1. What is E-Commerce? Section 8.1

2. What is E-commerce? E-commerce is the exchange of goods, services, information, or other businesses through electronic media. E-commerce is the exchange of goods, services, information, or other businesses through electronic media. Through low-cost or free connections to the internet, millions of people around the world can instantly access information and communicate with each other.

3. Business on the Net Not all businesses can complete all of their activities using the internet, but the internet can be used for many activities. Not all businesses can complete all of their activities using the internet, but the internet can be used for many activities. For example, a company can process orders, bill customers, and maintain accounts. For example, a company can process orders, bill customers, and maintain accounts.

4. Bricks to Dot.Coms A company that does almost all of its business activities through the internet is referred to as a dot.com business. A company that does almost all of its business activities through the internet is referred to as a dot.com business. Businesses that complete most of their activities by means other than the internet are referred to as bricks and mortar businesses. Businesses that complete most of their activities by means other than the internet are referred to as bricks and mortar businesses.

5. Information Stage Information Stage-the website provides basic information to help prospective customers as they gather information about products and companies. Information Stage-the website provides basic information to help prospective customers as they gather information about products and companies.

6. Interaction Stage In addition to providing information, the company uses its website to interact with its consumers. In addition to providing information, the company uses its website to interact with its consumers. The simplest form of interaction is the use of e-mail. The simplest form of interaction is the use of e-mail. They can check product availability, calculate product costs and shipping charges, and determine how long it will take to have an order delivered. They can check product availability, calculate product costs and shipping charges, and determine how long it will take to have an order delivered.

7. Integration Stage With all of the internet tools available, an entire business transaction can be completed on an integrated site. With all of the internet tools available, an entire business transaction can be completed on an integrated site. Customers can get necessary product, pricing, and shipping information. Companies with integrated use of the internet do not have to be a dot.com business.

8. The Internet and Marketing Many of the first internet businesses did not understand the importance of marketing. Many of the first internet businesses did not understand the importance of marketing. Thousands of business thought they could be successful in e-commerce, but a majority was not successful because they did not apply the marketing concept. Thousands of business thought they could be successful in e-commerce, but a majority was not successful because they did not apply the marketing concept.

9. Advantages of E-Commerce Businesses that use the internet have several advantages over those who do not. Businesses that use the internet have several advantages over those who do not. They also have immediate access to customers all over the world. They also have immediate access to customers all over the world. They can introduce new products or update product information instantaneously. They can introduce new products or update product information instantaneously. With the Internet, a customer’s concern or question can be sent to the company at any time. With the Internet, a customer’s concern or question can be sent to the company at any time.

10. Disadvantages of E-Commerce Not everything about the development of the Internet as a business tool has been positive. Not everything about the development of the Internet as a business tool has been positive. Provides any easier way for someone to start a business without understanding everything that’s necessary for success. Provides any easier way for someone to start a business without understanding everything that’s necessary for success. By using E-commerce, businesses have found that it is harder to predict the demand for products. By using E-commerce, businesses have found that it is harder to predict the demand for products.

11. The Marketing Concept Applied to E-Commerce E-Commerce has demonstrated the importance of the marketing concept to successful businesses. E-Commerce has demonstrated the importance of the marketing concept to successful businesses. All parts of the marketing mix not just promotion is important for successful e-commerce All parts of the marketing mix not just promotion is important for successful e-commerce When information about a company's products and services can be viewed by people in many locations, it is harder for businesses to find their target market.

12. 8.2 Growing Importance of E-Commerce

13. Growth of internet It was first developed as a military and research tool in the 1950’s It was first developed as a military and research tool in the 1950’s In 2000, the United States had the highest amount of internet users, which is 40% of all users in the world In 2000, the United States had the highest amount of internet users, which is 40% of all users in the world Internet sales to consumers represent less than 1% of all consumer purchases Internet sales to consumers represent less than 1% of all consumer purchases

15. Business usages of the internet Many businesses believe that the internet is not useful for the type of business activities they perform Many businesses believe that the internet is not useful for the type of business activities they perform In 1998, only $8 billion out of $45 billion of sales came from the internet In 1998, only $8 billion out of $45 billion of sales came from the internet Businesses can use the internet to distribute information to the customers and the employees Businesses can use the internet to distribute information to the customers and the employees

17. Business usages of the internet continued… Small businesses can benefit competitively from using the internet. Small businesses can benefit competitively from using the internet. From the very beginning of the internet, the primary way people have communicated using internet technology is through e-mail. From the very beginning of the internet, the primary way people have communicated using internet technology is through e-mail. A business can use the information it gathers to improve its marketing mix. A business can use the information it gathers to improve its marketing mix.

18. Business usages of the internet continued… Businesses that do not provide information about themselves on the internet may miss some potential customers. Businesses that do not provide information about themselves on the internet may miss some potential customers. The internet has affected the ability to find out information out about its customers The internet has affected the ability to find out information out about its customers

19. Impact of E-Commerce on Distribution Channels

20. Distribution for E-Commerce Effective distribution is an important part of satisfying customer needs. Effective distribution is an important part of satisfying customer needs. Major distribution changes in e-commerce have been in access to products and services, order processing, and the methods used to distribute products from the business to its customers. Major distribution changes in e-commerce have been in access to products and services, order processing, and the methods used to distribute products from the business to its customers.

21. Finding and Buying Products With Internet access consumers have more choices of companies and products. With Internet access consumers have more choices of companies and products. Consumers and companies can easily find suppliers and vendors on the Internet by using a search engine. Consumers and companies can easily find suppliers and vendors on the Internet by using a search engine. The Internet has made it easier for a company to process an order. The Internet has made it easier for a company to process an order. Online shopping carts have been designed to make it easy to complete an order, make immediate payment, and submit the order securely. Online shopping carts have been designed to make it easy to complete an order, make immediate payment, and submit the order securely. Eventually U.S. consumers will make up only a small percentage of individuals shopping on the Internet. Eventually U.S. consumers will make up only a small percentage of individuals shopping on the Internet.

22. Order Processing The Internet has streamlined order processing and reduced the amount of paper that must be handled to complete a sales transaction. The Internet has streamlined order processing and reduced the amount of paper that must be handled to complete a sales transaction. The customer or salesperson can check on the status of the order at any time it is processed, filled, and shipped. The customer or salesperson can check on the status of the order at any time it is processed, filled, and shipped. The use of the Internet for order processing reduces the number of errors since the accuracy of the order can be more easily checked. The use of the Internet for order processing reduces the number of errors since the accuracy of the order can be more easily checked. There is also a large savings in order processing and distribution costs. There is also a large savings in order processing and distribution costs. PRODUCTSAVINGS Computer Software 99% Banking Services 89% Airline Tickets 87% Stocks78% Books56% Toys/Gifts48%

23. Product Distribution Express packages, fresh flowers, and gourmet foods can be transported on airplanes to insure rapid shipment, so it is not possible for those types of products to be distributed using the Internet. Express packages, fresh flowers, and gourmet foods can be transported on airplanes to insure rapid shipment, so it is not possible for those types of products to be distributed using the Internet. The Internet allows many services to be easier to process and products less expensive to distribute. The Internet allows many services to be easier to process and products less expensive to distribute. Companies have had to change the form of their products to be able to distribute them using the internet. Ex. Airlines and E-tickets. Companies have had to change the form of their products to be able to distribute them using the internet. Ex. Airlines and E-tickets.

24. Distribution Problems and Solutions The key distribution problems include the security of transactions, expanded the distribution requirements, and customer service demands. The key distribution problems include the security of transactions, expanded the distribution requirements, and customer service demands. Privacy concerns have led some users to distrust and avoid sites that use cookies (small files that a web server sends to your browser when you access a site) because the cookies can be sent to a users computer without their permission. Privacy concerns have led some users to distrust and avoid sites that use cookies (small files that a web server sends to your browser when you access a site) because the cookies can be sent to a users computer without their permission.

25. Transaction Security One of the greatest concerns express by customers is the security of their personal information they must provide to the company when placing an order. One of the greatest concerns express by customers is the security of their personal information they must provide to the company when placing an order. The most important is that their credit card number will be stolen. The most important is that their credit card number will be stolen. There are alternatives to using a credit card to purchasing a product on the internet for example; pre arranged payments. There are alternatives to using a credit card to purchasing a product on the internet for example; pre arranged payments. Consumers are also afraid the business will misuse the information after the order has been processed. To meet this concern, companies have purchased security technology. Consumers are also afraid the business will misuse the information after the order has been processed. To meet this concern, companies have purchased security technology.

26. Expanded Distribution and Customer Service Businesses found that they had to distribute their products in different ways to many more locations than before. For example; books can be electronically delivered to a customer but flowers cannot (most products can be electronically ordered). Businesses found that they had to distribute their products in different ways to many more locations than before. For example; books can be electronically delivered to a customer but flowers cannot (most products can be electronically ordered). Companies such as UPS and FedEx have expanded their services and offer overnight shipping. Companies such as UPS and FedEx have expanded their services and offer overnight shipping. E-businesses offer complete return policies and procedures on their websites, while some have made arrangements to make returns at local stores. E-businesses offer complete return policies and procedures on their websites, while some have made arrangements to make returns at local stores. Customer service centers have been improved by 24/7 online help centers, FAQ’s, and product warranties. Customer service centers have been improved by 24/7 online help centers, FAQ’s, and product warranties.

27. Promotion in E-Commerce

28. Communication Only 2% of internet users go online with the intention of purchasing a product Only 2% of internet users go online with the intention of purchasing a product Most people go online to research the product they want to buy and go buy it at a local store Most people go online to research the product they want to buy and go buy it at a local store Many companies use internet advertising to promote products and services Many companies use internet advertising to promote products and services Top internet advertisers include Amazon, yahoo, eBay, E*Trade, etc. Top internet advertisers include Amazon, yahoo, eBay, E*Trade, etc.

29. Internet Promotion Web site sponsorship, priority placement in web browsers and comparison shopping services, and providing consumer information websites. Web site sponsorship, priority placement in web browsers and comparison shopping services, and providing consumer information websites. Companies are competing for attention of internet users. Companies are competing for attention of internet users.

30. Cost of E-Commerce Its estimated the companies will spend between 5 million and 23 million dollars. Its estimated the companies will spend between 5 million and 23 million dollars.

31. Planning the Shopping Experience There are 8 steps to shopping online There are 8 steps to shopping online The steps deal with everything from search engines for gathering information to answering the questions of the customer. The steps deal with everything from search engines for gathering information to answering the questions of the customer.

32. Effective Promotion Methods Important methods of promotion for E-Commerce include the following Important methods of promotion for E-Commerce include the following An easy to remember meaningful internet address An easy to remember meaningful internet address Well designed online advertisements Well designed online advertisements Advertisements and other media such as newspapers and television Advertisements and other media such as newspapers and television Registration with search engines to identify the company for people gathering information related to its products Registration with search engines to identify the company for people gathering information related to its products