1. Chapter 5 and Module B ELECTRONIC COMMERCE: Strategies For The New Economy & THE WORLD WIDE WEB AND THE INTERNET THE WORLD WIDE WEB AND THE INTERNET

2. WWW and the Internet World Wide Web World Wide Web Internet Internet Web site Web site Web page Web page URL (uniform resource locator) URL (uniform resource locator) Link (hyperlink) Link (hyperlink) Top-level domain Top-level domain

3. Understanding Addresses Consider www.uts.edu.au (University of Technology in Sydney) Consider www.uts.edu.au (University of Technology in Sydney)www.uts.edu.au http:// - starts most addresses but may be left off http:// - starts most addresses but may be left off www – World Wide Web www – World Wide Web uts – the organization uts – the organization edu – top-level domain (organization type) edu – top-level domain (organization type) au – country location (if none, then current country) au – country location (if none, then current country)

4. Top-Level Domains com – commercial or for- profit business com – commercial or for- profit business coop – cooperative coop – cooperative edu – educational institution edu – educational institution gov – U.S. government agency gov – U.S. government agency mil – U.S. military organization mil – U.S. military organization net – Internet administrative organization net – Internet administrative organization int – International treaties organization int – International treaties organization info – general information info – general information biz – business biz – business museum – accredited museum museum – accredited museum name – personal name – personal pro – Accountant, doctor, lawyer, etc. pro – Accountant, doctor, lawyer, etc. Many more Many more

5. WEB 2.0 Web 2.0 (Live Web) – second generation of the Web; focuses on online collaboration, users as both creators and modifiers of content, dynamic and customized information feeds, etc. Web 2.0 (Live Web) – second generation of the Web; focuses on online collaboration, users as both creators and modifiers of content, dynamic and customized information feeds, etc. Wikis Wikis Social networking sites Social networking sites Blogs Blogs RSS feeds RSS feeds Podcasting Podcasting Many others Many others

6. The Internet Backbone Network access point (NAP) Network access point (NAP) Network service provider (NSP) Network service provider (NSP) Internet service provider (ISP) Internet service provider (ISP)

7. INTERNET TECHNOLOGIES  Internet backbone – major set of computer connections on Internet

8. Internet Servers

9. Internet server computer – provides information and services on the Internet Internet server computer – provides information and services on the Internet Web server – provides information and services on the Web Web server – provides information and services on the Web Mail server – provides e-mail services Mail server – provides e-mail services ftp (file transfer protocol) server – maintains files you download ftp (file transfer protocol) server – maintains files you download IRC (Internet Relay Chat) server – supports discussion groups and chat rooms IRC (Internet Relay Chat) server – supports discussion groups and chat rooms

10. Communications Protocols Information moves on the Internet according to communications protocols Information moves on the Internet according to communications protocols Communications protocol (protocol) – set of rules that every computer follows to transfer information Communications protocol (protocol) – set of rules that every computer follows to transfer information Most widely used Most widely used TCP/IP TCP/IP http http ftp ftp

11. Telecommunications Hardware To access and use the Web, you also need hardware To access and use the Web, you also need hardware Mainly, some sort of modem Mainly, some sort of modem Telephone Telephone DSL DSL Cable Cable Satellite Satellite

12. WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES? Black Friday is traditionally a big day for retailers Black Friday is traditionally a big day for retailers But Black Friday may soon be replaced by Cyber Monday But Black Friday may soon be replaced by Cyber Monday Cyber Monday is the Monday after Thanksgiving when people go back to work and buy products online Cyber Monday is the Monday after Thanksgiving when people go back to work and buy products online

13. WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES? The “e” in e-commerce changes a lot of things The “e” in e-commerce changes a lot of things For example, Black Friday is a brick-and-mortar concept; Cyber Monday is an “e” (electronic) concept For example, Black Friday is a brick-and-mortar concept; Cyber Monday is an “e” (electronic) concept No matter, any kind of commerce is still just commerce No matter, any kind of commerce is still just commerce And all businesses must execute well to survive and thrive And all businesses must execute well to survive and thrive

14. Electronic Commerce E-commerce is changing everything E-commerce is changing everything Electronic commerce (e-commerce) Electronic commerce (e-commerce) Electronic business (e-business) Electronic business (e-business) Mobile commerce (m-commerce) Mobile commerce (m-commerce)

15. Types of Businesses Brick-and-Mortar Brick-and-Mortar Click-and-Mortar (or Bricks-and-Clicks) Click-and-Mortar (or Bricks-and-Clicks) Dot-Coms (or Pure Plays) Dot-Coms (or Pure Plays)

16. E-COMMERCE BUSINESS MODELS

17. B2B E-Commerce Business to Business (B2B) e- commerce Business to Business (B2B) e- commerce Where all the e-commerce money is Where all the e-commerce money is Basically, it’s about businesses doing business with other businesses Basically, it’s about businesses doing business with other businesses Supply chain management (from Chapter 2) is a big part of B2B e-commerce Supply chain management (from Chapter 2) is a big part of B2B e-commerce

18. B2C E-Commerce Business to Consumer (B2C) e- commerce Business to Consumer (B2C) e- commerce B2C is the glitzy e-commerce like iTunes, eBay, etc B2C is the glitzy e-commerce like iTunes, eBay, etc

19. C2B E-Commerce Consumer to Business (C2B) e- commerce Consumer to Business (C2B) e- commerce True economic inversion of the B2C model True economic inversion of the B2C model Fotolia is a good example (www.fotolia.com) Fotolia is a good example (www.fotolia.com)www.fotolia.com There you can post photos and videos and businesses will pay you a royalty to use them (if they like what you offer) There you can post photos and videos and businesses will pay you a royalty to use them (if they like what you offer) You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites

20. C2C E-Commerce Consumer to Consumer (C2C) e- commerce Consumer to Consumer (C2C) e- commerce You selling to another person (or the reverse) You selling to another person (or the reverse) Usually occurs through an intermediary such as eBay Usually occurs through an intermediary such as eBay

21. B2G E-Commerce Business to Government (B2G) e- commerce Business to Government (B2G) e- commerce Lockheed providing products and services to DoD Lockheed providing products and services to DoD Fairly large e-commerce model in terms of revenue Fairly large e-commerce model in terms of revenue Most U.S. government entities (for sure at the federal level) won’t do business with your business if you can’t do it electronically Most U.S. government entities (for sure at the federal level) won’t do business with your business if you can’t do it electronically

22. C2G E-Commerce Consumer to Government (C2G) e- commerce Consumer to Government (C2G) e- commerce You selling something to the government You selling something to the government This market is quite small This market is quite small Most times, “you” must register as a business before selling something to the government, which would then become B2G e-commerce Most times, “you” must register as a business before selling something to the government, which would then become B2G e-commerce

23. G2B E-Commerce Government to Business (G2B) e- commerce Government to Business (G2B) e- commerce SBA providing surety guarantees, disaster assistance, etc to small businesses SBA providing surety guarantees, disaster assistance, etc to small businesses TSA holding auctions and selling off confiscated items (most times, you must be a “business” to participate in these auctions) TSA holding auctions and selling off confiscated items (most times, you must be a “business” to participate in these auctions) U.S. Geological Survey (DOI) selling detailed survey data to businesses U.S. Geological Survey (DOI) selling detailed survey data to businesses

24. G2C E-Commerce Government to Consumer (G2C) e- commerce Government to Consumer (G2C) e- commerce Does not fit well at all within the traditional supply-and-demand e-commerce notion Does not fit well at all within the traditional supply-and-demand e-commerce notion Paying taxes, registering vehicles, etc Paying taxes, registering vehicles, etc

25. G2G E-Commerce Government to Government (G2G) e- commerce Government to Government (G2G) e- commerce Mainly about information sharing, not commerce Mainly about information sharing, not commerce

26. E-COMMERCE RULES TO LIVE BY 1. Understand your business, products, services, and customers 2. Find customers and establish relationships 3. Move money easily and securely

27. 1. UNDERSTAND YOUR BUSINESS, PRODUCTS, SERVICES, & CUSTOMERS To be successful, you must… To be successful, you must… Define your products and services Define your products and services Define your target customers Define your target customers B2B (other businesses) B2B (other businesses) B2C (individuals) B2C (individuals) Define your customers perception of the value of your products and services Define your customers perception of the value of your products and services

28. Who Are Your Customers? Business to Business Business to Business Other businesses Other businesses Business to Consumer Business to Consumer Individuals Individuals Each is different and has different needs and wants Each is different and has different needs and wants

29. B2C: Convenience Versus Specialty Convenience Convenience Lower priced Lower priced Purchased frequently Purchased frequently Example: common food items Example: common food items Specialty Specialty Higher priced Higher priced Purchased less frequently Purchased less frequently Example: Stereos, computers Example: Stereos, computers

30. B2C: Commoditylike and Digital Commoditylike Commoditylike Same no matter where you purchase it Same no matter where you purchase it Examples: books, music, movies Examples: books, music, movies Price and ease of ordering are important Price and ease of ordering are important Digital Digital Purchased and delivered over the Internet Purchased and delivered over the Internet Best product type for B2C e-commerce Best product type for B2C e-commerce Examples: Music, software Examples: Music, software

31. B2C: Mass Customization Mass customization – the ability of an organization to give its customers the opportunity to tailor its products or services Mass customization – the ability of an organization to give its customers the opportunity to tailor its products or services Dell – customized computer purchases Dell – customized computer purchases Apple iTunes – only the music you want (not necessarily the whole album) Apple iTunes – only the music you want (not necessarily the whole album)

32. B2B: MRO Versus Direct Maintenance, repair, and operations (MRO) materials (indirect materials) – materials necessary for running a company but do not relate to the company’s primary business activities Maintenance, repair, and operations (MRO) materials (indirect materials) – materials necessary for running a company but do not relate to the company’s primary business activities Similar to convenience items in B2C Similar to convenience items in B2C Office supplies, repair parts, lubricating oils Office supplies, repair parts, lubricating oils

33. B2B: Horizontal Versus Vertical B2B e-commerce takes advantage of e- marketplaces B2B e-commerce takes advantage of e- marketplaces Electronic marketplace (e-marketplace) – interactive business providing a central market where multiple buyers and sellers can engage in e-commerce Electronic marketplace (e-marketplace) – interactive business providing a central market where multiple buyers and sellers can engage in e-commerce Horizontal e-marketplaces Horizontal e-marketplaces Vertical e-marketplaces Vertical e-marketplaces

34. 2. FIND CUSTOMERS AND ESTABLISH RELATIONSHIPS You must first find customers You must first find customers Then establish relationships Then establish relationships Otherwise, you can’t make a sale Otherwise, you can’t make a sale B2C and B2B techniques are very different B2C and B2B techniques are very different

35. B2C Marketing Mix Tools Registering with search engines Registering with search engines Online ads Online ads Viral marketing Viral marketing Affiliate programs Affiliate programs

36. Registering with Search Engines Some search engines will list your site for free Some search engines will list your site for free Others charge a fee Others charge a fee For an additional fee, your site can appear at top of a search list (every time) For an additional fee, your site can appear at top of a search list (every time)

37. Online Ads Online ads (banner ads) – small advertisements that appear on other sites Online ads (banner ads) – small advertisements that appear on other sites Two variations are: Two variations are: Pop-up ad – small Web page advertisement that appears on your screen outside the current Web site Pop-up ad – small Web page advertisement that appears on your screen outside the current Web site Pop-under ad – pop-up ad you do not see until you close your current browser window Pop-under ad – pop-up ad you do not see until you close your current browser window

38. Viral Marketing Viral marketing Viral marketing Blue Mountain Arts (www.bluemountain.com) Blue Mountain Arts (www.bluemountain.com)www.bluemountain.com Send a card Send a card Card has link so the other person can send you a card back Card has link so the other person can send you a card back

39. Affiliate Programs Affiliate program Affiliate program If viewers buy at the second site, the second site pays a small fee to the first site If viewers buy at the second site, the second site pays a small fee to the first site Usually a percentage of the sale Usually a percentage of the sale Click-through Click-through Conversion rate Conversion rate

40. B2B Marketing Much more personal Much more personal Not usually done with generic ads designed for mass distribution Not usually done with generic ads designed for mass distribution Often take place in e-marketplaces Often take place in e-marketplaces Once a contact is made, the relationship must be established; this often requires face-to-face meetings Once a contact is made, the relationship must be established; this often requires face-to-face meetings Must also integrate the IT systems to the supplier business and customer business Must also integrate the IT systems to the supplier business and customer business

41. 3. MOVE MONEY EASILY AND SECURELY In e-commerce, most money moves electronically In e-commerce, most money moves electronically Security becomes very important Security becomes very important

42. B2C Payment Systems Credit cards Credit cards Financial cybermediaries Financial cybermediaries Electronic checks Electronic checks Electronic Bill Presentment and Payment Electronic Bill Presentment and Payment Smart cards Smart cards

43. B2B Payment Systems Business customers… Business customers… Make large purchases Make large purchases Will not pay with credit card or financial cybermediary Will not pay with credit card or financial cybermediary Use financial EDI Use financial EDI Pay for many purchases at once (perhaps the end of the month) Pay for many purchases at once (perhaps the end of the month)

44. B2B Payment Systems Electronic data interchange (EDI) Electronic data interchange (EDI) Financial EDI Financial EDI

45. Security: The Pervading Concern Security is very important when moving money Security is very important when moving money Some security measures… Some security measures… Encryption Encryption Secure Sockets Layers Secure Sockets Layers Secure Electronic Transactions Secure Electronic Transactions Many, many others Many, many others

46. E-BUSINESS TRENDS “E” is certainly changing many things “E” is certainly changing many things Many trends in every part of your life Many trends in every part of your life Three important ones Three important ones 1. Youth 2. M-commerce 3. The Long Tail

47. E-Business Trend - Youth Screenager – person who spends a lot of time in front of a screen – TV, iPod, computer, cell phone Screenager – person who spends a lot of time in front of a screen – TV, iPod, computer, cell phone Digital native – personal ushered into this world alongside the digital revolution Digital native – personal ushered into this world alongside the digital revolution Most young people are screenagers and digital natives Most young people are screenagers and digital natives They readily embrace technology and therefore are most suited to running a business in the “e” world They readily embrace technology and therefore are most suited to running a business in the “e” world

48. E-Business Trend – M-Commerce M-commerce – e-commerce conducted over a wireless device M-commerce – e-commerce conducted over a wireless device Mobility is key for the next generation of e- commerce that will rely on Mobility is key for the next generation of e- commerce that will rely on 1. Knowing where we are 2. Our ability to do anything from anywhere

49. E-Business Trend – Long Tail Long Tail – first offered by Chris Anderson; explains e-commerce profitability in terms of a sales curve Long Tail – first offered by Chris Anderson; explains e-commerce profitability in terms of a sales curve Brick-and-mortar businesses carry limited inventory, inventory that is popular Brick-and-mortar businesses carry limited inventory, inventory that is popular E-businesses can carry huge amounts of “niche” inventory that may only sell a couple of times a year E-businesses can carry huge amounts of “niche” inventory that may only sell a couple of times a year