Me project e-commerce- epgdim 14

PROJECT REPORT
on

“E-Commerce”
In fulfillment of the requirements for
Executive Post Graduate Diploma in Industrial Marketing
(2012-2014)
UNDER THE GUIDENCE OF:
Dr. Pratap C. Mohanty
(M.E. Faculty)

SUBMITTED TO:

SUBMITTED BY:

Prof.Dr. Pratap C. Mohanty

Hitesh Bharti- Roll No. 24

INDIAN INSTITUTE OF FOREIGN TRADE
(DEEMED UNIVERSITY)
B-21, QUTAB INSTITUTIONAL AREA,
IIFT BHAWAN,
NEW DELHI - 110016
www.iift.edu

E Commerce Project, Group 2, EPGDIM 14

Page 1

Acknowledgement
We would like to extend our special gratitude to our professor, Dr. Pratap C.
Mohanty, for his tremendous support and guidance all through the first Semester
of EPGDIM 2014. We would like to thank him once again for his dedication and
commitment that ensured all our concepts were cleared. We would not have been
able to finish this project without his guidance and encouragement.
Thank you very much Sir.
You have been the inspiration and support for us aspiring ‘Marketers’.


Page 2

Table of Contents
S No.

Contents

Page Number

1

Objectives

5

2

Introduction

5

3

E Commerce History

7

4

Types of E Commerce

11

5

E-Commerce from the Buyer’s Perspective

10

6

E-Commerce from the Seller’s Perspective

11

7

Benefits and Challenges of E-Commerce

13

8

E Commerce Applications

14

9

E Commerce Security Issues

24

18

Conclusion

25

19

Bibliography

26


Page 3


Page 4

E-commerce as Marketing
Communications
Objectives of the Project:
•

To define e-commerce and understand its role as a transaction processing system

•

To list the three types of e-commerce, and explain how e-commerce supports the
stages of the buying process and methods of marketing and selling

•

To discuss several examples of e-commerce applications and services

•

To Define m-commerce, and describe several m-commerce services

•

To list the components of an e-commerce system, and explain how they function
together to provide e-commerce services.

Introduction:
Electronic commerce (e-commerce)
Electronic commerce, commonly known as e-commerce, is a type of industry where
buying and selling of product or service is conducted over electronic systems such as
the Internet and other computer networks. Electronic commerce draws on
technologies such as mobile commerce, electronic funds transfer, supply chain
management, Internet
marketing, processing,
electronic (EDI), inventory
management systems, and automated data collection systems. Modern electronic
commerce typically uses the World Wide Web at least at one point in the
transaction's life-cycle, although it may encompass a wider range of technologies
such as e-mail, mobile devices social media, and telephones as well.
Electronic commerce is generally considered to be the sales aspect of e-business. It
also consists of the exchange of data to facilitate the financing and payment aspects
of business transactions.

Page 5

E-commerce can be divided into:
E-tailing or "virtual storefronts" on websites with online catalogs, sometimes
gathered into a "virtual mall"
•

The gathering and use of demographic data through Web contacts and social
media
•
•

Electronic Data Interchange (EDI), the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospective and
established customers (for example, with newsletters)
•
•

Business-to-business buying and selling

•

The security of business transactions

Figure : Top 10 E commerce development in the past decade

The Above figure gives a glimpse of the Development of E Commerce as an Industry.
Various players all over the world are in the fight for that dominant position.


Page 6

A lot of Online trading or online Supermarkets have evolved with the time, these
companies include a wide range of products and services in their portfolio ranging from
household to Kids section to Kitchen Section to apparels to etc etc.

Figure : U.S E commerce values in Billion Dollars
The Above Figure denotes the amount of market share (U.S markets) e commerce industry has over the
period of years.

E-Commerce History
•

EDI
–

•

Automating transactions using EDI
–

•

Uses private communications networks (VANs) to transmit standardized
transaction data between business partners and suppliers

Drastically reduced the amount of paperwork and the need for human
intervention

Internet
Provided the ideal platform for conducting EDI transactions


Page 7

Figure : E-Commerce History

Transaction Processing
•

Transaction
–

•

An exchange involving goods or services

Transaction processing system (TPS)
–

–

•

Information system used to support and record transactions such as paying
for products or paying an employee (e.g. payroll system that calculates an
employee’s pay and cuts a check)
transaction processing systems share a common set of activities called the
transaction processing cycle

Batch processing
–
–

•

Transactions are collected over time and processed together in batches
useful in situations where transactions take place away from the computer
system

Online transaction processing
–

Takes place at the point of sale

Critical to time-sensitive transactions such as selling concert tickets and making flight
reservations

Page 8

The Transaction Processing Cycle
•

Data collection
–

•

Data editing
–

•

Processing transaction data

Data storage
–

•

Implemented if an error is found in the entered data

Data manipulation
–

•

Checking the validity of data entered

Data correction
–

•

The process of capturing transaction related data

Altering databases to reflect the transaction

Data output
–

Receipts, picking lists, and other documents


Page 9

Figure : Transaction Processing System

Different Transaction Processing for Different Needs
•

Order processing system
–
–

•

Supports the sales of goods or services to customers
Arranges for shipment of products

Purchasing system
–

Supports the purchase of goods and raw materials from suppliers


Page 10

Types of E-Commerce
•

Business-to-consumer e-commerce (B2C)
–
–

•

Connects individual consumers with sellers , cutting out the middleman
E.g. Amazon.com

Business-to-business e-commerce (B2B)
–

•

Supports business transactions on across private networks, the Internet,
and the Web

Consumer-to-consumer e-commerce (C2C)
–

Connects individual sellers with people shopping for used items

–

E.g. ebay.com

E-Commerce from the Buyer’s Perspective
•

Process of buying or acquiring goods or services
–

Realizing a need

–

Researching a product

–

Selecting a vendor

–

Providing payment

–

Accepting delivery

–

Using product support

Consumer review Web Sites like Epions.com help shopper’s avoid purchasing mistake
and pressure manufacturers to produce better products.


Page 11

E-Commerce from the Seller’s Perspective
•

Sellers business practices
–
–

Manufacturing products or supplying services that meet customer needs

–

•

Market research to identify customer needs

Marketing and advertising to make customers aware of available products
and services

Sellers business practices
–
–

Making arrangements for delivery of the product

–
•

Providing a method for acquiring payments

Providing after-sales support

Supply chain management
–

From the seller’s perspective, the process of producing and selling goods

– Involves three areas of focus: demand planning, supply planning, and

demand fulfillment, Demand fulfillment is a process of getting the product or
service to the customer


Page 12

Figure : Supply Chain Management


Page 13

Figure 6: E Commerce from the seller’s point of view

Benefits and Challenges of E-Commerce
1. Buyers enjoy the convenience of shopping from their desktop
2. B2C e-commerce
a. Levels the playing field between large and small businesses
3. Challenges
a. Established businesses must alter systems and business practices
b. Security, privacy, reliability: E-commerce can survive only if all involved can

trust the system
c. Social concerns


Page 14

Figure 7: E Commerce can dramatically extend a business’s market

E-Commerce Applications
The Major applications of e-commerce are listed below:
• E-Commerce
–

Playing an increasingly important role in our personal and professional
lives

–

Allows us to discover new and interesting products

–

Allows us to find better deals

–

Used to monitor bank accounts and transfer electronic funds

 Retail E-Commerce: Shopping Online

 E-tailing provides customers with


Page 15

–

Product information

–

The ability to comparison shop

 E-tailing options
–

Set up an electronic storefront

–

Lease space in a cybermall
•

Web site that allows users to browse through a wide variety of
products offered by several different retailers

The mySimon site provides the product price quotations from numerous eretailers to help find out best deal on many different products


Page 16

Figure 9: The mySimon site provides the product price quotations from numerous eretailers to help find out best deal on many different products


Page 17

Online Clearing
Marketplaces

Houses,

Web

Auctions

and

• Provide a platform for businesses and individuals to sell their products and

belongings
–

www.ubid.com
•

–

Provides a method for manufacturers to liquidate stock and
consumers to find a good deal

eBay.com
•

Most popular auction/marketplace

B2B Global Supply Management and Electronic Exchanges
•

Global supply management (GSM)
–

•

Businesses can find the best deals for raw materials and supplies needed
to manufacture their products on the global market

Electronic exchange
–

an industry-specific Web resource created to provide a convenient
centralized platform for B2B e-commerce among manufacturers, suppliers,
and customers
Promotes cooperation between competing companies

Marketing
• Web is used for
–

Unsolicited advertising
•

–

Access to product information through business Web sites
•

–

Banner: A rectangular area embedded in the Web page content for
advertising, often across the top of the page

Get better deals and make informed decisions

Market research
•

Traditionally done by interviewing customers


Page 18

•

Market segmentation divides customer opinions based on various
criteria

•

E-commerce allows market segmentation to take place on an
individual level

Figure 10: Consumer Reports advertise unbiased product testing and reviews. Many
consumers find it worth the subscription fee to access its vehicle rating.

Banking, Finance, and Investment
• Online banking provides
–

Convenient access to bank balance information

–

Ability to transfer funds, pay bills, and obtain account histories

• Electronic funds transfer
–

Popular for paying bills and receiving paychecks


Page 19

• Online brokerages
–

Able to execute trades fast, within seconds

Mobile Commerce (M- Commerce)
• A form of e-commerce
• Takes place over wireless mobile devices such as
–

Handheld computers and cell phones

–

takes place in emerging technologies such as dashtop computers
embedded in automobile dashboards

• Presents unique opportunities and challenges

Figure 11: Most online services provide a simple form to buy and sell stocks

Page 20

M-Commerce Technology
• Technologies and standards
–

Wireless Application Protocol (WAP)
•

a communication standard used by developers to create mcommerce applications

–

Wireless Markup Language (WML)

–

Infrared or Bluetooth wireless networking technology
•

Near Field Communications (NFC)

• Open Mobile Alliance (OMA)
–

Hundreds of mobile operators, device and network suppliers and
companies have joined together to create standards and interoperability
between mobile devices

Types of M-Commerce Applications
• Methods for delivering m-commerce services
–

Directly from cell phone service providers

–

Via mobile Internet or Web applications
•

Location-based m-commerce applications

–

Using Short Message Service (SMS) text messaging or Multimedia
Messaging Service (MMS)

–

Using short-range wireless technology, such as infrared
•

Proximity payment system

E-Commerce Implementation
• Implementing e-commerce
–

Requires large investment and expertise

• E-Commerce host
–

A company that takes on some or all of the responsibility of setting up and
maintaining an e-commerce system for a business or organization

Infrastructure

Page 21

• E-Commerce requires significant infrastructure changes
• Businesses must have employees who are technically savvy
• B2C e-commerce
–

Often connects manufacturers directly with consumers, cutting out the
middleman

–

Requires shipping individual products directly to consumers

Figure 12: Office Depot: A Large e-commerce system


Page 22

Building Traffic
• Marketing
–

Online advertising methods include banner ads, pop-up ads, and e-mail

–

market segmentation: customer opinions are divided into demographic
variables such as race, gender, income, education, and age to determine
which segment a product appeals to most

–

Offline advertising methods include magazines, newspapers, radio, and
television

Electronic Payment System
• proximity payment system
–

allows customers to transfer funds wirelessly between their mobile device
and a point-of-sale terminal

• Electronic cash (e-cash or digital cash)
–

Provides a private and secure method of transferring funds from a bank
account or credit card to online vendors or individuals

–

PayPal
•

Best-known e-cash provider

• E-cash benefits
–

Privacy - hides account information from vendors

–

Convenient if seller cannot process a credit card

• Smartcards
–

Credit cards with embedded microchips that can store and process data
and can be used as electronic wallets


Page 23

Figure 12: Online Credit card Transaction
E-cash systems such as PayPal allow users to purchase product online without the
vendor with a credit card number. You can also use e-cash to transfer funds between
individuals.


Page 24

Figure 13: Pay pal Service

International Markets
• Internet users of all nationalities will have access to your products
• First consideration of a global e-commerce strategy
–

Visitors of all nationalities and cultures should feel
viewing your Web content

comfortable while

• Costly approach
–

Create multiple versions of your Web site, each in a different language

• Once the international market is won over, e-tailer faces other challenges
–

Foreign Currency, shipping, national taxes


Page 25

E-Commerce Security Issues
Security is another important aspect which was not a concern in an offline commercial
market but since the number of threats, virus, hackers have grown so the protection of ecommerce platforms have just changed and new software’s are used with firewall
protection to completely safeguard the security of the commerce online. The transaction
and payment systems too are secured and governed by cyber law and privacy as per
company guidelines. The data security is difficult to control on the internet. As there are
no specific cyber laws and varies from one state to another so implementation of data
tasks can cause private data hampering.
• There are significant privacy and security concerns
–

Public network

–

No buyer or seller identity verification

–

Hacker attacks

E-Commerce Security Issues
• Digital certificate
–

A type of electronic business card

–

Attached to Internet transaction data

–

Verifies the sender of the data

–

Provided by certification authorities

–

Encryption
•

Uses high-level mathematical functions and computer algorithms to
transform data so that it is unintelligible to all but the intended
recipient

• Securing data in transit
–

Secure Sockets Layer (SSL)
•

Digital certificates combined allows for encrypted communications to
occur between Web browser and Web server

–

Transport Layer Security (TLS)

•

A URL associated with this begins with https

•

Allow for encrypted communication to occur between browsers and servers

•

Secures usernames, passwords, credit card information


Page 26

Business Resumption Planning
• Great pains are taken to ensure that transaction processing systems remain in

working order
• Business resumption planning (BRP)
–

Takes into account every possible disaster and provides courses of action
to minimize negative effects

–

The goal is to protect data and keep key systems operating until order is
resume

Conclusion:
With the study conducted with this project, we came to understand what actually is ecommerce and what is its importance in our lives, in today`s world where no one has
time, e commerce proves to be the best solution as it provides ease of transaction and
minimal engagement time, because of these two major advantages e-commerce has
made its footprints strong in the world economy.
E-commerce has taken the technology resource by storm by enabling the business to
grow wide and reach further audiences. E-commerce have made global communication
better and fused the energies in the right direction. After several years technology has
made the world come close and exchange trade secrets. E-commerce has surpassed
the geographical boundaries.
Decrease in operational cost:
E-commerce is breath taking which has lead significant impact on every process. The
operation cost earlier which involved many systems, documents and all is free from
materials and it has now only been limited to Intel mini case which stands out as perfect
e-commerce gadget.
Customization is another aspect which has been affected greatly as now personalization
after e-commerce is just at your finger clicks and no one connecting emotionally to
someone is just part which has changed the thought process of buying and selling of
products on the web. Earlier e-commerce during the emergence was not safe but now
has shredded new aspects. E-commerce has really improved sales, organized the
company process and helped in drawing fruitful results.


Page 27

There are inventory storage problems, stack issues and calculation problems which were
pertinent before when only the manually valuation of things was done. The e-commerce
solutions have reduced all these shortcomings and made processing, distribution of all
expensive goods from electronics to other valuables easy.
The listing is done on the website portals of the order released. The components use
has now been counted and authentication of every step is quite possible which was
unlike earlier. There are stocks which are obsolete have taken the place in listing and
status is always being updated. E-commerce solutions have been are not only part of the
technology sector but finance, marketing and many allied professions today. Life has
changed with e-commerce solutions as every step using online methods are well
guarded. Every company has so many products the technology oriented e-commerce
trade has really simplified various aspects including the features and characteristics of
customer products. E-commerce is climbing the popularity charts rapidly.
E-commerce is now new to the entire world but the increase in its dynamics has certainly
made it the best mode of communication and. E- commerce solution also have
affordable rather cheap telecommunications cost. Internet communication is quite cheap
and reliable too when compared to VAN’s. The internet does not comprise of leasing the
cables unlike other communication media. The laying down of cables is difficult rather
sending any fax, mail, message or the direct calling.
It is because of e-commerce the world trading is possible at such extensive level and
people have come closer.

Bibliography:
 Internet
 Online e commerce websites
 Kotler, P., Wong, V., Saunders, J. and Armstrong, G.

(2005),
"Principles of Marketing," 4th European ed., Pearson Education
Limited, Essex.


Page 28

Me project e-commerce- epgdim 14

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