1. Review Slides of Chapter 8

2. 8-1 E-Commerce

3. The Expanding World of E-Commerce
E-Commerce- involves business activities, including the exchange of goods, services, and information, completed electronically via the Internet.
Includes purchasing and selling products online, providing and exchanging business information, and offering customer service and support.

4. The Expanding World of E-Commerce
The introduction of the personal computer happened in the late 1970s.
The World Wide Web was introduced in 1991.
The Internet is an important way for businesses to reach both final consumers and other businesses.

5. The Expanding World of E-Commerce
By 2007 more than 200 million people in the United States or about 70 percent of the population has internet access.
By 2007 there were over 1 billion users worldwide, a 209 percent increase since 2000.
Almost all businesses of significant size use computers and the Internet in their daily operations.

6. Business on the Net
Not all businesses can complete all of their activities online
Companies that can complete almost all of their business online are called click-only companies.
Companies that complete most of their activities by means other than the internet are called brick-and-mortar businesses.
Companies that use both the internet and traditional businesses operations are called brick-and-click businesses.

7. Stages of Development
Businesses progress through three stages as they develop their e-commerce presence on the Internet.
Information Only:
Develop a simple website, which is a form of of one way communication through the Web.
Provides basic information.
Customers can’t use the website to interact with the business directly.
Must still visit business in person or call them directly to obtain more information or make a purchase.

8. Stages of Development Interaction Stage:
In addition to providing information, the company uses its website to interact with the customers (ex: ).
Companies can add a database in which customers can search for specific information, check availability, calculate costs with shipping charges, and determine how long it will take to be delivered.
Site may contain an order form, customers can or fax the form to the company but cant place an order directly on the website.

9. Stages of Development Full Integration:
An entire business transaction can be completed on an integrated site.
Can place an order, pay for it, track it until it’s delivered, and obtain assistance before and after the sale- all using the Internet.

10. Success in E-Commerce
To be successful, businesses need to identify target markets and develop the marketing mix that meets the target market’s needs.
They must also provide a high level of service and complete all marketing activities.

11. Advantages of E-Commerce
Immediate access to prospective customers all over the world.
Can introduce new products or update product information instantaneously.
Customer’s questions and concerns can be sent to a business at anytime and a response can be delivered immediately.
Customers can order products day or night any day of the year.
Companies can enter international markets by translating the language of the website.

12. Disadvantages of E-Commerce
Not all businesses started online understand what is necessary for success.
Products aren't always what they seem, not delivered on time, can be damaged when received.
Errors can be made during order processing.
Returning products is difficult.
Much more difficult to predict demand for products.
Customers expects service and support 24/7 which puts pressure on the businesses employees.
The changing nature of competition and the purchasing behavior of customers is difficult to predict.
Online companies have to compete for business worldwide.
Many consumers use websites to compare prices and don’t actually buy something.

13. The Marketing Concept Applied to E-Commerce
A companies information can be viewed by many people in many locations so it’s important to understand the needs and wants of their target market and how those wants/needs can be satisfied.
Business must be able to offer the products and services customers want and distribute them effectively, make purchases affordable, make ordering and paying online east, and provide adequate descriptions and pictures to answer important customer questions.
Must also provide service after the sale and provide expected services during the sale.
All parts of the marketing mix are essential to successful
E-Commerce.

14. Review Many businesses use E-Commerce to conduct business.
E-Commerce does not include only sales made by businesses using the internet.
The World Wide Web was introduced in 1991.
Around the world as of 2007, the internet was used by about 1 billion people.
The three stages of development for business websites are Information Only (the most basic stage), Interaction, and Full Integration.
Companies have access to customers around the world.
Small businesses can compete more effectively against large businesses on the internet.
The internet has resulted in the development of new products.
Click-only businesses preform almost to all of their business online.
All marketing mix elements are important to a business using E-Commerce.

15. Section 8.2 The Growing Importance of E-Commerce
You can work in Internet marketing with just a high school diploma

16. The Internet was first developed in the 1950s as a military and research tool.
Over 120 million businesses, organizations, and individual registered websites were active worldwide in 2007; millions are added each year.
The United States has an est. 211 million online users (highest number of users in the world).

17. Businesses use the web to learn about their competitors’ prices as well as credit terms.
Small businesses use the Internet to identify with other businesses: distribution, customer services, billing, and collecting payments.
Internet can make small businesses international by giving them resources to reach customers located in other countries.

18. Business-To-Consumer 2006… Internet sales were $110 billion
B2C
Business-To-Consumer
2006… Internet sales were $110 billion
Small percentage of an individual’s purchases are online
B2B
Business-To-Business
2007… Internet sales were over $800 billion
Online sales will likely increase by millions and even billions of dollars in future years

19. Benefits of businesses using the Internet:
Communication
Gathering Information
Improving Operations
Who provides information for the Internet?
Businesses
Government Agencies
Colleges
Universities
Libraries

20. There is faster than average growth in employment for e-marketing/ e-commerce
Businesses send messages, exchange documents, offer training, and update records online.
Internet sales to consumers represent about 3% of all consumer purchases

21. 8.3 Marketing Via the Internet
What is virtual marketing?
It is the completion of marketing activities primarily through the use of computer and internet technologies.
Examples include:
Online surveys
Distribution of electronic products
Electronic payments
Communication and promotion strategies

22. Pros and Cons of Virtual Marketing
Customers can purchase products from any company
Customers have more choices when it comes to stores
By using search engines you can easily find venders/suppliers
It can be shipped to stores instead of your home
Cons:
The marketing plan is more difficult for e-commerce
Purchasing online can be risky, people can possibly get your credit card information

23. Distribution for E-commerce
Distribution is the marketing function that determines success or failure of a company that are engaged in e-commerce
With internet access customers can locate and purchase products from a company that has a website.
More and more companies are integrating product purchasing on websites.
Information must be sent to the county department for billing and processing of payments.

24. Distribution Problems and Solutions
The key distribution problems facing many e-commerce business are security of transactions, expanded distribution requirements and customer services demands.
Over half of all internet consumers make at least one online purchase every three months.
A product fulfillment center provides some or all of the activities required to fill customers orders.
#goducks

25. Cookies
Cookies are small files that a web server sends to your web browser when you access a site

26. Distribution for E-Commerce
Effective distribution is an important part of satisfying customer needs.
Major distribution changes in e-commerce have been in access to products and services, order processing, and the methods used to distribute products from the business to its customers.

27. Finding and Buying Products
With Internet access consumers have more choices of companies and products.
Consumers and companies can easily find suppliers and vendors on the Internet by using a search engine.
The Internet has made it easier for a company to process an order.
Online shopping carts have been designed to make it easy to complete an order, make immediate payment, and submit the order securely.
Eventually U.S. consumers will make up only a small percentage of individuals shopping on the Internet.

28. Order Processing
The Internet has streamlined order processing and reduced the amount of paper that must be handled to complete a sales transaction.
The customer or salesperson can check on the status of the order at any time it is processed, filled, and shipped.
The use of the Internet for order processing reduces the number of errors since the accuracy of the order can be more easily checked.
PRODUCT
SAVINGS
Computer Software
99%
Banking Services
89%
Airline Tickets
87%
Stocks
78%
Books
56%
Toys/Gifts
48%

29. Product Distribution
The Internet allows many services to be easier to process and products less expensive to distribute.
Companies have had to change the form of their products to be able to distribute them using the internet. Ex. Airlines and E-tickets.
Express packages, fresh flowers, and gourmet foods can be transported on airplanes to insure rapid shipment, so it is not possible for those types of products to be distributed using the Internet.

30. Distribution Problems and Solutions
The key distribution problems include the security of transactions, expanded the distribution requirements, and customer service demands.
Privacy concerns have led some users to distrust and avoid sites that use cookies (small files that a web server sends to your browser when you access a site) because the cookies can be sent to a users computer without their permission.

31. Transaction Security
One of the greatest concerns express by customers is the security of their personal information they must provide to the company when placing an order.
The most important is that their credit card number will be stolen.
There are alternatives to using a credit card to purchasing a product on the internet for example; pre arranged payments.
Consumers are also afraid the business will misuse the information after the order has been processed. To meet this concern, companies have purchased security technology.

32. Expanded Distribution and Customer Service
Businesses found that they had to distribute their products in different ways to many more locations than before. For example; books can be electronically delivered to a customer but flowers cannot (most products can be electronically ordered).
Companies such as UPS and FedEx have expanded their services and offer overnight shipping.
E-businesses offer complete return policies and procedures on their websites, while some have made arrangements to make returns at local stores.
Customer service centers have been improved by 24/7 online help centers, FAQ’s, and product warranties.

33. 8.4 The Role of Promotion for E-Commerce

34. Promotion Methods
Online Advertising - Companies compete online for the attention of internet users. Online Advertising is reviewed by the Internet Advertising Bureau which established standards for size, appearance and use of methods. There are different types of methods to use for online advertising such as..
Pop-Up ads, which is an advertisement that opens in a new window when a web page is being viewed.
Rich Media include a variety of digital technologies that provide interactive multimedia experiences for users.
Web Sponsoring - A way to build recognition of a company's name and products. The sponsor's name is included on the website so that visitors see the name each time they access the site.
Example: A bank could sponsor a website that helps consumers understand how to lease or finance a automobile.

35. Promotion Methods
Priority Placement - Some search engines display the sponsor's name, link to the website, and a brief description or promotional message in a column beside the search results.
Example : Google and Yahoo
Information Web Sites - Companies and organizations develop free websites on topics of interest to their prospective customers. Companies believe that when customers better informed, they are more likely to purchase related products and services.
Example : Petersons.com (provides information on choosing a college)

36. Other Types of Promotion
Internet use has developed many creative ways to promote and sell products.
A company can purchase lists from other companies and then those people promotions/coupons.
Internet promotions are used to encourage consumers to ask for free samples of the product.
New audio-visual technology allows businesses to provide detailed products information
new personalized methods of promotion includes online newsletters, messages, and business blogs.

37. Planning the Shopping Experience
The reasons for higher satisfaction in online shopping includes convenience, saving time, and getting everything from one source
It is much easier to compare competitive pricing online rather than in stores
The design of the website is significantly important because it helps attract consumers to the business and finalize a purchase
When companies carefully plan the shopping experience for internet customers, provide needed information, and make shopping easy and enjoyable, customers will be willing to buy online

38. Effective Promotion Methods
Promotion can be more than just advertising
Promotional tools for e commerce include
simple website name that is easy for people to remember
promotions that might include an incentive that would increase visits to the website
other advertisements not online, such as newspapers and tv
a customer service area on the website for people to ask questions
collect information about the target market

39. Review questions for Chapter 8 Test
Strong Hint!!!!
What is E-Commerce?
Review questions for Chapter 8 Test

40. True or False?
The Internet was developed as a military and research tool in the 1950’s.
True

41. True or False?
Internet sales to consumers represent less than three percent of all consumer purchases.
True

42. True True or False? Many established businesses use
e-commerce to conduct business.
True

43. E-commerce includes only sales made on the Internet.
True or False?
E-commerce includes only sales made on the Internet.
False

44. True or False?
All businesses can complete all business activities using the Internet.
False

45. There are no disadvantages for businesses operating on the Internet.
True or False?
There are no disadvantages for businesses operating on the Internet.
False

46. *** You need to know these stages!!!
True or False?
Businesses go through three stages as they develop their e-commerce presence on the Internet.
*** You need to know these stages!!!
True

47. True or False?
Businesses on the Internet have immediate access to prospective customers all over the world.
True

48. True or False?
The Internet has resulted in the development of new products that can be delivered to customers’ computers.
True

49. True or False?
Many businesses believe that the Internet is not useful for the type of business activities they perform.
True

50. True or False?
Businesses can use the Internet to distribute information to customers but not to employees.
False

51. True or False?
The Internet has not affected a company’s ability to find information about its customers.
False

52. True or False?
Businesses can use the Internet to distribute information to customers but not to employees.
False

53. Small businesses cannot benefit competitively from using the Internet
True or False?
Small businesses cannot benefit competitively from using the Internet
False

54. True or False?
Most businesses do not use the Internet to gather information because they have to pay for almost all of the information.
False

55. Around the world, the Internet is used by
a)     500 million people
b)     500,000 people
c)      50 million people
d)     1 billion people D

56. A business that performs almost all of its business activities through the Internet is referred to as a
a)     Web.com business.
b)     click only business
c)      Bricks and mortar business.
d)     Traditional business. B

57. From the very beginning of the Internet, the primary way people have communicated using Internet technology is through
a)     .
b)     Web pages.
c)      Commercial transactions.
d)     All of the above A

58. Why were many of the first dot
Why were many of the first dot.com or click only companies unsuccessful? A. They had poor web site designs. B. They didn’t promote their products. C. They didn’t understand the marketing concept. D. They set prices too low. C

59. Which of the following is an advantage of e-commerce?
a)     Small companies can more easily compete with larger companies.
b)     All business expenses are lower.
c)      Businesses don’t need to perform every marketing activity.
d)     There is almost no competition. A

60. The use of the Internet as a place to buy and sell products had its beginnings:
a)     Just after World War II
b)     In the early 1970’s
c)      About 1985
d)     In the mid ’s D

61. What are the 3 stages of web development and what a web site in each stage would provide.
Information – the website provides basic information to help prospective customers as they gather information about products and companies.
Interaction – gives all of the above and an to interact questions with…. the company uses its website to interact with its consumers. They can check product availability, calculate product costs and shipping charges, and determine how long it will take to have an order delivered.
Integration – With all of the internet tools available , an entire business transaction can be completed on an integrated site. Customers can get necessary product, pricing, and shipping information . (Companies with integrated use of the internet do not have to be a dot.com business. )

62. What are Please list 2 types of business-to-business Internet communications (besides e-mail):
Answers will vary…

63. From our notes, please list two advantages and two disadvantages of the Internet:
Answers will vary…

64. On tomorrow’s test you will also have to know the following:
How to calculate market potential
How to calculate market share
How to calculate breakeven point.