GLS UNIVERSITY

0302501 E-COMMERCE
UNIT– I
Introduction to E-commerce
 History of E-commerce and Indian
Business Context
 Advantages and Disadvantages of E-
commerce
 E-business Model
◦ Business-to-Consumer(B2C)
◦ Business-to-Business(B2B)
◦ Consumer-to-Consumer(C2C)
 E-Marketing
◦ E-Marketing Value Chain
◦ Site Adhesion: Content, Format, and
Access
◦ Metrics Defining Internet Units of
Measurement
 E-Advertising
 E-Branding
◦ Elements of Branding
What is E-commerce?


Commonly known as Electronic Marketing.

“It consist of buying and selling goods and services over an electronic
systems Such as the internet and other computer networks.”

“E-commerce is the purchasing, selling and exchanging goods and services
over computer networks (internet) through which transaction or terms of sale are
performed Electronically.

E-commerce is the use of the internet and the web to transact business.

More formally,digital enabled commercial transactions between and among
organizations and individuals.

E-commerce and digital marketing work together to
breathe life into your business. They are complementary
processes. Digital marketing brings attention to your
brand. E-commerce allows you to actually sell.
History of E-commerce


1970s: Electronic Funds Transfer (EFT)

Used by the banking industry to exchange account information over
secured networks


Late 1970s and early 1980s: Electronic Data Interchange
(EDI) for e-commerce within companies

Used by businesses to transmit data from one business to another


1990s: the World Wide Web on the Internet provides easy-
to-use technology for information publishing.
Process of E-commerce

A consumer uses Web browser to connect to the
home page of a merchant's Web site on the Internet.


The consumer browses the catalog of products
featured on the site and selects items to purchase. The
selected items are placed in the electronic equivalent of
a shopping cart.


When the consumer is ready to complete the purchase
of selected items, he/she provides a bill-to and ship-to
address for purchase and delivery
Process of E-commerce


When the merchant's Web server receives this
information, it computes the total cost of the order--
including tax, shipping, and handling charges--and
then displays the total to the customer.


The customer can now provide payment information,
such as a credit card number, and then submit the
order.
Process of E-commerce


When the credit card number is validated and the
order is completed at the Commerce Server site, the
merchant's site displays a receipt confirming the
customer's purchase.


The Commerce Server site then forwards the order to
a Processing Network for payment processing and
fulfillment.
Advantages of E-commerce
1.24x7 operation
2.Global reach
3.Cost of acquiring,serving and retaining customers
4.An extend enterprise is easy to build
5.Disintermediation
6.Improved customer service to your clients
7.Power to provide the 'best of both the worlds'
8.A technology based customer interface
9.The customer controls the interaction
10.Knowledge of customer behaviour
1. 24x7 operation
2. Global reach
3. Cost of acquiring,serving and retaining customers:
because of 24x7 operation and its global reach it is relatevily cheaper
to acquire new customer over the net.
4. An extend enterprise is easy to build : The internet provides an
effective way to extend the enterprise beyond the narrow confines of
the organization. Tools like ERP(enterprise resource
planning ),SCM(suppy chain management and CRM (customer
relationship management)
5. Disintermediation : One can directly approach the
customers and suppliers , cutting down on the number of
levels and in the process , cutting down the costs.
6. Improved customer service to your clients : Results in
higher satisfaction and more sales.
7. Power to provide the 'best of both the worlds' : benifits the
trditional business side by side with the Internet tool.
8. A technology based customer interface : Operationally ,
there is no direct human intervention during any transaction
,we have either face to face or screen to face . thus
'screen-to-customer' interface in e-commerece market
comes with a solution of reintroduce humans into the
process, such as service representative available on
demand for web users. If interface does not work properly it
can effect the revnue of the organization.
9. The customer controls the interaction : The seller has much
less power in the online environment due to the control and
information flows that the online world puts in customer's
hands
10.Knowledge of customer behaviour
Disadvantages of E-commerce

1. Compatibility issue

2. Initial cost

3. User resistance

4. Security/ Privacy

5. Touch/ feel issue

6. Internet Access
Disadvantages of E-commerce

1. Compatibility issue :There could be software/hardware compatibility

issue as some E-Commerce software may be incompatible with some
operating system or any other component.

2. Initial cost: The cost of creating / building E-Commerce application

in-house may be very high. There could be delay in launching the E-
Commerce application due to mistakes, lack of experience.

3. User resistance: User may not trust the site being unknown faceless
seller. Such mistrust makes it difficult to make user switch from physical
stores to online/virtual stores.
4. Security/ Privacy: Difficult to ensure security or privacy on
online transactions.

5. Lack of touch or feel of products during online shopping.

6. Internet access is still not cheaper and is inconvenient to use for

many potential customers like one living in remote villages.
E-business

Electronic Business (E-Business) is
the administration of conducting any
business using internet, extranet, web
and intranet.

This would include buying and
selling of goods or services using
commercial transactions conducted
electronically along with providing
customer or technical support with the
help of the internet.

E-business is similar to E-
commerce but it is more than just a
simple act of buying and selling
services or goods online. It is the
method of utilizing digital information
What are The Key Differences Between E-Commerce
and E-Business?


E-Business is not limited to just buying and selling
products or services. Whereas E-Commerce is the name
of buying and selling products/services with the help of
the internet.

E-Commerce is a main part of E-Business

There is no need for an E-Business to have a physical
presence. If the company has physical offices along with
their online business activities then it can be referred to
as E-Commerce.

E-Commerce supports any kind of business transaction
related to money, but E-Business includes monetary and
allied activities.

E-Commerce needs the internet to be able to
E-business Models

1.Business-to-Consumer(B2C)

2.Business-to-Business(B2B)

3.Consumer-to-Consumer(C2C)
Business-to-Consumer(B2C)

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.
Business-to-Consumer(B2C)
Advantages of B2C :

1.Inexpensive costs, big opportunities

2.Globalization
3.Reduced operational costs
4.Customer convenience
5.Knowledge management

For example, Amazon was the first-ever B2C E-

Commerce store.
Points of B2C Process

1. Visiting the virtual mall

2. Customer registers
3. Customer buys products.
4. Merchant processes the order
5. Credit card is processed
6. Operations management
7. Shipment and delivery
8. Customer receives
9. After-sales service
Business-to-Business(B2B)

A website following the B2B
business model sells its products to
an intermediate buyer who then
sells the product to the final
customer.

As an example,
a wholesaler places an order from a
company's website and after
receiving the consignment, sells the
endproduct to the final customer
who comes to buy the product at
one of its retail outlets.
Business-to-Business(B2B)
Advantages of B2B

1.Direct interaction with customers

2.Focussed sales promotion
3.Building customer loyalty
4.Scalability
5.Savings in distribution costs

Example :

Intel selling Microprocessor to Dell

Heinz selling Ketchup to McD.
Business-to-Business(B2B)- Transactions
1. Review catalogues
2. Identify Specifications
3. Define requirements
4. Post request for proposals
5. Review vendor reputation
6. Select vendor
7. Fill out purchase orders
8. Send PO to vendor
9. Prepare invoice
10. Make payment
11. Arrange shipment
12. Organize product inspection and reception
Consumer-to-Consumer(C2C)
•C2C is simply commerce between private
individuals or consumers.
•Consumer sell directly to other cosumers via
– online classified ads and auctions
– by selling personal services or expertise
online.
Example :

buying an iPod from eBay

selling a Car to neighbour

OLX
E-Marketing
Traditional Marketing
- If marketing is whatever you do to promote the sale of your
products or services, then it should include:

1. Market research – from competitive information-gathering to

industry awareness to soliciting customer opinions and
preferences
2. Publicity from press releases to the positioning of your
company and its offerings in the marketplace
3. Advertising that is text-based and graphic-based
4. Sales, including distribution and merchandising
5. Customer service and customer support.
Traditional-Marketing

Problems associated with the Traditional Market:

1. Traditional Marketing is often expensive.

2. Traditional Marketing can be a very time-
consuming process.
3. Traditional marketing often has a “hit and
miss” quality.
What is E-Marketing


Electronic marketing or E-marketing is the use of
electronic media and applications to conduct marketing
research and communication activities.

The term electronic marketing initially served as an
extension of "Internet marketing" to address the growth of
mobile technology and digital applications used in
marketing.

The terms E marketing , Internet Marketing, Online
marketing are interchanged and frequently can be
considered synonymous
Features


Internet marketing allows global marketing facility.

It is less expensive.

It makes marketing easier.

It increases the choice of products,services and sellers.

Vast availability of information.
Internet marketing tools


It includes Websites, social media and online
advertisement.

Use of social media.

Marketing plan.

Social media is the latest marketing buzz,by both online
and offline marketing experts way to reach customers.

A properly designed website is one of the most important
marketing tools that an E. Marketing needs, because
through that the customer will get the attraction to visit
again and again.
E-marketing value chain

Customer Customer Customer Customer

Acquisition Support Fulfilment support
(Pre-purchase (during (purchase (post
support) purchase) dispatch) purchase)

e-marketing thrives with the maintenance of strong relationship between

the company and the customer . It is like a chain - the company acquires
customers , fulfills their needs and offers support ( before and after
purchase) , and gains their confidence so that they return to it again.
Site Adhesion
1. Content
A customer accesses a website for the content of that site. Initially a customer will
want to navigate quickly to gain a clear understanding of the site's progression to
more detailed information.

2. Format

The format of an organization's site is important with respect to the customer's
technical sophistication.

Vendors need to create a balance between information provision and
information delivery speed.

The selection of data format is crucial, as initially the goal is to create viewer
interest and engage the viewer in a prolonged interaction.

3. Access
Online data access depends on the bandwidth requirement. The clear rule in the
initial interaction phase is to use as minimal a bandwidth as is feasible to facilitate
as wide as audience as possible.
Metrics Defining Internet Units of Measurement

To measure parameters associated with the web and websites

we have to assess two things -

1. Advertising – how many people saw our banner ad?

2. Visitation – how many people came to our site?
Metrics Defining Internet Units of Measurement

Click-through captures How many users click through to the next stage in the customer
acquisition process?

Time Spent How long did the viewer stay at the site and which items, pages
or routes did the viewer select to navigate through the site?

Time Spent searching Did the viewer use the 'site map' or 'search' feature, and if so for
what and for how long?

Time Spent before click How long did a viewer linger in the opening stages of the
-through
interaction and where?

E-mails and telephone calls How many e-mails or calls did this section generate and on

what issues?

Registered users If the site has a registration facility, what is the rate?
ADVANTAGES OF E- MARKETING
1. E- MARKETING offers bottom-line benefits that tie in directly to the demands placed on
the organization trying to make a transition into the new economy.

2. E- MARKETING can save money and help to strech the market budget.

3. E- MARKETING can save time.

4. E- MARKETING gives customers another way to buy.

5. E- MARKETING can be information-rich and interactive.

6.E- MARKETING erases the time and distance barriera that get in the way of conducting
business transaction with customer in other countries.

7. E- MARKETING can lower barriers to entry and offer equal opprtunity for access.

8. E- MARKETING can be continuosly available.

E-Advertisement
E-Advertisement, also called as Internet advertising,

uses the internet to deliver the promotional marketing
messages to consumers.

It includes

email marketing

search engine marketing

social media marketing

many types of display advertising (web banner
advertising)

mobile advertising.
Online Advertising - What to Measure?
The performance metrics of Online Ad are as follows −
Clicks It is the number of times viewer clicks the Ad. It can be taken as viewer’s
acknowledgement to your Ad. It suggests that the viewer has seen the Ad and wants
further information.

Impressions It is the number of times your Ad is displayed on the web page.

Click Through Rate It is the ratio of Ad clicks to Ad impressions. The higher the CTR, the more relevant
(CTR) your Ad is.

Cost Per Click It is the amount advertiser pays for each click on the Ad.
(CPC) The number of clicks determines the amount of payment.
The lower CPC is better.
Online Advertising - What to Measure?

Cost Per Thousand It is the amount the advertiser pays for thousand clicks.
Impressions or
Cost Per Mille

(CPM)

Return On It is (Return – Investment) X 100. The higher ROI is better.

Investment
(ROI)
E-Marketing vs E- Advertising


Digital Advertising is One Aspect of Digital Marketing

Digital Advertising is an Activity While Digital Marketing is
a Process

Online Advertising is Based on Sales While Digital
Marketing is Based on Audience Psychology

Digital Advertising Makes Audiences Aware of a Brand
While Digital Marketing Develops the Brand

Digital Advertising is a Tool of Digital Marketing
Why Internet Advertisement?


Ads can be updated any time with a minimal cost.

Adscan reach large numbers of buyers all over the world.

Online ads are frequently cheaper in comparison with
television, radio, newspaper, or billboard ads.

Webads can efficiently use text, audio, graphics, and
animation.

The audience for Internet advertising is growing rapidly.

Web ads can be catered to a specific target.
E-Advertising
Various means of advertising -

1. E-mail

2. Banners

3. Skyscrapers

4. Banner swapping

5. Streaming Video and Audio

6. Effectiveness Tracking

7. Mini-site, Pop-ups

8. Interstitials
E-Advertising
• E-mail :because of its low cost and its ability to reach a wide
variety of targeted audience.
• Banners : Commonly used form of advertising on the Inernet .
Banner contains a short text or a graphical message to promote
the product.
• Skyscrapers : Extra long skinny ads running down the right or
left side of a website.
• Banner Swapping : Its a direct exchange of links between
websites
• Streaming Video and Audio : companies and content networks
insert ads for marketers into music and video clips as
consumers listen to them.
• Effectiveness Tracking : It helps traditional advertiser to track the
people where they go after seeing their ads.
• Mini-site, Pop-ups : These ads burst upon the screens. Mini-sites
allow advertisers to market without sending people away from the
site they are visiting.
• Interstitials : The sites where when it uploads , a new window will
open in the browser from any other company , asking to apply aor
purchase something from it . These windowsare called intersitials ,
and they demand your attention because and u have to click on it
even to close the window.
It is estimated that the click through rates are as high as 5 percent.
E-branding

A known and respected brand name can

present to potential customers, a powerful
statement of quality value and other desirable
qualities in one recognizable element.

Branded products ar easier to advertise and

promote, because each product carries the
reputation of the brand name.
E-branding
There are 3 Elements of Branding

Differentiation In what significant ways is this product

or service unlike its competitors?

Relevance How does this product or service fit

into my life?

Perceived value Is this product or service good?