1. E-Commerce Systems Chapter 8
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
Identify the major categories and trends of e-commerce applications
Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications
Identify and give examples of key factors and Web store requirements needed to succeed in e-commerce

3. Learning Objectives
Identify and explain the business value of several types of e-commerce marketplaces
Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives

4. Case 1: KitchenAid & Royal Bank of Canada
Companies doing business online must police unauthorized use of brand names, logos, and trademarks to protect their investments
Companies such as BrandProtect, MarkMonitor, and NameProtect help companies fight for control of their brands and reputations
Brand protection challenges have grown exponentially
Using logos without permission is easy; go to a web site, grab a logo, and put it somewhere else

5. Case Questions Consider your online shopping patterns
How much weight do you place on the presence of a name, logo, or other trademark on a Web site when purchasing goods or services?
Do you stop to consider whether you may have been misled?
How could you tell the difference?

6. Case Questions
Brian Maynard of KitchenAid notes that development of the Internet changed the problem of brand policing
What are some of these changes?
What challenges can you think of that did not exist in the pre-online world?

7. Case Questions
The companies mentioned in the case (Kitchen-Aid, RBC, Disney, Coke) were well established and enjoyed strong brand recognition well before the advent of the Internet
Do you think online-only companies face the same problems as they do?

8. Introduction to e-Commerce
Selling
Accepting payments
Marketing
Delivering
E-commerce encompasses the online process of…
Servicing
Developing
Internet and other information technologies support every step of the process

9. Scope of e-Commerce

10. E-Commerce Technologies

11. Categories of e-Commerce
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Business-to-Business (B2B)
Virtual storefront
Multimedia catalogs
Interactive order processing
Electronic payments
Online customer support
Online auctions
Posting to newspaper sites
Personal websites
E-commerce portals
Electronic business marketplaces
Direct links between businesses, auctions, and exchanges

12. Essential e-Commerce Architecture

13. Access Control and Security
E-commerce processes must establish mutual trust, secure access between parties
User names and passwords
Encryption key
Digital certificates and signatures
Restricted access areas
Other people’s accounts
Restricted company data
Webmaster administration areas

14. Profiling and Personalizing
Profiling gathers data on you and your website behavior and choices
User registration
Cookie files and tracking software
User feedback
Profiling is used for
Personalized (one-to-one) marketing
Authenticating identity
Customer relationship management
Marketing planning
Website management

15. Search Management
Search processes help customers find the specific product or service they want
E-commerce software packages often include a website search engine
Customized search engine may be acquired from companies like Google or Requisite Technology
Searches are often on content or by parameters

16. Content and Catalog Management
Content Management Software
Helps develop, generate, deliver, update, and archive text and multimedia information at e-commerce websites
Catalog Management Software
Helps generate and manage catalog content
Catalog and content management software works with profiling tool to personalize content
Product configuration and mass customization

17. Workflow Management
E-business & e-commerce management depends on a workflow software engine
Software model of business processes
Workflow models express predefined
Sets of business rules
Roles of stakeholders
Authorization requirements
Routing alternatives
Databases used
Task sequences

18. Example of Workflow Management

19. Most e-commerce applicants are event driven
Event Notification
Most e-commerce applicants are event driven
Responds to customer’s first website visit, payments, and so on
Monitors all e-commerce processes
Records all relevant events, including problem situations
Notifies all involved stakeholders
Works in tandem with user-profiling software

20. Collaboration and Trading
Processes support vital collaboration arrangements and trading services
Needed by customers, suppliers, and other stakeholders to accomplish e-commerce transactions
Online communities of interest
, chat, discussion groups
Enhances customer service
Builds loyalty

21. Electronic Payment Example
Complex processes
Near-anonymous and electronic nature of transactions
Many security issues
Wide variety of debit and credit alternatives
Financial institutions may be part of the process
Web Payment Processes
Shopping cart process
Credit card payment process
Debit and other more complex processes
Electronic Funds Transfer (EFT)
Major payment system in banking, retail
Variety of information technologies capture and process money and credit card transfers
Most point-of-sale terminals in retail stores are networked to bank EFT systems

22. Securing Electronic Payments
Network sniffers easily recognize credit card formats
Encrypt data between customer and merchant
Encrypt data between customer and financial institution
Take sensitive information off-line

23. E-Commerce Application Trends

24. Case 3: Driving the “Buzz” on the Web
Social networks contain “influentials”
Old Thinking
Influentials drive proactive behavior in others
Influentials can’t be influenced in a way that accelerates a word-of-mouth campaign
New Thinking
Find embryo trends, then help influentials discover them

25. Case Study Questions
How can companies benefit from the “cultural assessments” regularly performed by Mattel?
How could the information obtained be used to create business value for those organizations?
In spite of disconfirming evidence as to the effectiveness of targeting online opinion leaders, companies are increasing their efforts to identify and contact them
Why do you think this is the case?

26. Case Study Questions
One of the participants in the case states that “you want to ride the wave, rather than trying to start one of your own”
What does she mean by that?
If companies are not starting these “waves,” where are they coming from?

27. B2C E-Commerce Success Factors
Selection & value
Performance and service
Look and feel
Advertising and incentives
Personal attention
Community relationships
Security and reliability
Great consumer communications

28. Differences in Marketing

29. Web Store Requirements

30. B2B E-Commerce
B2B is the wholesale and supply side of the commercial process
Businesses buy, sell, or trade with other businesses
Electronic funds transfers
Data interchange
Relies on multiple electronic information technologies
Trading systems
Catalog systems

31. E-Commerce Marketplaces
One to Many
Sell-side marketplaces
One supplier dictates product offerings and prices
Many to One
Buy-side marketplaces
Many suppliers bid for the business of a buyer
Some to Many
Distribution marketplaces
Unites suppliers who combine their product catalogs to attract a larger audience

32. E-Commerce Marketplaces
Many to Some
Procurement marketplaces
Unites major buyers who combine purchasing catalogs
Attracts more competition, which lowers prices
Many to Many
Auction marketplaces
Dynamically optimizes prices

33. B2B E-Commerce Web Portal
B2B e-commerce portals offer multiple marketplaces
Catalogs
Exchanges
Auctions
Often developed and hosted by third-party market-maker companies
Infomediaries serve as intermediaries in e-business and e-commerce transactions

34. Clicks and Bricks
Success will go to those who can integrate Internet initiatives with traditional operations
Merging operations has trade-offs

35. Integrated vs. Separate e-Business
The business case for merging e-commerce with traditional business operations
Move strategic capabilities in traditional operations to the e-commerce business
Integrate e-commerce into the traditional business
Sharing of established brands
Sharing of key business information
Joint buying power and distribution efficiencies

36. Other Clicks and Bricks Strategies
Partial e-commerce integration
Joint ventures and strategic partnerships
Complete separation
Spin-off of an independent e-commerce company
Barnes and Noble’s experience with spin-off
Gained venture capital, entrepreneurial culture, flexibility
Attracted quality management
Accelerated decision making
Failed to gain market share

37. E-Commerce Channel Choices
An e-commerce channel is the marketing
or sales channel created by a company for its e-commerce activities
There is no universal strategy or e-commerce channel choice
Both e-commerce integration and separation have major business pros and cons
Most businesses are implementing some measure of clicks-and-bricks integration

38. E-Commerce Strategy Checklist
Questions to ask and answer
What audiences are we attempting to reach?
What action do we want audiences to take?
Who owns the e-commerce channel within the organization?
Is the e-commerce channel planned alongside other channels?
Is there a process for generating, approving, releasing, and withdrawing content?
Will our brand translate to the new channel?
How will we market the channel itself?

39. Case 2: Entellium, Digg, Peerflix, Zappos, Jigsaw
For many Internet companies, the second-mover advantage is substantial
Second-movers can use the same approach as first movers, but with better products and services, at much lower cost
Another strategy is to use combinations of successful business models

40. Case Study Questions
Is the second-mover advantage always a good business strategy?
Defend your answer with examples of the companies in this case
What can a front-runner business do to foil the assaults of second movers?
Defend your answer using examples of the front-runner companies in the case
Do second movers always have the advantage in Web based business success?
Evaluate the five strategies in the case, and the companies that used them, to defend your answer