e-commerce in business

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1st Semester 2011

Nick Prinsloo



` Study Unit 1: Introduction to e-Commerce



` Define the meaning of e-Commerce What are the 3 main components of e-Commerce?

x Business-to-consumer

x Business-to-business

x Transactions and selling processes which support selling

and purchasing activities on the web



` Why should managers study e-Commerce? Key part of business

Need for e-Commerce training grows daily

Low success rate in e-business blamed on inadequatetraining in area of management not IT

Disadvantaged students who need to learn about

commercial value of internet as they will be exposed to it

in business

e-Commerce brings with it a new mindset ± we need torethink how we do business



` What is the definition of e-Business A term which includes the streamlining of business

practices, the indication of back-end systems with

suppliers and customers, the electronic management of

stock, customer relationship management (CRM) and a

well designed front-end in the form of a website or portal.



` Give the definition for electronic data

interchange? EDI occurs when one business transmits computer

readable data in the standard format to another business

Businesses that engage in EDI with one another are

called trading partners



` Explain why certain products are more suited to

electronic commerce than others? Products suitable for selling through e-Commerce:

x O

ffice supplies, computers, airline transportation (ticketing),books.

x What else?

Products not suitable:

x Perishable foods, clothes ± goods need to be examined

closely,x What else?



` What are the advantages & disadvantages of

electronic commerce? Advantages

x A better market offering

x Better profitability

x Create markets

x Improve information flow and cooperation



` What are the advantages & disadvantages of

electronic commerce? Disadvantages

x Lack of knowledge and familiarity with e-Commerce

x Unprepared businesses

x Integration problems

x Security fears

x Unclear legal rules

x The undefined size and potential of the SA internet market



` What is the meaning of value chains in electroniccommerce? A value chain is a way of organising the activities that

each strategic business unit undertakes, these include

x Identifying customersx Designing products,

x Purchasing materials and supplies

x Producing or manufacturing product,

x Marketing or selling

x Delivering productsx After sales service and support



` Explain the driving forces of electronic

commerce? Business Pressures that cause a business to change ±

one way of responding to these pressures is e-

Commerce




commerce? Business Pressures

x Market & Economic pressures

x Strong Competition

x The merging Global economy

x Regional trade agreements

x Extremely low labour costs in some countries (e.g. China)

x

Frequent and significant changes in marketsx The increasing power of consumers





x Societal and Environmental Pressures

x The changing nature of the workforce

x Government deregulations

x The increasing importance of ethical and legal issues

x Shrinking government subsidies

x The growing social responsibility of business

x Rapid political changes





x Technological pressures

x Rapid technological obsolescence

x Increasing innovation and newer technologies

x Information overload

x The rapid decline in the cost of technology versus the

performance ratio



` How should businesses respond to these pressures? Strategic Systems

Continuous improvement efforts (BPR)

Business process re-engineering

` E-Commerce contributes to this process by: Reducing cycle time and time to market

Empowerment of employees and collaborative work

Knowledge management

Customer focused approach

Business alliances



` Define the concept new economy (or networked

economy)? Intro of e-Commerce has opened new doors and

perspectives on some economic principles.

To succeed in this new economy businesses need to

invest in entirely new business models with more

customer focus than ever before.



` Define the concept new economy (or networked economy)? Drivers of the New Economy

x PC

x Networksx Global Telecommunication infrastructure

x Globalisation

x The internet

x The web

x e-Commercex IT / Information technology

x Knowledge management ± Info turned into Knowledge



` What are the 10 driving principles of the new

economy? Tangible Value

Space dynamics

Time

Value of people

New growth dynamics

New determination of value

New distribution dynamics

New market dynamics

New transaction dynamics

New dynamics for the satisfaction of needs and desires



` Study Unit 2: The Infrastructure for e-Commerce

` Study Unit 3: Creating Web Pages

` Study Unit 4:Establishing an e-Commerce store



` Study Unit 2: The Infrastructure for e-Commerce



` Understanding the Infrastructure on which er-

Commerce is built What is the Internet?

x A global network of computers networks

x WorldWideWeb = a way of organising and viewing

(standardised) the information that is shared across internet

x TheWEB sits ³above´ the internet



` Understanding the Infrastructure on which e-

Commerce is built. Internet

NAP

POP

LAN

ISP



� What the...?� Packet switching

� TCP/IPArchitecture

� IP

� URL

� IPAddress

� DNS

� HTTP



` Servers DNS

Domain Names?

Web Servers

x Client ±server paradigm

x Web hosting



` Transfer Protocols HTTP

Mail Protocols

x SMTP

x POP

x IMAP

x FTP



` Markup Languages HTML

XML



` Intranet

` Extranet Public Networks

Private Networks Virtual Private Networks (VPN)



` Internet Applications Electronic Mail

Telnet

FTP

Mailing Lists

Usenet Newsgroups

Gopher

WWW

SET



` Study Unit 3: Creating Web Pages Outcomes

x Define the meaning of host?

x Name some hosts

x Explain the 3 types of web hosting?

x What is the criteria used to evaluate an ISP for website

hosting?

x What are the 3 types of software solutions provided by ISP¶s

x What are the cost components of an e-commerce site?



` Study Unit 3: Creating Web Pages Outcomes

x Explain the meaning of disciplined creativity?

x Components of a website?

xHow should websites be designed?

x Critically analyse the design an composition of a website?

x set objectives of the website?

x Making website comply with business objectives

x Enhance the performance and usability of the site

xCommon design problems

x Pre-testing phase of website

x Post-testing phase of website



` Steps in Planning a Website



DesignElements

Layout

COMPONENTSOF A WEBSITE

Look and Feel(aesthetics)

The Content

Right Size

Right detail

Right Info

Navigationtools

LinkingStructure

SectionBreakdown

Linking Pages

Image Maps

Animations

Images

Colour

Text

Spacing

Alignment

Size

Font

Colour

Background &Forground

Contrast

not consistent



` Evaluating a page Common web design problems

x Page from outer space

x Monster page

x Media overkill

x Uneven

x Meaningless links



` What to take into account for testing Speed

Reliability

Platform Independence

Media Accessibility

Usability

Must test on-line



` Checklist for self-evaluation of website Sidebars

Hyperlinks

Colours

Contrast

Search facilities

A site map

Graphics

Consistency Purposeful content



` Study Unit 4:Establishing an e-Commerce store What are the prerequisites for & preparatory steps in

setting up a shop on the internet

How to analyze and plan banking, trading and payment

requirements

Planning the launch of online shop



` Prerequisites for setting up e-store Identify role players

Feasibility study

How will e-commerce fit in with existing business

structure

Analyze customer needs, desires & expectations



` Determine banking requirements Get Internet merchant status at the bank

Select method of receiving credit card purchases

` Obtain Digital Certificate



` Determine cost Site setup fee

Annual maintenance fee

Monthly hosting fee

Domain registration

Scanner for digital photo conversion

Design & HTML help

Merchant credit card setup fee

Software ISP

Disk space



` Planning development and launch of site and shop Who will«?

x ...be responsible, organise, supervise, manage site

Launch

xSubmit to search engines

x Make site detectable with meta tags

x Advertise on other sites

x Conventional advertising

x Clever domain name usage ± put on all corporate printed

materialx Use e-mail mailing lists to inform interested parties



` Basic functions and Features of Online Trading

Software Catalogue displays

Shopping Cart

Cookies

Transaction processing (Virtual checkout counter)

Database (used to populate store catalogue & keep

buyer information)



` Security on online payments SSL (secure sockets layer)

TLS (Transport layer security)

SET (Secure electronic transaction)

3D SET (developed by VISA 2000)



` Study Unit 5: Online Marketing Principles

` Study Unit 6: Special Applications of Online

Marketing

` Study Unit 7: Advertising Online` Study Unit 8: e-Tailing

` Study Unit 9: eCRM and Online Branding



` Outcomes Describe the ³Market´

x In normal sense

x In terms of e-commerce

Give an overview of the working of the model of e-commerce consumer behaviour

What are the general characteristics of internet users

What is the meaning of Market segentation

x

Why is this NB for e-commerce One-to-one marketing on the internet



` Outcomes What is Customer Relationship management (CRM)

x How can it be incorporated into e-commerce

What are the differents tools that can be used in e-

commerce to enhance customer service

Market research in e-commerce



` The Market defined Amarket is usually a group of people with the need to

buy a product or service, the financial means to buy it,

the willingness to make the purchase and the authority to

do so.x The business to business market

x The business to consumer market

x The electronic marketplace



MacroEnvironment

Market

Environment

MicroEnvironment



INTERNAL INFLUENCING

FACTORS

EXTERNAL INFLUENCING

FACTORS

STIMULI

Product,

Distribution,

Promotion, Price

DECISION-MAKING PROCESS

Awareness of need, Gathering of

information, Evaluation, Decision-

Making, Action (Purchase),

Post-purchase evaluation

Need fulfilment,

satisfaction

E-COMMERCE CONTRIBUTIONS

Logistics, Technical

Support, Customer Service



` Market Segmentation Demarcating the heterogeneous mass market into more

homogenous groups.

Purpose: to analyse each group as a potential target for

which a particular marketing plan and strategy can beformulated

The various virtual communities that the internet has

helped create have become an ideal target market for

specific products and services.

The virtual community is a gathering of people who share

a common interest



` One-on-One Marketing on the Internet

` Customer Relationship Management (CRM)

` E-commerce customer service` Tools to enhance customer service

` Market Research



` E-Mail

` Social Networks

` Search Engines

` Marketing Models Viral Marketing

Affiliate Marketing

Multiple Partners

Selling up

` SMS Marketing



` What are the benefits

` Terminology

` Banners

` E-mail` How to market a website

` Cost benefit analysis

` How do we know if our online adverts are effective



` Retailing in e-commerce

` Business models

` Direct Internet Marketing

` Internet shopping process



` E-CRM

` Tools for building Customer relationships

` The meaning of branding

` Brand equity` Ways of adding value onnline

` Brand communities

` Steps in online brand building



` Study Unit 10: Business-To-Business (B2B) e-

Commerce

` Study Unit 11: Special e-Commerce Applications



` Explain advantages

` What is the B2B infrastructure

` B2B models

` Different B2B formats` Supply chain

` B2B Management Components

` Meaning, benefits and implementation of ERP



` The meaning and Benefit of E-Procurement

` The meaning and benefit of E-Logistics



` The E-Marketplace

` Portals

` Virtual Communities

` Auctions



` Study Unit 12: Managing Your e-Commerce

activities



` Creating an e-Commerce business plan

e-commerce in business

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