2. CHAPTER OBJECTIVES © SOUTH-WESTERN EDUCATIONAL PUBLISHING E-COMMERCE nDescribe the recent growth of the Internet. nDiscuss common business uses of the Internet besides selling products. nDescribe the stages businesses commonly go through in developing an e-commerce business. nIdentify successful e-commerce businesses and strategies. nOutline the steps for starting an e-commerce business. 99

3. © SOUTH-WESTERN EDUCATIONAL PUBLISHING THE GROWTH OF THE INTERNET Millions of people accessing info and communication via the Internet E-commerce – doing business on-line; using the Internet to buy/sell products and exchange business info Transmitting purchases Advertising Allows many small businesses to compete with larger, estb. Companies; however, only ONE percent of all sales are completed using the Internet

4. © SOUTH-WESTERN EDUCATIONAL PUBLISHING THE GROWTH OF THE INTERNET Estimated number of Web site providers 10,000,000 300,000 4 200

5. © SOUTH-WESTERN EDUCATIONAL PUBLISHING THE GROWTH OF THE INTERNET 500 million people have access 50 millions homes in 2000; only 13 million in 1995 US leads the world in use of Internet – 40% of users Internet sales for 1998 – $8 billion B2B (business-to-business) sales for 1998 – $45 billion Internet sales expected to reach $2 trillion by 2005 There are other uses for Internet other than sales …

6. © SOUTH-WESTERN EDUCATIONAL PUBLISHING BUSINESS USES OF THE INTERNET nBusiness communications – in and outside of company; post employee newsletter; send reports, memos, letter to co-workers nProvide info about co. and products to customers nOnline training, financial planning and accounting

7. © SOUTH-WESTERN EDUCATIONAL PUBLISHING BUSINESS USES OF THE INTERNET nInformation gathering - research nUsed to make decisions nFree nGather data on customers nCustomers can request info/ask Qs nGet competitor info nImproving business operations

8. © SOUTH-WESTERN EDUCATIONAL PUBLISHING BUSINESS USES OF THE INTERNET nImproving business operations nInventory control nWhen product is sold nOrder can immediately be entered nSpeeds up processing and shipping nDownload financial statements nReduction in cost of business activity nAir flight, banking, paying bills, software

9. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Difference between companies nDot-com – internet company nBrick-and-mortar – have an actual physical location

10. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Three STAGES OF E-COMMERCE DEVELOPMENT nInformation stage nSimple nProvides basic info. about the company nProducts nServices nAddress nHours nPayment methods nManuals nUpdates

11. © SOUTH-WESTERN EDUCATIONAL PUBLISHING STAGES OF E-COMMERCE DEVELOPMENT nInteraction stage nInteracts with the customer nEmail nCustomer is able to request info, ask questions or contact specific people nCheck product availability nCalculate costs nDetermine how long until delivery

12. © SOUTH-WESTERN EDUCATIONAL PUBLISHING STAGES OF E-COMMERCE DEVELOPMENT nIntegration stage nEntire customer transaction can be completed using the Internet nCan place an order and pay for the order nTrack shipment nObtain customer assistance

13. © SOUTH-WESTERN EDUCATIONAL PUBLISHING SUCCESS WITH E-COMMERCE nLeading Internet businesses nSites selling books, computer hardware/software and music nEbay, Amazon, Dell, Buy.com, OnSale.com, Gateway, Egghead, BarnesnadNoble, AOL nRapidly growing nTravel, investing, insurance and toys

14. © SOUTH-WESTERN EDUCATIONAL PUBLISHING SUCCESS WITH E-COMMERCE nAdvertising n1998 - spent less than $2 billion n2002 - expected to be $15 billions nInternet Advertising Bureau - established standards for size and appearance of Internet ads.

15. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Relative Sizes of Common Internet Advertisements Full Banner 468  60 pixels Full Banner 468  60 pixels Half Banner 234  60 pixels Half Banner 234  60 pixels Button 120  90 pixels Button 120  90 pixels Vertical Banner 120  240 pixels Vertical Banner 120  240 pixels Micro Button 88  31 pixels

16. © SOUTH-WESTERN EDUCATIONAL PUBLISHING SUCCESS WITH E-COMMERCE nNeed to meet customer needs nOnly 2% of users go online to make a purchase nUsually very loyal; will come back nPrimary consumer concerns nSecurity nDifficulty in making purchases nBelief of poor customer service

17. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Consumer and E-COMMERCE nHow to keep them nUnderstandable, easy-to-use Web site nGet products quickly after order nFamiliar businesses and brand names nUseful/accurate info nHow to lose them nOut-of-date info nSlow response in any process nWebsite is slow nPoor customer service

18. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ESTABLISHING AN E-COMMERCE BUSINESS nDetermine the purpose of your Web site nEntire business or just provide info nStudy your customers nWho are they, what they want, interests, product they typically buy, AGES nPlan your online business nBased on study above you will decide what products/services to offer

19. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ESTABLISHING AN E-COMMERCE BUSINESS nObtain a server and domain name nWeb-hosting service; maintains web for a fee; must register domain name ($35/yr) nDevelop order processing and customer service procedures nSpecialized software - electronic shopping carts; secure server to accept payment; process for filling orders nDesign the Web site nAttractive and easy to use; basic design

20. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ESTABLISHING AN E-COMMERCE BUSINESS nAdvertise your online business nRegister business with major search engines nPlace advertising in other internet locations nOpen for business nMaintain and update web site regularly; keep up with latest technology and online business procedures

21. © SOUTH-WESTERN EDUCATIONAL PUBLISHING ESTABLISHING AN E-COMMERCE BUSINESS nDetermine the purpose of your Web site nStudy your customers nPlan your online business nObtain a server and domain name nDevelop order processing and customer service procedures nDesign the Web site nAdvertise your online business nOpen for business