Electronic Commerce & Marketing

What is E-Commerce? Business communications and transactions over networks and through computers, specifically –The buying & selling of goods & services and –The transfer of funds through digital communications

What E-Commerce Can Be? Communication medium Automation of business transactions Cut service costs Improve quality of goods & delivery Online buying/selling of products (including information)

How are Businesses Using the Web? 77 % for gathering product information 49 % for researching competitors 43 % for collaboration 42 % for vendor support 39 % for communication

Types of Communication Networks

The Internet Global network of networks. Any computer connected can communicate with any server in the system Well suited for communicating with wide variety of stakeholders I.e., can use Internet to distribute software updates to customers.

Intranet Essentially, a fenced-off mini-Internet within an organization. A firewall is used to restrict access so people outside the organization cannot access the intranet. Focus is upon improving the organization’s ability to serve stakeholders.

Extranet Links buyer & supplier to facilitate greater coordination of common activities Communication is confined to the computers that link the two organizations. Using Internet technology to establish & operate an extranet offers higher economies than using commercial communication networks for EDI.

EDI = Electronic Data Interchange Been around for some 20 years. Describes the electronic exchange of standard business documents between firms. Uses standardized, structured data formats (not free form messages) Good for repetitive, routine transactions. Still only accounts for 20% of info flow in US

EDI Advantages Reduced paper handling; saves time & money Data exchanged in real time Fewer errors since data keyed only once Enables greater coordination of activities between the business partners Accelerates money flows; payments received sooner

What E-Commerce Does for Us Communication device for building customer relationships Alternative distribution channel Medium for delivering service to customers Tool for gathering marketing research data Method for integrating members of the supply chain

Myths About E-Commerce Enables businesses to bypass channel partners Can use Internet as sole means of acquiring new customers Can eliminate advertising & other promotional expenditures Web sites can provide all the information prospects ever need to know Web site success is best measured by how long a visitor stays Internet will replace traditional marketing media

E-Marketing Security Concerns Internet is inherently open; harder to restrict physical access to servers. Same technologies that are used to operate the Net may be used to attack it. –computers & networks –computers can be programmed to run multiple combinations of words to breach a password

Security Methods Access Control –Data Access Control based on visitor identification Personal Memory –name, account number, password Possessed Object –badge, plastic card, key, IP address Personal Characteristic –fingerprint, voiceprint, signature, hand size

Security Methods Access Control –Firewalls device placed between Intranet and Internet monitors/controls all traffic between the 2 restricts outsiders’ access to intranet simplest method is to restrict access to designated IP addresses can also restrict access to certain applications must balance cost of firewall with the protection

Security Methods Coding –Basically, encryption techniques –Used to protect integrity of messages or complement data access controls –Must have the “key” to read the encryption

Deciding Whether or Not to Engage in Online Marketing What is your purpose for engaging in e- marketing? –What are appropriate goals? –Profits or prestige? –Are you serious about making an online presence? Why should you go online? –To introduce new products? –To improve technical support? –To reach new prospects? –To enhance channel relations?

Deciding Whether or Not to Engage in Online Marketing What are your expectations? –Extensive data exchange? –Use as an employee recruitment tool? Who’s in charge? –Who has the final say on web site content? –Who will be the web master? –Who sets the budget? Do you have the talent & patience necessary?