turban ec2010

Overview of Electronic Commerce

1. Define electronic commerce (EC) and describe its various categories. 2. Describe and discuss the content and framework of EC. 3. Describe the major types of EC transactions. 4. Discuss e-commerce 2.0. 5. Understand the elements of the digital world.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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6. Describe the drivers of EC as they relate to business pressures and organizational responses. 7. Describe some EC business models. 8. Describe the benefits and limitations of EC to organizations, consumers, and society.

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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electronic commerce (EC) The process of buying, selling, or exchanging products, services, or information via computer e-business A broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organizationCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-3


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OTHER EC CONCEPTS Pure Versus Partial EC EC Organizations brick-and-mortar (old economy) organizations Old-economy organizations (corporations) that perform their primary business off-line, selling physical products by means of physical agents virtual (pure-play) organizations Organizations that conduct their business activities solely online click-and-mortar (click-and-brick) organizations Organizations that conduct some e-commerce activities, usually as an additional marketing channelCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-5

electronic market (e-marketplace) An online marketplace where buyers and sellers meet to exchange goods, services, money, or information


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Interorganizational information systems (IOSs) Communications systems that allow routine transaction processing and information flow between two or more organizations Intraorganizational information systems Communication systems that enable e-commerce activities to go on within individual organizations


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intranet An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols extranet A network that uses the Internet to link multiple intranets


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AN EC FRAMEWORK Five support areas for EC applications People Public policy Marketing and advertisement Support services Business partnerships


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EC IS CLASSIFIED BY THE NATURE AND DIRECTION OF TRANSACTIONS AND INTERACTIONS business-to-business (B2B) E-commerce model in which all of the participants are businesses or other organizations business-to-consumer (B2C) E-commerce model in which businesses sell to individual shoppers e-tailing Online retailing, usually B2C


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business-to-business-to-consumer (B2B2C) E-commerce model in which a business provides some product or service to a client business that maintains its own customers consumer-to-business (C2B) E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they needCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-12

intrabusiness EC E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization business-to-employees (B2E) E-commerce model in which an organization delivers services, information, or products to its individual employeesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-13

consumer-to-consumer(C2C) E-commerce model in which consumers sell directly to other consumers collaborative commerce (c-commerce) E-commerce model in which individuals or groups communicate or collaborate online


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e-learning The online delivery of information for purposes of training or education e-government E-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens


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social computing An approach aimed at making the humancomputer interface more natural Web 2.0 The second-generation of Internet-based services that let people collaborate and share information online in new ways, such as social networking sites, wikis, communication tools, and folksonomiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-16

social network A category of Internet applications that help connect friends, business partners, or individuals with specific interests by providing free services such as photo presentations, e-mail, blogging, and so on using a variety of tools


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social network service (SNS) A service that builds online communities by providing an online space for people to build free homepages and that provides basic communication and support tools for conducting different activities in the social network social networking The creation or sponsoring of a social network service and any activity, such as blogging, done in a social network (external or internal)Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-19

enterprise-oriented networks Social networks whose primary objective is to facilitate business Examples of Enterprise Social Networks carnivalconnections.com xing.com


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virtual world A user-defined world in which people can interact, play, and do business. The most publicized virtual world is Second Life How Students Make Money in a Virtual World


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digital economy An economy that is based on digital technologies, including digital communication networks, computers, software, and other related information technologies; also called the Internet economy, the new economy, or the Web economy


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digital enterprise A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing technology in a way that improves business processesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-23


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corporate portal A major gateway through which employees, business partners, and the public can enter a corporate Web site


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The Changing Business Environment Economic, legal, societal, and technological factors have created a highly competitive business environment in which customers are becoming more powerful These environmental factors can change quickly, vigorously, and sometimes in an unpredictable manner Companies need to react quickly to both the problems and the opportunities resulting from this new business environmentCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-28


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The Business Environment and Performance Impact Model Business Pressures Organizational Response Strategies


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business model A method of doing business by which a company can generate revenue to sustain itself


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THE STRUCTURE AND PROPERTIES OF BUSINESS MODELS Revenue Models Sales Transaction fees Subscription fees Advertising fees Affiliate fees Other revenue sourcesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-32


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value proposition The benefits a company can derive from using EC Functions of a Business Model


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TYPICAL EC BUSINESS MODELS1. Online direct marketing 2. Electronic tendering systems tendering (bidding) system Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins

3. Electronic marketplaces and exchanges 4. Viral marketing 5. Social networking and Web 2.0 toolsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 1-36

THE BENEFITS AND IMPACTS OF EC EC provides benefits to organizations, individual customers, and society Ethical Issues ethics The branch of philosophy that deals with what is considered to be right and wrong

WHY STUDY E-COMMERCE?Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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E-Marketplaces: Mechanisms, Tools, and Impacts of E-commerce

1. Describe the major electronic commerce (EC) activities and processes and the mechanisms that support them. 2. Define e-marketplaces and list their components. 3. List the major types of e-marketplaces and describe their features. 4. Describe electronic catalogs, search engines, and shopping carts. 5. Describe the major types of auctions and list their characteristics.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-39

6. Discuss the benefits, limitations, and impacts of auctions. 7. Describe bartering and negotiating online. 8. List the major Web 2.0 tools and their use in EC. 9. Understand virtual worlds and their use in EC. 10. Discuss competition in the digital economy. 11. Describe the impact of e-marketplaces on organizations, intermediation, and industries.


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e-marketplace An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia marketspace A marketplace in which sellers and buyers exchange goods and services for money (or for other goods and services), but do so electronicallyCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-44

E-MARKETPLACE COMPONENTS AND PARTICIPANTS digital products Goods that can be transformed to digital format and delivered over the Internet front end The portion of an e-sellers business processes through which customers interact, including the sellers portal, electronic catalogs, a shopping cart, a search engine, and a payment gatewayCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-45

back end The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery intermediary A third party that operates between sellers and buyers


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TYPES OF E-MARKETPLACES Private E-Marketplaces sell-side e-marketplace A private e-marketplace in which one company sells either standard and/or customized products to qualified companies buy-side e-marketplace A private e-marketplace in which one company makes purchases from invited suppliers

Public E-MarketplacesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-47

storefront A single companys Web site where products or services are sold e-mall (online mall) An online shopping center where many online stores are located


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TYPES OF STORES AND MALLS General stores/malls Specialized stores/malls Regional versus global stores Pure-play online organizations versus click-and-mortar stores

Web portal A single point of access, through a Web browser, to critical business information located inside and outside (via Internet) of an organizationCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-49

Types of Portals Commercial (public) portal Corporate portals Publishing portals Personal portals mobile portal A portal accessible via a mobile device voice portal A portal accessed by telephone or cell phone Knowledge portalsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-50

THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES infomediaries Electronic intermediaries that provide and/or control information flow in cyberspace, often aggregating information and selling it to others e-distributor An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one placethe intermediarys Web siteCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-51

electronic catalogs (e-catalogs) The presentation of product information in an electronic form; the backbone of most e-selling sites Online Catalogs Versus Paper Catalogs

EC SEARCH ACTIVITIES, TYPES, AND ENGINES Types of EC Searches Internet/Web Search enterprise search The practice of identifying and enabling specific content across the enterprise to be indexed, searched, and displayed to authorized usersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-52

desktop search Search tools that search the contents of a users or organizations computer files, rather than searching the Internet. The emphasis is on finding all the information that is available on the users PC, including Web browser histories, e-mail archives, and word-processed documents, as well as in all internal files and databases


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search engine A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results Software (Intelligent) Agents Voice-Powered Search


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electronic shopping cart An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop Product Configuration


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auction A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids electronic auctions (e-auctions) Auctions conducted online Innovative AuctionsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-56

dynamic pricing Prices that change based on supply and demand relationships at any given time One Buyer, One Seller One Seller, Many Potential Buyers forward auction An auction in which a seller entertains bids from buyers. Bidders increase price sequentially


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reverse auction (bidding or tendering system) Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism name-your-own-price model Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.comCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-58


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Many Sellers, Many Buyers double auction An auction in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides

Copyright 2010 Pearson Education, Inc. 2009 Publishing as Prentice Hall

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Limitations of E-Auctions Minimal Security Possibility of Fraud Limited Participation

Impacts of Auctions Auctions as a Coordination Mechanism Auctions as a Social Mechanism to Determine a Price Auctions as a Highly Visible Distribution Mechanism Auctions as an EC Component Auctions for Profit for IndividualsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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ONLINE BARTERING bartering The exchange of goods and services e-bartering (electronic bartering) Bartering conducted online, usually in a bartering exchange bartering exchange A marketplace in which an intermediary arranges barter transactions

ONLINE NEGOTIATINGCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-63

BLOGGING (WEBLOGGING) blog A personal Web site that is open to the public to read and to interact with; dedicated to specific topics or issues vlog (or video blog) A blog with video content


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micro-blogging A form of blogging that allows users to write messages (usually up to 140 characters) and publish them, either to be viewed by anyone or by a restricted group that can be chosen by the user. These messages can be submitted by a variety of means, including text messaging, instant messaging, e-mail, MP3, or just on the Web


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Twitter A free micro-blogging service that allows its users to send and read other users updates. tweets Text-based posts up to 140 characters in length posted to Twitter Commercial Uses of Blogs Using Blogging to Facilitate Collaboration Potential Risks of Corporate Blogs Bloggers and PoliticsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-66

Mechanism Aids for Web 2.0 Tools tag A nonhierarchical keyword or term assigned to a piece of information (such as an Internet bookmark, digital image, video clip, or any computer document) folksonomy (collaborative tagging, social classification, social indexing, social tagging) The practice and method of collaboratively creating, classifying, and managing tags to annotate and categorize contentCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-67

social bookmarking Web service for sharing Internet bookmarks. The sites are a popular way to store, classify, share, and search links through the practice of folksonomy techniques on the Internet and intranets

wiki (wikilog) A blog that allows everyone to participate as a peer; anyone may add, delete, or change contentCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-68

avatars Animated computer characters that exhibit humanlike movements and behaviors BUSINESS ACTIVITIES AND VALUE IN VIRTUAL WORLDS Types of business activities in virtual worlds: Creating and managing a virtual business Conducting regular business activities Providing services for those who build, manage, or make money with virtual propertiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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COMPETITION IN THE INTERNET ECOSYSTEM Competitiveness Factors Lower search costs for buyers Speedy comparisons Lower prices Customer service Barriers to entry are reduced Virtual partnerships multiply Market niches abound differentiation Providing a product or service that is uniqueCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-70

Customization, Personalization, and Competition customization Creation of a product or service according to the buyers specifications personalization The ability to tailor a product, service, or Web content to specific user preferences


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TRANSFORMING ORGANIZATIONS Technology and Organizational Learning The Changing Nature of Work Disintermediation and Reintermediation disintermediation Elimination of intermediaries between sellers and buyers reintermediation Disintermediated entities or newcomers take on new intermediary rolesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-74

REDEFINING ORGANIZATIONS New and Improved Product Capabilities mass customization A method that enables manufacturers to create specific products for each customer based on the customers exact needs build-to-order (pull system) A manufacturing process that starts with an order (usually customized). Once the order is paid for, the vendor starts to fulfill itCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-75


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Retailing in Electronic Commerce: Products and Services

1. Describe electronic retailing (e-tailing) and its characteristics. 2. Define and describe the primary e-tailing business models. 3. Describe how online travel and tourism services operate and their impact on the industry. 4. Discuss the online employment market, including its participants, benefits, and limitations. 5. Describe online real estate services. 6. Discuss online stock-trading services.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-79

7. Discuss cyberbanking and online personal finance. 8. Describe on-demand delivery of groceries and similar products/services. 9. Describe the delivery of digital products and online entertainment. 10.Discuss various online consumer aids, including comparison-shopping aids. 11.Describe disintermediation and other B2C strategic issues.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-80

OVERVIEW OF ELECTRONIC RETAILING electronic retailing (e-tailing) Retailing conducted online, over the Internet e-tailers Retailers who sell over the Internet

SIZE AND GROWTH OF THE B2C MARKET WHAT SELLS WELL ON THE INTERNET CHARACTERISTICS AND ADVANTAGES OF SUCCESSFUL E-TAILING


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WHAT SELLS WELL ON THE INTERNET

Travel Computer hardware and software Consumer electronics Office supplies Sport and fitness goods Books and music Toys and hobbies

Health and beauty Entertainment Apparel and clothing Jewelry Cars Services Food and drugs Pet supplies Others82


CLASSIFICATION BY DISTRIBUTION CHANNEL1. Direct marketing by mail-order retailers that go online 2. Direct marketing by manufacturers 3. Pure-play e-tailers 4. Click-and-mortar retailers 5. Internet (online) malls


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Direct Marketing by Mail-Order Companies direct marketing Broadly, marketing that takes place without intermediaries between manufacturers and buyers; in the context of this book, marketing done online between any seller and buyer

Direct Sales by Manufacturers


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Pure-Play E-Tailers virtual (pure-play) e-tailers Firms that sell directly to consumers over the Internet without maintaining a physical sales channel


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click-and-mortar retailers Brick-and-mortar retailers that offer a transactional Web site from which to conduct business brick-and-mortar retailers Retailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores multichannel business model A business model where a company sells in multiple marketing channels simultaneously (e.g., both physical and online stores)


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OTHER B2C MODELS AND SPECIAL RETAILING Transaction brokers Information portals Community portal and social networks Content creators or disseminators Viral marketing Market makers Make (build)-to-order B2B2C Service providers

B2C IN SOCIAL NETWORKSCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-88

Online travel bookings and associated travel services are one of the most successful e-commerce implementations SPECIAL SERVICES ONLINE Wireless services Direct marketing Alliances and consortia Travel-Oriented Social NetworksCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-89

BENEFITS AND LIMITATIONS OF ONLINE TRAVEL SERVICES Benefits The amount of free information is tremendous Information is accessible at any time from any place Substantial discounts

Limitations Many people do not use the Internet The amount of time and the difficulty of using virtual travel agencies can be significant Complex trips or those that require stopovers might not be available online Copyright 2010 Pearson Education, Inc.Publishing as Prentice Hall

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IMPACT OF EC ON THE TRAVEL INDUSTRY Direct impacts because customers increasingly using the Internet to make bookings Indirect impacts because airlines and hotel chains encouraging customers to book direct or through online wholesalers, bypassing travel agents Investing in content (information, travel advice, and the like) is a requirement for success in this competitive marketCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-91

CORPORATE TRAVEL Many large corporations receive additional services from large travel agencies To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips Travel authorization software that checks availability of funds and compliance with corporate guidelines is usually provided by travel companiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-92


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THE INTERNET JOB MARKET The following parties use the Internet job market: Job seekers Employers seeking employees Classified ads Job agencies Government agencies and institutions

A Consortium of Large Employers and College Career Advisors Online Job Markets on Social Networking Global Online PortalsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-94


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BENEFITS AND LIMITATIONS OF THE ELECTRONIC JOB MARKET Probably the biggest limitation of the online job market is the fact that some people do not use and do not have access to the Internet, although this problem has declined substantially


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REAL ESTATE ONLINE Zillow, Craigslist, and Other Web 2.0 Real Estate Services

INSURANCE ONLINE Companies use Internet to offer standard insurance policies, such as auto, home, etc. often at a substantial discount to individuals

ONLINE STOCK TRADING The Risk of Trading in an Online Stock AccountCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-98


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electronic (online) banking or e-banking Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking


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HOME BANKING CAPABILITIES Informational, administrative, transactional, portal, and others

VIRTUAL BANKS Have no physical location; only conduct online transactions

INTERNATIONAL AND MULTIPLE-CURRENCY BANKING Support global transactionsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-101

ONLINE FINANCIAL TRANSACTION IMPLEMENTATION ISSUES Securing Financial Transactions Access to Banks Intranets by Outsiders Imaging Systems Fees Online Versus Fees for Offline Services Risks

PERSONAL FINANCE ONLINE Online Billing and Bill Paying TaxesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-102

ON-DEMAND DELIVERY OF PRODUCTS e-grocer A grocer that takes orders online and provides deliveries on a daily or other regular schedule or within a very short period of time on-demand delivery service Express delivery made fairly quickly after an online order is received The Case of E-Grocers

FRESHDIRECTCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-103

ONLINE DELIVERY OF DIGITAL PRODUCTS, ENTERTAINMENT, AND MEDIA


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ONLINE ENTERTAINMENT Adult Entertainment Internet Gambling Online Dating Services


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shopping portals Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented shopping robots (shopping agents or shopbots) Tools that scout the Web on behalf of consumers who specify search criteria


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SPY SERVICES Wireless Shopping Comparisons

BUSINESS RATINGS SITES TRUST VERIFICATION SITES OTHER SHOPPING TOOLS


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A traditional brick-and-mortar store with a mature Web site that uses a click-and mortar strategy is able to do the following: Speak with one voice Leverage the multichannels Empower the customer


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disintermediation The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain reintermediation The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary rolesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-109


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cybermediation (electronic intermediation) The use of software (intelligent) agents to facilitate intermediation channel conflict Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition


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DETERMINING THE RIGHT PRICE PRODUCT AND SERVICE CUSTOMIZATION AND PERSONALIZATION FRAUD AND OTHER ILLEGAL ACTIVITIES HOW TO MAKE CUSTOMERS HAPPY


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What should our strategic position be? What are the limitations of e-tailing? How should we introduce wireless shopping? Do we have ethics and privacy guidelines? How will intermediaries act in cyberspace?


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Consumer Behavior, Internet Marketing, and Advertising

1. Describe the factors that influence consumer behavior online. 2. Understand the decision-making process of consumer purchasing online. 3. Describe segmentation and how companies are building one-to-one relationships with customers. 4. Explain how consumer behavior can be analyzed for creating personalized services. 5. Discuss the issues of e-loyalty and e-trust in electronic commerce (EC). 6. Describe consumer market research in EC.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-115

7. Describe the objectives of Web advertising and its characteristics. 8. Describe the major advertising methods used on the Web. 9. Describe various online advertising strategies and types of promotions. 10. Describe permission marketing, ad management, localization, and other advertising-related issues. 11. Relate Web 2.0 and social networks to Internet market research and advertising.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-116


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A GENERIC PURCHASING-DECISION MODEL Five major phases: Need identification Information search product brokering Deciding what product to buy merchant brokering Deciding from whom (from what merchant) to buy a product

Alternative evaluation Purchase and delivery Postpurchase behaviorCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-118

CUSTOMER DECISION SUPPORT IN WEB PURCHASING PLAYERS IN THE CONSUMER DECISION PROCESS Initiator Influencer Decider Buyer UserCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-119

FROM MASS MARKETING TO ONE-TO-ONE MARKETING Mass Marketing and Advertising market segmentation The process of dividing a consumer market into logical groups for conducting marketing research and analyzing personal information one-to-one marketing (relationship marketing) Marketing that treats each customer in a unique wayCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-120


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personalization The matching of services, products, and advertising content with individual consumers and their preferences user profile The requirements, preferences, behaviors, and demographic traits of a particular customer cookie A data file that is placed on a users hard drive by a remote Web server, frequently without disclosure or the users consent, which collects information about the users activities at a siteCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-123

behavioral targeting Targeting that uses information collected about an individuals Web-browsing behavior, such as the pages they have visited or the searches they have made, to select an advertisement to display to that individual


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collaborative filtering A market research and personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profilesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-125

CUSTOMER LOYALTY e-loyalty Customer loyalty to an e-tailer or loyalty programs delivered online or supported electronically Business Intelligence and Analytical Software

SATISFACTION IN EC Satisfaction is one of the most important success measures in the B2C online environment

TRUST IN EC trust The psychological status of willingness to depend on another person or organizationCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-126


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OBJECTIVES AND CONCEPTS OF MARKET RESEARCH ONLINE What Are Marketers Looking For in EC Market Research?

REPRESENTATIVE MARKET RESEARCH APPROACHES Market Segmentation Research Online Sampling Methods Online Surveys Hearing Directly from Customers Data Collection in the Web 2.0 EnvironmentCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-129

Observing Customers Movements Online transaction log A record of user activities at a companys Web site clickstream behavior Customer movements on the Internet Web bugs Tiny graphics files embedded in e-mail messages and in Web sites that transmit information about users and their movements to a Web server


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spyware Software that gathers user information over an Internet connection without the users knowledge clickstream data Data that occur inside the Web environment; they provide a trail of the users activities (the users clickstream behavior) in the Web site Web mining Data mining techniques for discovering and extracting information from Web documents; explores both Web content and Web usageCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-131

LIMITATIONS OF ONLINE MARKET RESEARCH Accuracy of responses Loss of respondents because of equipment problems The ethics and legality of Web tracking The difficulty in obtaining truly representative samples The lack of understanding of the online communication process and how online respondents think and interact in cyberspaceCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-132

HOW TO OVERCOME THESE LIMITATIONS Identify the intended target audience or demographic so that the right kind of sampling can be performed Anonymity for target respondents may encourage them to be more truthful in their opinions Concerns about the security of the information transmitted should be minimized Companies may outsource their market research to large and experienced companies that have specialized market research departments and expertiseCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-133

BIOMETRIC MARKETING biometrics An individuals unique physical or behavioral characteristics that can be used to identify an individual precisely (e.g., fingerprints) By applying the technology to computer users, we can improve security and learn about the users profile precisely


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Advertising is an attempt to disseminate information in order to affect buyerseller transactions In traditional marketing, advertising was impersonal, one-way mass communication that was paid for by sponsors interactive marketing Online marketing, facilitated by the Internet, by which marketers and advertisers can interact directly with customers, and consumers can interact with advertisers/vendorsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-135


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The Advertising Cycle ad views The number of times users call up a page that has a banner on it during a specific period; known as impressions or page views button A small banner that is linked to a Web site; may contain downloadable software page An HTML (Hypertext Markup Language) document that may contain text, images, and other online elements, such as Java applets and multimedia files; may be generated statically or dynamicallyCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-137

click (click-through or ad click) A count made each time a visitor clicks on an advertising banner to access the advertisers Web site CPM (cost per thousand impressions) The fee an advertiser pays for each 1,000 times a page with a banner ad is shown conversion rate The percentage of clickers who actually make a purchaseCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-138

click-through rate The percentage of visitors who are exposed to a banner ad and click on it click-through ratio The ratio between the number of clicks on a banner ad and the number of times it is seen by viewers; measures the success of a banner in attracting visitors to click on the ad hit A request for data from a Web page or fileCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-139

visit A series of requests during one navigation of a Web site; a pause of a certain length of time ends a visit unique visit A count of the number of visitors entering a site, regardless of how many pages are viewed per visit stickiness Characteristic that influences the average length of time a visitor stays in a siteCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-140

Advertising Online and Its Advantages Cost Richness of format Personalization Timeliness Location-basis Linking Digital branding

advertising networks Specialized firms that offer customized Web advertising, such as brokering ads and targeting ads to select groups of consumersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-141

BANNERS banner On a Web page, a graphic advertising display linked to the advertisers Web page keyword banners Banner ads that appear when a predetermined word is queried from a search engine random banners Banner ads that appear at random, not as the result of the users actionCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-142

Benefits and Limitations of Banner Ads major benefit is users are transferred directly to an advertisers site, often the shopping page major disadvantage of banners is their cost

banner swappingAn agreement between two companies to each display the others banner ad on its Web site

banner exchangesMarkets in which companies can trade or exchange placement of banner ads on each others Web sitesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-143

POP-UP AND SIMILAR ADS pop-up ad An ad that appears in a separate window before, after, or during Internet surfing or when reading e-mail pop-under ad An ad that appears underneath the current browser window, so when the user closes the active window the ad is still on the screen

E-MAIL ADVERTISING NEWSPAPER-LIKE AND CLASSIFIED ADSCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-144

SEARCH ENGINE ADVERTISEMENT URL Listing Keyword Advertising search engine optimization (SEO) The craft of increasing site rank on search engines; the optimizer uses the ranking algorithm of the search engine (which may be different for different search engines) and best search phrases, and tailors the ad accordinglyCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-145

GOOGLETHE ONLINE ADVERTISING KING ADVERTISING IN CHAT ROOMS OTHER FORMS OF ADVERTISING Advertising in Online Newsletters Posting Press Releases Online Video Ads advergaming The practice of using computer games to advertise a product, an organization, or a viewpointCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-146

social network advertising Online advertising that focuses on social networking sites Types of Social Network Advertising Direct advertising that is based on your network of friends Direct advertising placed on your social network site Indirect advertising by creating groups or pages

Sponsored Reviews by BloggersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-147

VIDEO ADS ON THE WEB AND IN SOCIAL NETWORKING

Tracking the Success of an Online Video Campaign

viral marketing Word-of-mouth marketing by which customers promote a product or service by telling others about it Viral Marketing in Social Networks

Web video analytics A way of measuring what viewers do when they watch an online video


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OTHER ADVERTISING STRATEGIES affiliate marketing A marketing arrangement by which an organization refers consumers to the selling companys Web site Ads as a Commodity (Paying People to Watch Ads) Selling Space by Pixels Personalized Ads Webcasting A free Internet news service that broadcasts personalized news and information, including seminars, in categories selected by the userCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-149

ONLINE EVENTS, PROMOTIONS, AND ATTRACTIONS Live Web Events

mobile advertising Ads sent to and presented on mobile devices Mobile Marketing


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PERMISSION ADVERTISING spamming Using e-mail to send unwanted ads (sometimes floods of ads) permission advertising (permission marketing) Advertising (marketing) strategy in which customers agree to accept advertising and marketing materials (known as opt-in)


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SOME IMPLEMENTATION ISSUES admediaries Third-party vendors that conduct promotions, especially large-scale ones Ad Exchanges Advertisement as a Revenue Model Measuring Online Advertisings Effectiveness


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ad management Methodology and software that enable organizations to perform a variety of activities involved in Web advertising (e.g., tracking viewers, rotating ads) localization The process of converting media products developed in one environment (e.g., country) to a form culturally and linguistically acceptable in countries outside the original target marketCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 4-154

Automatic Versus Manual Web Page Translation Using Internet Radio for Localization Internet radio A Web site that provides music, talk, and other entertainment, both live and stored, from a variety of radio stations

AD CONTENT INTELLIGENT AGENTS APPLICATIONS


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B2B E-Commerce

1. Describe the B2B field. 2. Describe the major types of B2B models. 3. Discuss the characteristics of the sell-side marketplace, including auctions. 4. Describe the sell-side models. 5. Describe the characteristics of the buy-side marketplace and e-procurement. 6. Explain how reverse auctions work in B2B. 7. Describe B2B aggregation and group purchasing models.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-158

8. Describe other procurement methods. 9. Define exchanges and describe their major types. 10. Describe B2B portals. 11. Describe third-party exchanges. 12. Describe partner relationship management (PRM). 13. Describe how B2B can benefit from social networking and Web 2.0. 14. Describe Internet marketing in B2B, including organizational buyer behavior.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-159

business-to-business e-commerce (B2B EC) Transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks; also known as eB2B (electronic B2B) or just B2B THE BASIC TYPES OF B2B TRANSACTIONS AND ACTIVITIES Sell-side Buy-side Exchanges Supply chain improvements and collaborative commerceCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-160


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THE BASIC TYPES OF B2B E-MARKETPLACES AND SERVICES One-to-Many and Many-to-One: Private EMarketplaces company-centric EC E-commerce that focuses on a single companys buying needs (many-to-one, or buy-side) or selling needs (oneto-many, or sell-side)


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Many-to-Many: Exchanges exchanges (trading communities or trading exchanges) Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other public e-marketplaces Third-party exchanges open to all interested parties (sellers and buyers)

Supply Chain Improvers and Collaborative CommerceCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-163


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B2B CHARACTERISTICS Parties to the Transaction: Sellers, Buyers, and Intermediaries online intermediary An online third party that brokers a transaction online between a buyer and a seller; may be virtual or clickand-mortar


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Types of Transactions spot buying The purchase of goods and services as they are needed, usually at prevailing market prices strategic (systematic) sourcing Purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers


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Types of Materials Traded direct materials Materials used in the production of a product (e.g., steel in a car or paper in a book) indirect materials Materials used to support production (e.g., office supplies or light bulbs) MRO (maintenance, repair, and operation) Indirect materials used in activities that support productionCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-167

The Direction of the Trades vertical marketplaces Markets that deal with one industry or industry segment (e.g., steel, chemicals) horizontal marketplaces Markets that concentrate on a service, material, or a product that is used in all types of industries (e.g., office supplies, PCs)

SUPPLY CHAIN RELATIONSHIPS IN B2B SERVICE INDUSTRIES ONLINE IN B2BCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-168

THE BENEFITS AND LIMITATIONS OF B2B Benefits: sellers (S), buyers (B), both (J)


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sell-side e-marketplace A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet B2B Sellers Customer Service

SALES FROM CATALOGS Configuration and Customization Benefits and Limitations of Online Sales from CatalogsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-171


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USING AUCTIONS ON THE SELL SIDE Forward auctions offer the following benefits to B2B sellers: Revenue generation Cost savings Increased stickiness Member acquisition and retention

AUCTIONING FROM THE COMPANYS OWN SITE USING INTERMEDIARIES IN AUCTIONS EXAMPLES OF B2B FORWARD AUCTIONSCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-173

buy-side e-marketplace A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method


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PROCUREMENT METHODS E-Procurement Organizations and Types E-sourcing E-tendering E-reverse auctioning E-informing Web-based ERP E-marketsites E-MROCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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INEFFICIENCIES IN TRADITIONAL PROCUREMENT MANAGEMENT procurement management The planning, organizing, and coordinating of all the activities relating to purchasing goods and services needed to accomplish the organizations mission maverick buying Unplanned purchases of items needed quickly, often at nonpre-negotiated higher pricesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-177

THE GOALS AND BENEFITS OF E-PROCUREMENT e-procurement The electronic acquisition of goods and services for organizations


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request for quote (RFQ) The invitation to participate in a tendering (bidding) system CONDUCTING REVERSE AUCTIONS E-Tendering by Governments

GROUP REVERSE AUCTIONS


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internal procurement marketplace The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog Benefits of Internal Aggregated (Consolidated) Catalogs Quickly find what desired offering, check availability and delivery times, and complete electronic requisition forms, using fewer suppliers


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desktop purchasing

Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department group purchasing The aggregation of orders from several buyers into volume purchases so that better prices can be negotiated Internal Aggregation of Purchasing Orders External Aggregation for Group PurchasingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-183


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BUYING AT SELLERS SITES AND COLLABORATIVE COMMERCE PURCHASING DIRECT GOODS bartering exchange An intermediary that links parties in a barter; a company submits its surplus to the exchange and receives points of credit, which can be used to buy the items that the company needs from other exchange participantsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-185


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FUNCTIONS OF EXCHANGES 1. Matching buyers and sellers 2. Facilitating transactions 3. Maintaining exchange policies and infrastructure


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dynamic pricing A rapid movement of prices over time and possibly across customers, as a result of supply and demand matching Revenue Models Transaction fees Service fees Membership fees Advertising fees Other revenue sourcesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-188


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B2B portals Information portals for businesses vortals B2B portals that focus on a single industry or industry segment; vertical portals OWNERSHIP OF B2B MARKETPLACES consortium trading exchange (CTE) An exchange formed and operated by a group of major companies in an industry to provide industrywide transaction servicesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-190


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partner relationship management (PRM) Business strategy that focuses on providing comprehensive quality service to business partners E-COMMUNITIES AND PRM


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THE OPPORTUNITIES Discover new business partners Improve recruitment Enhance ability to learn about new technologies, competitors, etc. Find sales prospects Improve participation in industry association activitiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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THE USE OF WEB 2.0 TOOLS IN B2B SOCIAL NETWORKS IN THE B2B MARKETPLACE EXAMPLES OF OTHER ACTIVITIES OF B2B SOCIAL NETWORKS STRATEGY FOR B2B SOCIAL NETWORKING Participate Monitor Use existing applications The Future of Social NetworkingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-194

ORGANIZATIONAL BUYER BEHAVIOR A Behavioral Model of Organizational Buyers

THE MARKETING AND ADVERTISING PROCESSES IN B2B METHODS FOR B2B ONLINE MARKETING Targeting Customers Electronic Wholesalers

AFFILIATE PROGRAMS, INFOMEDIARIES, AND DATA MININGCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-195


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1. 2. 3. 4. 5. 6. 7. 8.

Which B2B model(s) should we use for e-procurement? Which B2B model(s) should we use for online B2B sales? Which exchange to join? Which solution vendor(s) should we select? What is the organizational impact of B2B? What are the ethical issues in B2B? How shall we manage the suppliers Which type of social network? Private (proprietary) or public? 9. Can we use B2C marketing methods and research in B2B?Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-197

B2B E-Commerce

1. Describe the B2B field. 2. Describe the major types of B2B models. 3. Discuss the characteristics of the sell-side marketplace, including auctions. 4. Describe the sell-side models. 5. Describe the characteristics of the buy-side marketplace and e-procurement. 6. Explain how reverse auctions work in B2B. 7. Describe B2B aggregation and group purchasing models.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-199

8. Describe other procurement methods. 9. Define exchanges and describe their major types. 10. Describe B2B portals. 11. Describe third-party exchanges. 12. Describe partner relationship management (PRM). 13. Describe how B2B can benefit from social networking and Web 2.0. 14. Describe Internet marketing in B2B, including organizational buyer behavior.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-200

business-to-business e-commerce (B2B EC) Transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks; also known as eB2B (electronic B2B) or just B2B THE BASIC TYPES OF B2B TRANSACTIONS AND ACTIVITIES Sell-side Buy-side Exchanges Supply chain improvements and collaborative commerceCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-201


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THE BASIC TYPES OF B2B E-MARKETPLACES AND SERVICES One-to-Many and Many-to-One: Private EMarketplaces company-centric EC E-commerce that focuses on a single companys buying needs (many-to-one, or buy-side) or selling needs (oneto-many, or sell-side)


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Many-to-Many: Exchanges exchanges (trading communities or trading exchanges) Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other public e-marketplaces Third-party exchanges open to all interested parties (sellers and buyers)

Supply Chain Improvers and Collaborative CommerceCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-204


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B2B CHARACTERISTICS Parties to the Transaction: Sellers, Buyers, and Intermediaries online intermediary An online third party that brokers a transaction online between a buyer and a seller; may be virtual or clickand-mortar


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Types of Transactions spot buying The purchase of goods and services as they are needed, usually at prevailing market prices strategic (systematic) sourcing Purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers


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Types of Materials Traded direct materials Materials used in the production of a product (e.g., steel in a car or paper in a book) indirect materials Materials used to support production (e.g., office supplies or light bulbs) MRO (maintenance, repair, and operation) Indirect materials used in activities that support productionCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-208

The Direction of the Trades vertical marketplaces Markets that deal with one industry or industry segment (e.g., steel, chemicals) horizontal marketplaces Markets that concentrate on a service, material, or a product that is used in all types of industries (e.g., office supplies, PCs)

SUPPLY CHAIN RELATIONSHIPS IN B2B SERVICE INDUSTRIES ONLINE IN B2BCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-209

THE BENEFITS AND LIMITATIONS OF B2B Benefits: sellers (S), buyers (B), both (J)


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sell-side e-marketplace A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet B2B Sellers Customer Service

SALES FROM CATALOGS Configuration and Customization Benefits and Limitations of Online Sales from CatalogsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-212


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USING AUCTIONS ON THE SELL SIDE Forward auctions offer the following benefits to B2B sellers: Revenue generation Cost savings Increased stickiness Member acquisition and retention

AUCTIONING FROM THE COMPANYS OWN SITE USING INTERMEDIARIES IN AUCTIONS EXAMPLES OF B2B FORWARD AUCTIONSCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-214

buy-side e-marketplace A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method


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PROCUREMENT METHODS E-Procurement Organizations and Types E-sourcing E-tendering E-reverse auctioning E-informing Web-based ERP E-marketsites E-MROCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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INEFFICIENCIES IN TRADITIONAL PROCUREMENT MANAGEMENT procurement management The planning, organizing, and coordinating of all the activities relating to purchasing goods and services needed to accomplish the organizations mission maverick buying Unplanned purchases of items needed quickly, often at nonpre-negotiated higher pricesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-218

THE GOALS AND BENEFITS OF E-PROCUREMENT e-procurement The electronic acquisition of goods and services for organizations


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request for quote (RFQ) The invitation to participate in a tendering (bidding) system CONDUCTING REVERSE AUCTIONS E-Tendering by Governments

GROUP REVERSE AUCTIONS


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internal procurement marketplace The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog Benefits of Internal Aggregated (Consolidated) Catalogs Quickly find what desired offering, check availability and delivery times, and complete electronic requisition forms, using fewer suppliers


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desktop purchasing

Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department group purchasing The aggregation of orders from several buyers into volume purchases so that better prices can be negotiated Internal Aggregation of Purchasing Orders External Aggregation for Group PurchasingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-224


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BUYING AT SELLERS SITES AND COLLABORATIVE COMMERCE PURCHASING DIRECT GOODS bartering exchange An intermediary that links parties in a barter; a company submits its surplus to the exchange and receives points of credit, which can be used to buy the items that the company needs from other exchange participantsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-226


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FUNCTIONS OF EXCHANGES 1. Matching buyers and sellers 2. Facilitating transactions 3. Maintaining exchange policies and infrastructure


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dynamic pricing A rapid movement of prices over time and possibly across customers, as a result of supply and demand matching Revenue Models Transaction fees Service fees Membership fees Advertising fees Other revenue sourcesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-229


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B2B portals Information portals for businesses vortals B2B portals that focus on a single industry or industry segment; vertical portals OWNERSHIP OF B2B MARKETPLACES consortium trading exchange (CTE) An exchange formed and operated by a group of major companies in an industry to provide industrywide transaction servicesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-231


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partner relationship management (PRM) Business strategy that focuses on providing comprehensive quality service to business partners E-COMMUNITIES AND PRM


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THE OPPORTUNITIES Discover new business partners Improve recruitment Enhance ability to learn about new technologies, competitors, etc. Find sales prospects Improve participation in industry association activitiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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THE USE OF WEB 2.0 TOOLS IN B2B SOCIAL NETWORKS IN THE B2B MARKETPLACE EXAMPLES OF OTHER ACTIVITIES OF B2B SOCIAL NETWORKS STRATEGY FOR B2B SOCIAL NETWORKING Participate Monitor Use existing applications The Future of Social NetworkingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-235

ORGANIZATIONAL BUYER BEHAVIOR A Behavioral Model of Organizational Buyers

THE MARKETING AND ADVERTISING PROCESSES IN B2B METHODS FOR B2B ONLINE MARKETING Targeting Customers Electronic Wholesalers

AFFILIATE PROGRAMS, INFOMEDIARIES, AND DATA MININGCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-236


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E-Supply Chains, Collaborative Commerce, And Corporate Portals

1. Define the e-supply chain and describe its characteristics and components. 2. List supply chain problems and their causes. 3. List solutions provided by e-commerce (EC) for supply chain problems. 4. Describe RFID supply chain applications. 5. Define c-commerce and list the major types.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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6. Describe collaborative planning and collaboration, planning, forecasting, and replenishing (CPFR) and list the benefits of each. 7. Discuss integration along the supply chain. 8. Understand corporate portals and their types and roles. 9. Describe e-collaboration tools such as workflow software and groupware. 10. Describe Collaboration 2.0 technology and tools.


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supply chain The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers e-supply chain A supply chain that is managed electronically, usually with Web technologiesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-241


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SUPPLY CHAIN PARTS Upstream supply chain procurement The process made up of a range of activities by which an organization obtains or gains access to the resources (materials, skills, capabilities, facilities) they require to undertake their core business activities

Internal supply chain and value chain Downstream supply chainCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-243

supply chain management (SCM) A complex process that requires the coordination of many activities so that the shipment of goods and services from supplier right through to customer is done efficiently and effectively for all parties concerned. SCM aims to minimize inventory levels, optimize production and increase throughput, decrease manufacturing time, optimize logistics and distribution, streamline order fulfillment, and overall reduce the costs associated with these activities


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e-supply chain management (e-SCM) The collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains information visibility The process of sharing critical data required to manage the flow of products, services, and information in real time between suppliers and customersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-245

Activities and Infrastructure of e-SCM Supply Chain Replenishment e-procurement The use of Web-based technology to support the key procurement processes, including requisitioning, sourcing, contracting, ordering, and payment. Eprocurement supports the purchase of both direct and indirect materials and employs several Web-based functions such as online catalogs, contracts, purchase orders, and shipping notices Supply Chain Monitoring and Control Using RFID Inventory Management Using Wireless DevicesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-246

collaborative planning A business practice that combines the business knowledge and forecasts of multiple players along a supply chain to improve the planning and fulfillment of customer demand

Collaborative Design and Product Development E-Logistics Infrastructure for e-SCM


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TYPICAL PROBLEMS ALONG THE SUPPLY CHAIN bullwhip effect Erratic shifts in order up and down supply chains Need for information sharing along the supply chain

EC SOLUTIONS ALONG THE SUPPLY CHAIN visibility The knowledge about where materials and parts are at any given time, which helps in solving problems such as delay, combining shipments, and moreCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-248

radio frequency identification (RFID) Tags that can be attached to or embedded in objects, animals, or humans and use radio waves to communicate with a reader for the purpose of uniquely identifying the object or transmitting data and/or storing information about the object


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LIMITATIONS AND CONCERNS OF RFID Cost Interference and accuracy Limited range in passive RFID Environment restrictions on usage Privacy

RUBEE: AN ALTERNATIVE TO RFID? RuBee Bidirectional, on-demand, peer-to-peer radiating transceiver protocol under development by the Institute of Electrical and Electronics EngineersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-252

collaborative commerce (c-commerce) The use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative EC applications collaboration hub (c-hub) The central point of control for an e-market. A single c-hub, representing one e-market owner, can host multiple collaboration spaces (c-spaces) in which trading partners use c-enablers to exchange data with the c-hubCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-253


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vendor-managed inventory (VMI) The practice of retailers making suppliers responsible for determining when to order and how much to order RetailerSupplier Collaboration: Target Corporation Lower Transportation and Inventory Costs and Reduced Stock-Outs: Unilever Reduction of Design Cycle Time: Clarion Malaysia Reduction of Product Development Time: Caterpillar, Inc.

BARRIERS TO C-COMMERCECopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-257


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collaborative planning, forecasting, and replenishment (CPFR) Project in which suppliers and retailers collaborate in their planning and demand forecasting to optimize flow of materials along the supply chain


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advanced planning and scheduling (APS) systems Programs that use algorithms to identify optimal solutions to complex planning problems that are bound by constraints product lifecycle management (PLM) Business strategy that enables manufacturers to control and share product related data as part of product design and development efforts SUPPORTING JOINT DESIGNCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-261


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HOW INFORMATION SYSTEMS ARE INTEGRATED Web Services An architecture enabling assembly of distributed applications from software services and tying them together

INTEGRATION ALONG THE EXTENDED SUPPLY CHAINCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-263

corporate (enterprise) portal A gateway for entering a corporate Web site, enabling communication, collaboration, and access to company information


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TYPES OF GENERIC CORPORATE PORTALS Portals for Suppliers and Other Partners Customer Portals Employee Portals Executive and Supervisor Portals mobile portals Portals accessible via mobile devices, especially cell phones and PDAsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-266

The Functionalities of Portals information portals Portals that store data and enable users to navigate and query the data collaborative portals Portals that allow collaboration

CORPORATE PORTAL APPLICATIONS AND ISSUES Developing PortalsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-267


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workflow The movement of information as it flows through the sequence of steps that make up an organizations work procedures workflow systems Business process automation tools that place system controls in the hands of user departments to automate information processing tasks workflow management The automation of workflows, so that documents, information, and tasks are passed from one participant to the next in the steps of an organizations business processCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-269

COLLABORATION AND GROUPWARE: SOME BASIC CONCEPTS groupware Software products that support groups of people who share common tasks or goals and collaborate on their accomplishment Synchronous Versus Asynchronous Communication virtual team A group of employees using information and communications technologies to collaborate from different work bases Mass CollaborationCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-270

ELECTRONIC MEETING SYSTEMS: FACE-TOFACE SUPPORT AND VIRTUAL MEETINGS virtual meetings Online meetings whose members are in different locations, even in different countries group decision support system (GDSS) An interactive computer-based system that facilitates the solution of semistructured and unstructured problems by a group of decision makersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-271

REAL-TIME COLLABORATION TOOLS FOR VIRTUAL MEETINGS screen-sharing software Software that enables group members, even in different locations, to work on the same document, which is shown on the PC screen of each participant Sharing Documents and Workspaces


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ELECTRONIC TELECONFERENCING teleconferencing The use of electronic communication that allows two or more people at different locations to have a simultaneous conference video teleconference Virtual meeting in which participants in one location can see participants at other locations on a large screen or a desktop computerCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-273

data conferencing Virtual meeting in which geographically dispersed groups work on documents together and exchange computer files during videoconferences Web Conferencing

unified communication (UC) Simplification of all forms of communication in the enterprise Web Collaboration Web SuitesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-274

Collaboration 2.0 The technology and tools used for collaboration in the Web 2.0 world and in Enterprise 2.0 that are in sync with social networking and user-generated content collaborative workspace An interconnected environment in which all the participants in dispersed locations can access and interact with each other just as inside a single entityCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 6-275

instant messaging Technologies that create the possibility of realtime text-based communication between two or more participants over the Internet/intranet presence information Status indicator that conveys ability and willingness of a potential communication partner


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Mobile Collaboration in the Web 2.0 Environment Mobile social networking service Mobile handset mobile instant messaging Messaging service that transposes the desktop messaging experience to the usage scenario of being on the move Mobile Unified Communication

voice-over-IP (VoIP) Communication systems that transmit voice calls over Internet Protocolbased networks Blogs, Wikis, Virtual Worlds, Forums, and Other ToolsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Mobile Computing and Commerce, and Pervasive Computing

1. Discuss the value-added attributes, benefits, and fundamental drivers of m-commerce. 2. Describe the mobile computing environment that supports m-commerce (devices, software, services). 3. Describe the four major types of wireless telecommunications networks. 4. Discuss m-commerce applications in finance. 5. Describe m-commerce applications in shopping, advertising, and provision of content.


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6. Discuss the application of m-commerce within organizations and across the supply chain. 7. Describe consumer and personal applications of m-commerce. 8. Understand the technologies and potential application of location-based m-commerce. 9. Describe the major inhibitors and barriers of mcommerce. 10.Discuss the key characteristics, critical technologies, and major applications of pervasive computing.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8-280

mobile commerce (m-commerce, m-business) Any business activity conducted over a wireless telecommunications network or from mobile devices


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ATTRIBUTES OF M-COMMERCE Ubiquity Convenience Interactivity Personalization Localization


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DRIVERS OF M-COMMERCE Widespread availability of more powerful mobile devices The handset culture The service economy Vendors push The mobile workforce Increased mobility Improved price/performance Improving bandwidthCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8-284

wireless mobile computing (mobile computing) Computing that connects a mobile device to a network or another computing device, anytime, anywhere


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MOBILE DEVICES Mobile computers personal digital assistant (PDA) A stand-alone handheld computer principally used for personal information management smartphone A mobile phone with PC-like capabilities


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MOBILE COMPUTING SOFTWARE AND SERVICES Messaging Services short message service (SMS) A service that supports the sending and receiving of short text messages on mobile phones multimedia messaging service (MMS) The emerging generation of wireless messaging; MMS is able to deliver rich media


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Location-Based Services Voice-Support Services interactive voice response (IVR) A voice system that enables users to request and receive information and to enter and change data through a telephone to a computerized system voice portal A Web site with an audio interface that can be accessed through a telephone call


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WIRELESS TELECOMMUNICATIONS NETWORKS personal area network (PAN) A wireless telecommunications network for device-to-device connections within a very short range Bluetooth A set of telecommunications standards that enables wireless devices to communicate with each other over short distancesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8-289

wireless local area network (WLAN) A telecommunications network that enables users to make short-range wireless connections to the Internet or another network Wi-Fi (wireless fidelity) The common name used to describe the IEEE 802.11 standard used on most WLANs


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WiMax A wireless standard (IEEE 802.16) for making broadband network connections over a mediumsize area such as a city wireless wide area network (WWAN) A telecommunications network that offers wireless coverage over a large geographical area, typically over a cellular phone network


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MOBILE BANKING MOBILE PAYMENTS Mobile Proximity Payments Mobile Remote Payments


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digital divide Refers to the gap between people with effective access to digital and information technology and those without microfinance Refers to the provision of financial services to poor or low-income clients, including consumers and the self-employed


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MOBILE MARKETING CAMPAIGNS Four classes of mobile marketing campaigns:1. 2. 3. 4. Information Entertainment Raffles Coupons


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The major objectives of these classes fell into one of six categories:1. 2. 3. 4. 5. 6. Building brand awareness Changing brand image Promoting sales Enhancing brand loyalty Building customer databases Stimulating mobile word of mouth


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MOBILE MARKETING GUIDELINES The basic principles of the Global Code of Conduct for Internet marketing: Notice Choice and consent Customization and constraint Security Enforcement and accountability


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NEEDS OF THE MOBILE WORKFORCE mobile worker Any employee who is away from their primary work space at least 10 hours a week or 25 percent of the time Benefits of Mobile Workforce Support Mobile workers can be divided into three segments: Mobile professionals (senior executives and consultants) Mobile field force (field sales and service technicians) Mobile specialty workers (delivery personnel and construction workers)Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8-298

Some solutions widely used by the three segments include: Mobile office applications Sales force automation (SFA) Field force automation (FFA) Mobile CRM (e-CRM)


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Challenges of Mobile Workforce Support Network coverage gaps and interruptions Internetwork roaming Mobile network and application performance Device and network management Bandwidth management


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mobile entertainment Any type of leisure activity that utilizes wireless telecommunication networks, interacts with service providers, and incurs a cost upon usage


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MOBILE MUSIC AND VIDEO MOBILE GAMES Technology Number of players Genre

MOBILE GAMBLING


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location-based m-commerce (l-commerce) Delivery of m-commerce transactions to individuals in a specific location, at a specific time The services provided through location-based mcommerce focus on five key factors:1. 2. 3. 4. 5. Location Navigation Tracking Mapping TimingCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 8-304

L-COMMERCE INFRASTRUCTURE Mobile devices Communication network Positioning component Service or application provider Data or content provider


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Positioning Components network-based positioning Relies on base stations to find the location of a mobile device sending a signal or sensed by the network terminal-based pos

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