1. Describe major landmarks in Electronic Commerce history. (1.1 and 1.

2)

a. The Interdisciplinary Nature of EC

From just the brief overview of the EC framework and classification, you can probably see
that EC is related to several different disciplines. The major academic EC disciplines include the
following: accounting, business law, computer science, consumer behavior, economics, engineering,
finance, human resource management, management, management information systems, marketing,
public administration , and robotics

b. The Google Revolution

During its early years, EC was impacted by companies such as Amazon.com, eBay, AOL, and
Yahoo!. However, since 2001 no other company has probably had more of an impact on EC than
Google. Google related Web searches to targeted Figure 1.3 Categories of transactions in e-
commerce 1 Overview of Electronic Commerce 13 advertisements much better than its competitors
did. Today, Google is much more than just a search engine; it employs many innovative EC models, is
involved in many EC joint ventures, and impacts both organizational activities and individual lives.

c. Cyber Monday, Single Day

An interesting evidence for the growth of online shopping is the volume of shopping during
Cyber Monday in the U.S. and Single Day (11/11) in China

d. Social Commerce (F-Commerce)

Social Commerce: The explosion of social media and networks, as well as Web 2.0 tools (e.g.,
wikis, blogs) resulted in new ways of conducting e-commerce by making it social.

F-Commerce: Given the popularity of Facebook and the rapidly increasing commercial
activities conducted on or facilitated by the site, some believe that Facebook is revolutionizing e-
commerce especially for small businesses. Thus, they coined the term f-commerce , pointing to the
increased role of Facebook in the e-commerce fi eld as of 2009

e. EC Failures

Starting in 1999, a large number of EC companies, especially e-tailing and B2B exchanges,
began to fail. Well-known B2C failures include Drkoop, MarchFirst, eToys, and Boo. Wellknown B2B
failures include Webvan, Chemdex, Ventro, and Verticalnet. (Incidentally, the history of these
pioneering companies is documented by David Kirch in his Business Plan Archive. A survey by
Strategic Direction ( 2005 ) found that 62% of dot-coms lacked financial skills, and 50% had little
experience with marketing. Similarly, many companies failed to have satisfactory order fulfillment
and enough inventory to meet the fluctuating and increasing demand for their products.

As of 2008, many startups related to Web 2.0 and social commerce started to collapse. Does
the large number of failures mean that EC’s days are numbered? Absolutely not! First, the dot-com
failure rate is declining sharply. Second, the EC fi eld is basically experiencing consolidation as
companies test different business models and organizational structures. Third, some pure EC
companies, including giants such as Amazon.com and Netflix, are expanding operations and
generating increased sales. Finally, the click-and-mortar model seems to work very well, especially in
e-tailing (e.g., GAP, Walmart, Target, Apple, HP, and Best Buy).
 f. EC Successes

The last few years have seen the rise of extremely successful EC companies such as eBay,
Pandora, Zillow, Google+, Facebook, Yahoo!, Amazon. com, Pay Pal, Pinterest, VeriSign, LinkedIn,
and E*TRADE. Click-and-mortar companies such as Cisco, Target, General Electric, IBM, Intel, and
Schwab also have seen great success. Additional success stories include start-ups such as Alloy. com
(a young-adult-oriented portal), Blue Nile (Chapter 2), Ticketmaster, Net-a-Porter (Case 1.1),
Expedia, Yelp, TripAdvisor, and Campusfood

2. Social computing and list its characteristics. (1.2 and 1.3)

Social computing refers to a computing system that involves social interactions and
behaviors. It is performed with a set of tools that includes blogs, wikis, social network services, and
other social software tools, and social marketplaces. Whereas traditional computing systems
concentrate on business processes particularly cost reduction and increases in productivity, social
computing concentrates on improving collaboration and interaction among people and on user-
generated content.

Example: Advances in social computing impact travel operations and decisions. Travelers can
share good travel experiences or warn others of bad experiences using sites such as tripadvisor.com

Web 2.0

The term Web 2.0 was coined by O’Reilly Media in 2004. Web 2.0 is the second generation
of Internet-based tools and services that enables users to easily generate content, share media, and
communicate and collaborate, in innovative ways. Web 2.0 as a new digital ecosystem, which can be
described through five C’s: creativity, connectivity, collaboration, convergence, and community.

Characteristics:

1. User participation

2. Openness

3. Network Effects

4. Describe Web 2.0 and Web 3.0 (1.4, 1.5 1.6)

Web 2.0

The term Web 2.0 was coined by O’Reilly Media in 2004. Web 2.0 is the second generation
of Internet-based tools and services that enables users to easily generate content, share media, and
communicate and collaborate, in innovative ways. Web 2.0 as a new digital ecosystem, which can be
described through five C’s: creativity, connectivity, collaboration, convergence, and community.

Characteristics:
 1. User participation

2. Openness

3. Network Effects

Talk about social media and social network and the use of them

Web 3.0

Web 3.0 is projected to deliver a new generation of business applications that will see
business and social computing converge. Web 3.0 could change the manner in which people live and
work as well as the organizations where they work, and it may even revolutionize social networking

Web 3.0 will have the following capabilities:

• Make current applications smarter by introducing new intelligent features

• Provide easier and faster interaction, collaboration and user engagement

• Facilitate intelligent-based powerful search engines

• Provide more user-friendly application creation and human-computer interaction

capabilities

• Increase the wisdom and creativity of people

• Enable smarter machine (Gartner 2014 )

• Enable much wider bandwidth

• Enable better visualization including 3-D tools

• Simplify the use of mobile computing and mobile commerce

4. Define the five capabilities of EC. (1.7)

1. Real-time, customer specific pricing

Individual pricing lists need to be available to your customers across all buying channels, in real
time. This means having a system that supports continual price changes at an individual SKU level
that could be different for each customer accessing the system.

2. Quick order & reorder/auto-replenishment

Due to the high frequency of component ordering, your customers frequently know exactly what
they want and increasingly depend on eCommerce to quickly locate and purchase the products they
need. These customers need to be able to easily enter in a long list of items they want to purchase,
but also to be able to bulk order items they have recently ordered.

3. Bundle and tiered pricing

Many products offered by electrical wholesalers are very low cost and often it isn’t worth listing or
selling products unless they are grouped into larger bundles or tiers of packs. The B2B commerce
platform therefore needs to allow the business to group and price products in a way where they can
be easily marketed, merchandised and purchased.

4. Future stock availability

Visibility of overall stock and Available To Promise rules are critical in managing the supply chain.
Without this, customers may decide to abandon their shopping journeys or not come back to shop
at all, even though the
wholesaler is about to receive stock imminently.

5. Customer self-service and administration

Corporate buyers will often have customer hierarchies for approval workflows and processes. Ensure
your system has the capabilities to empower customers to build and configure their own users, cost
center hierarchy and workflow. This means they can administer the buying limits and approvals
themselves, reducing administration and overall costs for you.

5. What is a business model? Describe its functions and properties. (1.7)

A business model describes the manner in which business is done to generate revenue and
create value. This is accomplished by attaining organizational objectives. A key area is attracting
enough customers to buy the organization’s products or services. Note: The January–February 2011
issue of Harvard Business Review is dedicated to business model innovations (5 articles), including
several topics related to e-commerce. Several different EC business models are possible, depending
on the company, the industry, and so on. Business models can be found in existing businesses as well
as in proposed ones.

Functions and properties:

• A description of the customers to be served and their value proposition . Also, how
these customers can be reached and supported.

• A description of all products and services the business plans to deliver. Also, what
the differentiating aspects of the products are.

• The company’s growth strategies.

• A description of the required business process and the distribution infrastructure

(including human resources).

• A list of the resources required, their cost and availability (including human
resources).
 • A description of the organization’s supply chains , including suppliers and other
business partners .

• The value chain structure.

• The relevant markets with a list of the major competitors and their market share.
Also, market strategies and strengths/weaknesses of the company.

• The competitive advantage offered by the business model including pricing and
selling strategies.

• The anticipated organizational changes and any resistance to change.

• A description of the revenues expected ( revenue model ), sources of funding, and

the financial viability .

6. Describe a revenue model and a value proposition. How are they related? (1.7)

Models also include a value proposition, which is a description of the benefits of using the
specific model (tangible and intangible), both to the customers and to the organization.

Your Value Proposition is the reason why customers turn to your company over another. It
solves your customer's problem or satisfies your customer's need. Each Value Proposition consists of
a selected bundle of products and/or services that caters to the requirements of a specific Customer
Segment. And your Revenue Model is how you generate money from your core business.

A company uses its revenue model to describe how it will generate revenue and its business
model to describe the process it will use to do so.

7. Describe the following business models: direct marketing, tendering system, electronic
exchanges, viral marketing, and social networking/commerce.

Online direct marketing.

The most obvious EC model is that of selling products or services online. Sales may be from a
manufacturer to a customer, eliminating intermediaries or physical stores (e.g., Dell), or from
retailers to consumers, making distribution more efficient (e.g., Net-a-Porter, Walmart online). This
model is especially efficient for digitizable products and services (those that can be delivered
electronically). This model has several variations and uses different mechanisms (e.g., auctions). It is
practiced in B2C (where it is called e-tailing ) and in some B2B types of EC. 2. Electronic tendering
systems.

Large organizational buyers usually make large-volume or large-value purchases through a

tendering (bidding) system, also known as a reverse auction . Such tendering can be done online,
saving time and money. Pioneered by General Electric Corp., e-tendering systems are gaining
popularity. Indeed, many government agencies mandate that most of their procurement must be
done through e-tendering.

Electronic marketplaces and exchanges.

 Electronic marketplaces existed in isolated applications for decades (e.g., stock and
commodities exchanges). But as of 1996, hundreds of e-marketplaces (old and new) have introduced
new methods and efficiencies to the trading process. If they are well organized and managed, e-
marketplaces can provide significant benefits to both buyers and sellers. Of special interest are
vertical marketplaces that concentrate on one industry.

Viral marketing.

According to the viral marketing model (people use e-mail and social networks to spread
word-of mouth advertising. It is basically Web-based word-of- mouth advertising, and is popular in
social networks.

Group purchasing.

Group purchasing is a well-known offline method, both in B2C and B2B. It is based on the
concept of quantity discounts (“cheaper by the dozen”). The Internet model allows individuals to get
together, so they can gain the large-quantity advantage. This model was not popular in B2C until
2010 when Groupon introduced a modified model in which people are grouped around special deals.

8. Major technological and non technological barriers and limitations to EC. (1.8)

Barriers to EC are either non-technological or technological. Representative major barriers

are listed in Table 1.7 . Van Toorn et al. ( 2006 ) classified the barriers into sectorial barriers (e.g.,
government, private sector, international organizations), internal barriers (e.g., security, lack of
technical knowledge, and lack of time and resources), external barriers (e.g., lack of government
support), cultural differences, organizational differences, incompatible B2B interfaces, international
trade barriers, and lack of standards. These limitations are diminishing with time but still need to be
addressed when implementing EC. One important area that may limit some EC project is ethics.

Ethical issues can create pressures or constraints on EC business operations. Yet some
ethical sites increase trust and help EC vendors. Ethics relates to standards of right and wrong. Ethics
is a difficult concept, because what is considered ethical by one 1 Overview of Electronic Commerce
35 person may seem unethical to another. Likewise, what is considered ethical in one country may
be unethical in another. For further discussions of EC ethical issues see Gaskin and Evans ( 2010 ).
Implementing EC use may raise ethical issues ranging from monitoring employee e-mail to invasion
of privacy of millions of customers whose data are stored in private and public databases. In
implementing EC, it is necessary to pay attention to these issues and recognize that some of them
may limit, or even prohibit, the use of EC. An example of this can be seen in the attempted
implementation of RFID tags (Online Tutorial T2) in retail stores due to the potential invasion of
buyers’ privacy. 1.1.1.2 Overcoming the Barriers Despite these barriers, EC is expanding rapidly. As
experience accumulates and technology improves, the cost-benefi t ratio of EC will increase,
resulting in even greater rates of EC adoption.

9. Summarize the major points involved with the future of e-commerce. (1.8)
 Several economic, technological, and societal trends impact EC and shape its direction. For
example, most experts agree that the shift from EC to mobile commerce is inevitable. Also, many
believe in the future of social commerce, as a major component of e-commerce. There will be a
surge in the use of e-commerce in developing countries (mostly thanks to smartphones and tablets
as well as e-payment systems). E-commerce will win its battle against conventional retailing. Finally,
e-commerce will increase its global reach. EC will impact some industries more than others. This
impact is changing with time. For example, major impacts in the past 5 years were felt in travel,
retail, stock brokering, and banking. Next, according to Hiner ( 2011 ) are: movies: healthcare, book
publishing, and electronic payments.

The number of Internet users worldwide was estimated to be around 2.6 billion in winter
2014, up from 2.4 billion in 2012. With more people on the Internet EC will increase. EMarketer
forecasted that almost 73% of all Internet users in the US would shop online in 2011. The estimate
for February 2014 is over 85. EC growth would come not only from B2C, but also from B2B and from
newer applications such as e-government, e-learning, B2E, social commerce, and c- commerce. The
total volume of EC has been growing every year by 10–16% in spite of the failures of individual
companies and initiatives and the economic slowdown.

The rising price of petroleum, along with repercussions of the 2008–2012 fi nancial
meltdown, has motivated people to shop online and look for bargains where price comparison is
easy and fast.

Another important factor is the increase in mobile devices and especially smartphones.

10. List the major EC mechanisms. (2.1)

Electronic markets, e-stores and e-catalogs, storefronts, malls and portals.

11. Define e-marketplace and describe its attributes. (2.2)

Electronic markets play a central role in the digital economy, facilitating the exchange of
information, goods, services, and payments. In executing the trading process, e-
marketplaces create economic value for buyers, sellers, market intermediaries, as well as for
society at large. Markets (electronic or otherwise) have four major functions:

1. enabling transactions to occur by providing a meeting place for buyers and sellers;

2. enabling the flow of relevant information

3. providing services associated with market transactions, such as payments and escrow

4. providing auxiliary services such as legal, auditing, and security.

The electronic market is the major venue for conducting EC transactions. An e-marketplace
(also called e-market, virtual market, or marketspace), is an electronic space where sellers
and buyers meet and conduct different types of transactions. Customers receive goods and
services for money (or for other goods and services, if bartering is used). The functions of an
e-market are the same as those of a physical marketplace; however, computerized systems
tend to make electronic markets much more efficient by providing more updated
information and various support services, such as rapid and smooth executions of
transactions.

12. Describe e-distributors. (2.3)

A special type of intermediary in e-commerce is the B2B e-distributor. These intermediaries

connect manufacturers with business buyers (customers), such as retailers (or resellers in
the computer industry). E-distributors aggregate product information from many
manufacturers, sometimes thousands of them, in the e- distributor’s catalog.

13. List and briefly describe the dimensions by which electronic catalogs can be classified.
(2.4)

Electronic catalogs (e-catalogs) consist of a product database, directory, and a presentation

function. They are the backbone of most e-commerce sales sites. For merchants, the
objective of e-catalogs is to advertise and promote products and services. For the customer,
the purpose of such catalogs is to locate information on products and services. E-catalogs
can be searched quickly with the help of search engines. Consumers may search inside one
company’s catalog to find a product or service, or use Google or Bing to find companies that
sell the product they need.

14. What is self-customization? (2.4)

A key characteristic of EC is the ability to self- customize products and services, as done by
dell.com, nike.com, or jaguarusa.com. Manufacturers like to produce customized products in
economical and rapid ways so that the price of their products will be competitive.

15. List and describe the four major types of auctions. (2.5)

An online auction is an electronic space where sellers and buyers meet and conduct different
types of transactions. This market mechanism uses a competitive process where a seller
solicits consecutive bids from buyers (forward e- auctions) or a buyer solicits bids from
sellers (reverse e-auctions). One major characteristic of auctions is that they are based on
dynamic pricing. Dynamic pricing refers to prices that are not fixed, but are allowed to
fluctuate, and are determined by supply and demand. In contrast, catalog prices are fixed, as
are prices in department stores, supermarkets, and most web stores.

- One Buyer

One Seller in this configuration, one can use negotiation, bargaining, or bartering. The
resulting price will be determined by each party’s bargaining power, supply and demand in
the item’s market, and (possibly) business environment factors.

- One Seller, Many Potential Buyers

In this configuration, the seller uses a forward auction, which is an auction where a seller
entertains bids from multiple buyers.

- One Buyer, Many Potential Sellers

 Two popular types of auctions in which there is one buyer and many potential sellers are
reverse auctions (tendering) and name-your-own-price auctions.

- Reverse Auctions

When there is one buyer and many potential sellers, a reverse auction (bidding or tendering
system) is in place. In a reverse auction, the buyer places an item he or she wants to buy for
a bid (or tender) on a request for quote (RFQ) system.

16. Define social network analysis. (2.6)

Social network services (or sites) are companies that host social communities. They are also
known as social networks. Social networks appear in a variety of forms; the most well-
known, mostly social-oriented network is Facebook or LinkedIn which is a business oriented
network.

17. Describe virtual shopping. (2.7)

'Virtual shopping' is a phrase used to describe the growth of VR (Virtual Reality) and AR

(Augmented Reality) assisted ecommerce experiences. Rather than browsing through a
static product catalog, virtual retailing reimagines the online shopping experience using 3D
renderings of the real-life in-store environment.

18. Define augmented reality

An enhanced version of reality created by the use of technology to overlay digital information on an
image of something being viewed through a device (such as a smartphone camera) An increasing
number of business applications use the technology of augmented reality (AR). See Marcom on a
Dime (2010) for more details. The term AR has several definitions depending on its field of
applications. According to Wikipedia, augmented reality is “a live, copy, view of a physical, real-world
environment whose elements are augmented (or supplemented) by computer-generated sensory
input such as sound, video, graphics or GPS data”. Such an arrangement helps people enhance the
sensory perception of reality. The computerized layer can be seen through an application on mobile
devices such as smartphones, webcams, or 3D glasses (including 3D TV). Google developed
Augmented Reality (AR) glasses called ‘Google Glass’. Bonsor also explains the relationship of AR to
virtual reality. Augmented reality (AR) is an enhanced version of the real physical world that is
achieved through the use of digital visual elements, sound, or other sensory stimuli delivered via
technology. It is a growing trend among companies involved in mobile computing and business
applications in particular.

 Amid the rise of data collection and analysis, one of augmented reality’s primary goals is to
highlight specific features of the physical world, increase understanding of those features,
and derive smart and accessible insight that can be applied to real-world applications. Such
big data can help inform companies' decision-making and gain insight into consumer
spending habits, among others. Augmented reality (AR) involves overlaying visual, auditory,
or other sensory information onto the world in order to enhance one's experience.
  Retailers and other companies can use augmented reality to promote products or services,
launch novel marketing campaigns, and collect unique user data.

 Unlike virtual reality, which creates its own cyber environment, augmented reality adds to
the existing world as it is.

 Augmented reality continues to develop and become more pervasive among a wide range of
applications. Since its conception, marketers and technology firms have had to battle the
perception that augmented reality is little more than a marketing tool. However, there is
evidence that consumers are beginning to derive tangible benefits from this functionality
and expect it as part of their purchasing process.

 For example, some early adopters in the retail sector have developed technologies that are
designed to enhance the consumer shopping experience. By incorporating augmented
reality into catalogue apps, stores let consumers visualize how different products would look
like in different environments. For furniture, shoppers point the camera at the appropriate
room and the product appears in the foreground.

Elsewhere, augmented reality’s benefits could extend to the healthcare sector, where it could play a
much bigger role. One way would be through apps that enable users to see highly detailed, 3D
images of different body systems when they hover their mobile device over a target image. For
example, augmented reality could be a powerful learning tool for medical professionals throughout
their training. Augmented Reality vs. Virtual Reality

Augmented reality uses the existing real-world environment and puts virtual information on top of it
to enhance the experience.

In contrast, virtual reality immerses users, allowing them to "inhabit" an entirely different

environment altogether, notably a virtual one created and rendered by computers. Users may be
immersed in an animated scene or an actual location that has been photographed and embedded in
a virtual reality app. Through a virtual reality viewer, users can look up, down, or any which way, as if
they were actually there.

19. Define crowdsourcing and list its elements.

Another platform for e-commerce is crowdsourcing. Crowdsourcing is a platform for collective

intelligence in e-commerce and social commerce (see the industry website crowdsourcing.org ).
Here we present the essentials of the technology. In Chapter 8 we present the applications that are
based on this technology. Definitions and major Concepts the term crowd refers to any group of
people such as a group of consumers, employees of a corporation, or members of a social network
who offer expertise. A crowd is frequently referred to a large group.

Crowdsourcing is the practice of engaging a ‘crowd’ or group for a common goal — often innovation,
problem solving, or efficiency.

It is powered by new technologies, social media and web 2.0.  Crowdsourcing can take place on
many different levels and across various industries. Thanks to our growing connectivity, it is now
easier than ever for individuals to collectively contribute — whether with ideas, time, expertise, or
funds — to a project or cause. This collective mobilization is crowdsourcing.
It is a process of tapping into individuals or groups of people, paid or unpaid who are linked together
with a common interest to bring forward powerful increased results through their aggregated
actions or activities.

The Internet and social media have brought organizations closer to their stakeholders, laying the
groundwork for new ways of collaborating and creating value together like never before.

This phenomenon can provide organisations with access to: New ideas and solutions, deeper
consumer engagement, opportunities for co creation, optimization of tasks, reduced costs.

20. Define Semantic Web. Discuss Web 4.0 and 5.0

The Internet age has known many definitions. At the beginning there was what we call now web 1.0,
back then simply named as web. Were developed the first websites, portals and online services and
users could only read the information, without the chance of a direct interaction. It was the web of
one-way communication.

Then arrives the web 2.0, with the emergence and proliferation of social networks and all the
applications as blogs, forums and podcasts, that made possible new forms of participative
communication. Indeed, because of the development of these new instruments, users started to
communicate among them and share contents through the web, helping to generate the content
itself. From a passive actor the user becomes the lead in the creation and management of online
contents, by building new processes and dynamics in what we can also call collaborative web.

Here we come to the third stage, web 3.0. They called like that for the first time in 2006, and it is
characterized more by a series of factors than by a particular technology.

Semantic web: a virtual environment in which information and data are connected and organized so
that they can be processed automatically. In short, a web in which the machines read contents and
also interpret them. This has appeared alongside web 3.0 as an era in which Internet deeply came
into our lives, by becoming an integral part of our daily life where we are all always connected,
anytime and anywhere.

Recently they have been talking about web 4.0, with the related future predictions. Surely in the
next stage of web technologies of augmented reality and Big data will have a main role. It is
suspected that it will be an age in which each person will have a digital alter ego and will talk more
and more with new interfaces, like intelligent machines. There’s also a pretty dystopian vision of the
web in the future, with a greater control of the information that will affect not only the digital world
but also the reality around us.

Web 5.0 a sensory emotive space where we are able to move the web from an emotionally flat
environment to a space of rich interactions. 

21. . Describe the nature of B2C EC. 22. List the major characteristics of B2C.

B2C, or business-to-consumer, is used to describe a commerce transaction between a business and

an end consumer. Traditionally, the term referred to the process of selling products directly to
consumers, including shopping in-store or eating in a restaurant. Today it describes transactions
between online retailers and their customers.

What is the Difference Between B2C and B2B?

B2B eCommerce is an online business model that facilitates online sales transactions between two
businesses, whereas B2C eCommerce refers to the process of selling to individual customers directly.

For example, an online retailer that sells office furniture is a B2B business because its primary target
market is other businesses. B2B eCommerce also facilitates transactions between wholesalers and
retailers or manufacturers and wholesalers and is typically a more complex process.

An example of a B2C transaction would be someone buying a pair of shoes online or booking a pet
hotel for a dog. It is likely the model that most people are familiar with.

Some companies operate as both B2B and B2C businesses. For instance, an events management
company may offer wedding organization services, but may also provide conference management
services to other businesses.  

Benefits of B2C eCommerce

 Global Reach

The number one benefit of B2C eCommerce is the global reach it has. Even small businesses
operating out of homes can sell to customers on the other side of the world. This availability to sell
to anyone anywhere makes sure success is inevitable.

 No Physical Overheads

B2C has primarily been dominated by in-store purchases where consumers need to visit a physical
store in order to buy something from a brand. By introducing an eCommerce element to business,
management can lower overhead costs. Shutting down brick and mortar stores which do not make a
profit and spending a fraction of the cost on marketing, companies can send consumers to the online
store to make purchases.

 More Data to Profile Customers

When you move your business online you open the door to more information about your customers
and more ways to target them directly. Using analytics tools like Google Analytics you can discover
demographical information about your consumers as well as psychographic information like
consumer interests and values. This information can help you create a persona of your consumers
that will inform how you talk to them through your website and any marketing material.

 Trackable Marketing

Traditional marketing methods have always been hard to track but, through eCommerce, online
marketing can be easy to implement and track conversions. Attribution models seek to show the
importance of different marketing channels in achieving business success online. Reports through
Google Analytics can show how a customer-first came to your website, how many visits it took for
them to convert, and the page that a customer converted on. With this information, you can build a
stronger website that converts better than your competition.
B2C Dropshipping

Dropshipping is a lucrative B2C business model that has been proven successful with a lot of Oberlo
Merchants. Running an online store through dropshipping means holding no inventory, and only
placing product orders as they come in from your customers. There is no need to worry about
packaging, shipping, and storage costs as these fall on your supplier who ships products straight to
your customers.

B2C dropshipping is a great business solution as it allows small business to make bigger profits and
scale according. With potential customers located across the global B2C dropshipping enables
businesses to save money on packaging and delivery while still building a strong brand that
customers can rely on.

Discover thousands of products you can start selling online.

What is B2C Marketing?

B2C marketing refers to all the marketing techniques and tactics used to promote products or
services to end consumers. Unlike B2B marketing, which often relies on building long-term personal
relationships and focusing on customer education, B2C marketing aims to invoke an emotional
response and capitalize on the value of the brand.

B2C marketers know that their customers are prone to making impulse purchases and typically make
buying decisions independently. They can be swayed by various factors, including a trendy brand,
quality customer service, convenience (free and fast shipping), and social proof.

However, not all buyers respond to the same marketing methods, hence why good B2C marketing is
based on market segmentation and targeted messaging. In order to craft effective promotional
campaigns, marketers need to consider the best practices for each channel and target audience and
tailor their efforts to achieve the highest possible return on investment.

The Best B2C Marketing Strategies

Effective B2C campaigns begin with extensive market research. To craft effective messages and
select the right campaign elements, B2C businesses need to know who their customers are, what
preferences and pain points they have, what they want, and where to find them. Marketing
personas that represent specific market segments are often used to assist marketers with the
development of targeted promotional campaigns.

Due to the rapid growth of eCommerce industry and the increasing influence of social media
channels, B2C marketing strategies are constantly evolving. Yet, some of the most powerful
strategies include:

 Social media marketing and advertising

 Paid search advertising

 B2C content marketing

 Email marketing

 Creative contests
  Loyalty and reward programs

 Affiliate marketing

 SEO optimization

 Giveaways and free add-ons

 Influencer marketing

 Mobile-first marketing

23. List the B2C distribution channel models

Typically, B2C models fall into the following five categories: direct sellers, online intermediaries,
advertising-based B2C, community-based, and fee-based. The most frequently occurring is the
direct seller model, where goods are purchased directly from online retailers.

24. Describe the direct marketing model used by manufacturers

Direct marketing is a type of marketing campaign whose goal is to initiate a personal relationship
between the customer and the marketing organization. In a direct marketing campaign, the
marketing organization communicates directly with a pre-selected customer or segment of
customers via one or more marketing channels. A key feature of direct marketing is a direct
response – organizations that engage in direct marketing must establish the means for customers to
respond directly to their marketing efforts, especially with orders and purchase requests.

Direct marketing stands in contrast to traditional advertising mediums that communicate messages
on a many-to-one basis. In traditional ad platforms (billboards, print media, broadcast ads, etc.), the
marketing organization relies on intermediaries to spread its promotional message to large swaths of
consumers, in hopes that some consumers who see the ad will seek out the organization and its
products. Direct marketing typically happens directly between the marketing organization and the
customer, with no mass messaging and without the use of intermediaries.

There are two components to direct marketing: direct promotion and direct distribution. To
successfully implement a direct marketing campaign, an organization must have the infrastructure,
data, and processes in place to effectively reach its target customers with personalized messaging
and to deliver goods and services to purchasers with a high level of customer service.

Channel selection and development is the first task associated with direct marketing. Marketing
organizations must identify marketing channels where they can reach prospective customers directly
with information and offers about goods and services. The most popular channels include:

Catalogue Distribution

Catalogue distribution was one of the earliest techniques associated with direct selling. To serve
customers who lived a long way from a physical store, manufacturers and retailers would distribute
catalogues through the mail and empower customers to send in mail-orders for items they wished to
purchase. This meant that rural customers would not have to travel long distances to purchase the
product from an intermediary.

Telemarketing

Telemarketing describes a form of direct marketing where the marketing organization contacts
prospective buyers by phone. Some countries have a do-not-call list that allows individuals to opt-
out of unsolicited sales calls, but marketing organizations can still market by phone to customers
who have opted-in, or with whom they have an existing relationship.

SMS and Mobile Marketing

Consumers can opt-in to receive direct SMS marketing messages from their preferred brands.
Mobile marketing also exists in the form of mobile banner ads, push notifications, QR codes, and
other direct channels between the business and the customer.

Digital Marketing Channels

The increasing shift towards digital marketing as a low-cost, high-impact alternative to traditional
marketing media has created new and promising direct marketing channels. Organizations that sell
informational or software products can effectively distribute their products via the internet, making
web-based promotion an effective tool for connecting prospects with a product or service. The most
popular digital channels include:

 Email Marketing – Emails are inexpensive to create, design and test, and they allow
organizations to communicate directly with existing customers and with prospective
customers who may have submitted their contact information or registered for a newsletter
or mailing list.

 Pay-per-click (PPC) Advertisement – PPC advertisement on platforms like Google and

Facebook allow businesses to reach specific market segments with targeted messaging that
connects prospects back to the business website where sales and other types of marketing
conversions are possible.

 Social Media – Social media websites are effective platforms for direct advertising, as they
facilitate direct two-way communication between customers and the business while
encouraging engagement and interaction.

Leverage Direct Marketing through Digital Channels with Directive

Direct marketing is a powerful tool for organizations that wish to sell or distribute their products
online. By communicating directly with prospective buyers through digital channels, marketers can
take full control of the customer experience, enhance brand loyalty, and collect valuable customer
data that can be used to optimize marketing spend and return-on-investment.

25. Describe corporate online travel services. (3.3)

(google) Corporate travel management companies (TMCs) are used by organizations to help manage
their business travel strategy. Not to be confused with leisure travel companies, TMCs help
organizations book their travel either offline, via a Reservations team, or online using an online
booking tool. TMCs are crucial in helping companies fully manage and understand their travel
management strategy and provide numerous services, such as management information to help
pinpoint areas where you can save money, account management to provide advice and
comprehensive review packs and traveler tracking to help fulfill your duty of care requirements.

(textbook) The corporate travel market is huge and its online portion has been growing rapidly in
recent years. Corporations can use all the online travel services where they may receive special
services. Companies can enable employees to plan and book their own trips to save time and
money. Using online optimization tools provided by travel companies, such as those offered by
American Express, companies can try to reduce travel costs even further. Expedia via Egencia
TripNavigator, Travelocity, and Orbitz also offer software tools for corporate planning and booking.
TripAdvisor for Business provides information to the tourism and hospitality industries. TripAdvisor
Trip Connect offers a way for businesses to compete for bookings and generate new business by
bringing visitors directly to their online booking pages.

26. What are the limitations of electronic job markets? (3.4)

(google) The disadvantages of online recruitment: Costs can spiral. It can be difficult to measure their
effectiveness. It's informal. It attracts bad candidates. There's a lot of competition. It could lead to
lost labor hours. It attracts fraudulent applicants. It can affect communication

(textbook) The electronic job market also has a few limitations. One major limitation is the fact that
some people do not use and do not have access to the Internet, although this problem is declining
substantially. One solution to the problem of limited access is the use of in-store Internet kiosks, as
used by companies such as Home Depot or Macy’s. Computers are also available in libraries and
other public places. Mobile job search apps such as iPQ Career Planner and Pocket Resume are
becoming popular. Security and privacy are another limitation. Posted résumés and employer-
employee communications are usually not encrypted. Thus, confidentiality and data protection
cannot be guaranteed. It is also possible that someone at a job seeker’s current place of
employment (e.g., his or her boss) could find out that that person is job hunting. LinkedIn, for
example, provides privacy protection, enabling job seekers to determine who can see their résumé
online

27. What are the advantages of online stock tracking? (3.5)

(google) The advantages of online stock tracking: Lower fees. More control and flexibility. Ability to
avoid brokerage bias. Access to online tools. Option to monitor investments in real time.

(textbook) The commission for an online trade is between $1 and $15 (“dirt cheap brokers”) to $15–
$30 (“mid- priced discount broker”), compared with an average fee of $100–$200 per trade from a
full-service broker. With online trading, there are no busy telephone lines, and the chance to err is
small, because there is no oral communication in a frequently noisy environment. Orders can be
placed from anywhere, at any time, and there is no biased broker to push a sale. Furthermore,
investors can find a considerable amount of free research information about specific companies or
mutual funds. Many services provided to online traders include online statements, tax-related
calculations, extensive research on industries, real-time news, and even tutoring on how to trade

28. Define a P2P loan system. (3.6)

(google) Peer-to-peer lending, also known as P2P lending, is an online system where individual
investors fund loans (or portions of loans) to individual borrowers. Also called marketplace lending,
peer-to-peer lending is a growing alternative to traditional lending.

(textbook) The introduction of online banking enables the move of personal loans to the Web in
what is called online person-to-person money lending, or in short P2P lending. This model allows
people to lend money and to borrow from each other via the Internet. An emerging innovation in
online banking is peer-to-peer (P2P) online lending. Two examples are Zopa Limited in the United
Kingdom and Prosper Marketplace in the United States, which offer P2P online lending, respectively.
Note that, despite the global credit crunch of 2008–2012 and the fact that neither has a
government-backed guarantee, both Zopa and Prosper are enjoying solid growth. For example, as of
April 2014, Zopa’s 50,000 active members had lent more than £528 million at negotiated rates to UK
customers, mainly for car payments, credit card debts, and home improvements. The default rate of
these P2P lenders is very low since money is lent only to the most credit-worthy borrowers. A word
of caution about virtual banking, including P2P lending: Before sending money to any cyberbank,
especially those that promise high interest rates for your deposits, make sure that the bank is a
legitimate one. Several cases of fraud already have occurred.

29. Describe on-demand delivery services. (3.7)

(google) It means that the customer can choose when and where they want the products delivered!
The shipper will usually select the available methods to offer to the customer so they can choose
from. Usually, the delivery is done the same day, the next day, or up to five days after purchase. The
customer gets to decide according to the preferred schedule. Not only that, but with some on-
demand delivery solutions, the customer can choose where they want their products delivered.
Now, they can receive the goods at their doorstep, at the neighbors’ house, or even at their holiday
destination.

(textbook) Most e-tailers use third party logistics carriers to deliver products to customers. They
might use the postal system within their country or they might use private shippers such as UPS,
FedEx, or DHL. Deliveries can be made within days or overnight. Customers are frequently asked to
pay for expedited shipments (unless they have a “premium” subscription, such as Amazon.com
Prime. Some e-tailers and direct marketing manufacturers own a fleet of delivery vehicles in order to
provide faster service or cut delivery costs to the consumer. According to Mark Sebba, CEO of Net-a-
Porter, the company prefers “to do as much as possible in-house, which includes operating their
own delivery vans for customers in London and Manhattan”. Such firms provide either regular
deliveries or will deliver items on demand (e.g., auto parts). They might also provide additional
services to increase the value proposition for the buyers. An example in this category is an online
grocer, or e-grocer. An e-grocer is a that takes orders online and provides deliveries on a daily or
other regular schedule or within a very short period of time, sometimes within an hour. Home
delivery of food from restaurants or pizza parlors is another example. In addition, office supplies
stores, repair parts distributors (e.g., for cars), and pharmaceutical suppliers promise speedy, same
day delivery. An express delivery option is referred to as an on-demand delivery service. In such a
case, the delivery must be done quickly after an order is received. A variation of this model is same-
day delivery

30. Define disintermediation and reintermediation. (3.11) \

(google) The term disintermediation refers to the process of cutting out the financial intermediary in
a transaction. It may allow a consumer to buy directly from a wholesaler rather than through an
intermediary such as a retailer, or enable a business to order directly from a manufacturer rather
than from a distributor.

Reintermediation is the movement of investment capital into secure bank deposits or the
reintroduction of a middleman between a supplier and a customer. This term is the opposite of
disintermediation.

(textbook) Intermediaries usually provide three types of services:

(1) they provide relevant information about demand, supply, prices, and trading requirements.

(2) they help match sellers and buyers; and/or

(3) they offer value-added services such as transfer of products, escrow, payment arrangements,
consulting, or assistance in finding a business partner.

In general, the first and second types of services can be fully automated, and thus it is likely to be
assumed by e-marketplaces, infomediaries, and portals that provide free or low-fee services. The
third type requires expertise, such as knowledge of the industry, the market, the products, and the
technological trends, and therefore can only be partially automated.

Intermediaries that provide only (or mainly) the first two types of services may be eliminated; this
phenomenon is called disintermediation. An example is the airline industry and its push for selling
electronic tickets directly by the airlines. Most airlines require customers to pay $25 or more per
ticket processed by an employee via telephone. This results in the disintermediation of many travel
agents from the purchasing process.

In another example, discount stockbrokers that only execute trades manually are disappearing.
However, brokers who manage electronic intermediation are not only surviving but may also be
prospering. This phenomenon, in which disintermediated entities or newcomers take on new
intermediary roles, is called reintermediation.