Transaction Management in Database Management System
Recommended E-Commerce Books & Concepts
1. RECOMMENDED BOOKS
1. E-COMMERCE: AN INDIAN PERSPECTIVE BY P.T.
JOSEPH, PRENTICE HALL INIDA
2. E-COMMERCE – A MANAGER’S GUIDE BY RAVI
KALAKOTA AND WHINSTON, PRENTICE HALL
INDIA
3. E-COMMERCE – A MANAGERIAL PERSPECTIVE BY
EFRAIM TURBAN AND OTHERS, PEARSON
4. E-COMMERCE – BUSINESS, TECHNOLOGY, AND
SOCIETY BY KENNETH C LAUDON, PEARSON
2. SCOPE OF E-BUSINESS
INFORMATION KNOWLEDGEMENT
TECHNOLOGY MANAGEMENT
E-BUSINESS
CUSTOMER
SUPPLY CHAIN
RELATIONS
MANAGEMENT
MANAGEMENT
3. E-commerce definition
Technology-enabled transactions and technology-
mediated exchanges of digitized information
between parties (individuals or organizations) as
well as the electronically based intra-organizational
or inter-organizational activities that facilitate such
exchanges
4. MEANING OF E-BUSINESS
It is buying and selling, marketing and servicing, and delivery and payment of
products, service and information over the Internet, intranet, extranet and other
networks, between an inter-networked enterprise and its prospects, customers,
suppliers and other business partners. (C.S.V. MURTHY)
From a communication perspective, electronic commerce is the delivery of
information, products/services, or payments via telephone lines, computer
networks, or any other means.
From business process perspective, electronic commerce is the application of
technology toward the automation of business transactions and workflows.
From service perspective, electronic commerce is a tool that addresses the desire
of firms, consumers, and management to cut service costs while improving the
quality of goods and increasing the speed of service delivery.
From an online perspective, electronic commerce provides the capability of
buying and selling products and information on the Internet and other online
services. (Ravi Kalakota and Andrew B.Whinston)
5. Differences between Definitions of E-commerce
The definitions differ with respect to the
media under consideration. Some focus on
the Internet, some include all sorts of direct
electronic distribution channels (e.g., TV-
shopping), and others include all forms of
electronic market places (e. g., electronic
trading systems on stock exchanges).
6. Definitions of E-commerce
For the purpose of this class a broad definition of e-
commerce will be used.
Electronic commerce denotes the seamless application
of information and communication technology from
its point of origin to its end point along the entire
value chain of business processes conducted VIA the
INTERNET, INTRANET & EXTRANET and designed to
enable the accomplishment of a business goal.
These processes may be partial or complete and may
encompass business-to-business, as well as
business-to-consumer, consumer-to-business
transactions and intermediaries.
7. Pure Vs. Partial Electronic
Commerce
– Three dimensions
• the product (service) sold [physical / digital];
• the process [physical / digital]
• the delivery agent (or intermediary) [physical /
digital]
– Traditional commerce
• all dimensions are physical
– Pure EC
• all dimensions are digital
– Partial EC
• all other possibilities include a mix of digital
and physical dimensions
8. Electronic Commerce Vs. Electronic Business
• Electronic Commerce is the use of
electronic transmission mediums
(telecommunications) to engage in the
exchange, including buying and selling,
of products and services requiring
transportation, either physically or
digitally, from location to location.
9. Electronic Commerce Vs. Electronic Business
• The term electronic commerce is restricting.
• It does not fully encompass the true nature of the
many types of digital information exchanges.
• The term electronic business also includes the
exchange of information directly related to the
actual buying and selling of goods. Increasingly,
businesses are using electronic mechanisms to
distribute information and provide customer
support.
• E-Business describes the broadest definition of
EC. It includes customer service and
intrabusiness tasks. It is frequently used
interchangeably with EC.
10. Electronic Commerce Vs. Electronic Business
• Electronic business involves more than just selling
and buying; it includes all kinds of presale and
postsale efforts.
• Then it encompasses new approaches to :
– market research,
– advertising,
– product purchasing and distribution,
– customer support,
– recruiting,
– public relations,
– business operations,
– product management,
– knowledge distribution,
– financial transactions.
11. Electronic Commerce s. Electronic Business
• E-business also helps to perform the following functions :
– 1) bring products to market;
– 2) match buyers with sellers;
– 3) communicate with government in pursuit of commerce;
– 4) deliver electronic goods.
In addition, Electronic business includes other activities such as :
- market survey,
- data interchange,
- business relations development with partners,
- joint advertising programs with customers,
- joint development of products and services with customers.
All these activities impact strategic planning, entrepreneurial
opportunities, organizational design and performance, business law,
and taxation policies.
12. Traditional Vs Electronic Commerce Transactions
• Example of Traditional Commerce transactions :
– The purchaser
• generates a request,
• gains approval,
• selects an appropriate supplier,
• determines availability, and issues a
purchase order
– The seller must
• verify credit and sales history,
• check inventory,
• schedule shipping,
• notify the warehouse, and
• issue an invoice
13. Traditional Vs Electronic Commerce Transactions
• Example of Electronic Commerce transactions :
– The purchaser
• Select products from a web site,
• Request approvals and forward orders to
purchasing via electronic processes,
– The seller can
• add orders to database,
• check warehouse inventory and customer status,
• arrange delivery,
• handle communications all via electronic
commerce.
14. Differences between traditional and e-commerce
In the following table you can see in table form the differences in media used for traditional and e-commerce. Please
notice that as far as e-commerce is concerned everything can be done through a server:
Action Traditional commerce E-commerce
Acquire product information Magazines, flyers, online catalogs Web pages
Request item Printed forms, letters E-mail
Check catalogs, prices Catalogs On-line catalogs
Check product availability and confirm price Phone, fax E-mail
Generate order Printed form E-mail, web pages
Send /Receive Order Fax, mail E-mail, EDI
Prioritize order On-line database
Check inventory at warehouse phone,fax On-line database, web pages
Schedule delivery Printed form E-mail, On-line database
Generate invoice Printed form On-line database
Receive product Shipper Shipper (unless it is electronic)
Confirm receipt Printed form E-mail
Send/Receive Invoice Mail E-mail, EDI
Schedule payment Printed form EDI, On-line database
Send /Receive Payment Mail EDI
Table from: ‘Understanding e-commerce’ – Microsoft press
15. E-COMMERCE vs TRADITIONAL COMMERCE
Key elements E-commerce Traditional commerce
Value Creation Information Product/Service
Strategy Sense and respond Classical
Simple rules
Competitive edge Speed Quality/Cost
Competitive force Low barriers of entry Power of suppliers
Power of customers Product substitution
Resource focus Demand side Supply side
Customer interface Screen-to-face Face-to-face
Communication Technology-mediated channels Personal
Accessibility 24 x 7 Limited time
Customer Self-service Seller influenced
interaction
Consumer behavior Personalization Standardization
One-to-one marketing Mass/one-way marketing
Promotion Word of mouth Merchandising
Product Commodity Perishables, feel & touch
16. Advantages of Electronic Commerce
• Electronic commerce can increase sales and decrease costs.
• Web advertising reaches to potential customers in the world.
• Web creates virtual communities for specific products or
services.
• A business can reduce the costs by using electronic commerce
in its sales support and order-taking processes.
• Electronic commerce increases sale opportunities for the
seller.
• Electronic commerce increases purchasing opportunities for
the buyer.
17. Advantages of Electronic Commerce : General Welfare
of Society
• Electronic commerce benefits the general welfare of
society because:
– Electronic payments of tax refunds and welfare cost
less to issue and arrive securely.
– Electronic payments can be audited easily.
– Electronic commerce enables people to work from
home.
– Electronic commerce makes products and services
available in remote areas.
18. Disadvantages of Electronic
Commerce
• Some business processes are difficult
to be implemented through electronic
commerce.
• Return-on-investment is difficult to
apply to electronic commerce.
• Businesses face cultural and legal
obstacles to conducting electronic
commerce.
19. Timeline of History of E-Commerce
1981: World's first recorded B2B online shopping system. Thomson Holidays UK
1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering.
1984: World's first recorded B2C online home shopper. Mrs Jane Snowball uses the Gateshead SIS/Tesco
system to buy groceries.
1987: Swreg begins to provide software and shareware authors means to sell their products online
through an electronic Merchant account.
1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer.
1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will Change the Way
We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.
1994: Netscape releases the Navigator browser in October under the code name Mozilla. Pizza Hut offers
pizza ordering on its Web page. The first online bank opens. Attempts to offer flower delivery and
magazine subscriptions online. Adult materials also become commercially available, as do cars and
bikes. Netscape 1.0 is introduced in late
21 SSL encryption that made transactions secure.
1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, internet-only radio
stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use
Internet for commercial transactions. eBay is founded by computer programmer Pierre Omidyar
as AuctionWeb.
20. 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
1999: Business.com sold for US $7.5 million to eCompanies, which was purchased in 1997 for
US
$149,000. The peer-to-peer filesharing software Napster launches. ATG Stores launches
to sell decorative items for the home online.
2000: The dot-com bust.
2002: eBay acquires PayPal for $1.5 billion [5]. Niche retail companies CSN Stores and
NetShops
are founded with the concept of selling products through several targeted domains, rather
than a central portal.
2003: Amazon.com posts first yearly profit.
2007: Business.com acquired by R.H. Donnelley for $345 million[6].
2008: US eCommerce and Online Retail sales projected to have reached $204 billion, an increase
of 17 percent over 2007[7].
21. Industrial Age Information Age
Market Place Organizing Business Market Space
Hierachies Organizing Business Networks
Scarce Physical Limitless Digital
Resources Economics in Business Resources
Machine/Craft Populating Business Knowledge/
Workers Intelligent Workers
Real Estate and Infrastructure in Business Information
Infrastructure Technology
22. DOMAINS IN INTERNET
A domain name is an identification label that
defines a realm of administrative autonomy,
authority, or control in the Internet. Domain
names are also hostnames that identify
Internet Protocol (IP) resources such as
web sites. Domain names are formed by the
rules and procedures of the
Domain Name System (DNS).
23. Top-level domains
• The top-level domains (TLDs) are the highest level of domain names of
the Internet. They form the DNS root zone of the hierarchical
Domain Name System. Every domain name ends in a top-level or first-
level domain label.
• When the Domain Name System was created in the 1980s, the domain
name space was divided into two main groups of domains. The
country code top-level domains (ccTLD) were primarily based on the
two-character territory codes of ISO-3166 country abbreviations. In
addition, a group of seven generic top-level domains (gTLD) was
implemented which represented a set of categories of names and multi-
organizations. These were the domains GOV, EDU, COM, MIL, ORG,
NET, and INT.
• During the growth of the Internet, it became desirable to create
additional generic top-level domains. As of October 2009, there are 21
generic top-level domains and 250 two-letter country-code top-level
domains. In addition, the ARPA domain serves technical purposes in the
infrastructure of the Domain Name System.
24. GenericTop Level Domains intended use
Aero: the air transport industry.
Asia: companies, organizations and individuals in the Asia-Pacific region
Biz: business use
Cat: Catalan language/culture
Com: commercial organizations, but unrestricted
Coop: cooperatives
Edu: post-secondary educational establishments
Gov: government entities within the United Statesat the federal, state, and local levels
Info: informational sites, but unrestricted
Int: international organizations established by treaty
Jobs: employment-related sites
Mil: the U.S. militarymobisites catering to mobile devices
Museum: museums
Name: families and individuals
Net: originally for network infrastructures, now unrestricted
Org: originally for organizations not clearly falling within the other gTLDs, now
unrestricted
Pro:certain professions
Tel: services involving connections between the telephone network and the Internet
(added March 2, 2007)
Travel: travel agents, airlines, hoteliers, tourism bureaus, etc
25. HISTORY OF .COM DOMAIN
•On 15 March 1985, the first commercial Internet
domain name (.com) was registered under the name
Symbolics.com by Symbolics Inc., a computer systems
firm in Cambridge, Massachusetts.
•By 1992 fewer than 15,000 dot.com domains were
registered.
•In December 2009 there were 192 million domain
names. A big fraction of them are in the .com TLD,
which as of March 15, 2010 had 84 million domain
names, including 11.9 million online business and e-
commerce sites, 4.3 million entertainment sites, 3.1
million finance related sites, and 1.8 million sports sites.
26. The Chronological Events of the Evolution of Internet
1969 First ARPANET installed in UCLA in Sept. 1969
5 E-mail was invented by accident for sending messages by two
programmers. Ray Tomlinson of BBN is credited for sending the world’s
first e-mail message in 1973
1973-74 Transport Control Protocol/Internet Protocol (TCP/IP) was developed by
Vintcerf to link difference packet networks. These are capable of
connecting multiple independent networks through routers/gateways.
1980-86 National Science Foundation (NSF) supported the development of CSNET,
a computer science research network.
12 NSF initiated a new program of networking and computer support for
super computing centers for research. It launched the NSFNET network
backbone program.
15 In Switzerland at CERN Tim Berners-Lee proposed a hypertext system that
will run across the Internet on different operating systems. This was the
World Wide Web.
18 CSNET service was discontinued. Internet connectivity had become essential
tool for the conduct of scientific research. NSFNET program had outgrown
its initial version
27. Brief History
Origin
The demand within business and government to make better use of computing
and to better apply computer technology to improve customer interaction,
business processes, and information exchange both within an enterprise and
across enterprises.
Evolution
• During 1970s – Introduction of Electronic Funds Transfer (EFT) – Ex. Debit
Cards
• During the late 1970s and early 1980s – introduction of electronic messaging
technologies, such as Electronic Data Interchange (EDI) (procurement) and
Electronic Mail (E-MAIL) (Communication), Document workflow systems
Desktop videoconferencing, Outsourcing and coordination of logistics, Virtual
and team-based enterprises, Mass customization (demand-driven
manufacturing), Technical data interchange (engineering).
• Mid-1980s – introduction of online services – Social interaction (Chat and
Inter-relay Chat (IRC)) and knowledge sharing (such as File Transfer
Programmes)
• During 1990s – the advent of World Wide Web on the Internet – Publishing
and dissemination of information. (Ravi Kalakota and Andrew B.Whinston)
28. 1979: Michael Aldrich invented online shopping
1981: Thomson Holidays, UK is first B2B online shopping
1982: Minitel was introduced nationwide in France by France Telecom and
used for online ordering.
1984: Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball ,72,
is first online home shopper
1985: Nissan UK sells cars and finance with credit checking to customers online
from dealers' lots.
1987: Swreg begins to provide software and shareware authors means to sell
their products online through an electronic Merchant account.
1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a
NeXT computer.
1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New
Technologies Will Change the Way We Shop and What We Buy. St. Martin's
Press. ISBN 0312063598.
1994: Netscape releases the Navigator browser in October under the code name
Mozilla. Pizza Hut offers online ordering on its Web page. The first online bank
opens. Attempts to offer flower delivery and magazine subscriptions online.
Adult materials also become commercially available, as do cars and bikes.
Netscape 1.0 is introduced in late
1994 SSL encryption that made transactions secure.
29. 1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour,
internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell
and Cisco begin to aggressively use Internet for commercial transactions. eBay
is founded by computer programmer Pierre Omidyar as AuctionWeb.
1998: Electronic postal stamps can be purchased and downloaded for printing
from the Web.
1999: Business.com sold for US $7.5 million to eCompanies, which was
purchased in 1997 for US $149,000. The peer-to-peer filesharing software
Napster launches. ATG Storeslaunches to sell decorative items for the home
online.
2000: The dot-com bust.
2002: eBay acquires PayPal for $1.5 billion [8]. Niche retail companies
CSN Stores and NetShops are founded with the concept of selling products
through several targeted domains, rather than a central portal.
2003: Amazon.com posts first yearly profit.
2007: Business.com acquired by R.H. Donnelley for $345 million[9].
2008: US eCommerce and Online Retail sales projected to have reached $204
billion, an increase of 17 percent over 2007[10
30. E-Business Applications can be divided into three categories:
• Internal Business Systems:
Customer Relationship Management
Enterprise Resource Planning
Human Resources Management
2. Enterprise Communication and Collaboration:
VoIP (Voice over Internet Protocol)
Content Management System
E-mail
Voice Mail
Web Conferencing
Digital Work Flows (or business process management)
9. Electronic Commerce - Business-to-Business Electronic Commerce
(B2B) or Business-to-Consumer Electronic Commerce (B2C):
Internet shop
Supply chain management
Online marketing
Offline marketing
31. Models
When organizations go online, they have to decide which e-business models best suit
their goals. A business model is defined as the organization of product, service and
information flows, and the source of revenues and benefits for suppliers and customers
. The concept of e-business model is the same but used in the online presence. The
following is a list of the currently most adopted e-business models such as
E-shops – Online shopping
E-procurement-is the business-to-business or business-to-consumer or Business-
to-government purchase and sale of supplies, Work and services through
the Internet as well as other information and networking systems, such as Electronic
Data Interchange and Enterprise Resource Planning.
E-malls -Web site that displays electronic catalogs from several suppliers,
and charges commission from them for the sales revenue generated at that site.
E-auctions
Virtual Communities - is a social network of individuals who interact through
specific media, potentially crossing geographical and political boundaries in order to
pursue mutual interests or goals. One of the most pervasive types of virtual community
include social networking services, which consist of various online communities.
32. Collaboration Platforms - offer a set of software components and
software services that enable individuals to find each other and the information they
need and to be able to communicate and work together to achieve common business
goals. The core elements of a collaboration platform are messaging (email,
calendaring and scheduling, and contacts), team collaboration (file synchronization,
ideas and notes in a wiki, task management, full-text search), and real-time
collaboration and communication (e.g., presence, instant messaging, Web
conferencing, application / desktop sharing, voice, audio and video conferencing),
and Social Computing tools (e.g., blog, wiki, tagging, RSS, shared bookmarks).
Third-party Marketplaces - online marketplace that allows sellers to offer
their goods alongside offerings of the website
Value-chain - a business model describing the dissemination of value-
generating information services throughout an Extended Enterprise. This value
chain begins with the content supplied by the provider, which is then distributed and
supported by the information infrastructure; thereupon the context provider supplies
actual customer interaction. It supports the physical value
chain of procurement, manufacturing, distribution and sales of traditional
companies.
Information Brokerage and
Telecommunication
33. Classification by provider and consumer
Roughly dividing the world into providers/producers and
consumers/clients one can classify e-businesses into the
following categories:
•business-to-business (B2B) - describes commerce transactions between
businesses, such as between a manufacturer and a wholesaler, or between a
wholesaler and a retailer. Metalsite.com, verticalnet.com, SHOP2gether.com
•business-to-consumer (B2C) - describes activities of businesses serving end
consumers with products and/or services. Ex. Amazon.com, autobytel.com,
eDiets.com. Pets.com
•business-to-government (B2G) – iGov.com
•government-to-business (G2B)
•government-to-government (G2G)
•government-to-citizen (G2C)
•consumer-to-consumer (C2C) – ebay.com, InfoRocket.com
•consumer-to-business (C2B) – Priceline.com
35. Brokerage Models
Brokers are market-makers. they
bring buyers and sellers together
and facilitate transactions. Brokers
play a frequent role in business-to-
business (B2B), business-to-
consumer (B2C), or consumer-to-
consumer (C2C) markets. Usually a
broker charges a fee or commission
for each transaction it enables. The
formula for fees can vary.
36. Brokerage models include:
Marketplace Exchange -- offers a full range
of services covering the transaction
process, from market assessment to
negotiation and fulfillment. Exchanges
operate independently or are backed by an
industry consortium. [Orbitz,
ChemConnect]
Buy/Sell Fulfillment -- takes customer
orders to buy or sell a product or service,
including terms like price and delivery. [
CarsDirect, Respond.com]
37. Demand Collection System -- the patented "name-
your-price" model pioneered by Priceline.com.
Prospective buyer makes a final (binding) bid for a
specified good or service, and the broker arranges
fulfillment. [Priceline.com]
Auction Broker -- conducts auctions for sellers
(individuals or merchants). Broker charges the seller a
listing fee and commission scaled with the value of the
transaction. Auctions vary widely in terms of the
offering and bidding rules. [eBay]
Transaction Broker -- provides a third-party payment
mechanism for buyers and sellers to settle a
transaction. [PayPal, Escrow.com]
38. Distributor -- is a catalog operation that connects a large
number of product manufacturers with volume and retail
buyers. Broker facilitates business transactions between
franchised distributors and their trading partners.
Search Agent -- a software agent or "robot" used to
search-out the price and availability for a good or service
specified by the buyer, or to locate hard to find
information.
Virtual Marketplace -- or virtual mall, a hosting service
for online merchants that charges setup, monthly listing,
and/or transaction fees. May also provide automated
transaction and relationship marketing services. [zShops
and Merchant Services at Amazon.com]
39. Advertising Models
The web advertising model is an extension of the
traditional media broadcast model. The
broadcaster, in this case, a web site, provides
content (usually, but not necessarily, for free) and
services (like email, IM, blogs) mixed with
advertising messages in the form of banner ads.
The banner ads may be the major or sole source of
revenue for the broadcaster. The broadcaster may
be a content creator or a distributor of content
created elsewhere. The advertising model works
best when the volume of viewer traffic is large or
highly specialized.
40. Portal -- usually a search engine that may include varied
content or services. A high volume of user traffic makes
advertising profitable and permits further diversification of
site services. A personalized portal allows customization of
the interface and content to the user. A niche portal
cultivates a well-defined user demographic. [Yahoo!]
Classifieds -- list items for sale or wanted for purchase.
Listing fees are common, but there also may be a
membership fee. [Monster.com, Craigslist]
User Registration -- content-based sites that are free to
access but require users to register and provide demographic
data. Registration allows inter-session tracking of user
surfing habits and thereby generates data of potential value
in targeted advertising campaigns. [NYTimes]
41. Query-based Paid Placement -- sells favorable link
positioning (i.e., sponsored links) or advertising
keyed to particular search terms in a user query,
such as Overture's trademark "pay-for-
performance" model. [Google, Overture]
Contextual Advertising / Behavioral Marketing --
freeware developers who bundle adware with their
product. For example, a browser extension that
automates authentication and form fill-ins, also
delivers advertising links or pop-ups as the user surfs
the web. Contextual advertisers can sell targeted
advertising based on an individual user's surfing
activity.
42. Content-Targeted Advertising -- pioneered by
Google, it extends the precision of search advertising
to the rest of the web. Google identifies the meaning
of a web page and then automatically delivers
relevant ads when a user visits that page. [Google]
Intromercials -- animated full-screen ads placed at
the entry of a site before a user reaches the intended
content. [CBS MarketWatch]
Ultramercials -- interactive online ads that require
the user to respond intermittently in order to wade
through the message before reaching the intended
content. [Salon in cooperation with Mercedes-Benz]
43. Infomediary Models
Data about consumers and their
consumption habits are valuable,
especially when that information is
carefully analyzed and used to target
marketing campaigns. Independently
collected data about producers and their
products are useful to consumers when
considering a purchase. Some firms
function as infomediaries (information
intermediaries) assisting buyers and/or
sellers understand a given market.
44. Advertising Networks -- feed banner ads to a network of
member sites, thereby enabling advertisers to deploy large
marketing campaigns. Ad networks collect data about web
users that can be used to analyze marketing effectiveness. [
DoubleClick]
Audience Measurement Services -- online audience market
research agencies. [Nielsen//Netratings]
Incentive Marketing -- customer loyalty program that
provides incentives to customers such as redeemable points
or coupons for making purchases from associated retailers.
Data collected about users is sold for targeted advertising. [
Coolsavings]
Metamediary -- facilitates transactions between buyer and
sellers by providing comprehensive information and
ancillary services, without being involved in the actual
exchange of goods or services between the parties. [
Edmunds]
45. Merchant Models
Wholesalers and retailers of goods and services. Sales may be
made based on list prices or through auction.
Virtual Merchant --or e-tailer, is a retail merchant that
operates solely over the web. [Amazon.com]
Catalog Merchant -- mail-order business with a web-based
catalog. Combines mail, telephone and online ordering. [
Lands' End]
Click and Mortar -- traditional brick-and-mortar retail
establishment with web storefront. [Barnes & Noble]
Bit Vendor -- a merchant that deals strictly in digital
products and services and, in its purest form, conducts both
sales and distribution over the web. [
Apple iTunes Music Store]
46. Manufacturer (Direct)
The manufacturer or "direct model", it is predicated on the power of the
web to allow a manufacturer (i.e., a company that creates a product or
service) to reach buyers directly and thereby compress the distribution
channel. The manufacturer model can be based on efficiency, improved
customer service, and a better understanding of customer preferences. [
Dell Computer] Purchase -- the sale of a product in which the right of
ownership is transferred to the buyer.
Lease -- in exchange for a rental fee, the buyer receives the right to use
the product under a “terms of use” agreement. The product is returned to
the seller upon expiration or default of the lease agreement. One type of
agreement may include a right of purchase upon expiration of the lease.
License -- the sale of a product that involves only the transfer of usage
rights to the buyer, in accordance with a “terms of use” agreement.
Ownership rights remain with the manufacturer (e.g., with software
licensing).
Brand Integrated Content -- in contrast to the sponsored-content
approach (i.e., the advertising model), brand-integrated content is created
by the manufacturer itself for the sole basis of product placement.
47. Affiliate Models
In contrast to the generalized portal, which seeks to drive a
high volume of traffic to one site, the affiliate model, provides
purchase opportunities wherever people may be surfing. It
does this by offering financial incentives (in the form of a
percentage of revenue) to affiliated partner sites. The affiliates
provide purchase-point click-through to the merchant. It is a
pay-for-performance model -- if an affiliate does not generate
sales, it represents no cost to the merchant. The affiliate model
is inherently well-suited to the web, which explains its
popularity. Variations include, banner exchange, pay-per-
click, and revenue sharing programs. [Barnes & Noble,
Amazon.com]
Banner Exchange -- trades banner placement among a
network of affiliated sites.
Pay-per-click -- site that pays affiliates for a user click-
through.
Revenue Sharing -- offers a percent-of-sale commission based
on a user click-through in which the user subsequently
purchases a product.
48. Community Models
The viability of the community model is based
on user loyalty. Users have a high investment
in both time and emotion. Revenue can be
based on the sale of ancillary products and
services or voluntary contributions; or
revenue may be tied to contextual advertising
and subscriptions for premium services. The
Internet is inherently suited to community
business models and today this is one of the
more fertile areas of development, as seen in
rise of social networking.
49. Open Source -- software developed collaboratively by a global
community of programmers who share code openly. Instead of
licensing code for a fee, open source relies on revenue
generated from related services like systems integration,
product support, tutorials and user documentation. [Red Hat]
Open Content -- openly accessible content developed
collaboratively by a global community of contributors who
work voluntarily. [Wikipedia]
Public Broadcasting -- user-supported model used by not-for-
profit radio and television broadcasting extended to the web. A
community of users support the site through voluntary
donations. [The Classical Station (WCPE.org)]
Social Networking Services -- sites that provide individuals
with the ability to connect to other individuals along a defined
common interest (professional, hobby, romance). Social
networking services can provide opportunities for contextual
advertising and subscriptions for premium services. [Flickr,
Friendster, Orkut]
50. Subscription Models
Users are charged a periodic -- daily, monthly or annual -- fee
to subscribe to a service. It is not uncommon for sites to
combine free content with "premium" (i.e., subscriber- or
member-only) content. Subscription fees are incurred
irrespective of actual usage rates. Subscription and advertising
models are frequently combined. Content Services -- provide
text, audio, or video content to users who subscribe for a fee to
gain access to the service. [Listen.com, Netflix]
Person-to-Person Networking Services -- are conduits for the
distribution of user-submitted information, such as individuals
searching for former schoolmates. [Classmates]
Trust Services -- come in the form of membership associations
that abide by an explicit code of conduct, and in which members
pay a subscription fee. [Truste]
Internet Services Providers -- offer network connectivity and
related services on a monthly subscription. [America Online]
51. Utility Models
The utility or "on-demand" model is based on metering
usage, or a "pay as you go" approach. Unlike subscriber
services, metered services are based on actual usage rates.
Traditionally, metering has been used for essential
services (e.g., electricity water, long-distance telephone
services). Internet service providers (ISPs) in some parts
of the world operate as utilities, charging customers for
connection minutes, as opposed to the subscriber model
common in the U.S. Metered Usage -- measures and bills
users based on actual usage of a service.
Metered Subscriptions -- allows subscribers to purchase
access to content in metered portions (e.g., numbers of
pages viewed). [Slashdot]
53. Every Business is an information business
Industrial logic Managers are
becoming based information
on information processors
Value chains are
virtual as well as Information Business operations
physical Business are information
Entrepreneurs are Organizations are
infopreneurs information designs
55. Technology
Brand Integrated E-Strategy Service
Market
CONVERGENCE
56. Problems encountered in e-commerce in
India
Concerns about security. Many people will not use credit cards over the Internet
due to concerns about theft and fraud.
Lack of instant gratification with most e-purchases (non-digital purchases). Much
of a consumer's reward for purchasing a product lies in the instant gratification
of using and displaying that product. This reward does not exist when one's
purchase does not arrive for days or weeks.
The problem of access to web commerce, particularly for poor households and
for developing countries. Low penetration rate of Internet access in some sectors
greatly reduces the potential for e-commerce.
The social aspect of shopping. Some people enjoy talking to sales staff, to other
shoppers, or to their cohorts: this social reward side of retail therapy does not
exist to the same extent in online shopping.
Cyber crime is the greatest hurdle for the development of e-commerce in
developing countries like India.
61. The Extranets
• Extranet enables companies to
share some of their data with
business partners or clients,
perhaps by establishing a shared
database, and connecting
intranets using TCP/IP and
Firewall.
62. Major difference between Extranet, Intranet and
Internet
• The major difference between
each of these networks is the
control of access to information
and how it is shared.
64. FROM MASS ADVERTISEMENT
TO
INTERACTIVE ADVERTISEMENT
Parameters Mass Marketing Direct Interactive
Marketing Marketing
Best outcome Volume sales Customer data Customer relationships
Consumer Passive Passive Active
Behaviour
Leading products Food, personal care Credit cards, travel Upscale apparel, travel
Products financial services
Market High volume Targeted goods Targeted individuals
Preferred media TV, magazines Mailing lists Online services
Preferred Tech. Story boards Databases Servers, the Web
Worst outcome channel surfing Recycling bins Log off
65. ONLINE ADVERTISEMENT METHODS
1. BANNERS
A banner contains a short text and graphical message to promote product. With the progress of Internet
programming we are starting to find banners with video clips and sound. Banners contain links that, when
clicked on, transfer the customer to the advertiser’s home page.
Types of Banners:
Keyword banners – effective for targeted audience
Random banners – effective for introduction and promotion of new product.
2. SPLASH SCREEN
An initial Web site page used to capture the user’s attention for a short time as a promotion or lead-in to the
site home page or to tell the users what kind of browser and other software they need to view the site.
3. SPOT LEASING
Search engines often provide space (spot) in their home page for any individual business to lease. Unlike
banners, which show up at various times, the ad place on the spot will always be there.
4. URL (UNIVERSAL RESOURCE LOCATORS)
The major advantage of using URL as advertising tool is that it is free. Anyone can submit its URL to a search
engine and be listed. Also, by using URL the targeted audience can be locked and the unwanted viewers can be
filtered because of the keyword function.
5. E-MAIL
6. CHAT ROOMS
7. INTERNET COMMUNITIES
