E-Commerce Unit-2
E-Commerce Unit-2
E-Commerce
Features
E-Commerce provides the following features −
Non-Cash Payment − E-Commerce enables the use of credit cards, debit cards,
smart cards, electronic fund transfer via bank's website, and other modes of
electronics payment.
24x7 Service availability − E-commerce automates the business of enterprises and
the way they provide services to their customers. It is available anytime, anywhere.
Advertising / Marketing − E-commerce increases the reach of advertising of
products and services of businesses. It helps in better marketing management of
products/services.
Improved Sales − Using e-commerce, orders for the products can be generated
anytime, anywhere without any human intervention. It gives a big boost to existing
sales volumes.
Support − E-commerce provides various ways to provide pre-sales and post-sales
assistance to provide better services to customers.
Inventory Management − E-commerce automates inventory management. Reports
get generated instantly when required. Product inventory management becomes very
efficient and easy to maintain.
Communication improvement − E-commerce provides ways for faster, efficient,
reliable communication with customers and partners.
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communication or transaction. pass communication to required person
or do the transactions.
E-Commerce advantages
Advantages to Organizations
Advantages to Consumers
Advantages to Society
Advantages to Organizations
Using e-commerce, organizations can expand their market to national and
international markets with minimum capital investment. An organization can easily
locate more customers, best suppliers, and suitable business partners across the
globe.
E-commerce helps organizations to reduce the cost to create process, distribute,
retrieve and manage the paper based information by digitizing the information.
E-commerce improves the brand image of the company.
E-commerce helps organization to provide better customer services.
E-commerce helps to simplify the business processes and makes them faster and
efficient.
E-commerce reduces the paper work.
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E-commerce increases the productivity of organizations. It supports "pull" type
supply management. In "pull" type supply management, a business process starts
when a request comes from a customer and it uses just-in-time manufacturing way.
Advantages to Customers
It provides 24x7 support. Customers can enquire about a product or service and place
orders anytime, anywhere from any location.
E-commerce application provides users with more options and quicker delivery of
products.
E-commerce application provides users with more options to compare and select the
cheaper and better options.
A customer can put review comments about a product and can see what others are
buying, or see the review comments of other customers before making a final
purchase.
E-commerce provides options of virtual auctions.
It provides readily available information. A customer can see the relevant detailed
information within seconds, rather than waiting for days or weeks.
E-Commerce increases the competition among organizations and as a result,
organizations provides substantial discounts to customers.
Advantages to Society
Customers need not travel to shop a product, thus less traffic on road and low air
pollution.
E-commerce helps in reducing the cost of products, so less affluent people can also
afford the products.
E-commerce has enabled rural areas to access services and products, which are
otherwise not available to them.
E-commerce helps the government to deliver public services such as healthcare,
education, social services at a reduced cost and in an improved manner.
Disadvantages of e-commerce
The disadvantages of e-commerce can be broadly classified into two major categories −
Technical disadvantages
Non-Technical disadvantages
Technical Disadvantages
There can be lack of system security, reliability or standards owing to poor
implementation of e-commerce.
The software development industry is still evolving and keeps changing rapidly.
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In many countries, network bandwidth might cause an issue.
Special types of web servers or other software might be required by the vendor,
setting the e-commerce environment apart from network servers.
Sometimes, it becomes difficult to integrate an e-commerce software or website with
existing applications or databases.
There could be software/hardware compatibility issues, as some e-commerce
software may be incompatible with some operating system or any other component.
Non-Technical Disadvantages
Initial cost − The cost of creating/building an e-commerce application in-house may
be very high. There could be delays in launching an e-Commerce application due to
mistakes, and lack of experience.
User resistance − Users may not trust the site being an unknown faceless seller.
Such mistrust makes it difficult to convince traditional users to switch from physical
stores to online/virtual stores.
Security/ Privacy − It is difficult to ensure the security or privacy on online
transactions.
Lack of touch or feel of products during online shopping is a drawback.
E-commerce applications are still evolving and changing rapidly.
Internet access is still not cheaper and is inconvenient to use for many potential
customers, for example, those living in remote villages.
E-commerce business models
E-commerce business models can generally be categorized into the following categories.
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Business - to - Consumer
A website following the B2C business model sells its products directly to a customer. A
customer can view the products shown on the website. The customer can choose a product
and order the same. The website will then send a notification to the business organization
via email and the organization will dispatch the product/goods to the customer.
Consumer - to - Consumer
A website following the C2C business model helps consumers to sell their assets like
residential property, cars, motorcycles, etc., or rent a room by publishing their information
on the website. Website may or may not charge the consumer for its services. Another
consumer may opt to buy the product of the first customer by viewing the
post/advertisement on the website.
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Consumer - to - Business
In this model, a consumer approaches a website showing multiple business organizations for
a particular service. The consumer places an estimate of amount he/she wants to spend for a
particular service. For example, the comparison of interest rates of personal loan/car loan
provided by various banks via websites. A business organization who fulfills the consumer's
requirement within the specified budget, approaches the customer and provides its services.
Business - to - Government
B2G model is a variant of B2B model. Such websites are used by governments to trade and
exchange information with various business organizations. Such websites are accredited by
the government and provide a medium to businesses to submit application forms to the
government.
Government - to - Business
Governments use B2G model websites to approach business organizations. Such websites
support auctions, tenders, and application submission functionalities.
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Government - to - Citizen
Governments use G2C model websites to approach citizen in general. Such websites support
auctions of vehicles, machinery, or any other material. Such website also provides services
like registration for birth, marriage or death certificates. The main objective of G2C websites
is to reduce the average time for fulfilling citizen’s requests for various government services.
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Business to Business E-Commerce
These are the transactions between the businesses conducted electronically over the internet,
Intranets or extranets.
The availability for secure broadband internet platform and private and public B2B e-
market places.
The need for collaboration between suppliers and Buyers.
The ability to save money, reduce delays and improves collaboration.
The emergence of effective technologies for intra and inter organizational ntegration.
There are four types of B2B transactions usually occurs. Those are
E-Commerce that focuses on Single Companies buying needs (Many to one/ buyside)
and Selling needs (One to Many and Sell Side)
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Example : A Pharmacy buys medicines from different online drug companies.
Many to Many e-market places usually owned and run by a third party or a
consortium in which many buyers and many sellers meet electronically to trade with
each other.
Third party exchanges open to all interested parties (Sellers and Buyers) is called
public e-market places.
To improve the supply chain the organization needs to have the collaboration. The
collaboration includes different things like Buyers, Sellers, Payment associations and
technology providers etc.,These can be elaborated in the following figure :
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B2B Characteristics
Sellers
Buyers and
Intermediaries
Types of Transactions :
1. Spot buying
The purchase of goods and services as they are needed prevailing market prices.
Example : Buying fire extinguisher
2. Strategic Sourcing / Systematic Sourcing
Purchases involving long term contracts that usually are based on private negotiations
between sellers and buyers.
Example : Buying coffee beans for coffee shop.
1. Direct Materials
Materials used to in production. Ex. Steel in a Car, Paper in a Book
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2. Indirect Materials
Materials used to support production. Ex. Office Supplies, Light bulbs
3. MRO (Maintenance, Repair and Operation)
These are indirect materials used in activities that support production.
Benefits of B2B
Limitations of B2B
1. Channel Conflict
2. Operation of Public Exchanges
3. Elimination of the distributor or the retailer
Our Company
Our company includes manufacturing, retailing and service industry
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Suppliers
Suppliers include organizations which supply raw material, components and services.
Customers
Customers use catalogs for auctions.
Intermediaries and
Intermediaries are used as exchanges.
Support Services
Support services include logistics, supply chain, payments and security.
The following diagram shows inter relationships between
Company
Suppliers
Customers
Intermediaries and
Support Services
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Those are
Revenue generation
Cost savings
Increased sales
Member acquisition and retention
In the e-auctions, options include
Reverse auctions
Negotiations
Group purchasing or
Any other e-procurement method
Procurement Methods
In this, it shows some of the inefficiencies that results getting goods lately and it looks
somewhat complexity in getting the right goods.
Then the traditional procurement is changed to e-procurement.
2. E-Procurement
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Benefits of e-Procurement
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6. Delivery
Throughout the delivery process, we need to evaluate the products and services delivered
to ensure that they are meeting the quality standards.
7. Analyzing results
Once the product is delivered to the customer, it is essential to analyze the process and
evaluate its success as well as record observations for the future.
Just-in-Time Delivery
Just-in-Time logistics operate under the concept of receiving raw materials, products and
parts as they are needed rather than days or even weeks before. This allows to significantly
cut inventory cost by having fewer unnecessary suppliers and for less material into store.
As efficient to as JIT delivery, it can be difficult to coordinate large amounts of shipments
effectively, especially when dealing with shipments that vary in size and destination. With
JIT services from expedited transportation, the team of experts and superior customer service
can coordinate shipments.
Following are the various JIT services which are :
1. Expert Customer Service
2. Direct tracking
3. Time definite delivery
4. Expected tracking services
5. Just in time freight services
6. Door to door services
Auctions and Services from traditional to Internet based EDI
A no. of different methods exist to auctions and value goods exchanged between buyers and
sellers. Here are a no. of auction techniques are given below:
1. The Dutch Auction
In a Dutch auction, the auctioneer lowers the offer price sequentially until a buyer agrees
to pay the offer price. Often the prices are indicated by a clock, which falls over a price
scale until a buyer presses a button to stop the clock. The first buyer to do this obtains a
unit at the price in effect at the time that the clock was stopped.
2. The English Auction
In this, different potential buyers bid for a good or service, sequentially increasing the
offered price until only one active bidder remains. This auction technique is commonly
used for the sale of art work and other valuable objects.
3. Offer Auction
An offer auction is an institution in which sellers can make offers sequentially and buyers
are able to accept any offer, but not to make any bids.
4. The Bid Auction
A bid auction refers to the opposite case in which buyers can make bids sequentially, but
sellers can only indicate that a bid is accepted.
5. Clearing house auction
In this, buyers submit bids and sellers submit offers. Once submitted, the bids are arrayed
in descending order, from highest to lowest, while the offers are arrayed in ascending
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order, from lowest to highest. A price is then determined by a crossing of the bid and
offer arrays.
6. First – price sealed bid auction
When there is only one unit, the high bidder in the discriminative auction wins the auction
and purchases it at his/her bid price, which is the highest or “first” price. Therefore, a
discriminative auction with a single unit is called a first price, sealed bid auction.
7. Competitive sealed bid auction
In contrast to discriminative case, it is possible to design a mechanism for selling multiple
units in which all of the N highest winning bidders pay a uniform price. When the uniform
price is specified to be the highest rejected bid, the institution is known as a competitive
auction.
8. Double auction
Under double auction rules, any buyer who makes a bid must raise his/her hand and be
recognized. The bid is then publicly announced to the market. Sellers offers are also
publicly announced. All bids and offers are written on the black board as they are made.
Only the most attractive bid or offer has “standing” or can be accepted. This is a double
auction in a sense that bids rise and offers fall at the same time.
Integration with the backend information System
Since the goal of e-commerce enabled website is to provide a shopping experience
that is as smooth and transparent. When placing an order over the internet are phone, we
should never view our electronic commerce applications as an isolated sales channel. Instead,
our website should be coordinated with our traditional back-end systems. In an ideal world,
we will want to implement a full, seamless integration between the two systems.
But it can be expensive. To completely integrate a website with an existing catalog
order entry system can be costly. This includes the software that creates the actual website
pages, the shopping cart and the product search engine and an electronic data interchange
EDI system than enables online customers to receive real time inventory and order status.
The above can be implemented as a phased approach.
Phase 1 :
Sell only a subset of items one product family online and use manual integration.
Customers will still be able to order from your site.
Phase 2 :
Sell our entire product line and feature limited integration. Limited integration varies
depending on our priorities.
Phase 3 :
Implement full integration with existing back-end. At this stage, our system will
process and fulfill online orders as effectively.
Role of Software Agents in B2B Business
Software agents are a piece of software which works for the user. However, Software agents
are not just a program. An agent is a system situated within or a part of an environment that
senses the environment and act on it.
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Characteristics of Software Agents:
Software Agents are like guards and locomotives of the most e-Commerce. Some of the
characteristics of these are
Software Agents can do their task without any out source intervention.
Software Agents are specific in their goals.
Good software is one which has attitude to receive and adopt changes.
Safety of the information must be promised by the agents.
It has an effective usage of the existing resources.
Agents must be very careful in handling unauthorized users.
Types of Software Agents
Agents can be classified into different types based on the characteristics they posses.
1. Collaborative Agents
It is a software program that helps users solve problem especially in complex in
complex and unfamiliar domains by collecting errors, suggesting what to do next.
2. Interface Agents
These compute programs that employ machine learning techniques in order to provide
assistance to a user dealing with a particular application.
3. Mobile Agents
It is an executing program that can migrate during execution from one machine to
another machine in heterogeneous networks.
4. Information/Internet Agents
The intelligent part of a software which can automatically search information on a
website is termed as information agents.
5. Reactive Agents
There are responsible for simulating the response to the present stage of the
environment in which they are embedded. These agents interact with other agents in a
simple way.
Electronic Marketing in B2B
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4. Don’t speak the same language
Always personalized our emails as per the designation and responsibilities shared by the
individual representing our client understand the requirements of the users first before
sending mails.
5. Online training portals
Train our clients through web based training. Ask the clients to create their own login id
and passwords. Share necessary information about our products and services in the portal
itself for the client to login and go through the necessary information,
6. Take the product feedback
It is essential to have a regular feedback of our product and services. The clients can give
their valuable feedback on our website only. These must be regularly monitored.
7. Good relationship
Share a good and healthy relationship with our clients. Don’t forget to wish our clients on
the important occasion through mail.
Solution of B2B EC
Internet and Mobile as a combined force is dramatically accelerating the speed at which B2B
companies go to market and is disrupting the traditional B2B sales model. Our customers
are smarter than ever and prefer the simplicity of searching to a catalogue online and
making the purchase necessary than extensive manual process of order forms.
Mark Jock offers highly specialized digital commerce solution for B2B business.
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5. Generate business leads and grow our business
Increasingly our prospects are internet as a touch point for doing research and short listing
dealers. We can stay ahead of the race on optimizing our e-commerce site for featuring in
search engines and social media channels for reaching our prospects. Here the solution is
product prospects online.
6. Let our customers place and manage their orders anywhere
Smart phones have become part and parcel of our personnel and professional life.
Whenever customers usually wants place an order, they use their phones extensively. We
can do this from anywhere.
7. Simplifying forecasting and ordering
Forecasting and ordering is a repetitive and important process, which every customer
undergoes. Mark Jack solution makes our customers stock forecasting and ordering. In
this, reorder level can be set and this will help of inbuilt forecasting technique.
8. Seamless integration with third party systems
We can meet the needs of our internal and external customers by easily integrate our site
with our enterprise resource planning, customer relationship management, accounting,
stock level, human resources and order stock and payment information system.
Managerial Issues
Various factors can be considered to achieve B2B business effectively. Those are
As the world becomes more interconnected through computers and the Internet, EDI
interchange place a more critical role in our lives. An EDI message referred as a transaction
set basically consists of a string of data elements each representing one fact. These elements
include price, quantity and product number etc., An individual who interacts with an EDI on
a daily basis makes a electronic funds transfer debit individuals bank account etc.,
EDI software is also widely used in the retail industry as part of electronic scanning and point
of sale inventory control systems. EDI implementation makes an organization function more
effectively, eliminating the need to reenter information. Software for EDI was developed to
eliminate the problems and errors that arise from handling information manually.
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