1. IB Business Management
4.8 Electronic Commerce
(E-commerce)

2. Learning Outcomes
To have knowledge of the Features of e-commerce (A01)
To understand and be able to apply the effects of changing technology and e-commerce on the marketing mix (A02)
To Understand the differences between the following types of e-commerce: • business to business (B2B) • business to consumer (B2C) • consumer to consumer (C2C) (A02)
To evaluate the costs and benefits of e-commerce to firms and consumers (A03)

3. Will physical shops exist in the future?
Essential Question
Will physical shops exist in the future?

4. E-commerce Trading of goods & services via the internet
Began August 1991
Existing companies have taken opportunities to trade online and Ecommerce has provided opportunities for many new business startups
Examples of e-markets include:
Financial services
Gaming
Retailing (books, DVD’s, music, clothes?)

5. Watch the Video on E-Commerce
What are the key features of an e-commerce business?
Are there any advantages or disadvantages?
Is it a suitable approach for all businesses or is it more suited to particular industries?

6. Industries Embracing E-commerce

7. Ecommerce and the marketing mix

8. E-commerce & Price Internet increases price transparency
Internet cuts out the middleman
Prices can be adjusted instantly

9. E-commerce & Place Global customer base possible Wider customer base
Can shop at any time
More competition
More shipping costs
Lower costs because fewer facilities needed
No retail stores needed
Can locate warehouse in cheapest rental areas

10. E-commerce & Product Options can be viewed online
Company does not have to stock every item
Just provide the option and supply as-needed
Possibilities for interactive, personalized shopping
Change a product online and view your changes
Information on product can be stored online
User manual, specs, etc.

11. E-commerce & Promotion
Preferred language on websites
FAQs
Opportunity to make money from advertising revenue from other firms
New opportunities on the internet:
More detailed ads
Online video, audio, photos
Viral marketing
Also traditional promotion tailored for internet
E.g., contests, discounts, coupons

12. ThE DIFFERENT TYPES OF E-commerce

13. Business to Business (B2B) versus Business to Consumer (B2C)
E-commerce catered to needs of other businesses
Corporate banking
Suppliers
Advertising
Shipping
Often to facilitate business transactions rather than to increase sales
B2C
E-commerce directly catered to the end user, i.e. the consumer
Some businesses do both

14. Task
Read the article ‘Even Faster Food’ and consider the questions below
What are the benefits of ecommerce for:
Businesses?
Customers?

15. Benefits of E-commerce for Companies
Another source of revenue
Growing industry
Can be updated very quickly
Easy for customers to search for
Direct channel of distribution = higher profit margins
Enables more rapid response to competition
Target wider range of customers
Improves customer service
Options for instant download/e-ticketing reduce costs
Cheaper than printing catalogues
Can be used as an opportunity for promotion
Reduces packaging costs
User manuals & software downloads available online
Reduces overhead costs
Less rent, staffing, insurance, etc.

16. Benefits of E-commerce for Customers
Customers can compare competitors more easily
More choice
more convenient
Lots of information can be made available
Customers have lower costs
Customers can find products rapidly
Can shop 24 hours a day
Can make decisions without hassle from sales staff
However, What are the potential difficulties/problems with Ecommerce from customers perspectives?

17. Disadvantages of E-commerce - customers
Not all customers have access to internet
Slow internet speed makes some websites difficult to navigate
Some customers worry about security of online payments
Information overload
No chance to see and try products before you buy
Time delay between ordering and receiving
What might the difficulties of ecommerce be for businesses?

18. Disadvantages of E-commerce - businesses
Set up and maintenance costs can be high
Not appropriate for all goods
Information overload
Too much data
Too many pages
Some customers do NOT have access
Internet prone to hackers & breakdowns
Customers normally pay with credit card, therefore finance charges
Potential for Fraud

19. Issues and decisions with E-commerce
Payment systems
Security
Distribution methods
Maintenance and updating of the site
International Issues
After sales service
Legal issues

20. Task – Investigate an Ecommerce Business
Evaluate the decisions has the business you have chosen made with regards to the following issues
Payment systems
Distribution methods
Lead Times
Delivery costs to customers
Geographical scope of operations
After sales service

21. Suggested businesses ASOS.com Sherpas Amazon CityShop Tesco
Marks and Spencer
Ctrip

22. E-Commerce – CUEGIS? CONCEPT
RELEVANCE TO INTERNATIONAL MARKETING THEORY
CHANGE
CULTURE
ETHICS
GLOBALISATION
INNOVATION
STRAETEGY