1.
CHAPTER NO. 7:
E-COMMERCE
(ELECTRONIC COMMERCE)

2.
E-COMMERCE
The internet remains a place where you can
start with nothing and soon challenge the
heights.
Googal.com
Hotmail.com
Yahoo.com
Utube.com
Face book.
-Mark DiMassimo

3.
1. The opportunity to increase revenues
2. The ability to expand their reach into global
markets
3. The ability to remain open 24 hours a day, seven
days a week
4. The capacity to use the Web’s interactive nature to
enhance customer service
5. The power to educate and to inform
6. The ability to lower the cost of doing business
7. The ability to spot new business opportunities and
to capitalize on them
8. The power to track sales results

4.
 How a company exploits the web’s interconnectivity
and the opportunities it creates to transform
relationships with its suppliers and vendors, its customers,
and other external stakeholders is crucial to its success.
 Web success requires a company to develop a plan for
integrating the web into its overall strategy.
 Developing deep, lasting relationships with customers
takes on even greater importance on the web.
 Creating a meaningful presence on the web requires an
ongoing investment of resources-time, money, energy,
and talent
 Measuring the success of its web-based sales effort is
essential if a company is to remain relevant to customers
whose tastes, needs, and preferences are always changing.

5.
 What exactly do you expect a web site to do for your
company?
 How much can you afford to invest in an e-commerce effort?
 What rate of return do you expect to earn on that
investment?
 How long can you afford to wait for that return?
 How well suitable are your products and services for selling
on the web?
 How will the “back office” of your web site work?
 How will you handle order fulfillment?

6.
TWELVE MYTHS OF E-COMMERCE
1. Setting up a business on the web is easy and inexpensive
Establishing a true transactional Web site will require several
months and an investment ranging from $10,000 up to nearly $1
million.
2. If I launch a site, customers will flock to it
3. Making money on the web is easy
One study by management consultant firm found that Web
retailers invest 65% of their revenues in marketing and
advertising, compared to their off-line counterparts, who invest
just 4%...
4. Privacy is not an important issue on the web
5. The most important part of any e-commerce effort is technology
6. “Strategy? I don’t need a strategy to sell on the web! Just give
me a web site, and the rest will take care of itself”

7.
TWELVE MYTHS
E-COMMERCE
7 On the web, customer service is not as important as it is in a
traditional retail store
8 Flash makes a web site better (Don’t make the sites much flashy.
Keep the design of your site simple.)
9 It’s what’s up front that counts
10 E-commerce will cause brick-and-mortar retail stores to
disappear
11 The greatest opportunities for e-commerce ,lie in the retail store
12 It’s too late to get on the web
E-commerce is still in its infancy. Companies are still figuring out
how to succeed on the Web, and also learning that which technique
will work.

8.
BASIC STRATEGIES FOR ACHIEVING SUCCESS
IN E-COMMERCE EFFORTS:
 Focus on a niche in the market:
 A niche can be defined in many ways including
by geography, by customer profile, by product,
by product usage and many others.
 Attract visitors by giving away “freebies”:
 One e-commerce consultant calls the cycle of
giving something away and then selling
something “the rhythm of the Web”
 The freebie must something customer value, but
it does not have to be much expensive.
 In fact, one of the most common giveaways on
the Web is Information.

9.
 Make creative use of e-mail but avoid becoming a
“spammer”:
 Supported by online newsletters or chat-rooms, customers
welcome well constructed permission e-mail that directs
them to a company’s site for information or special deals.
 Make sure your Web site says “credibility”:
 Use known and trusted brand names to build credibility.
 Promote your Web site online and offline
 Consider forming strategic alliances with larger, more
established companies and not-for-profit organization.
 Develop a community of online customers:
 E-mail lists , chat rooms, customer polls, guest books and
message boards are powerful tools for building a community of
customers.
 Make the most of the Web’s global reach.

10.
DESIGNING A KILLER WEB SITE
 Understanding Your Target Customer
 Give Customers What They Want
 Select an Intuitive Domain Name ( Ideal domain name should be
short, memorable, indicative of a company’s business and easy to
spell.)
 Make Your Web Site Easy to Navigate
 Create a Gift Idea Center
 Build Loyalty by Giving Online Customers a Reason to Return
to Your Web Site (Establish an incentive program)
 Establish Hyperlinks with Other Businesses, Preferably Those
Selling Products or Services That Complement Yours
 Include an E-mail Option and a Telephone Number in Your
Site

11.
 Give Shoppers the Ability to Track Their Orders Online ( Send order
confirmation e-mail & Send e-mail notification, when shipment
is made. )
 Offer Web Shoppers a Special All Their Own. ( Regular special offers
available on the Web attract customers’ intention.)
 Follow a Simple Design
 Create fast, simple checkout process
 Assure customers that their online transactions are secure
 Post shipping and handling charges up front
 Confirm transactions
 Keep your site updated
 Test your site often
 Consider hiring a professional to design your site

12.
ENSURING WEB PRIVACY AND
SECURITY
 Privacy
 Take the inventory of the customer data
collected
 Develop a company privacy policy for the
information you collect
 Post your company’s privacy policy
prominently on your web site and follow it
 Security
 Virus deduction software
 interruption deduction software
 firewall
According to Pew Internet & American Life Project, 86%
of Internet users say that they worry about online privacy.
To make sure privacy of customers, companies should take
following steps:

13.
FIVE BASIC APPROACHES TO LAUNCH AN
E-COMMERCE EFFORT:
Generally, Web experts identify three basic pricing
categories for creating a Web site: less than $10,000;
between $10,000 and $30,000; and more than $30,000.
 Online shopping malls:
 Under $10,000 category
 To join, simply provide description and photographs of the
product they sell
 It’s disadvantage is the lack of prominence and control on site
 Storefront-building services:
 Under $10,000 category
 Help entrepreneur to create online shops
 Charges are from $100 to$500 per month

14.
FIVE BASIC APPROACHES TO LAUNCH AN
E-COMMERCE EFFORT:(CONTINUED)
 Internet service providers (ISPs):
 Under $10,000 category
 ISPs offer more design flexibility and the ability to
customize their Web sites
 Hiring professionals to design a custom site:
 Between $10,000-$30,000
 Professionals are hired for designing the Web sites
 Building a site in house:
 It costs from $250,000 to $500,000
 Lesser use of this approach because of high cost

15.
'BRICK AND MORTAR'
 A traditional "street-side" business that deals with its
customers face to face in an office or store that the
business owns or rents. The local grocery store and the
corner bank are examples of "brick and mortar"
companies. Brick and mortar businesses can find it
difficult to compete with web-based businesses because
the latter usually have lower operating costs and greater
flexibility.

16.
'CLICK AND MORTAR'
 A type of business model that includes both online and
offline operations, which typically include a website
and a physical store. A click-and-mortar company can
offer customers the benefits of fast online transactions
or traditional face-to-face service.