E-Comemrce

E-Comemrce

1. Internet and WWW Capabilities

   • Information Dissemination
     • a relatively economical medium for firms to market their products and services over vast distance.  - global platform where firms can effectively compete for customers and access to new markets - No geographical limits. 
   • Integration
     • Integration of information via websites that can be linked to corporate database to provide real-time access to personalised information. 
     • Airline
       • - fares adjusted based on availability, booking time, current and historical demand, forecast demand. -> maximum revenue.   - offers customers the ability to check the frequent flier accounts, do not have to wait for mostly statements to see if they are eligible for travel benefits and rewards. 
   • Mass Customisation
     • - Customised product to meet customer's need -> increase competitive advantage. 
     • Dell Computer Corporation
       • - allow customers to customise their computer based on their specific performance needs - linking an online product configuration systems with JIT productions allows Dell to build each individual computers based on the customers' specification. 
   • Interactive Communication
     • - build customers loyalty by provide immediate communication - one-way video call, online chat box,  - demonstrates responsiveness 
     • Land's End
       • - text chat, one way video call - Outdistances traditional, non-electronic means in terms of tailoring and timeliness
   • Transaction Support
     • - lowers transaction cost by automation.  - Reducing human resources costs (phone representative, back-office staffs) - placed an order -> customer data base -> credit card is charged, inventory is checked, order routed to fulfilment centre -> shipping label is automatically generated. 
   • Disintermediation
     • - removal of middleman -> higher revenue/profit -> offer cheaper product.  - Have to handle problems + customer complains  - Reintermediation = add middle man. 

2. EC Business Strategy

   • Brick-and-Mortar
     • - Physical stores - High cost - Lowers perceive risks of buying  - Consumer immediate satisfaction of shopping
   • Click-only
     • - High perceived risk - Inconvenience return - Convenient shopping from home  - low costs of operations 
     • Amazon, Ebay
   • Click-And-Mortar
     • - fully maximise commercial opportunities in both dimensions  - require complex system to operate both  - Different skills are required to support web-based computing, require substantial resource investments. 
   • EC Revenue Models
     • 1. Affiliate marketing: Amazon 2. Subscription: Netflix 3. Licensing: Norton 4. Transaction fees/Brokerage: Paypal, eBay  5. Traditional sales: iTunes  6. Web advertising: Facebook

3. B2C E Commerce

   • - Reverse Pricing: consumers state what they want and what price they offer -> source for firms that are willing to match it up - Group buying: special discount by bulk purchasing
   • Benefits
     • Product
       • - Unlimited product, not restricted by physical space. Amazon vs regular bookstore - Price comparison: easy to compare price, compete with lower price + exposure. Booking.com (hotels), cheap flights.com (airfare). Or provide better quality/service
     • Place
       • - availability of virtual storefront as long as there's internet regardless of tIme and place. More competitive.  - Global scale
     • Price
       • - no rent expenses, retail space, employ sales clerks.  - Reduce cost, able to lower price, be more price competitive. 
     • Niche Market
       • - able to accomodate demands from the niche market.  - physical store has many limitations so will only cater to mainstream or mass market. (Cinema - popular movies) - Can be a successful business model in the digital world. 
   • Drawbacks
     • Shopping Experience
       • - lack of sensory information: taste, smell, feel  - trouble of returning - high perceive risks  - social needs  - However, provide anonymity -> buying stuffs that are too embarrassed to buy in person
     • Product Delivery Drawbacks
       • - delivery time lag, needs that are needed instantly - instant gratification of shopping  - fear of loss parcels
   • Websites
     • Structural Firmness
       • - ensure privacy and security of consumer's data - Website loading fast  - Understandable error message if something goes wrong
     • Functional Convenience
       • - easy to use - easy to fInd and navigate through site's link  - help features  - one-click ordering, variety of payment methods
     • Representational Delight
       • - aesthetically pleasing - easy to look at - professionalism  - use of colour schemes, backgrounds, high quality images  - clear, concise, consistent layout 

4. Internet Marketing

   • Search Marketing
     • - Have appearance on search engine such as google, Bing
     • Search Engine Optimisation
       • - attempt to move up the websites in the organic search results  - keep content updated, include keywords, have other pages link to the site -> position higher in the search results
     • Paid Search
       • - high quality leads, users actually search for the specific words - to appear on the first page of the result pages 
       • - click fraud for pay-per-click model  - abuse by clicking on link repeatedly -> high cost of advertising  - network click fraud = host  - competitive click fraud = competitors driving up advertising costs
       • Google's AdWords
         • - paid-per-click model
   • Mobile Marketing
     • - rise of mobile usage, increase apps  - placing ads in applications 
   • Social Media Marketing
     • - increase users on social media - pages to interact, promotions, inform - gather public feedbacks, ideas for new products and services 
     • Coca-Cola Company
       • - over 45 million fans - download free virtual goodies - build strong relationship with customers 
   • Display Ad
     • - ad space on websites - advertising presence  - ads pop up in between videos  - goods that are related to the content of a website  - interactive banner ads, static banner ads, video ads. 
   • E-Mail Marketing
     • - low cost of marketing compared to mail - effectiveness can be measured directly (including links or images in the email to track customers)  - build positive green image - save paper

5. Mobile Commerce

   • Location Based
     • - highly personalised mobile services based on user's location - making use of Global Positioning System (GPS)  - Information or service needs within an area - Recommend restaurants, shops  - receive real time traffic or public transport information 
   • Information on the Go
     • - Massive information online - easy and quick search  - Customers reviews - Showrooming  - QR codes, mobile ticketing 
   • Product and Content Sales
     • - Mobile versions of website  - create apps to sell goods or services  - Content like TV, newspapers - mobile networking - Facebook check in

6. C2C EC

   • E Auction
     • 1. Forward auction - highest bid wins. Buyers bid 2. Reverse auction - sellers bids, lowest bid wins - Market force sets price
     • Fraud
       • 1. Bid luring 2. Bid Shielding: two accounts. Chasing other bidders away and then withdraw the high bid.  3. Counterfeit items: claims to be an original but its not 4. Shipping Fraud: excessive handling and shipping fees  5. Payment failure: not paying for items after auction 6. Non-shipment: not sending items after payment is received 
   • Online Classifieds
     • - no transaction take place online but allows users to buy and sell things on their own.  - Craiglist, gumtree  - Freecycling 

7. E Government

   • G2C
     • - Taxation: filing for tax. Saving resources for paper and time - Smart ID card can be used as HK. 
   • G2B
     • - e-procurement, government streamlines its supply chain bu buying materials directly from suppliers 
     • GovSales.gov (US)
       • - marketplace for real time auctions for surplus and seized goods
   • G2G
     • - comprehensive e-government tools to find government-wide information related to business topics. - Inport and export website  - intergovernmental collaboration 

8. issues in EC

   • Legal
     • Taxation
       • Internet Tax Freedom Act: passed to create incentives for EC - put traditional business at a disadvantage  - Loss of sales tax 
     • Digital Rights Management
       • - digital media are easily copied and shared - lost revenue  - DRM control the digital media to discourage, limit or prevent illegal copying and distribution.  - restricts device, and how many can be used and how many times can be played.  - Use watermark to trace to orignial purchaser
   • Finances
     • Managing risks: - use automated fraud screening services  Fraud Indicators - Email addresses - Shipping and billing address: ship to foreign, high-risk countries, may require the 2 addresses to be the same - Transaction patterns: larger orders, using different cards to the same address, many transaction within a short period 
     • - Use third-party payment service: paypal or google checkout  - Protect customers, dun need to give too much private information - secure information - Ease of shopping 
     • Credit/Debit Cards
       • - Identity theft  - Card Verification Value: Only holding on to the actual card can see.  - fraudulent credit card details also post risks to sellers. 
     • Online Banking
       • - Security issues  - online investing has seen steadily growing  - apps to check balance, initiate transaction, trading