STUDY MATERIAL FOR B.

COM
COMPUTER APPLICATION IN BUSINESS
SEMESTER - IV, ACADEMIC YEAR 2020 - 21

UNIT CONTENT PAGE Nr

I INTRODUCTION TO COMPUTERS 02

II OVERVIEW OF E-COMMERCE AND E-BUSINESS 07

III CONSUMER ORIENTED E-COMMERCE APPLICATIONS 13

IV ELECTRONIC DATA INTERCHANGE 22

V E- MARKETING TECHNIQUES 26

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 STUDY MATERIAL FOR B.COM
COMPUTER APPLICATION IN BUSINESS
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UNIT - I
COMPUTER APPLICATION IN BUSINESS
COMPUTER
A computer is an electronic device, operating under the control of instructions stored in
its own memory, that can accept data, process the data according to specified rules, produce
results, and store the results for future use. A computer is composed of hardware and
software, and can exist in a variety of sizes and configurations.

COMPONENTS OF COMPUTER
A computer contains many electric, electronic, and mechanical components known as
hardware. These components include input devices, output devices, a system unit, storage
devices, and communications devices.

INPUT DEVICES
Input Devices used to provide data and instructions to the computer are called Input
devices. Some important input devices are Key board, Mouse, Scanner, MICR, Web camera,
Microphone etc.

1. Keyboard:
The Key board is used for typing text into the computer. It is also known as standard
Input device. A computer keyboard is similar to that of a type writer with additional keys. The
most commonly available computer keyboard has 104 keys.

2. Mouse:
It is a device that controls the movement of the cursor on a monitor. A mouse will have
2 buttons on its top. The left button is the most frequently used button. There will be a wheel
between the left and right buttons. This wheel enables us to smoothly scroll through screens of
information.

3. Scanner:
It is an input device that can read text or illustrations printed on paper and translate
into digital form. The main advantage of these scanners is that the data need not be entered
separately resulting in saving lot of time.

OUTPUT DEVICES
Any device that is capable of representing information on a computer is called an
Output device. Output devices receive information from the CPU and present it to the user in
the desired form. Some important Output devices are: Monitor, Printer

1. Monitor:
It is similar to TV screen- either a monochrome (black & white) or colour and it displays
the output. It is also referred as Visual Display Unit. Several types of monitors are in use. Some
of them are Colour Graphic Adapter, Enhanced Graphics Adaptor, Video Graphics Adapter and
Super Video Graphics Adapter. The screen sizes differ from system to system.

2. Printers
There are many different types of printers. In large organizations laser printers are
most commonly used due to the fact that they can print very fast and give a very high-quality
output.

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COMPUTER APPLICATION IN BUSINESS
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MEMORY OF THE COMPUTER (Central Processing Unit - CPU)

Memory or storage capacity is one of the important components of a computer. Any
storage unit of a computer system is classified on the basis of the following criteria:
1. Access time: This is the time required to locate and retrieve stored data from the
storage unit in response to program instructions.
2. Storage capacity: It is the amount of data that can be stored in the storage unit.
3. Cost per bit of storage
Units of memory:
The computer stores a character in the storage cells with binary (0,1) mechanism. Thus,
the basic unit of memory is a bit (binary digit – 0 & 1). To store a character, a computer requires
8 bits or 1 byte. This is called the word length‖ of the storage unit. Hence the storage capacity
of the computer is measured in the number of words it can store and is expressed in terms of
bytes.

The different units of measurement are

8 Bits = 1 Byte
1024 Bytes = 1 Kilo Byte (KB)
1024 KB = 1 Mega Byte (MB)
1024 MB = 1 Giga Byte (GB)

TYPES OF MEMORY:
A computer memory is of two types
1.PRIMARY MEMORY:
Primary memory is also called internal memory and is an important part of a computer.
It is the main area in a computer where the data is stored. The stored data can be recalled
instantly and correctly whenever desired. This memory can be quickly accessed by the CPU for
reading or storing information. Primary memory is further classified into two types: Random
Access Memory (RAM) and Read- Only Memory ROM)

RAM:
RAM is also known as read/write memory as information can be read from and written
onto it. RAM is a place in a computer that holds instructions for the computer, its programs and
the data. The CPU can directly access the data from RAM almost immediately. However, the
storage of data and instructions in RAM is temporary, till the time the computer is running. It
disappears from RAM as soon as the power to the computer is switched off.

ROM:
It is called Read-only memory as information can only be read from and not written or
changed onto ROM. ROM is the built-in memory of a computer. It stores some basic input –
output instructions put by the manufacturer to operate the computer. The storage of data and
instructions in ROM is permanent. It does not depend on the power supply.

2. SECONDARY MEMORY:
The primary memory which is faster (and hence expensive) is generally not sufficient for
large storage of data. As a result, additional memory, secondary memory‖ is used. It is also
referred as backup storage as it is used to store large volume of data on a permanent basis
which can be transferred to the primary memory whenever required for processing. Data are
stored in secondary storage in the same binary codes as in the main (primary memory) storage.

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Some of the devices of secondary storages are Floppy Disk, Hard Disk, CD-ROM, DVD and Flash
drive.

CLASSIFICATION OF COMPUTERS
Computers are classified according to the storage capacity, speed and the purpose for
which they are developed.

These can be classified into three types:

1. Analog Computes
2. Digital Computers
3. Hybrid Computers

1.Analog computers:
They operate by measuring‖ instead of counting. The name (derived from greek word
analog) denotes that the computer functions by establishing similarities between the two
quantities. They are powerful tools for solving differential equations.
2. Digital Computers:
These computers operate by counting. All quantities are expressed as discrete digits or
numbers. These are useful for evaluating arithmetic expressions and manipulations of data.
3. Hybrid Computers:
Computers which combine the features of analog and digital computers are known as
Hybrid computers. A majority of the computers that are in use are digital. These computers
were essentially developed for computations. Later, the developments in the computers led to
the use of digital computers in variety of applications.

ADVANTAGES of computer
1. Multitasking
Multitasking is one of the major advantages of computer. Person can perform multiple
task, multiple operation, calculate numerical problems within few seconds. Computer can
perform trillion of instructions per second.

2. Speed
Now computer is not just a calculating device. Now a day’s computer has very important
role in human life. One of the main advantages of computer is its incredible speed, which helps
human to complete their task in few seconds. All the operations can be performed very fast just
because of its speed elsewise it takes a long time to perform the task.

3. Cost/ Stores huge amount of data

It is a low-cost solution. Person can save huge data within a low budget.
Centralized database of storing information is the major advantage that can reduce cost.

4. Accuracy
One of the root advantages of computer is that can perform not only calculations but
also with accuracy.
5. Data Security
Protecting digital data is known as data security. Computer provide security from
destructive forces and from unwanted action from unauthorized users like cyber attack or
access attack.
Destructive – mopTfukhd

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DISADVANTAGE OF COMPUTER
1. Virus and hacking attacks
Virus is a worm and hacking are simply an unauthorized access over computer for some
illicit purpose. Virus is being transferred from email attachment, viewing an infected website
advertisement, through removable device like USB etc.
2. Online Cyber Crimes
Online cyber-crime means computer and network may have used in order to commit crime.
Cybers talking and Identity theft are the points which comes under online cyber-crimes.
For example: one may get the access of the access to your shopping account like amazon
account now that person will be able to know your personal details like debit card or credit card
number which can be than misused.
3. Reduction in employment opportunity
The previous generation did not have access to of computer they faced a big problem
when computer came in field. As we have seen in banking sector, senior bank employees faced
this problem when computer came to the banking sector
HARDWARE
Hardware refers to the physical components of a computer. Computer Hardware is any
part of the computer that we can touch. These are the primary electronic devices used to build
up the computer. Examples of hardware in a computer are the Processor, Memory Devices,
Monitor, Printer, Keyboard, Mouse, and the Central Processing Unit.

SOFTWARE
Software is collection of instruction, procedures, documentation that performs
different tasks on a computer system. We can also say computer software is a programming
code executed on a computer processor. The code can be machine level code or the code
written for an operating system. Example . Ms word, Powerpoint.
DIFFERENCE BETWEEN HARDWARE AND SOFTWARE

Hardware Software
Hardware is a physical parts computer Software is a set of instruction that tells a
that cause processing of data. computer exactly what to do.
It is manufactured. It is developed and engineered.
Hardware cannot perform any task Software cannot be executed without
without software. hardware.
As Hardware are physical electronic We can see and also use the software
devices, we can see and touch hardware. but can’t actually touch them.
It has four main categories: input device, It is mainly divided into System software,
output devices, storage, and internal Programming software and Application
components. software.
Hardware is not affected by computer Software is affected by computer viruses.
viruses.
It cannot be transferred from one place to But it can be transferred.
another electrically through network.
If hardware is damaged, it is replaced with If software is damaged, its backup copy
new one. can be reinstalled.

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Ex: Keyboard, Mouse, Monitor, Printer, Ex: Ms Word, Excel, Power Point,
CPU, Hard disk, RAM, ROM etc. Photoshop, MySQL etc.

Software:
Software is collection of instructions, Procedures, documentation that performs
different tasks on a computer system. We can also say computer software is a programming
code executed on a computer Processor. The code can be Machine – Level Code or the code
written for an operating System.
Examples:
Ms word, Excel, Powerpoint, Google Chrome, Photoshop, etc…….

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COMPUTER APPLICATION IN BUSINESS
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UNIT - II
OVERVIEW OF E-COMMERCE AND E-BUSINESS

E-COMMERCE
Ecommerce, also known as electronic commerce or internet commerce, refers to the
buying and selling of goods or services using the internet, and the transfer of money and data
to execute these transactions. Ecommerce is often used to refer to the sale of physical products
online, but it can also describe any kind of commercial transaction that is facilitated through the
internet. Examples of E-Commerce Amazon, Flipkart, eBay, Olx, Quikr.

E-COMMERCE MODELS
Electronic commerce can be classified into four main categories. The basis for this simple
classification is the parties that are involved in the transactions. So, the four basic electronic
commerce models are as follows,

1. Business to Business (B2B)

Business to business E-Commerce is including all kind of electronic transactions of
services or products that happened between two businesses or companies.

2. Business to Consumer (B2C)

Business to Consumer is the establishment of the electronic business relationship
between the seller to final customers. This is probably the most common form of E-Commerce.
This kind of E-Commerce type usually more dynamic and easier to do. Due to the development
of the internet and website, B2C has developed greatly too, and now you can easily find various
kind of online store on the internet. They sell all kind of products, such as books, electronics,
clothes, to digital products like music, movies, or e-books. People like online shopping more than
traditional one due to its simplicity and the price tends to be cheaper too (without including the
shipping cost).

3. Consumer to Consumer (C2C)

This kind of E-Commerce includes all electronic transactions of products or services
between the customer and another customer. Usually, this can happen with the third party
helps, for example, eBay as a marketplace for online action.

4. Consumer to Business (C2B)

Consumer to business is a kind of business model where the final users or the customers
create a product or service that a company uses to complete their business process or gain
competitive advantage.

For example, sites where freelance designers offer their service for logo creation, and
any company is free to use their service if they need it.

5. Business to Administration (B2A)

Business to Administration or B2A covers any kind of transactions that carry out between
business and government with the internet as their medium. It includes a large variety of
services, such as social security, fiscal, legal documents, employments, etc.

6. Consumer to Administration (C2A)

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Consumer to Administration includes all kind of transactions that happen between the
consumer with the government.
Examples: Education, Taxes, Social security, Health

BENEFITS OF E-COMMERCE:
Low costs
An important benefit of ecommerce is that starting a website is anytime less expensive
than a physical outlet. You do not have to furnish your outlet, no need to pay rent and hire
several employees to work in it. The cost of marketing and promotional strategies is also low.
One of its main Benefits of Ecommerce is the absence of middleman that reduces the cost price
to a greater degree. As a direct link is established between buyer and seller the portal is able to
create an effective supply chain.

Flexibility and speed

An individual or a company can easily open an online store within a few days whereas a
physical outlet needs space, commercial leasing procedure as well as ample construction and
decoration time for its opening. It is possible to change displays and product offerings within
minutes in an e-commerce site whereas you need proper planning and ample time and
manpower to do so in physical stores.

Speeds up the buying process

Earlier a customer had to pre-plan his shopping trip even if he wanted to buy a specific
thing. It would mean rearranging his schedule and going to the outlet to make the purchase.
One of the main benefits of ecommerce is that it speeds up the buying process. A visit to the
outlet which is very far from your home and will waste nearly two to three hours of your time is
no longer necessary. Just sit back in the comfort of your home or even your office, search for
the product and make a purchase.

Time savings
The online stores are open 24*7 hence you can use it as per your convenience. E-
commerce helps the customer to buy a particular product easily without wasting his time by
giving him access to a wide range of choices. You are also saving traveling time as the product is
being delivered at the destination of your choice.

A comprehensive description of products

Customers are on the look-out for a comprehensive description of the products they
want to buy and it is one of the major benefits of ecommerce. An e-commerce portal offers its
customers a product catalogue that has data sheets featuring all the useful information about
its products and services.

Easy availability through search engines

There is a huge difference between the physical and online stores if you are looking for
benefits of ecommerce. The first thrives because of its branding and the second on the large
traffic from search engines. With the advent of the internet, the consumer has become more
street smart and advanced. He realizes the importance of online shopping and has been using
search engines to find products and services at his convenience. A physical store is in most
cases limited to a single area whereas the search engines allow the worldwide audience in its
portal.

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Technology at its best

An important benefit of ecommerce is that it is using technology for its own advantage.
As the systems are computerized it becomes easy to maintain its working order without the
tension of getting tired or becoming slow by the end of the day. Technology helps to make
viable comparisons of the products and their rates and specifications which is not possible in
physical outlets hence the use of technology makes online portals accurate, effective and
efficient in their dealings with their customers.

Reduce the cost

If you are looking for one of the benefits of ecommerce then it can easily save time and
reduce its inventory cost when compared with physical stores. The online portal offers features
and facilities that automate several responsibilities. It introduces a web-based system through
which the website can automate and manage inventory by itself and thus reduce the operating
cost.

Encourages impulse to buy

An online site has information on the buying habits of its customers. It knows that there
are several products that the consumer is interested in buying but is unable to do so. One of the
benefits of e-commerce portal is that it can keep its eyes on these potential targets and offer
several schemes and discounts that prompt the customers to make an impulse buy.
The website makes its products more attractive with colour options and images so that
the customer is tempted to make a purchase.

Availability of reviews
Online sites encourage reviews from its customers to know about customer
satisfaction and what problems they are facing while using the products and services. One of
the benefits of e-commerce is the availability of these reviews on its online sites so that
potential customers can read about it and understand whether the product is suitable for their
particular needs.

LIMITATIONS OF DISADVANTAGES OF E-COMMERCE

Though e-commerce offers many advantages to customers, business, society and
nation, there are still some areas of concern that need to be addressed. The following are some
of the limitations or disadvantages of e-commerce.

Security
The biggest drawback of e-commerce is the issue of security. People fear to provide
personal and financial information, even though several improvements have been made in
relation to data encryption. Certain websites do not have capabilities to conduct authentic
transactions. Fear of providing credit card information and risk of identity limit the growth of e-
commerce.

Lack of privacy
Many websites do not have high encryption for secure online transaction or to protect
online identity. Some websites illegally collect statistics on consumers without their permission.
Lack of privacy discourages people to use internet for conducting commercial transactions.

Tax issue

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Sales tax is another bigger issue when the buyer and seller are situated in different
locations. Computation of sales tax poses problems when the buyer and seller are in different
states. Another factor is that physical stores will lose business if web purchases are free from
tax.

Fear
People fear to operate in a paperless and faceless electronic world. Some of the
business organizations do not have physical existence, People do not know with whom they are
conducting commercial transactions. This aspect makes people to opt physical stores for
purchases.

Product suitability
People have to rely on electronic images to purchase products. Sometimes, when the
products are delivered, the product may not match with electronic images. Finally, it may not
suit the needs of the buyers. The lack of ‘touch and feel’ prevent people from online shopping.

Cultural obstacles
E-commerce attracts customers from all over the world. Habits and culture of the
people differ from nation to nation. They also pose linguistic problems. Thus, differences in
culture create obstacles to both the business and the consumers.

High Labour cost

Highly talented and technically qualified workforce are required to develop and manage
the websites of the organization. Since internet provides a lot of job opportunities, business
organizations have to incur a lot of expenses to retain a talented pool of employees.

Legal issues
The cyber laws that govern the e-commerce transactions are not very clear and vary
from country to country. These legal issues prevent people from entering into electronic
contracts.

Technical limitations
Some protocol is not standardized around the world. Certain software used by vendor
to show electronic images may not be a common one. It may not be possible to browse through
a particular page due to lack of standardized software. Insufficient telecommunication
bandwidth may also pose technical problems.

Huge technological cost

It is difficult to merge electronic business with traditional business. Technological
infrastructure may be expensive and huge cost has to be incurred to keep pace with ever
changing technology. It is necessary to allocate more funds for technological advancement to
remain competitive in the electronic world.

E-BUSINESS
Electronic Business, shortly known as e-business, is the online presence of business. It
can also be defined as the business which is done with the help of internet or electronic data
interchange i.e. is known as E-business. E-commerce is one of the important components of e-
business, but it is not an essential part.

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E-business is not confined to buying and selling of goods only, but it includes other activities
that also form part of business like providing services to the customers, communicating with
employees, client or business partners can contact the company in case if they want to have a
word with the company, or they have any issue regarding the services, etc. All the basic
business operations are done using electronic media.

There are two types of e-business, which are:

• Pure-Play: The business which is having an electronic existence only. Example:
Hotels.com
• Brick and Click: The business model, in which the business exists both in online i.e.
electronic and offline i.e. physical mode.
DIFFERENCE BETWEEN E-COMMERCE AND E-BUSINESS

BASIS FOR
E-COMMERCE E-BUSINESS
COMPARISON

Trading of merchandise, over Running business using the

Meaning the internet is known as E- internet is known as E-
commerce. business.
What is it Subset Superset
Is it limited to
monetary Yes No
transactions
What they carry out Commercial transactions Business transactions
Approach Extroverted Ambivert
Requires Website Website, CRM, ERP, etc.
Which network is Internet, Intranet and
Internet
used Extranet.

ONLINE TRADING
In finance, an electronic trading platform also known as an online trading platform, is a
computer software program that can be used to place orders for financial products over a
network with a financial intermediary. Various financial products can be traded by the trading
platform, over a communication network with a financial intermediary or directly between the
participants or members of the trading platform. This includes products such
as stocks, bonds, currencies, commodities, derivatives and others, with a financial intermediary,
such as brokers, market makers, Investment banks or stock exchanges. Such platforms allow
electronic trading to be carried out by users from any location and are in contrast to
traditional floor trading using open outcry and telephone based trading. Sometimes the term
trading platform is also used in reference to the trading software alone.
Electronic trading platforms typically stream live market prices on which users can trade
and may provide additional trading tools, such as charting packages, news feeds and account
management functions. Some platforms have been specifically designed to allow individuals to
gain access to financial markets that could formerly only be accessed by specialist trading firms.
They may also be designed to automatically trade specific strategies based on technical
analysis or to do high-frequency trading.Electronic trading platforms are usually mobile-
friendly and available for Windows, iOS and Android

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COMPARISION BETWEEN TRADITIONAL COMMERCE AND ELECTRONIC COMMERCE

BASIS FOR
TRADITIONAL COMMERCE E-COMMERCE
COMPARISON
Traditional commerce is a branch of
e-Commerce means carrying
business which focuses on the exchange of
out commercial transactions
Meaning products and services, and includes all
or exchange of information,
those activities which encourages
electronically on the internet.
exchange, in some way or the other.
Processing of
Manual Automatic
Transactions
Accessibility Limited Time 24×7×365
Physical Goods can be inspected physically before Goods cannot be inspected
inspection purchase. physically before purchase.
Customer
Face-to-face Screen-to-face
interaction
Scope of
Limited to particular area. Worldwide reach
business
Information No uniform platform for exchange of Provides a uniform platform
exchange information. for information exchange.
Resource focus Supply side Demand side
Business
Linear End-to-end
Relationship
Marketing One-way marketing One-to-one marketing
Payment Cash, cheque, credit card, etc. Credit card, fund transfer etc.
Delivery of
Instantly Takes time
goods

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UNIT - III
CONSUMER ORIENTED E-COMMERCE APPLICATION

Consumer oriented e-commerce application

➢ Consumer oriented application
➢ Mercantile process model
1. Mercantile model from the consumers perspective
2. Mercantile model from the merchant’s perspective

CONSUMER ORIENTED APPLICATION:

Consumer oriented application Categories: Personal finance management Home
shopping Home entertainment Micro-transaction of information. Personal finance
management: it includes the technology for paying bills, whether by computer or telephone, to
manage the increasing complexity of household finances Home banking services are used.
Home banking services are categorized as Basic, Intermediate and advanced. Basic Services: the
basic service of home banking is ATM, banks introduced ATMs in 1970s to automate two
functions: Deposits and Cash extraction. ATM network can be thought of as analogous to the
internet with banks and their association being the routers and ATM machine being the
heterogeneous computers on the network.

Intermediate Service:
The problem associated with home banking is expensive service, it requires a PC ,a
modem and special software, these problems are solved by intermediate service using
QDPMM(Quick and Dirty personal money management) which allows you to pay the bills and
reconcile your checking accounts, reconcile your credit card accounts, move money between
investment accounts.

Advanced service:
Range of services that may will be offerd by banks in future, these services range from
online service to real time financial information from anywhere in world .Some of these
services are already being offered and others are planned for future, although these are simple
but they require extraordinary integration of computer system at branch, Central office and
partners level Third party service (airline, traveller check) Bill payment interbank clearing house
Real time financial information Investment vehicles ( Stock,MF ) Online shopping services Bank
server Transaction request Consumer at home.

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Mercantile process model:

Mercantile model from the consumer’s perspective

It defines interaction models between consumers and merchants for on-line commerce.
This is necessary because to buy and sell goods, a buyer, and other parties must interact in
ways that represent some standard business process. The business process model from a
consumer’s perspective consists of seven activities that can be grouped into three phases:
1. Pre-purchase determination
2. Purchase Consummation
3. Post purchase interaction

Mercantile process model Product/service search and discovery in the information space
Comparison shopping and Products selection based on various attributes Negotiation of terms,
Ex: Price, delivery time Placement of order Authorization of payment Receipt of product
Customer service and support (if not satisfied in X days, return product) Fig: Mercantile models
from the consumer’s perspective. Pre-purchase determination Purchase consummation Post
purchase interaction
Pre-purchase preparation phase:
It includes search and discovery for a set of products in the larger information space
capable of meeting customer requirements and product selection from the smaller set of
products based on attribute comparison.

Purchase consummation phase:

It includes mercantile protocols that specify the flow of information and documents
associated with purchasing and negotiation with merchants for suitable terms, such as price,
availability and delivery dates, and e-payment mechanisms that integrate payment into the
purchasing process.

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Post purchase interaction phase:

It includes customer services and support to address customer complaints, products
return and product defects. Customer with need Merchant Payment institution.
1 Buy request
2 Remittance request
3 approval
4 delivery
5 Monthly statement

Mercantile model from the merchant’s perspective

Customer inquiry and order planning generation Cost estimation and pricing of product
services Order receipt and entry Order selection and prioritization Order scheduling Order
fulfilment and delivery Order billing and account /payment management. Customer service and
support Presales Product service production and delivery Post sales interaction Fig. Order
management cycle in e-commerce.

Mercantile model from the merchant’s perspective the order to delivery cycle from the
merchants perceptive has been managed with an eye toward standardization and cost. To
achieve this model, it is necessary to examine OMC (order management cycle) with following
steps: Order planning and order generation Cost estimation and pricing. Order receipt and
entry. Order selection and posterization Order scheduling. Order fulfilment delivery. Order
billing and account /payment management. Post sales services.

Order planning & order Generation

➢ Order planning leads to order generation
➢ Orders are generated in a no. of ways in the e-commerce environment.
➢ The sales force broadcasts ads (direct marketing), sends personalized e-mail to
customers (cold calls), or creates a WWW page

Cost Estimation & pricing

➢ Pricing is the bridge between customer needs & company capabilities.
➢ Pricing at the individual order level depends on understanding the value to the
customer that is generated by each order, evaluating the cost of filling each order;

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&instituting a system that enables the company to price each order based on its value &
cost

Order Receipt & Entry

➢ After an acceptable price Quote, the customer enters the order receipt & entry phase of
OMC.
➢ This was under the purview of departments variously titled customer service, order
entry, the inside sales desk, or customer liaison.

Order Selection & Prioritization

➢ Customer service representatives are also often responsible for choosing which orders
to accept and which to decline.
➢ Not, all customers orders are created equal; some are better for the business.

Order Scheduling
➢ In this phase the prioritized orders get slotted into an actual production or operational
sequence.
➢ This task is difficult because the different functional departments- sales, marketing,
customer service, operations, or production- may have conflicting goals, compensation
systems, & organizational imperatives.
➢ Production people seek to minimize equipment changeovers, while marketing &
customer service reps argue for special service for special customers.

Order Fulfillment & Delivery

➢ In this actual provision of the product or service is made.
➢ It involves multiple functions and locations.

Order Billing & Account/Payment Management

➢ After the order has been fulfilled & delivered, billing is given by finance staff.
➢ The billing function is designed to serve the needs and interests of the company, not the
customer.
Post-sales Service
➢ This phase plays an increasingly important role in all elements of a company’s profit
equation: customer, price, & cost.
➢ It can include such elements as physical installation of a product, repair & maintenance,
customer training, equipment upgrading & disposal.
➢ The newest technologies are direct deposit of payroll, on-line bill payment and
telephone transfers
E-PAYMENT
An e-payment system is a way of making transactions or paying for goods and services
through an electronic medium, without the use of checks or cash. It’s also called an electronic
payment system or online payment system.
The electronic payment system has grown increasingly over the last decades due to the
growing spread of internet-based banking and shopping. As the world advances more with
technology development, we can see the rise of electronic payment systems and payment
processing devices. As these increases, improve, and provide ever more secure online payment
transactions the percentage of check and cash transactions will decrease.
ADVANTAGES OF USING ELECTRONIC PAYMENT SYSTEM
Time savings

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During Electronic payment system you do not have to spend and waste a lot of time
standing in lines of banks and post office and then your transaction would take hours or days to
be done. Using e-payment system you can make funds transaction in few minutes with waste of
no time.

Expenses control
Manage expenses with e-payment system Using electronic payment system would allow
you to have your electronic wallet where all the expenses and transactions history is recorded
on your account. So, it is easy to control and manage your expenses with e-payment system
rather than paying by cash while you have no control unless you keep a writing record of your
daily expenses which is of course difficult.

Reduced risk of money lost

Electronic wallets are virtual it cannot be left somewhere or even robbed by someone.
You just need to make sure you have a secure e-payment account and then you do not have to
be worry to forget your virtual wallet somewhere or you be the victim of rubbery. E-payment
eliminates the security risks that come with handling cash money.

Low Transaction Costs

Electronic payment system, you will face no additional charges for making a cash
payment. It can cost you money to get to store to purchase something and also checks postage
can be costly too. Generally, there are small fees or sometime no fees for swiping your card and
make a payment through your e-payment account online. This can save a lot of money spent on
transaction fees for both regular users and business owners.

High Speed and increased Convenience

Traditional payment methods like cash and cheque cannot be used at any time on day
or night while using electronic payment system you can pay for goods and services online at
any time anywhere in the world as you wish so. Customers do not have to spend time to get to
the store or service provider and also, they do not have to stand in online to make payment.
Users do not have to wait for cheque to access the fund they need to purchase anything. All the
fund transfers can be performed at anytime, anywhere with high speed and in a few minutes
without waste of time since all you need to have is access to the Internet.

Customer service
Since electronic payment services try to reach widest possible users, they try to provide
strong user interface. Using these services, you always are able to ask a question about your
account or issues you face from the support team. Customer support usually works 24 hour 7
days a week and you will get answer to your questions as soon as possible. Businesses which
use electronic payment would also offer users refund in special cases so you do not have to
worry if you pay for something wrong.

Low spend on paper and postage

One of the advantages of electronic payment system is that it lowers costs for papers
and lowers the cut of trees. The more payments are processed electronically, the less money
and trees are spent on paper and postage.

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Increased Sales
Electronic payment has become a successful alternative for traditional payment and it is
increasingly becoming the preferred payment option for customer when they want to purchase
goods or services. The number of people who carry cash and use it for shopping has decreased
all over the world. So, using e-payment system enables businesses and brands to make sales to
the customers who has moved to electronic payments while they are taking over those
customers that are still using traditional methods.

Last minute deals

Last minute deals are considerable in using of electronic payment system. It happens
when business owners throw cost-saving deals to encourage more customers. With electronic
payment service on the site, a customer can grab a deal even at the last minute and this would
cause sale increasing.

Ease of adding electronic payment service

You don’t need any special knowledge or experience to add payments to your website if
you own a brand or business. Even a non-technical person may implement it in minutes and
start providing customers online payments and enjoy the advantages and increased sale.

Influences of electronic payment on costumers

An online payment method may influence customers to purchase items or services on
the website. Since the transaction is quick and easy, and it can be done via credit cards, buyers
are going to grab the deal in most cases. So, an electronic payment system can be very useful.

Credit card payment

Online payment services customers can use credit cards to make payments, even
though they don’t have money in their bank account. You can also break down the payment
into several payments if your product or service is expensive. By this you will get the chance to
increase your sale.

Instant Payment
If you use electronic payment system for selling items or services, they are able to make
the payment in few minutes and on the other hand you will receive it as fast.

Save money
Electronic payment system work to significantly improve businesses and optimize
workflow while it can save your business a lot of money by reducing expenses spent on time,
work and papers. It also would prevent fraud and improve data accuracy so that you would be
able to make efficient financial decisions.

Limitation of E- Payment
Security:
One of the main limitations of ecommerce is security. In most cases, people are hesitant
to provide their personal and financial details in spite of advanced data encryption security
systems in place. Moreover, there are some websites that do not have the capability and
features installed to authenticate transactions. As such, there are instances of fraudulent
activities. The fear of providing financial information like credit card details hinders the growth
of ecommerce.

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Lack of Privacy:
To some extent, the privacy of a customer is compromised in ecommerce. You need to
provide your personal details, such as address, telephone number, and so on to the seller.
There are still lots of sites that do not have the advanced technology to protect sensitive
information. Moreover, there are also sites that illegally collect consumer statistics without
permission. This is one reason why people get sceptical while using ecommerce.

Tax Issue:
In case of different geographical locations, sales tax becomes an issue. Many a time
seller have faced problems in the computation of sales tax. Moreover, physical stores have a
risk of losing business if online transactions are exempted from taxation.

Fear:
In spite of popularity, there still resides an element of doubt in the mind of people when
it comes to online shopping. This is because the customer cannot physically examine the
product and is not sure about the features and attributes. This is why a lot of people prefer
shopping from physical stores.

Product Suitability:
As already mentioned, it is not possible for people to physically examine the product in
ecommerce. In many cases, the original product may not match with the picture or
specifications in the ecommerce site. This absence of ‘touch and feel’ creates a discouraging
effect.

Cultural Obstacles:
As the process of ecommerce encompasses customers across the globe, the habits,
traditions, and culture differ. There may also be linguistic problems and all these may lead to
issues between the seller and buyer.

High Labour Cost:

In order to get the whole ecommerce and delivery process right, a specialized workforce
is required. To get all these in the right shape, companies have to shed a good amount of
money and employ a talented pool of people.
Legal Issues:
A lot of legal compliances and cyber laws that need to be taken care of in an ecommerce
business. These regulations may vary from country to country. All these reasons deter
businesses from going electronic.

Technical Limitations:
E-commerce requires advanced technology platforms for better performance. Some
limitations, such as lack of proper domain, network and software issues and so on can affect
the seamless performance of an ecommerce site.

Huge Technological Cost:

Last but not the least; a lot of money needs to be invested to be built up the technical
infrastructure needed to run an ecommerce business. Moreover, they need to be upgraded
based to keep abreast with the changing technology.

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MODES OF E-PAYMENT
When you purchase goods and services online, you pay for them using an electronic
medium. This mode of payment, without using cash or cheque, is called an e-commerce
payment system and is also known as online or electronic payment systems.
The growing use of internet-based banking and shopping has seen the growth of various e-
commerce payment systems and technology has been developed to increase, improve and
provide secure e-payment transactions. Paperless e-commerce payments have revolutionised
the payment processing by reducing paper work, transaction costs, and personnel cost. The
systems are user-friendly and consume less time than manual processing and help businesses
extend their market reach.

Credit Card
The most popular form of payment for e-commerce transactions is through credit cards.
It is simple to use; the customer has to just enter their credit card number and date of expiry in
the appropriate area on the seller’s web page. To improve the security system, increased
security measures, such as the use of a card verification number (CVN), have been introduced
to on-line credit card payments

Debit Card
Debit cards are the second largest e-commerce payment medium in India. Customers
who want to spend online within their financial limits prefer to pay with their Debit cards. With
the debit card, the customer can only pay for purchased goods with the money that is already
there in his/her bank account as opposed to the credit card where the amounts that the buyer
spends are billed to him/her and payments are made at the end of the billing period.

Smart Card
It is a plastic card embedded with a microprocessor that has the customer’s personal
information stored in it and can be loaded with funds to make online transactions and instant
payment of bills. The money that is loaded in the smart card reduces as per the usage by the
customer and has to be reloaded from his/her bank account.

E-Wallet
E-Wallet is a prepaid account that allows the customer to store multiple credit cards,
debit card and bank account numbers in a secure environment. This eliminates the need to key
in account information every time while making payments. Once the customer has registered
and created E-Wallet profile, he/she can make payments faster.

Net banking
This is another popular way of making e-commerce payments. It is a simple way of
paying for online purchases directly from the customer’s bank. It uses a similar method to the
debit card of paying money that is already there in the customer’s bank. Net banking does not
require the user to have a card for payment purposes but the user needs to register with
his/her bank for the net banking facility. While completing the purchase the customer just
needs to put in their net banking id and pin.

Mobile Payment
One of the latest ways of that making online payments are through mobile phones.
Instead of using a credit card or cash, all that the customer has to do is send a payment request
to his/her service provider via text message the customer’s mobile account or credit card is

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charged for the purchase. To set up the mobile payment system, the customer just has to
download a software from his/her service provider’s website and then link the credit card or
mobile billing information to the software.

Amazon Pay
Another convenient, secure and quick way to pay for online purchases is through
Amazon Pay. Use your information which is already stored in your Amazon account credentials
to log in and pay at leading merchant websites and apps. Your payment information is safely
stored with Amazon and accessible on thousands of websites and apps where you love to shop.

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UNIT - IV
ELECTRONIC DATA INTERCHANGE
EDI Definition
EDI stands for Electronic Data Interchange. EDI is an exchange of data or business
documents between two or more businesses using a standardized electronic format, without
human intervention. It is mostly used by large businesses to carry out their business process
over a secured network with accuracy and in less time.
1) Purchase order (PO)
2) Sales order (SO)
3) Invoice
4) Advance Ship Notice (ASN)
5) Functional Acknowledgement

Each company has their own format of sending these documents. Suppose we have two
companies A and B. Company A sends its purchase order (PO) to company B. As the format of
the document is different for the Company B, it will manually read the data from PO sent by
Company A and create a Sales order (SO) from it in order to carry out further processes. EDI
provides the data exchange formats and reduces the manual intervention in the process.

Benefits of EDI
1) Expedite transmission
Information is transmitted from one organization to another organization efficiently and
swiftly.

2) Automated Data entry

Data is entered automatically by EDI software. For instance, when purchase order (PO)
from one company is received by another company. Sales order (SO) is automatically generated
at other company’s system with the help of EDI software.

3) Receipt verification
Receipt verification can easily be done with help of EDI software. No human
intervention is involved so there are minimal chances of error or delay.

4) Data Validation
Data validation is automatically done.

5) Availability of free software

Free software’s are available depending upon the EDI format chosen. For example- In
TRADACOMS EDI format, Price Information file and order files are available for free.

6) Low cost
Lower administrative, resource and maintenance cost.

7) Faster processing
With the help of EDI, business processes can be executed at a much faster rate as
compared to the traditional method sending information.

8) Building long-term relationships

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EDI helps in building long term relationships with trading partners and hence helps in
business growth.

9) Reduction in error
EDI has discarded manual data entry and paperwork. So there are minimal chances of
error.

DRAWBACKS OF EDI
Expensive
Setup and maintenance of some of the formats of EDI is expensive.

Initial setup is time consuming

Initial cost to setup EDI is time consuming.

EDI standard changes

The business process depends on EDI standard format. If any of the standard format
changes then the business process has to be changed accordingly.

System electronic protection

An EDI enabled system needs electronic protection from viruses, hacking, malware and
other frauds.

Staff training cost

Staff needs training in order to run EDI enabled software. Investment has to be done in
training.

Proper backup
Proper backup should be maintained as the whole data depends on EDI. In case of any
crash of EDI system, proper backup has to be maintained and extra cost is required for it.

Limit your trading partners

Some organization stops doing business which don’t use EDI. For instance, Wal-Mart
prefers to do business only with those organization which uses EDI

PARTIALLY INTEGRATED EDI SYSTEM

In a Partially Integrated EDI System, the process begins the same as in a non-EDI system.
A purchase requisition is completed by the requesting department and submitted to the
purchasing department. A purchasing agent reviews the purchase requisition. Again, if other
similar requests have been received, then the requisitions may be combined to take advantage
of quantity discounts. The purchasing agent then manually reviews the available vendors for
price and inventory availability. Once a vendor is selected, the partially integrated EDI system
differs from the non-EDI system.
The purchasing agent does not manually complete a purchase order, but logs onto a
computer system that displays a computerized purchase order form. The agent keys in the
appropriate data and submits it. Because the purchasing agent does not manually fill out a form
and then submit it to data processing, the chance for a clerical error in data entry is reduced.
Once the electronic purchase order is submitted, the data is transferred to a VAN and then
channelled from there to the appropriate vendor’s mailbox.

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The vendor retrieves its order form the VAN and a sales order is automatically
generated. Because another data entry setup is removed, the chance for a data entry error to
occur at this point is eliminated since no additional data entry is required to convert the
purchase order to a sales order. A credit checking procedure is most likely conducted by the EDI
system at this point. The electronic system notifies the warehouse personnel to ship the goods
from the warehouse.

FULLY INTEGRATED EDI SYSTEMS:

Fully Integrated Systems EDI systems encompass electronic data sharing throughout all
aspects of the purchasing and payments cycle. The processing of the actual payment and
remittance advice is called Financial EDI. Fully integrated EDI including financial EDI provides
firms with the greatest cost. The fully integrated EDI system allows the purchasers computer
system to electronically check inventory levels and production schedules to determine whether
the requested item in stock or when it scheduled to be produced.

IMPORTANCE OF EDI
EDI service arrangement provides the different features, which further becomes the
benefits of EDI.

1. Business Opportunities:
EDI service greatly increases the business opportunities, not only with the government,
but also with many private sector trading partners through wider diffusion of procurement
information.

2. Quality:
To improve the quality in the EDI service arrangement by keeping the better record
arrangement, removing the errors in the data and reducing the processing time are the major
factors. Also, less reliance on human interpretation of data and the minimized unproductive
time can improve the quality.

3. Reduced Inventory:
Reduces need for inventory frees capital. EDI makes its faster and more accurate filling
of orders, helps reduce inventory and assists you in “Just-In-Time” inventory arrangement.

4. Lower Mailing Cost:

EDI service arrangements lower the mailing costs. There is reduction in the mail room
sorting/distribution time, elimination of lost documents, reduction of postage and other
mailing costs.

5. Reduce Order Time:

EDI is much fast in processing the order and the EDI service arrangement make it faster
to make the term EDI more efficient. This is high customer satisfaction with faster response to
orders with less paper to handle. Using the EDI service arrangement can do also faster billing.
Also, orders are faster, so deliveries of goods are faster and enhance the performance of the
EDI service arrangement.

6. Better Information:

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To make the decision good, of accurate information is needed, which can be only be
provided by the EDI service arrangement. As the dramatic growth of electronic commerce on
the Internet, the concept of using the Internet for EDI has become the hottest idea of the
industry.

EDI VS EMAIL
Email:
1. E-mail is an acronym of electronic mail
2. E-mail system is basically used for sending message electronically to individuals or group
of individuals in an inter and intra office environment. It requires network to connect
them.
3. One of the advantages of E-mail is that it gives users ability to review, respond message
quickly.
4. No processing of the message received.

EDI
1. EDI is an acronym of Electronic Data interchange
2. EDI is the inter-organisational exchange of business documentation in structured,
machine process able form.
3. EDI provides communication between trading partners that agree to exchange EDI
transactions.
4. EDI eliminates the paper documents associated with common business transactions.
5. EDI message can be immediately processed by receiving computer without any human
intervention or interpretation or re-keying.

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UNIT - V
E- MARKETING TECHNIQUES

E-MARKETING
Internet has emerged as the biggest market place in the last few years. Prospective
buyers generally browse through the internet when in need of something or when they want to
know more details of something. The volume of internet transaction is increasing every day.
The shopping patterns of the people have changed due to internet invasions. Internet is a new
dynamic vehicle to influence buyers. It enables extensive coverage, as it has the potential to
reach global market at a rapid rate. The tremendous success of Microsoft, google, yahoo and
amazon provided confidence to business organisations and marketers to adopt e-marketing
along with their conventional methods to attract and retain customers.

Advantage of E-Marketing
➢ Internet provides 24 hours and 7 days “24/7” service to its users. So, you can build and
make customers relationships worldwide, and your customer can shop or order product
at any time.
➢ The cost of spreading your message on internet is zero. Many social media sites like
Facebook, LinkedIn and Google plus allow you freely advertise and promote your
business.
➢ You can easy and instantly update your registered customers or subscribers through
email.
➢ Visitors or potential customers of your website can get up to the minute information on
each visit.
➢ If you are having a sale, your customers can start shopping at the discounted prices
literally as soon as they open their email.
➢ If a company has an information sensitive business, like a law firm, newspaper or online
magazine, that company can also deliver its products directly to customers without
having to use a courier

Disadvantages of E-Marketing
➢ If you want a strong online advertising campaign you have to spend money. The cost of
web site design, software, hardware, maintenance of your business site, online
distribution costs and invested time, all must be factored into the cost of providing your
service or product online.
➢ Almost over 60% of households now a day shop online. While that numbers are
continuously growing, your company needs to reach maximum people.
➢ Some people prefer the live interaction when they buy any product. And if your
company has a small business with one location, this may also deter customers from
buying who lives on long distances.
➢ Your company should have updated information on your site. This requires research and
skills and thus timing of updates is also critical.
➢ Is your company web site secure? There are many incorrect stereotypes about the
security of the internet. As a result, many visitors of your business web site will not want
to use their credit card to make a purchase. So there is a fear in the minds of your
visitors of having their credit card stolen.

Product

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Product refers to the products and services offered by a business. Product decisions
include function, packaging, appearance, warranty, quality, etc. Customers need to understand
the features, advantages, and benefits that can be enjoyed by buying the goods or services.
When thinking about a product, consider the key features, benefits, and the needs and wants
of customers.

Price
Price refers to the pricing strategy for products and services and how it will affect
customers. Pricing decisions do not include just the selling price, but also discounts, payment
arrangements, credit terms, or any other price-matching services offered. When determining a
pricing strategy, it is important to consider the business’s position in the current marketplace.
For example, if the business is advertised as a high-quality provider of mechanical equipment,
the product pricing should reflect that.

Promotion
Promotion refers to the activities that make the business more known to consumers. It
includes items such as sponsorships, advertising, and public relations activities. Since promotion
costs can be substantial, it is essential to conduct a break-even analysis when making
promotion decisions. It is important to understand the value of a customer and whether it is
worth conducting promotions to acquire them.

Place
Place refers to where the product/service of the business is seen, made, sold, or
distributed. In essence, place decisions are associated with distribution channels and ways of
getting the product to target key customers.It is important to consider how accessible the
product or service is and ensure that customers can easily find you. The product or service must
be available to customers at the right time, at the right place, and in the right quantity.
For example, a business may want to provide their products over an e-commerce site, at a retail
store, or through a third-party distributor.

People
People refer to the staff, sales people, and those who work for the business. The
decision of the people are usually cantered around customer service – how do you want your
employees to be perceived by customers.

E-ADVERTISING
American marketing association defines advertising as “any paid form of non-personal
presentation and promotion of ideas, goods or services by an identified sponsor”. Advertising
on the internet is called online advertising or e-advertising. Customer buying goods through
online have rapidly increased due to the penetration of internet. Due to convenience and cost
savings, consumer prefer to buy goods through internet. So, at this stage, it is essential for
companies to attract and retain customers through internet or web.

ADVERTISING TECHNIQUES
Advertising Banners
Advertising banners are the most common form of Internet advertising. They rent
advertising space in websites and are usually visible on the upper or lower section of a page.
Most banners are click-through, linking to the web page of the advertiser. While planning,
attention must be paid to file size, as it affects the time necessary for an advertisement to load

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on the user's computer. The size of image files should be between 7KB and 10KB. The smaller
the size of a file, the faster it loads. Advertising banner designers pay a lot of attention to image
sizes, as slow loading can make viewers impatient and change their web location before the
banner has fully loaded.

Sponsorships
Sponsorship Companies that support a website financially or cooperate with the
company that has it can be advertised directly or indirectly. Sponsorships can form an effective
means of communication with the target group. The advertised message is channelled along
with the main content of the website and gives the impression that the website approves of the
advertised products. Such promotion, for example, can be achieved by preferential treatment
of the sponsor in the market directories of large search engines. Similar practice is followed also
in other media, where certain products are indirectly shown, as in the shopping columns of
magazines.

Splash screens
A splash screen is a starting web page used to attract attention for a short time, before
directing to the website's home page, or used to inform users of the type of advertising or
other software that is required in order to view the page. The great advantage of splash screens
compared with other advertising methods is that one can create modernistic multimedia
effects or provide plenty of information on a single visit.

Renting space
Search engines often provide advertising space in their home page. The duration of
advertising space use depends on the agreement made between the host of a website and the
renter. As opposed to advertising banners that appear at various times, advertising space for
rent will always be available. In this way, the competition is reduced. The disadvantage of
renting space is that the size of the advertisement is often small and limited, resulting in many
viewers losing their willingness, plus the fact that costs can be very high.

Coupons
A growing trend among retailers is to offer printable coupons on websites. You can put
these on your website, or place them on other sites where you think your customers might
visit. Some marketers of online coupons offer consumers many different coupons at one site.
You can sign up to have your coupons included for a fee or at no cost. With the no-cost method,
the person advertising your coupon sells the coupon to the consumer, keeping the money from
the sale of your coupons. This gets customers into your place of business at no cost, other than
the coupon value.

AdWords
Google offers advertisers a lead-generation system through its AdWords program. You
choose key words people use during Internet searches and pay for your ad to appear on pages
associated with those words. For example, if you sell bread, your Google ad will appear on
pages with relevant content, such as those with the words, "sandwich," "bread" or "whole
wheat."

Websites
A website is an online advertisement that allows you to deliver a complete message or
messages to current and potential customers. Even if you provide a variety of information on

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your site, you are still presenting an image and providing information to the public. Videos you
can embed video into the pages of websites to demonstrate a product or service using pictures
and sound. In addition to placing video on your website, you can create short 10- or 15-second
ads that appear at the beginning of other websites' videos.

Social Media
Getting consumers to spread the word about your product or service helps to give your
business credibility. Consumers are more likely to trust a product their friends have used than
one they've only seen advertised. Many businesses use Facebook, Myspace, Twitter and other
social media sites to advertise their companies.

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