1. Chapter 9 e-Commerce Systems McGraw-Hill/Irwin
Copyright © 2011 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 several key factors and Web store requirements need 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. Introduction to e-Commerce
Electronic commerce encompasses the entire online process of
Developing
Marketing
Selling
Delivering
Servicing
Paying for products and services
Relies on Internet and information technologies
Multimedia Lecture Support Package to Accompany Basic Marketing
Lecture Script 6-4

5. Mobile shopping increasing Social networking
RWC 1: Mobile Shopping
Mobile shopping increasing
Social networking
Web sites and too many steps
Sales pitches on social networks increasing
Birthday prompts ad for Flowers
Impulsive buyers
Cell phones
Starbucks Mobile Card App
Preloaded spending money
Scannable bar code
Last minute game tickets
Multimedia Lecture Support Package to Accompany Basic Marketing
Lecture Script 6-5

6. Business-to-Consumer
Scope of e-Commerce
Categories of e-Commerce
Business-to-Consumer
Virtual storefronts, multimedia catalogs, interactive order processing, electronic payment, online customer support
Business-to-Business
Electronic business marketplaces, direct links between businesses, auctions and exchanges
Consumer-to-Consumer
Online auctions, posting to newspaper sites, personal websites, e-commerce portals
Multimedia Lecture Support Package to Accompany Basic Marketing
Lecture Script 6-6

7. E-Commerce Technologies

8. Essential e-Commerce Architecture

9. Access Control and Security
E-commerce requires mutual trust and secure access
User names and passwords
Encryption key
Digital certificates and signatures
Restricted access areas
Other people’s accounts
Restricted company data
Webmaster administration areas

10. Profiling and Personalizing
Profiling captures 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

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

12. Content and Catalog Management
Content Management Software
Maintain text and multimedia for e-commerce
Catalog Management Software
Maintain catalog content
Catalog and content management software
Works with profiling tools to personalize content
Product configuration and mass customization
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 tools to personalize content
Includes product configuration and mass customization

13. Example of Workflow Management
Depends on a workflow software engine
Contains software model of business processes
Workflow models express predefined
Sets of business rules
Roles of stakeholders
Authorization requirements
Routing alternative
Databases used
Task sequences

14. Monitors e-commerce processes Records relevant events
Event Notification
Monitors e-commerce processes
Records relevant events
First website
Payments
Problem situations
Notifies involved stakeholders
Works with user-profiling software
Most e-commerce applications are event driven
Responds to such things as customer’s first website visit and payments
Monitors all e-commerce processes
Records all relevant events, including problem situations
Notifies all involved stakeholders
Works in conjunction with user-profiling software

15. Collaboration and Trading
Processes needed by customers, suppliers, and other stakeholders
Online communities of interest
, chat, discussion groups
Enhances customer service
Builds loyalty
Processes that support vital collaboration arrangements and trading services
Needed by customers, suppliers, and other stakeholders
Online communities of interest
, chat, discussion groups
Enhances customer service
Builds loyalty

16. Electronic Payment Example
Electronic Payment Processes
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

17. Securing Electronic Payments
Sniffers easily recognize credit card formats
Protection
Encrypt data
Between customer and merchant
Between customer and financial institution
Take sensitive information off-line
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

18. RWC 2: Driving the “Buzz” on the Web
Companies attempt to identify “influentials” that create online “word of mouth”
Increase sales
Influence opinions
Differing opinion
Sales data don’t match “influentials”
Influentials go with the flow, not effect change
Companies search social websites for “influentials” that are likely to promote a product or service through an on-line word of mouth campaign.
Effort didn’t pan out.

19. E-Commerce Application Trends

20. E-Commerce Success Factors
Selection and value
Performance and service
Look and feel
Advertising and incentives
Personal attention (one-to-one marketing)
Community relationships
Security and reliability

21. Differences in Marketing
Great Customer Satisfaction
Despite the differences, some things remain. Constant and informative communication channels must be open either via online chat or telephone with a human being.

22. Web Store Requirements

23. Developing a Web Store Build a website Market the website
Choose or set up web hosting
Use simple design tools and templates
Include a shopping cart and payment support
Market the website
Include Web page and advertising and promotions
Exchange advertising with other Web stores
Register with search engines and directories
Sign up for affiliate programs

24. Getting Customers to Find You
Submit your site to a search engine
Improve the quality and number of visitors
Search Engine Optimization (SEO)
Link Farms
Keyword stuffing
Organic Search

25. Serving Your Customers
Convert visitors into loyal customers
Develop one-to-one relationship with customers
Create incentives to encourage registration
Use Web cookies to identify visitors
Use tracking services to record and analyze website behavior and customer preferences
Create an attractive, friendly, efficient store
Offer fast order processing and payment
Notify when orders are processed and shipped
Provide links to related websites

26. Manage both the business and the website
Managing a Web Store
Manage both the business and the website
Record and analyze traffic, inventory, sales
Use CRM features to help retain customers
Link sales, inventory data to accounting systems
Operate 24 hours a day, seven day a week
Protect transactions and customer records
Use security monitors and firewalls
Use redundant systems and power sources
Employ passwords and encryption
Offer 24-hour tech support

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

28. 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

29. E-Commerce Marketplaces
Many to Some
Procurement marketplaces
Unites major buyers who combine catalogs
More competition
Lower prices
Many to Many
Auction marketplaces
Dynamically optimizes prices

30. B2B Commerce Web Portals
B2B portals offer multiple marketplaces
Catalogs
Exchanges
Auctions
Third-party market-maker companies
Infomediaries serve as intermediaries in e-business and e-commerce transactions

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

32. E-Commerce Integration
Move traditional strategies to e-commerce
Integrate e-commerce into traditional business
Sharing of established brands
Sharing of key business information
Joint buying power and distribution efficiencies
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

33. E-Commerce trade-offs

34. 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
Spun off independent e-commerce company
Gained venture capital, entrepreneurial culture, and flexibility
Attracted quality management
Accelerated decision making
Failed to gain market share

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

36. E-Commerce Strategy Checklist
Questions to ask and answer
What audiences are we attempting to reach?
What action do we want those 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?

37. RWC 3: Success for Second Movers
Entellium is a successful second mover
Same approach
Better products and services
Lower cost.
Another strategy
Combine successful business models
Second-mover advantage seems substantial
Entellium is an example of a company that has successfully implemented a second mover strategy on the Web.
The second-movers can use the same approach as first mover with better products and services at much lower cost.
Another strategy is to use combinations of business models that are successful.

38. Companies must protect brand names, logos and trademarks
RWC 4: Brands Go On-Line
Companies must protect brand names, logos and trademarks
BrandProtect, MarkMonitor, and NameProtect offer help
Challenge has grown exponentially
Another type of violation is using logos without permission
Companies that do business online must police unauthorized use of their brand names, logos and other trademarks to protect their investments.
Companies such as BrandProtect, MarkMonitor, and NameProtect are stepping in to offer companies some artillery in the fight for control of their brands and reputations.
The challenge of brand protection, however, has grown exponentially for companies operating in the online world.
Other type of violation is using logos without permission because it is so easy for someone to go to a company’s web site and grab a logo and put it somewhere else.