Copyright © 2014 Pearson Education, Inc. 1 Ch 4 E-Commerce Electronic Commerce is simply “doing business online” B2B E-Commerce is a way of conducting business online with professional partners such as suppliers and intermediates. There are other forms of e-Commerce

Copyright © 2014 Pearson Education, Inc. 2 Types of E-Commerce TYPE OF E-COMMERCEDEFINITION Business-to-Business (B2B) Companies doing business with each other, such as: manufacturers selling to distributors wholesalers selling to retailers. Business-to-Consumer (B2C) Businesses selling to the general public typically through catalogs utilizing shopping cart software.

Copyright © 2014 Pearson Education, Inc. 3 Types of E-Commerce TYPE OF E-COMMERCEDEFINITION Consumer-to-Consumer (C2C) This form usually involves the electronically facilitated transactions between consumers through some third party. Example: A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it.

Copyright © 2014 Pearson Education, Inc. 4 YOUR TURN! What are some examples of C2C platforms?

Copyright © 2014 Pearson Education, Inc. 5 Middlemen & Intermediation What is intermediation? – Let’s break it down: “Inter”  between or among For example: interdepartmental…between 2 departments “Mediation”  the process of bringing 2 parties to an agreement For example: When your Mom settles a fight between you and your siblings.

Copyright © 2014 Pearson Education, Inc. 6 Disintermediation Now that you know Intermediation, have a go at disintermediation. It’s the ‘cutting out’ of the middleman from the transaction and reaching customers more directly and efficiently.

Copyright © 2014 Pearson Education, Inc. 7 Reintermediation If disintermediation is ‘removing’, what is reintermediation? It’s the opposite Re-introducing the middleman into the equation… “The design of business models that reintroduces middlemen in order to reduce the challenges brought on by dealing directly with customers.”

Copyright © 2014 Pearson Education, Inc. 8 Brick-and-Mortar Businesses Bricks and mortar refers to businesses that have a physical (rather than virtual or online) presence. For example: Any store (Wholefoods, Post Office, etc) which are built of physical materials (such as bricks and mortar) that you can drive to and enter physically to see, touch, and purchase merchandise.

Copyright © 2014 Pearson Education, Inc. 9 Buying Online ‘E-tailing’, (Electronic Retailing) is the online form of physical retailing. Clothing stores with changing rooms in contrast to Online Stores that offer a wider range of styles and colors.

Copyright © 2014 Pearson Education, Inc. 10 Reverse Pricing Model A pricing model that allows the consumer to establish their product and pricing requirements while allowing the seller to compete for their business. Real-World Examples: – Reverse Auctions – Wholesale markets – Barter system

Copyright © 2014 Pearson Education, Inc. 11 Contextual Advertising In simple terms: Display ads that are relevant in some way to the content displayed on a web page Examples? – News and content websites – Google AdWords (search engines)

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Copyright © 2014 Pearson Education, Inc. 13 Advertising Online: PPC Models PPC or Pay-Per-Click Models are utilized to drive traffic to a particular website. Mostly seen on Search Engines and then Partner-Blogs. In the previous example, the red box is a PPC Campaign run through Google AdWords.

Copyright © 2014 Pearson Education, Inc. 14 Advertising Online: CTR CTR or Click-Through-Rate is the measurement of how successful an online advertising campaign really is Along with other measurements in the Advertising Toolbox, CTR can be used to ‘fine- tune’ an advertising campaign for effectiveness and reach.

Copyright © 2014 Pearson Education, Inc. 15 Auction Types: Forward vs. Reverse Forward Auction – A form of e-auction where the highest bidder wins EG: eBay and most other Traditional Auction Sites Reverse Auction – A form of e-auction where buyers post a request for a quote. ! Reverse Pricing Model

Copyright © 2014 Pearson Education, Inc. 16 Buyer Protection eBay offers a Buyer Protection service for all its auctions if the buyer pays through PayPal. For a small fee (that is usually taken at the time of transaction – cost incurred to the seller), buyers are protected against fraudulent activities. Bid luring (when a seller wants to finalize a transaction outside of the auction space) is banned under eBay’s Policies.

Copyright © 2014 Pearson Education, Inc. 17 Credit Card Transaction Protection CCV (Card Code Verification) is a special feature offered by most, if not all, credit card companies in an effort to reduce credit card fraud. Printed near the signature area on the back of the card. Smart chips now given a further enhanced protection in addition to the CCV system.

Copyright © 2014 Pearson Education, Inc. 18 KEY DEFINITIONS TYPES OF E-COMMERCEDESCRIPTION Business-to-Consumer (B2C) Transactions between businesses and their customers Business-to-Business (B2B)Transactions among businesses Consumer-to-Business (C2B) Transactions between customers and businesses Consumer-to-Consumer (C2C) Transactions between people not necessarily working together

Copyright © 2014 Pearson Education, Inc. 19 KEY DEFINITIONS TYPES OF E-COMMERCEDESCRIPTION Government-to-Citizen (G2C) Transactions between a government and its citizens Government-to-Business (G2B) Transactions between a government and businesses Government-to-Government (G2G) Transactions among governments

Copyright © 2014 Pearson Education, Inc. 20 Long Tail The concept of the Long Tail refers to catering to niche markets in addition to (or instead of) purely selling mainstream products.

Copyright © 2014 Pearson Education, Inc. 21 Click Fraud The possibility of abuse by repeatedly clicking on a link to inflate revenue to the host or increase the costs for the advertiser. A drawback of the Pay-Per-Click (PPC) models 2 Types of Click Fraud: – Network Click Fraud Fake clicks in order to get money from advertiser – Competitive Click Fraud Inflation of an Organization’s Ad costs by repeated clicking on ad link.

Copyright © 2014 Pearson Education, Inc. 22 Types of e-Auction Fraud TYPEDESCRIPTION Bid Luring Luring bidders to leave a legitimate auction to buy the same item at a lower price outside the action space (where return policies and buyer protection do not apply). Counterfeit Items Selling something that is said to be an original, but it turns out to be a “counterfeit” item

Copyright © 2014 Pearson Education, Inc. 23 Types of e-Auction Fraud (cont.) TYPEDESCRIPTION Bid Shielding Using two different accounts to place a low followed by a very high bid on a desired item, leading other bidders to drop out of the auction. The high bid is then retracted, and the item is won at the low bid. (aka “shill bidding”)

Copyright © 2014 Pearson Education, Inc. 24 Types of e-Auction Fraud (cont.) TYPEDESCRIPTION Shipping Fraud Charging excessive shipping and handling fees, far above actual cost. Payment Failure Buyers not paying for an item after auction conclusion. Non-shipment Sellers failing to ship item after payment has been received.