E-commerce and Information

Technology in Hospitality and Tourism

Chapter 4
E-Commerce Fundamentals

Copyright 2004 by Zongqing Zhou, PhD

Niagara University
4.1 The Internet and E-Commerce

 E-Commerce allows businesses to be

more effective and efficient in responds
to customers’ needs and wants as well
as in conducting transactions with
suppliers and within the company itself.
 It has changed the way that business is
being conducted.
 4.2 E-Commerce Defined

 The meaning of E-Commerce is not one

simple definition it can mean many
things to different people.
 One basic definition is a system of
conducting business activities using the
Internet and other information
technologies.
 4.2 E-Commerce Defined

 Common definitions include, but not

limited to the following:
 Buying and selling online

 Selling through the Internet

 Customer service using the Internet

 Marketing and advertising through the

Internet
4.2 E-Commerce Defined (cont.)
 Putting up a website for product and service
information, together with an email address for
customers to email in orders.
 E-commerce is creating a website that can accept
credit card information to sell online directly to
consumers.
 E-commerce involves 1) a website where
customers can find information, place an order, 2)
an order fulfillment center that tracks and ships the
orders, and 3) a customer service mechanism
where questions
4.3 Components of E-Commerce

 Our definition consists of three

components:
A. It requires a systematic approach
in conducting business. It
involves: research, planning,
operation and selling, marketing,
budgeting, customer service, and
human resource management.
4.3 Components of E-Commerce
B. E-commerce is a special type of business,
but it is still a business. Just as there are all
kinds of businesses, there are all kinds of
ecommerce businesses. Some ecommerce
businesses sell tangible products such as
computers and clothes. Others offer
intangible products and services such as
providing information and reservation
services. Most of the hospitality and travel
ecommerce borders between these two, if
tickets can be considered as a tangible
product.
4.3 Components of E-Commerce

C. Thirdly and lastly, e-commerce is

conducting business using
technologies. For a company to
be successful in ecommerce, it has
to understand these technologies
and make the best use of what is
available to the business.
4.3 Components of E-Commerce

 Types of E-Commerce
 B2B- between businesses
 B2C- between business and consumer
 C2C- between two or more individuals
 C2B- consumer initiated interactions and
transactions.
4.4 Classification of E-Commerce

 Online-only businesses- Base the

entire operation online.
 Direct sellers- sell directly to the consumer
 Intermediaries- the middleman
 Fee-free-and-as-based- free to the
consumer and paid by advertisers, who
then advertise on the site.
 Fee-based- Charged a fee to use their
service.
4.4 Classification of E-Commerce
(Cont.)
 Bricks-and clicks businesses- Operation both
online and in a physical space.
 Full-engaged models-product or service is
available online to sell directly to the consumer.
 Partially-engaged models- Some of the product or
service is available online, but not all only the
products suitable to be sold on the internet are
available.
 Same-line business- Can be full or partial but sell
the same line of products online.
 Expanded models- See E-Commerce is a way to
expand their business.
 By operation Mode By transaction parties

Buyer

Online-only Bricks-and-clicks Business Consumer

business business

Business
•Direct Sellers •Full-engaged B2B B2C
models
•Intermediaries
•Partial-engaged
•Fee-free-and- Seller
models
ad-based C2B C2C

Consumer
business •Same-line models
•Fee-based •Expanded models
business
Process of simple e-commerce
operation
 Establish a Web presence
 Provide information (online catalog and
product information.)
 Get the customers (marketing)
 Fill the order (secure payment methods and
fast shipping service)
 Provide customer support and service
(communications through both Web and
traditional means)
4.5 Establishing Web Presence

 To establish an e-commerce presence

on the Web:
 Apply for a domain name or use a third
party domain name
 Find a server to host the domain

 Create Web pages and load them to the

server
 Set up a payment method to receive
payment of the internet.
Applying for a domain name
 Website and homepage are interchangeable.
 Domain name is a convenient way to
recognize the homepage and to locate
information on the internet.
 What’s Needed:
 IP address
 DNA domain name system- distributed base.
 TCP/IP Transmission Control Protocol/Internet
Protocol- map between hostname and IP address
 Domain name continued…
 Registering a domain name
 Go to an ICANN-accredited registrar.
 ICANN- Internet Corporation for Assigned Names and
Numbers
 Can rent a cyber home on other people’s domains
 Benefits
 Credibility on the Web
 More power in marketing
 Better control
 Professionalism and security
 Branding opportunity
 Domain Name Meaning
 .com  Commercial Organization
 .edu  Educational Institutions
 .gov  Government Institutions
 .mil  Military groups
 .net  Major network support
 .org centers
 .int  Organizations other than
 .biz those listed here
 .info
 International organizations
 .name
 Business
 Unrestricted use
 For registration by individuals
Do ma in Na me Purpo s e Sta tus in 2 0 0 2
.a e ro Air tra ns port indus try Ope ra tiona l
.biz Bus ine s s Ope ra tiona l a nd a cce pting
live re gis tra tion
.coop Coope ra tive s Ope ra tiona l
.info Unre s tricte d us e Ope ra tiona l a nd a cce pting
live re gis tra tion
.mus e um Mus e ums Ope ra tiona l
.na me For re gis tra tion Ope ra tiona l a nd a cce pting
by individua ls live re gis tra tion
.pro For a ccounta nts , Unde r ne gotia tion
la wye rs , phys icia ns ,
a nd othe r profe s s iona ls
So urce : Inte rNIC (www.inte rnic.ne t), Ja nua ry, 2 0 0 3 .
  123 Registration, Inc. (US)
 Capital Networks Pty Ltd. (Australia)
 Domaninfo AB (Sweden)
 DomainRegistry.com, Inc. (US)
 Go Daddy Software, Inc. (US)
 Internet Domain Registrars, d/b/a (Canada & US)
 Key-Systems GmbH, d/b/a (Germany)
 Melbourne IT Limited, d/b/a Internet News Worldwide (Australia)
 Mr. DomReg.com, Inc. (Canada)
 Namebay (Monaco)
 Network Solutions, Inc. Registrar (US)
 NORDNET (France)
 Register.com, Inc. (US)
 Xin Net Corp. (China)

Source: UCANN (www.icann.org). For complete list, see ICANN’s Website.

Finding an ISP or Web Host

 Website is a series of WebPages (HTML

files) that reside on a server
 Two ways to host a Web site:

 Purchase your own server, set it up,

and manage your own site.

 Find an ISP or Web hosting

company without having to invest in

the server hardware and software.
Creating Web Pages and loading
them to the Server
 Depending on the ISP you may need to create
your own Web files and then load them up to
the server.
 Web host companies will create the Web files
for you based on the information you provide.
 Software needed:
 FTP- file transfer protocol- allows one computer to
transfer files from another computer over the
internet.
 Allocated Server Storage Space
 Shared hosting or dedicated server
 E-mail accounts
 Service and technical support
 Online Security
 Purpose of your Web site
 Determine who your customers are
 Avoid excessive use of graphics and
animations
 Put yourself in the visitor’s shoes when
designing a Web site
 How to make visitors repeat visitors
Setting up Payment Methods
 Concerns:
 Secure transmission
 Safety of information
 Who has access to the information
 Solutions:
 SSL (Secure Sockets Layer)- encrypts data transfer
 Encryptions:
 Asymmetric or public-key
 Symmetric
 Digital signature
 Certificate Authority
 Issues Solutions
 Security  SSL, SHTTP
 Privacy and  SET, digital
Identity signature, digital
certificate
Figure 4.1 Typical Offline Payment Process
Figure 4.2 Typical Online Payment Process
 Payment continued…

 Means of online payment:

 Traditional Credit Cards
 E-money

 eCash

 PayPal

 Billpoint

 Smart Card

 PowerWallet
 Major criteria
For dominant payment systems
 Security

 Reliability

 Privacy

 Convenience

 User friendly
 Universality

 Cost free
Security Issues

 SSL (Secure Sockets Layer)

 asymmetric encryption, also called
public-key encryption
 digital signature
 digital ertificate
 Certificate Authority (CA)