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E-Commerce Systems Chapter 8

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Presentation on theme: "E-Commerce Systems Chapter 8"— Presentation transcript:

1 E-Commerce Systems Chapter 8
McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

2 Learning Objectives Identify the major categories and trends of e-commerce applications Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications Identify and give examples of key factors and Web store requirements needed to succeed in e-commerce

3 Learning Objectives Identify and explain the business value of several types of e-commerce marketplaces Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives

4 Case 1: KitchenAid & Royal Bank of Canada
Companies doing business online must police unauthorized use of brand names, logos, and trademarks to protect their investments Companies such as BrandProtect, MarkMonitor, and NameProtect help companies fight for control of their brands and reputations Brand protection challenges have grown exponentially Using logos without permission is easy; go to a web site, grab a logo, and put it somewhere else

5 Case Questions Consider your online shopping patterns
How much weight do you place on the presence of a name, logo, or other trademark on a Web site when purchasing goods or services? Do you stop to consider whether you may have been misled? How could you tell the difference?

6 Case Questions Brian Maynard of KitchenAid notes that development of the Internet changed the problem of brand policing What are some of these changes? What challenges can you think of that did not exist in the pre-online world?

7 Case Questions The companies mentioned in the case (Kitchen-Aid, RBC, Disney, Coke) were well established and enjoyed strong brand recognition well before the advent of the Internet Do you think online-only companies face the same problems as they do?

8 Introduction to e-Commerce
Selling Accepting payments Marketing Delivering E-commerce encompasses the online process of… Servicing Developing Internet and other information technologies support every step of the process

9 Scope of e-Commerce

10 E-Commerce Technologies

11 Categories of e-Commerce
Business-to-Consumer (B2C) Consumer-to-Consumer (C2C) Business-to-Business (B2B) Virtual storefront Multimedia catalogs Interactive order processing Electronic payments Online customer support Online auctions Posting to newspaper sites Personal websites E-commerce portals Electronic business marketplaces Direct links between businesses, auctions, and exchanges

12 Essential e-Commerce Architecture

13 Access Control and Security
E-commerce processes must establish mutual trust, secure access between parties User names and passwords Encryption key Digital certificates and signatures Restricted access areas Other people’s accounts Restricted company data Webmaster administration areas

14 Profiling and Personalizing
Profiling gathers data on you and your website behavior and choices User registration Cookie files and tracking software User feedback Profiling is used for Personalized (one-to-one) marketing Authenticating identity Customer relationship management Marketing planning Website management

15 Search Management Search processes help customers find the specific product or service they want E-commerce software packages often include a website search engine Customized search engine may be acquired from companies like Google or Requisite Technology Searches are often on content or by parameters

16 Content and Catalog Management
Content Management Software Helps develop, generate, deliver, update, and archive text and multimedia information at e-commerce websites Catalog Management Software Helps generate and manage catalog content Catalog and content management software works with profiling tool to personalize content Product configuration and mass customization

17 Workflow Management E-business & e-commerce management depends on a workflow software engine Software model of business processes Workflow models express predefined Sets of business rules Roles of stakeholders Authorization requirements Routing alternatives Databases used Task sequences

18 Example of Workflow Management

19 Most e-commerce applicants are event driven
Event Notification Most e-commerce applicants are event driven Responds to customer’s first website visit, payments, and so on Monitors all e-commerce processes Records all relevant events, including problem situations Notifies all involved stakeholders Works in tandem with user-profiling software

20 Collaboration and Trading
Processes support vital collaboration arrangements and trading services Needed by customers, suppliers, and other stakeholders to accomplish e-commerce transactions Online communities of interest , chat, discussion groups Enhances customer service Builds loyalty

21 Electronic Payment Example
Complex processes Near-anonymous and electronic nature of transactions Many security issues Wide variety of debit and credit alternatives Financial institutions may be part of the process Web Payment Processes Shopping cart process Credit card payment process Debit and other more complex processes Electronic Funds Transfer (EFT) Major payment system in banking, retail Variety of information technologies capture and process money and credit card transfers Most point-of-sale terminals in retail stores are networked to bank EFT systems

22 Securing Electronic Payments
Network sniffers easily recognize credit card formats Encrypt data between customer and merchant Encrypt data between customer and financial institution Take sensitive information off-line

23 E-Commerce Application Trends

24 Case 3: Driving the “Buzz” on the Web
Social networks contain “influentials” Old Thinking Influentials drive proactive behavior in others Influentials can’t be influenced in a way that accelerates a word-of-mouth campaign New Thinking Find embryo trends, then help influentials discover them

25 Case Study Questions How can companies benefit from the “cultural assessments” regularly performed by Mattel? How could the information obtained be used to create business value for those organizations? In spite of disconfirming evidence as to the effectiveness of targeting online opinion leaders, companies are increasing their efforts to identify and contact them Why do you think this is the case?

26 Case Study Questions One of the participants in the case states that “you want to ride the wave, rather than trying to start one of your own” What does she mean by that? If companies are not starting these “waves,” where are they coming from?

27 B2C E-Commerce Success Factors
Selection & value Performance and service Look and feel Advertising and incentives Personal attention Community relationships Security and reliability Great consumer communications

28 Differences in Marketing

29 Web Store Requirements

30 B2B E-Commerce B2B is the wholesale and supply side of the commercial process Businesses buy, sell, or trade with other businesses Electronic funds transfers Data interchange Relies on multiple electronic information technologies Trading systems Catalog systems

31 E-Commerce Marketplaces
One to Many Sell-side marketplaces One supplier dictates product offerings and prices Many to One Buy-side marketplaces Many suppliers bid for the business of a buyer Some to Many Distribution marketplaces Unites suppliers who combine their product catalogs to attract a larger audience

32 E-Commerce Marketplaces
Many to Some Procurement marketplaces Unites major buyers who combine purchasing catalogs Attracts more competition, which lowers prices Many to Many Auction marketplaces Dynamically optimizes prices

33 B2B E-Commerce Web Portal
B2B e-commerce portals offer multiple marketplaces Catalogs Exchanges Auctions Often developed and hosted by third-party market-maker companies Infomediaries serve as intermediaries in e-business and e-commerce transactions

34 Clicks and Bricks Success will go to those who can integrate Internet initiatives with traditional operations Merging operations has trade-offs

35 Integrated vs. Separate e-Business
The business case for merging e-commerce with traditional business operations Move strategic capabilities in traditional operations to the e-commerce business Integrate e-commerce into the traditional business Sharing of established brands Sharing of key business information Joint buying power and distribution efficiencies

36 Other Clicks and Bricks Strategies
Partial e-commerce integration Joint ventures and strategic partnerships Complete separation Spin-off of an independent e-commerce company Barnes and Noble’s experience with spin-off Gained venture capital, entrepreneurial culture, flexibility Attracted quality management Accelerated decision making Failed to gain market share

37 E-Commerce Channel Choices
An e-commerce channel is the marketing or sales channel created by a company for its e-commerce activities There is no universal strategy or e-commerce channel choice Both e-commerce integration and separation have major business pros and cons Most businesses are implementing some measure of clicks-and-bricks integration

38 E-Commerce Strategy Checklist
Questions to ask and answer What audiences are we attempting to reach? What action do we want audiences to take? Who owns the e-commerce channel within the organization? Is the e-commerce channel planned alongside other channels? Is there a process for generating, approving, releasing, and withdrawing content? Will our brand translate to the new channel? How will we market the channel itself?

39 Case 2: Entellium, Digg, Peerflix, Zappos, Jigsaw
For many Internet companies, the second-mover advantage is substantial Second-movers can use the same approach as first movers, but with better products and services, at much lower cost Another strategy is to use combinations of successful business models

40 Case Study Questions Is the second-mover advantage always a good business strategy? Defend your answer with examples of the companies in this case What can a front-runner business do to foil the assaults of second movers? Defend your answer using examples of the front-runner companies in the case Do second movers always have the advantage in Web based business success? Evaluate the five strategies in the case, and the companies that used them, to defend your answer

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