1. Internet Marketing and Electronic Retailing
(E-Tailing)
• Overview of e-tailing
– Electronic retailing (e-tailing): Retailing conducted
online, over the Internet
– E-tailers: Those who conduct retail business over
the Internet
2. Types of Electronic Markets
• Electronic storefront: A single
or company Web site where
products and services are sold
• Mechanisms necessary for
conducting the sale:
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electronic catalogs
search engine
e-auction facilities
payment gateway
shipment court
customer services
3. Types of Electronic Markets (cont.)
• e-mall (online mall): An online shopping
center where many stores are located
– some are merely directories
– some provide shared services
(e.g., choicemall.com).
– some are actually large click-and-mortar
retailers
– some are virtual retailers (e.g., buy.com)
4. Types of Electronic Markets (cont.)
• Types of stores and malls
– General stores/malls
– Specialized stores/malls
– Regional versus global stores
– Pure online organizations versus click-and-mortar
stores
5. Types of Electronic Markets (cont.)
• e-marketplace:
An online market, usually B2B, in which buyers and sellers
exchange goods or services; the three types of emarketplaces are private, public, and consortia
• Private e-marketplaces:
Online markets owned by a single company; can be either
sell-side or buyside marketplaces
• Sell-side e-marketplace:
A private e-market in which a company sells either
standard or customized products to qualified companies
6. Types of Electronic Markets (cont.)
• Buy-side e-marketplace:
A private e-market in which a company makes purchases
from invited suppliers
• Public e-marketplaces:
B2B markets, usually owned and/or managed by an
independent third party, that include many sellers and
many buyers; also known as exchanges
• Consortia:
E-marketplaces owned by a small group of large
vendors, usually in a single industry
7. Web Advertisement
Advertising is an attempt to disseminate information in
order to affect a buyer-seller transaction
Internet Advertising Terminology
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Ad views
Banner
Click (ad click)
Click ratio
Cookie
CPM
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Effective frequency
Hit
Impressions
Reach
Visit
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8. Web Advertisement (cont.)
• Why Internet Advertisement?
– 3/4 of PC users gave up some television time
– Well educated, high-income Internet users are a desired
target for advertisers
– Ads can be updated any time with a minimal cost;
making them timely and very accurate
– Ads reach very large number of potential buyers all over
the world
– Online ads are much cheaper in comparison to
television, newspaper, or radio ads
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9. Web Advertisement (cont.)
Why Internet Advertisement?
– Web ads effectively use text, audio, graphics, and
animation
– Ads easily combine games, entertainment, and
promotions
– Web TV and Internet radio are attracting more
people
– Web ads can be interactive and targeted
– The use of the Internet is growing very rapidly
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10. The Future of Online Banking
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Three core strategies to pursue
1. Customers Agents—banks unable to achieve economies of scale
– Offer customers the widest possible choices
– Include products from multiple sources
– Provide the customers with integrated information services
2. Product Manufacturers – banks able to achieve economies of
scale
– Strengthen a trend that can already be seen in a number of product
segments
– In core processing services for small and medium-sized institutions
11. The Future of Online Banking (cont.)
• Three core strategies to pursue (cont.)
3. Integrated Players—banks with a strong brand and
position from manufacturing to delivery
• Many banks will adopt a hybrid strategy
• Every player needs to make crucial decisions about which
areas are strategically too risky:
– To outsource
– Which capabilities need to be built up in-house
12. The Future of Online Banking (cont.)
• Personal finance online
– Bill paying and e-checks
– Tracking bank accounts etc.
– Portfolio management
– Investment tracking
– Quotes and prices (past and current)
– Budget organization
– Record keeping
– Tax computations
– Retirement goals, planning and budgeting
13. E-Cards (cont.)
• Purchase cards
– Instrument of choice for B2B purchasing
– Special-purpose, non-revolving payment cards
issued to employees solely for purchasing and
paying for nonstrategic materials and services
14. E-Cards (cont.)
– Purchase cards—operate like other credit cards
• Cardholder of corporation places an order for goods or
services
• Supplier processes transaction with authorization of card
issuer
• Issuer verifies purchase authorization
• All cardholders’ transactions processed centrally—one
payment for all purchases
• Each cardholder reviews monthly statement
• Card issuer analyzes transactions—standard and ad hoc
reports are made
• Card issuer creates electronic file to upload to corporation’s
ledger system
16. Essentials of a Business Strategy
• Strategy—search for revolutionary actions
that will significantly change the current
position of a company, shaping its future
– Finding the position in marketplace that best fits
the firm’s skills
– Company’s choice of new position that must be
driven by its ability to find new trade-offs and
leverage a new system of complementary
activities into sustainable advantage
17. Essentials of a Business Strategy (cont.)
• Levels of strategy
– Corporate (or
organizational)
strategy
– IT strategy
– EC strategy
– EC functional
strategies
• These are interrelated
• Types of strategy
– Strategic planning
– Strategic response
– Strategic innovation
21. Essentials of a Business Strategy (cont.)
• Information technology (IT) strategy—strongly
correlated with EC strategy because:
– IT provides much of the infrastructure for EC
– EC applications must be integrated with IT
applications
– EC applications may replace or improve existing IT
applications
– EC organization may report to CIO
– Employees in IS department work on EC applications
22. Computer Crimes
• Computer crimes refers to computer fraud
and/or computer abuse
• Computer fraud committed by:
– Alteration of input
– Alteration of computer data
– Alteration/misuse of programs
– Destruction/suppression/misappropriation of
output
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23. Computer Crimes (cont.)
• Computer abuse committed by:
– Misuse of company computer
service/resources by performing unauthorized
private work or playing games by employees
– Compromise of system integrity by:
• Altering company data
• Introducing viruses
• Hacking into the system
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24. Computer Crimes (cont.)
• Characteristics of computer crime
– Chronic underreporting of abuse
– Security not introduced until abuse has occurred
– Organizational size unrelated to severity of
punishment
– Abuses by high-level employees less likely to be
prosecuted
– Programmers most difficult to identify
– Publicity discourages abuse
– Security efforts reduce abuse
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25. Computer Crimes (cont.)
• Effective measures in deterring computer
crime
– Make computer security visible
– Define and communicate company’s policy
regularly
– Make staff aware of penalties
– Report cases to police
– Publicize successful prosecution
– Deploy security technologies extensively
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26. The Future of Electronic Commerce
• Opportunities for buying
Increase rapidly
• Internet usage
Increase exponentially
Access via cell phones!
• M-commerce
No need for a computer brings more people to
the web
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27. The Future of
Electronic Commerce (cont.)
• Purchasing incentives
Increase buyers’ advantages
• Increased security and trust
Significant improvement is expected
• Efficient information handing
Accessible from anywhere
• Innovative organizations
Restructured and reengineered
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28. The Future of
Electronic Commerce (cont.)
• Virtual Communities
Spreading rapidly
• Payment systems
Ability to use e-cash cards and make
micropayments is getting close to reality
• Business-to-business
Continues to grow rapidly
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29. The Future of
Electronic Commerce (cont.)
• B2B exchanges
Provide infrastructure
• Auctions
Increasing rapidly
• Going global
Most appealing benefit of EC
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31. The Future of
Electronic Commerce (cont.)
• Technology trends
– Clients
• Thin client and embedded client
– Servers
• Windows NT
– Networks
• XDSL and wireless communication
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32. The Future of
Electronic Commerce (cont.)
• Technology Trends
– EC software and services
• Availability of all types of EC software
• Companies support auctions and multiple types of
certifications
– EC knowledge
• The quantity and quality of EC knowledge is increasing
rapidly
– Networked economy
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33. Benefits of EC (cont.)
• Benefits to Organizations (cont.)
– Allows reduced inventories and overhead by
facilitating pull-type supply chain management
– The pull-type processing allows for
customization of products and services which
provides competitive advantage to its
implementers
34. Benefits of EC (cont.)
• Benefits to Organizations (cont.)
– Reduces the time between the outlay of
capital and the receipt of products and
services
– Supports business processes reengineering
(BPR) efforts
– Lowers telecommunications cost - the Internet
is much cheaper than value added networks
(VANs)
35. Benefits of EC (cont.)
• Benefits to consumers
– Enables consumers to shop or do other
transactions 24 hours a day, all year round
from almost any location
– Provides consumers with more choices
– Provides consumers with less expensive
products and services by allowing them to
shop in many places and conduct quick
comparisons
36. Benefits of EC (cont.)
• Benefits to consumers (cont.)
– Allows quick delivery of products and services (in
some cases) especially with digitized products
– Consumers can receive relevant and detailed
information in seconds, rather than in days or
weeks
– Makes it possible to participate in virtual auctions
37. Benefits of EC (cont.)
• Benefits to consumers (cont.)
– Allows consumers to interact with other
consumers n electronic communities and
exchange ideas as well as compare experiences
– Facilitates competition, which results in
substantial discounts
38. Benefits of EC (cont.)
• Benefits to society
– Enables more individuals to work at home, and to
do less traveling for shopping, resulting in less
traffic on the roads, and lower air pollution
– Allows some merchandise to be sold at lower
prices benefiting less affluent people
39. Benefits of EC (cont.)
• Benefits to society (cont.)
– Enables people in Third World countries and rural
areas to enjoy products and services which
otherwise are not available to them
– Facilitates delivery of public services at a reduced
cost, increases effectiveness, and/or improves
quality
40. • The process
• Advertisers want to reach as many consumers as efficiently as
possible. This requires an understanding of how customers' minds
work.[4][dead link]
• Behavioral targeting is the most common targeting method used
online. Behavioral targeting works by anonymously monitoring and
tracking the content read and sites visited by a user or IP when that
user surfs on the Internet. This is done by serving tracking codes.
Sites visited, content viewed, and length of visit are databased to
predict an online behavioral pattern.[5] A further refinement to
behavioral targeting is Predictive Behavioral Targeting, where
machine learning algorithms overlay behavioral patterns with
sampled data, to create data-rich predicted profiles for every user.
• Alternatives to behavioral advertising include audience
targeting, contextual targeting, and psychographic[6] targeting.
41. •
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The phrase “online consumer behavior” describes the process of online shopping
from a consumer’s perspective. It is often described as the study of
trends, including the influence of online advertising, consumer willingness to click
on links, the prevalence of comparison shopping, among others. The decisionmaking process of an online consumer is often very different from that of a
consumer in a physical store. Companies are increasingly studying online
consumer behavior in order to adapt their sales and marketing strategies to appeal
to the Internet purchaser.
Online sales have increased all over the world, with more and more shoppers
looking to the Internet before they head out to malls or other stores. In order to
remain competitive, many companies are electing to devote at least some of their
marketing capital to the online space. Companies decide many of the finer points
of online sales, including advertising strategies, page layout, and ease of website
searching by analyzing online consumer behavior.
The field of online consumer behavior can be broad. Most of the time, theories in
this field are posited by economists or market analysts who specialize in consumer
analysis. Companies hire some consumer analysts on a contract basis to provide
tailored advice. Others work for independent market analyst firms, for think
tanks, or in academia.
