E-commerce 2014

business. technology. society.

tenth edition

Kenneth C. Laudon
Carol Guercio Traver

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 4
Building an E-commerce Presence: Web Sites, Mobile
Sites, and Apps

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

 Imagine Your E-commerce Presence
 What’s the idea? (More detail will follow)
 Vision includes:
 Mission statement
 Target audience
 Intended market space
 Strategic analysis (SWOT)
 Internet marketing matrix
 https://www.google.com/search?q=INTERNET+MARKETING+MATRIX&tbm=isch&tbo=u&source=univ&
sa=X&ei=XlI1Vd-aHYP7sAXJroH4Cg&ved=0CD0QsAQ&biw=1600&bih=751

 Development timeline and preliminary budget

 See ecommerce presence timeline (table 4-1)

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-3
 Imagine Your E-commerce Presence (cont.)
 Where’s the $$money?
 Business model(s):
 Portal, e-tailer, content provider, transaction broker,
market creator, service provider, community
provider
 Revenue model(s):
 Advertising, subscriptions, transaction fees, sales,
and affiliate revenue

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-4
 Imagine Your E-commerce Presence (cont.)
 Who and where is the target audience?
 Describing your audience
 Demographics
 Age, gender, income, location

 Behavior patterns (lifestyle)

 Consumption patterns (purchasing habits)
 Digital usage patterns (consumer actions on the web)
 Content creation patterns (blogs, Facebook)
 Buyers’ personas and characteristics

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-5
 Imagine Your E-commerce Presence (cont.)
 Characterize the marketplace
 Demographics
 Size, growth, changes
 Structure
 Competitors
 Suppliers
 Substitute products

 Where is the content coming from?

 Static or dynamic web pages?

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 Imagine Your E-commerce Presence (cont.)
 Know yourself—SWOT analysis
 Develop an e-commerce presence map (Fig 4-2)
 Develop a timeline: Milestones
 How much will this cost?
 Simple Web sites: up to $5000
 Small Web start-up: $25,000 to $50,000
 Large corporate site: $100,000+ to millions

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-7
 SWOT Analysis

Figure 4.1, page 189

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 E-commerce Presence Map

Figure 4.2, page 190

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 Building an E-commerce Site:
A Systematic Approach
 Most important management
challenges:
Developing a clear understanding of
business objectives
Knowing how to choose the right
technology to achieve those objectives

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-10
 Pieces of the Site-Building Puzzle
 Main areas where you will need to
make decisions:
 Human resources and organizational
capabilities
 Creating team with skill set needed to build and
manage a successful site
 Hardware/Software
 Telecommunications
 Site design

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 The Systems Development Life Cycle
 Methodology for understanding business
objectives of a system and designing an
appropriate solution
 Five major steps:
 Systems analysis/planning
 Systems design
 Building the system
 Testing
 Implementation

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Web Site Systems Development Life Cycle

Figure 4.5, Page 194

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 System Analysis/Planning
 Business objectives:
 List of capabilities you want your site to have

 System functionalities:
 List of information system capabilities needed
to achieve business objectives
 Information requirements:
 Information elements the system must produce
in order to achieve business objectives

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-14
 Systems Design:
Hardware and Software Platforms
 System design specification:
 Description of main components of a system and
their relationship to one another
 Two components of system design:
 Logical design
 Data flow diagrams, processing functions, databases

 Physical design
 Specifies actual physical, software components,
models, and so on

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 Build/Host Your Own vs. Outsourcing
 Outsourcing: Hiring vendors to provide
services involved in building site
 Build own vs. outsourcing:
 Build your own requires team with diverse skill set; choice of
software tools; both risks and possible benefits

 Host own vs. outsourcing

 Hosting: Hosting company responsible for ensuring site is
accessible 24/7, for monthly fee
 Co-location: Firm purchases or leases Web server (with control
over its operation), but server is located at vendor’s facility

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 Testing, Implementation, and
Maintenance
 Testing
 Unit testing
 System testing
 Acceptance testing

 Implementation and maintenance:

 Maintenance is ongoing
 Maintenance costs: Similar to development costs
 Benchmarking

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 Factors in Web Site Optimization

Figure 4.10, Page 205

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 Site Management Tools
 Basic tools
 Included in all Web servers
 Verify that links on pages are still valid
 Identify orphan files

 Third-party software for advanced

management
 Monitor customer purchases, marketing
campaign effectiveness, and so on
 WebTrends Analytics 10, Google Analytics

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 Dynamic Page Generation Tools
 Dynamic page generation:
 Page contents stored in databases as objects and fetched when needed
 Lowers menu cost (cost of changing the price of goods/services)
 Enables market segmentation

 Common tools:
 Common Gateway Interface (CGI) (offers a standard protocol for web servers to execute
programs)
 Active server pages (ASP) (Microsoft's server-side script engine that enables dynamically-
generated web pages)
 Java Server Pages (JSP) (same purpose as above)
 Open Data Base Connectivity (ODBC), a std DB access method allows connections to any DB

 Advantages
 Lowers menu costs
 Permits easy online market segmentation
 Enables cost-free price discrimination
 Enables content management system (CMS)
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E-commerce Merchant Server Software
 Provides basic functionality for online sales
 Online catalog
 List of products available on Web site

 Online shopping cart

 Allows shoppers to set aside, review, edit selections,
and then make purchase
 Credit card processing
 Typically works in conjunction with shopping cart
 Verifies card and puts through credit to company’s
account at checkout

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 The Hardware Platform
 Hardware platform:
 Underlying computing equipment needed for
e-commerce functionality
 Objective:
 Enough platform capacity to meet peak demand
without wasting money
 Important to understand the factors that
affect speed, capacity, and scalability of a
site

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Right-Sizing Your Hardware Platform:
The Demand Side
 Customer demand:
 Most important factor affecting speed of site
 Factors in overall demand:
 Number of simultaneous users in peak periods
 Nature of customer requests (user profile)
 Type of content (dynamic vs. static Web pages)
 Required security
 Number of items in inventory
 Number of page requests (Google has 40,000 per sec)
 Speed of legacy applications
 SEE TABLE 4.7 PG 217: FACTORS IN RIGHT-SIZING E-COMMERCE
PLATFORM

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 Personalization Tools
 Personalization
 Ability to treat people based on personal
qualities and prior history with site
 Customization
 Ability to change the product to better fit the
needs of the customer
 Cookies
 Primary method to achieve personalization
 Amazon.com customizes the content of the homepage based on
products you have viewed in the past

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-24
Developing a Mobile Web Site and Building
Mobile Applications
 Three types of m-commerce software
 Mobile Web site
 Browser-based Internet services accessed from
handheld mobile devices
 Mobile Web app built for a mobile web browser
of a smart device (phone, tablet)
 Native app designed specifically for mobile device

 Planning and building mobile presence

 Use systems analysis/design to identify unique
and specific business objectives
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 Developing a Mobile Web Presence
 Design considerations
 Platform constraints: Smartphone/tablet

 Performance and cost

 Mobile Web site:
 Least expensive

 Mobile app:
 Can utilize browser API

 Native app:
 Most expensive; requires more programming

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Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 4-27