BUSINESS TO CONSUMER

Types of E-commerce Classified by nature of market relationship Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Classified by type of technology used Peer-to-Peer (P2P) Mobile commerce (M-commerce)

Major Types of E-commerce

Business to Consumer Commerce Business-to-consumer electronic commerce (B2C) is a form of electronic commerce in which products or services are sold from a firm to a consumer. B2C e-commerce includes retail sales, often called e-retail (or e-tail) and other online purchases such as airline tickets, entertainment venue tickets, hotel rooms etc.

Business to Consumer Commerce Electronic commerce on the Internet between businesses and consumers is accelerating the impact of information technology on consumer behavior , business processes and markets. Technology is transforming consumer choices, which in turn transform the dynamics of the marketplace and organizations themselves.

The interrelationship among e-commerce, consumer behavior, business processes and competition. Technology provides access to a variety of products and services. Consumer choice dictates the marketing, distribution, and production of products and services. Need to cut costs -drives the need for improved technology. E-Commerce Technologies Consumer Behavior and Choice Business processes and marketplace competition

Classifications of B2C E-Commerce Direct Sellers Companies that provide products or services directly to customers are called direct sellers. These types of B2C companies are the most well-known. There are two types of direct sellers: e-tailers and manufacturers. E-tailers: Upon receiving an order, the e-tailer ships products directly to the consumer or to a wholesaler or manufacturer for delivery. Example: Amazon.com  Manufacturers: The manufacturer sells directly to consumers via the internet. The goal is to remove intermediaries, through a process called disintermediation, and to establish direct customer relationships. Disintermediation is not a new idea as catalog companies have been utilizing this method for years. Example: Dell.com 

Classifications of B2C E-Commerce (cont.) Online Intermediaries Online intermediaries are companies that facilitate transactions between buyers and sellers and receive a percentage of the transaction’s value. These firms make up the largest group of B2C companies today. There are two types of online intermediaries: brokers and infomediaries. Brokers A broker is a company that facilitates transactions between buyers and sellers. Infomediaries An infomediary is a firm that acts as a filter between companies and consumers. Individuals provide infomediaries with personal information and in turn receive targeted ads. Companies pay these infomediaries for the information that they collect.

Advantages of B2C E-commerce Inexpensive cost, big opportunities- once on the internet, opportunities are immense as companies can market their product to the whole world without much additional cost. Globalization- Internet is accessed by millions of people around the world, and definitely they are all potential customers. Reduced operational costs-Cutting down paper costs, customer support cost, and other processing costs. Shopping can be faster and more convenient. Offerings and prices can change immediately. Call centers can be integrated with the website.

According to Bidgoli (2002, p According to Bidgoli (2002, p.59) there are Five major activities involved in conducting B2C E-Commerce. 1.Information sharing: A B2C E-Commerce model may use some or all of the following applications and technologies to share information with customers: Company Web site Online catalogs E-mail Online advertisements Message board system Newsgroups and discussion groups

2.Ordering: A customer may use electronic forms similar to paper forms or e-mail to order a product or service. 3.Payment: There are a variety of options. These include: Credit cards Electronic cheques Digital cash

4.Fulfillment: 5.Service and support: The fulfillment function could be very complex depending upon the delivery of physical products (books, videos and CD's) or digital products (software, music, electronic documents). Fulfillment is responsible for physically delivering the product or service from the merchant to the customer. 5.Service and support:  Is more important in E-Commerce than traditional business because E-Commerce companies lack a traditional physical presence and need other ways to maintain current customers. Examples include: E-mail confirmation Periodic news flash Online surveys Help desk Guaranteed secure transactions

Challenges Faced by B2C E-Commerce The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive. In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult.

Retailing on the Web A basic fact of Internet retailing is that all web sites are created equal as far as the “location” imperative for success in retailing is concerned. No site is any closer to its customers. This makes it vital that businesses find ways to keep customers coming back to their stores.

Retailing on the Web The key to this goal is to optimize factors such as Performance and Service efficiency, Personalization, Socialization, The look and feel of the site, Offering incentives to purchase, and Security.

Personalization Personalizing customers shopping experience encourages them to make return visits. Many sites register customers by a personal interest profile. Then when customers returns, they are welcomed and guided just to those parts of a site that they are interested in. some sites automatically record details of customers visits and build similar user interest profiles.

Performance and Service Efficiency People don’t want to be kept waiting when browsing, selecting, or paying for products in an electronic store. A site must be efficiently designed for ease of access, shopping and buying, with sufficient server power and telecommunications capacity. Marketing, ordering, and customer service processes must also be friendly and helpful, as well as quick and easy.

Socialization Giving online customers with similar interests a feeling of belonging to a unique group of like-minded individuals helps build customer loyalty and value. Customer discussion forums. Chat rooms Bulletin board systems Cross-links to related web sites and newsgroups.

Look and Feel Web sites can offer an attractive virtual storefront. This may range from providing an exciting shopping experience with audio, motion and striking graphics, to a more traditional look and feel

Incentives Web stores must offer shoppers incentives to buy and return. e.g. Coupons, discounts, special offers, and vouchers for other web services. Some site provide with an electronic wallet where you can accumulate coupons for future use.

Security and Reliability Make customers feel confident that their credit card, personal information, and details of their transactions are secure from unauthorized use.

Websites that are engaged in (B2C) e-commerce Amazon.com, CompUSA.com, Travelocity.doc, hotels.com, chow.net, rediff.com, jaldi.com, indiatimes.com, indiaballs.com,