1. Chapter 5 Electronic Commerce: Strategies for the New Economy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. STUDENT LEARNING OUTCOMES 1. Define and describe the 9 major e- commerce business models. 2. Identify the differences and similarities among customers and their perception of value in B2B and B2C e-commerce. 3. Compare and contrast developing a marketing mix in B2B and B2C e-commerce. 5-2

3. STUDENT LEARNING OUTCOMES 4. Summarize ways of moving money in e- commerce and related issues. 5. Discuss major trends that are impacting both the e-commerce world and society in general. 5-3

4. WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES?  Black Friday is traditionally a big day for retailers  It’s when Christmas shoppers spend a lot of money, moving retailers out of the red and into the black  But Black Friday may soon be replaced by Cyber Monday  Cyber Monday is the Monday after Thanksgiving when people go back to work and buy products online 5-4

5. WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES?  The “e” in e-commerce changes a lot of things  For example, Black Friday is a brick-and- mortar concept; Cyber Monday is an “e” (electronic) concept  No matter, any kind of commerce is still just commerce  And all businesses must execute well to survive and thrive 5-5

6. WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES? 1. Do you shop for gifts online? If so, at what sites and for what occasions? 2. What’s your take on people spending time at work to shop for personal items? 3. How can brick-and-mortar retailers take advantage of Cyber Monday? 5-6

7. INTRODUCTION  E-commerce is changing everything  Electronic commerce (e-commerce) 5-7

8. INTRODUCTION  But e-commerce is still commerce 5-8

9. CHAPTER ORGANIZATION 1. E-Commerce Business Models  Learning outcome #1 2. Understand Your Business, Products, Services, and Customers  Learning outcome #2 3. Find Customers and Establish Relationships  Learning outcome #3 5-9

10. CHAPTER ORGANIZATION 4. Move Money Easily and Securely  Learning outcome #4 5. E-Business Trends  Learning outcome #5 5-10

11. E-COMMERCE BUSINESS MODELS 5-11

12. B2B E-Commerce  Business to Business (B2B) e-commerce 5-12

13. B2C E-Commerce  Business to Consumer (B2C) e-commerce 5-13

14. C2B E-Commerce  Consumer to Business (C2B) e-commerce 5-14

15. C2C E-Commerce  Consumer to Consumer (C2C) e- commerce 5-15

16. B2G E-Commerce  Business to Government (B2G) e- commerce 5-16

17. C2G E-Commerce  Consumer to Government (C2G) e- commerce 5-17

18. G2B E-Commerce  Government to Business (G2B) e- commerce 5-18

19. G2C E-Commerce  Government to Consumer (G2C) e- commerce 5-19

20. G2G E-Commerce  Government to Government (G2G) e- commerce  Vertical govt integration  Horizontal govt integration  )  Mainly about information sharing, not commerce 5-20

21. UNDERSTAND YOUR BUSINESS, PRODUCTS, SERVICES, & CUSTOMERS  To be successful, you must… 5-21

22. Who Are Your Customers?  Business to Business  Other businesses  Business to Consumer  Individuals  Each is different and has different needs and wants 5-22

23. Customer Product and Service Value Perception 5-23

24. B2C: Convenience Versus Specialty  Convenience  Specialty 5-24

25. B2C: Commoditylike and Digital  Commoditylike  Digital 5-25

26. B2C: Mass Customization  Mass customization 5-26

27. B2B: MRO Versus Direct  Maintenance, repair, and operations (MRO) materials (indirect materials) 5-27

28. MRO Materials  Buyers in B2B make large purchases  Can then demand a discount (not true in B2C)  Can team up with other buyers to create demand aggregation  Demand aggregation 5-28

29. Direct Materials  Direct materials 5-29

30. Direct Materials  Buyers can participate in reverse auctions for direct materials  Reverse auction 5-30

31. B2B: Horizontal Versus Vertical  B2B e-commerce takes advantage of e- marketplaces  Electronic marketplace (e-marketplace) 5-31

32. E-Marketplaces 5-32

33. Horizontal E-Marketplace  Horizontal e-marketplace 5-33

34. Vertical E-Marketplace  Vertical e-marketplace 5-34

35. To Summarize  B2C 5-35

36. To Summarize  B2B 5-36

37. FIND CUSTOMERS AND ESTABLISH RELATIONSHIPS 5-37

38. Business to Consumer  Need to determine your marketing mix  Marketing mix 5-38

39. B2C Marketing Mix Tools 5-39

40. Registering with Search Engines 5-40

41. Online Ads  Online ads (banner ads)   Two variations are:  Pop-up ad  Pop-under ad 5-41

42. Online Ads Banner ad for a loan lending services 5-42

43. Viral Marketing  Viral marketing 5-43

44. Affiliate Programs  Affiliate program 5-44

45. Affiliate Programs  Click-throughs and conversion rates are important  Click-through  Conversion rate 5-45

46. Affiliate Programs 5-46

47. Business to Business Marketing 5-47

48. Business to Business Marketing 5-48

49. To Summarize  B2C 5-49

50. To Summarize  B2B 5-50

51. MOVE MONEY EASILY & SECURELY 5-51

52. B2C Payment Systems 5-52

53. Financial Cybermediaries  Financial cybermediary 5-53

54. Financial Cybermediaries 5-54

55. Electronic Checks  Electronic check 5-55

56. Electronic Bill Presentment & Payment  Electronic Bill Presentment and Payment (EBPP)  5-56

57. Smart Cards  Smart card 5-57

58. B2C Payment Systems  Must move money and other information such as shipping address  Digital wallets can help  Digital wallet 5-58

59. Digital Wallets 5-59

60. B2B Payment Systems 5-60

61. EDI  Electronic data interchange (EDI) 5-61

62. EDI and a VAN 5-62

63. Financial EDI  Financial EDI 5-63

64. Security: The Pervading Concern 5-64

65. Encryption  Encryption  Often through public key encryption (PKE) 5-65

66. Public Key Encryption 5-66

67. Secure Sockets Layers  Secure Sockets Layer (SSL)…  Denoted by lock icon on browser or https:// (notice the “s”) 5-67

68. Secure Sockets Layers The “s” in https and the padlock 5-68

69. Secure Electronic Transactions  Secure Electronic Transaction (SET) 5-69

70. To Summarize  B2C 5-70

71. To Summarize  B2B 5-71

72. To Summarize  B2C and B2B – security…  Overriding concern  Encryption, SSLs, SET, and others 5-72

73. E-BUSINESS TRENDS 5-73

74. E-Business Trend - Youth  Screenager  Digital native 5-74

75. E-Business Trend – M-Commerce  Mobile computing  M-commerce 5-75

76. E-Business Trend – Long Tail  Long Tail 5-76

77. E-Business Trend – Long Tail 5-77

78. E-Business Trend – Long Tail 5-78