• Financial Services
• Online banking, online billing,..
• Procurement
• Office supplies, office equipment, furniture,
• Customer Service
• Intermediaries
• Airline packages

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E Business Challenges

• Cost
• Value
• Secure
• Leverage existing systems
• Interoperability

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Revenue Models

• Transaction fees
• License fees
• Subscription fees
• Fees for value added services
• Advertising fees

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Advantages of B2C

• Shopping can be faster and more convenient
• Offerings and prices can change instantaneously
• Call centers can be integrated with WWW
• Broadband telecom will enhance buying experience

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Keys to success in Business to Consumer E-Commerce

• Commodity-like its work best
• Digital products best of all
• Attracting and retaining customers
• Remember the importance of merchandising
• You must execute well
• Watch the competition

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Web sites

• http//www.ebxml.org/geninfo.htm
• http//www.marketingapprentice.com/marketing/index
  .htm

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Summary

• Understanding key concepts in E Business will
  allow you to apply technology along with
  fundamental business skills to be successful