Chapter 13: Electronic Commerce and Electronic Business Part 2

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Chapter 13Electronic Commerce and Electronic
BusinessPart 2
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Electronic Commerce - types
Business to Business
B2B
Business to consumer
B2C
Consumer to consumer
C2C
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Customer-Centric Retailing

• Internet allows firms to get closer to customers,
  cheaply
• Direct sales over the Web
• Interactive Marketing and Personalization
• M-Commerce and Next Generation Marketing
• Customer Self-Service

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Direct Sales Over the Web

• Sell directly to consumers
• Eliminate the middleman
• Disintermediation
• Example of disintermediation selling a sweater

Cost
Manufacturer
Distributor
Retailer
Customer
48.50
40.34
20.45
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Reintermediation

• Reintermediation The shifting of the
  intermediary role in a value chain to a new
  source ( e.g. Information Brokers)

Auto Dealer
Consumer
Info Broker (edmonds)
Auto Dealer
Consumer
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Interactive Marketing/Personalization

• Internet Understand user tastes
• Based on what they have viewed (or not viewed)
• How they behave on the site (e.g., abandoned
  shopping cart analysis)
• Based on what they have bought
• Pages then can be tailored (generally) and
  personalized to user interests

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Web Site Personalization
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Interactive Marketing/Personalization
How do web sites know its you?
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How a cookie works
A cookie is a tiny file deposited on the users
computer hard drive when an individual visits
certain Web sites used to identify the visitor
and track visits to the Web sites.
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Web Site Visitor Tracking
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M-Commerce and Next Generation Marketing

• M stands for mobile
• Internet is moving into the wireless world on
  private and public networks (cell phones a good
  example)
• Firms can and will communicate with customers
  through
• Cell phones (you can surf the web on a phone
  today)
• PDAs
• Interactive TV
• Cars
• Virtually anywhere

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Mobile Customer personalization
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WiFi Video

• What do you need to allow mobile access to the
  internet?
• What is Surf and Sips business model?
• Does it appear that it is easy to be successful
  in the hotspot business? What are potential
  issues?

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WiFi Article

• What are the WiFi business models presented in
  this article?

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Self Service

• Big use of the web answer customer questions,
  let them help themselves
• Substitute the web for human contact
• Needs to be combined with human contact to be
  effective

Examples of web based self service? Whats the
value proposition of web based self service?
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Customer self-service on KLMs web site
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B2B Business to Business

• Automation of transactions between businesses
• Fastest growing eCommerce
• Current estimate 80 of all eCommerce
  transactions are B2B
• 2004 revenue estimated to be 2.8 trillion WW
• Provides purchasers with
• More information (products, pricing)
• More options in terms of suppliers
• Convenience
• Reduced transaction costs

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Electronic Marketplaces

• Companies can use their own web sites for B2B
  commerce or use electronic hubs
• Electronic hubs
• Online marketplaces with many buyers and many
  sellers
• Avoid point-to-point connections
• integrated information one stop shopping for
  supplier and supplier product information

Buyers
Sellers
Catalogs Automated purchasing Pricing Processing
and Fulfillment
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E-Commerce Overview
Consumer to Consumer
Business to Business
Business to Consumer
Consumer
Manufacturer
Retailer
Consumer
How does payment work? What are the issues with
payment?
Bank/ Transaction Broker
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Some E-commerce Payment Systems

• Digital wallet
• Stores your financial information securely on
  your computer
• http//www.gator.com/home2.html
• E-cash
• Used instead of cash, cheque or credit card.
• Stored value card
• http//www.internetcash.com/
• Person-to-person payments
• To pay sellers not set up to process credit cards
• www.paypal.com
• Paypal - mobile

• Credit Cards
• Verified by Visa
• Electronic bill payment
• Pay your bills for you using your credit card or
  your bank account
• All major banks.

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Intranets

• Private, secure network based on Internet
  technology
• Using Internet technology to support internal
  organizational needs
• Email
• Document sharing
• Online repositories of information
• Remote access to resources
• Group collaboration
• Extranet intranet that is available to
  authorized outsiders.

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Intranets Organizational Benefits

• Cross platform availability
• Can be tied to internal transaction processing
  systems
• Interactive applications with text, audio, video
• Scalable as required
• Easy to use Web interface
• Low start-up costs
• Improved information sharing
• Reduced cost of distributing information
• Reduced cost for distributing software

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How Intranets Support Electronic Business
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Challenges Opportunities

• Unproven business models
• Business processes require change
• channel conflicts
• Security and Privacy
• BUT.
• The Internet provides firms with extraordinary
  opportunities to develop new products and
  services, new distribution channels, new avenues
  for marketing and sales, and even entirely new
  business models

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Can the Music Industry Change its Tune?

• What impact has the internet had on the Music
  Industry?
• Do you think the Internet is responsible for
  declining sales
• Right side of room Yes!
• Left side of the room. No!
• Can the legal download industry be successful in
  the long term?
• Right side of the room.Yes!
• Left side of the room.No!