Contents

ELECTRONIC TRADE (E-TRADE)................................................................................................... 3

ABSTRACT AND LEARNING OUTCOMES ................................................................................. 3
1. INTRODUCTION TO E-BUSINESS ...................................................................................... 3
1.1. What is Electronic Business? .................................................................................... 3
1.2. The Future of E-Business ............................................................................................. 5
1.3. The Benefits of E-Business ........................................................................................... 6
1.4. Success in E-Business ................................................................................................... 7
1.5. Integrating Technology into Your Business ................................................................. 8
1.6. E-Business Plan ............................................................................................................ 9
2. INTRODUCTION TO E-MARKETING................................................................................ 11
2.1. The Web as a Marketing Tool .................................................................................... 12
2.2. Marketing Tool: The Web .......................................................................................... 13
2.3. Supporting a Web Site ............................................................................................... 16
2.4. Web Marketing Tools ................................................................................................ 17
2.5. Intelligent Agents....................................................................................................... 19
2.6. Strategies for an Effective Marketing Plan ................................................................ 19
2. E-TRADE ......................................................................................................................... 21
3.1. Introduction to E-trade .............................................................................................. 21
3.2. Comparing Traditional Trade and E-trade ................................................................. 21
3.3. E-trade Business Models ........................................................................................... 23
3.4. Major Types of E-trade .............................................................................................. 25
3.5. Advantages and Disadvantages of E-trade ................................................................ 26
3.6. M-Trade ..................................................................................................................... 28
REFERENCES ......................................................................................................................... 29
APPENDIX I ........................................................................................................................ 30
APPENDIX II ....................................................................................................................... 31
APPENDIX III ...................................................................................................................... 32
APPENDIX IV ...................................................................................................................... 32
APPENDIX V ....................................................................................................................... 32
APPENDIX VII ..................................................................................................................... 33

ELECTRONIC TRADE (E-TRADE)

ABSTRACT AND LEARNING OUTCOMES
The purpose of this training module on Electronic Trade is to inform companies, which do not have
enough experience in electronic business, on how they should begin their activities in this field. By
providing information regarding the design and implementation of e-business; e-marketing, e-trade
and e-operations and also practical information about how to integrate e business models into their
business and marketing process. By this mean, this module might help those companies to take their
first steps in electronic business which enhance their growth in the market.
By the end of this module the trainees are expected to:
x
x
x
x
x
x
x

Learn what e-business; e-marketing, e-trade and e-operations are

Set up a clear strategy for integration of technology into their business
Be aware of the benefits of e-business
Be aware of using World Wide Web as a marketing tool
Be able to select the best way of on-line marketing and advertisement
Make sure about the main models and principles of e-trade
Know about the advantages obtained and conscious about the disadvantages confronted
during digital integration

The e-training module proceeds as follows. In the first chapter it is described what e-business is and
access to the Internet, tend to modify communication between the different players in the
professional world. The second chapter explains how web as a marketing tool can be used. A
comparison of traditional trade and electronic trade is given in the Third Chapter. The e-trade
business models and major types of e-trade are explained also in the Third Chapter.

1. INTRODUCTION TO E-BUSINESS
1.1.

What is Electronic Business?

Electronic business (e-business) can be defined as "the application of Internet technology to

streamline all aspects of business processes". E-Business is comprised of e-marketing, e-trade, and eoperations:
E-marketing: Building an online presence, showcasing a company, and providing detailed information
on the web (The majority of small businesses on the Internet today are actively doing e-marketing).
E-trade (commonly used as e-commerce in literature): Selling products and services online,
conducting payments, handling transaction details, and supporting automated customer inquiries.
E-operations: Streamlining of business processes and steps to enhance business efficiencies between
functional departments of a company (This also includes streamlining the supply chain between your
company and key suppliers).
Taken together,
3

E-BUSINESS
E-marketing

EE-operations

E-trade

The use of ICT by SMEs is increasingly common according to survey for EU countries. The recent
Eurostat statistics on ICT usage shows that 97 out of 100 enterprises equipped with computers.
Internet access is also a commonplace among enterprises; 95 out of 100 have internet access in the
workplaces. While Internet penetration is generally higher in larger enterprises, the gap between
larger firms and SMEs is narrowing.
In EU-27 countries, Internet penetration rates for small-sized firms (10-49 employees) is 94,42%
while the medium and small sized enterprises (50 and more employees) is around 99%. High level of
use of ICT leads the enterprises to promote them more in IT environment.

HOW EU ENTERPRISES USE

INTERNET
80
60
EU 27

40
20
0
E-MARKETING E-OPERATIONS E-COMMERCE

Figure 1.1. How are EU Enterprise Web-Sites being used?

The companies that want to enter to e-business world generally start with e-marketing. The next
level is e-trade. And, the third aspect of e-business is e-operations.
The Eurostat figures in 2010 are summarized on the Chart 1.1. above. While vast majority of the
enterprises are involved e-marketing by having a web site or homepage with a percentage of 68, the
involvement of e-operations and e-trade are significantly lower percentages of 21 and 15
consecutively.

1.2.

The Future of E-Business

Each year, more and more people get connected to the Internet. In the first years of internet launch
less than 1% of the world population were online in the world, this amount increase over 12% after
10 years in 2003. Today, almost 40% of the world population is using internet.
Year

(July 1)

World Population

Internet Users

Penetration*

2013

7,16

2,71

37,9%

2003

6,36

0,78

12,2%

1993

5,57

0,01

0,3%

* % of Population with Internet

Source: Internet Live Stats (elaboration of data by International Telecommunication
Union (ITU) and United Nations Population Division

Figure 1.2. The number of users of the Internet grows every year
Eventually, those people make their way around to buying something or just visiting a company's
Web site. Once they get to the site, it is important to have something that people want to see and
buy.
However, the coverage of the business that can be picked up from the Internet is not limited to
people sitting in their living rooms surfing the Web. Businesses that sell to other businesses are
discovering just how useful the Internet is to reinforce existing business partnerships and look after
new, profitable relationships.

E-business is still young and evolving, and the future looks nothing but bright for companies that
decide to perform business online. A business professional generally asks the following question:
How can I get a piece???

The answer comes from the level of involvement and willingness of a businessman to make some
hard business decisions. Some companies naturally bring their own name recognition to the game,
thus gaining instant customers.
Other forward-thinking business professionals and customers see the power of the Internet too, and
that is why it is becoming more and more powerful. Because of the variety of options and choices in
the World Wide Web (including online stores), customers are attracted to the www. This, in turn,
brings more businesses to the Web in search of the customers, which brings more customers to the
Web and so forth.

1.3.

The Benefits of E-Business

By taking a business into the Internets kingdom, a businessman opens the operation up to vistas a
businessman would never encounter if he were limited to a shop on a street. The benefits are great.
If a businessman designs and implements the e-business correctly he will see great advantages. The
benefits of e-business can be summarized as:

What can the internet

really do for your
company?

A lot

t across the
th globe
l b
The opportunity to access new markets

The chance to target market segments more effectively

Greater speed in getting the product and services to market

Providing more accurate information and improve customer experience

Providing convenience and comfort for the customers

Allowing 24/7 access to the products and services

The opportunity to increase sales

The opportunity to reduce costs by reducing overheads - for example, not having a retail
outlet in a busy high street location with high rents, reducing stock costs etc.

Improving the efficiency of the supply chain

Improving employee motivation through more flexible working methods

The opportunity to seem like a larger company even you are a small one

The above benefits are mainly related to speed, financial issues, increasing the market reach, and
appearing bigger. Lets say a few more words about them.
Speed:
In the past, if a businessman wanted to sell something, he had to:
x

rent a storefront

hire employees

stock the shelves

spend some money on advertising

maybe mail out some catalogues and

wait for customers to come in or mail in their order forms

In e-businesses, with the help of the Internet, the time between developing your product or service
and having it ready for the consumer is cut down considerably. Obviously, businessmen are more
close to the potential customers. Once a product is ordered, it has to work through the shipping and

handling channels. In fact, some e-sellers have collocated their warehouses with the post office or
shipping companies (such as Federal Express, DHL, Aras Kargo) to cut down on shipping times.
In addition to speed, more products can be made available compared to a conventional store. As a
customer, you could simply log onto a site like amazon.com or debenhams.com, find exactly which
product you want, type in your credit card details and wait for the package to arrive. Even if the
company does not have the product in stock, there are more sites within easy reach where you can
find what you are looking for.
Financial Issues:
Whether it is a street vendor stand on the side of the road or a multinational corporation with
thousands of employees, the whole reason businessmen want to take their organization to the
Internet is to make money and lots of it if possible.
If the lessons of the past continue, there is money to be made on the Internet. Consider the example
of Amazon.com founder Jeff Bezos. Starting with just three Sun workstations and a dream, he turned
his garage in suburban Seattle into the biggest success story of the Internet. Businesses know that
theres gold in the Web. The fantastic growth and business presence will continue and mean more
money for e-businesses which know what theyre doing.
Increasing Market Reach:
The Internet helps pulling the world closer together and expanding business contacts. When
customers go to an e-business site, they do not have to physically go to any store. Once they get
online, their computer will link to the e-business, where the customer can browse, shop, and make a
purchase. Actually, the physical store (if there is one) could be thousands of miles away from the
server housing the e-business content, which in turn could be thousands of miles away from the
consumer. Internet is bringing your company with its products and services to people anywhere in
the world.

Appearing Bigger:
The Internet is the great equalizer. Even if you have a small company, you may seem like a big one.
Everything comes across to the customer the same wayit comes across on the customers
computer however the company presents it. It does not matter whether you, as a businessman, have
a tiny little shop or a big company having a giant store. On the internet, the only thing limiting a small
business presence is itself.
When you are developing a Web site, the only thing that limits your presence is your ability to
develop the Web page. To be sure, the big companies hire big shot consultants, but with a little
knowledge, a little effort, and the right software, everyone can develop an excellent Web site.

1.4.

Success in E-Business

Up until early 2000, it seemed that in the kingdom of e-business, every company that went online
was successful. Then the bottom dropped out. Nowadays it is clear that not every business online
presence will be successful. So many companies tried their own hand at online success. Some won;
some lost.
Usually, managers, CEOs, and presidents think they can simply move their businesses online and
conduct business as usual. But that is not the case anymore. Since e-business is a marriage of
7

business and technology, it is infinitely significant to understand the technological side of the union
along with how technology affects the existing business.
Reformation in Your Business:
Technology is a major component of e-business. Therefore, e-business changes are harder to manage
as they include technological changes as well as changes in business. Value in an e-business is
different from value in conventional businesses. E-business' value is not found in tangible properties,
like materials, surplus, furnishing and so on. Rather, value is found in intangible ones like branding,
customer relationships, and supplier integration.
E-businesses should alter the environment and adapt to the changing marketplace in which they
compete. Changing only the method of delivery of their products to the customers wont be enough.
Unfortunately, many businesses have not developed an information-based business design to deal
with the necessary business change. An enterprise must develop a precise plan to accommodate the
increased flow of information.
When managers are overconfident, not able to foresee change in the market place and not able to
implement changes; companies fail to change at all or does not change fast enough or effectively
enough to hold off disaster. The problem sits squarely on the shoulders of management. The
managers can also fail to manage properly once the changes have been made. They have to see the
changes before their competition does, make rapid changes, and be able to make drastic changes to
their business model.

1.5.

Integrating Technology into Your Business

Integrating technology into e-business is not as simple as it may seem. To make an effective, useful
solution, you must make some complex technological changes. The necessity for integrated
applications is more important where e-business is concerned, since; customers expect and want
something more out of online businesses. With the knowledge that shopping efficiency is a factor in
business design, the need for an integrated infrastructure should become very clear.
Integration means that your organization must have a solid, faultless set of applications that must
work fluidly. The process requires a major application renovate so that you can develop a back-end
infrastructure that permits your e-business functions to work faultlessly.
Are You Ready to Integrate?
Frequently, managers put the responsibility for the e-business solely on the shoulders of their IT
managers. The responsibility for the technological side of an e-business solution is the IT manager's
department; however, the business planning and modelling behind the solution should not be
delegated to the technical department. A manager should develop an e-business solution to identify
how he can deliver what the customer wants via technology. In many cases, it is found that
integration is not simply a technological barrier that must be discussed.
Getting It Together
To make an e-business strategy work, organizations must pay attention to new architectures that
support organizational liveliness in terms of business applications. To be profitable, the company
must be able to meet the needs of the market without extreme costs, unnecessary delays,
organizational interruption, or loss of performance. The organizations must be level with their
customers' needs: diversity, price, quality, and fast delivery. The models becoming increasingly

popular are customer-centric and support a number of complex business designs. If you have a static
model with no room for change, none of these needs can be met.
When designing an integrated, lively e-business infrastructure, it is necessary to make well
researched and tended decisions in many different disciplines. Frequently, e-business infrastructures
fail somewhere between the problem and the solution execution slipped off the path; not because
the technology was not working. The main reasons e-businesses crash into trouble can be
summarized as following:
x

Poorly linked solutions to an organizational plan.

Faulty strategies and tactics.

Improperly executed plans.

Failing to understand all the faces of an organizational problem.

1.6.

E-Business Plan

While opening your e-business, you will have to plan for both the predictable business and the
technological changes that come with opening your virtual doors. In developing an e-business plan:

The first step is to take a look at where your organization is: The existing state of the
business, identification of the customers and their needs, specifying whether the
organization is serving them adequately and how can they be served better.

The second step is to take a look inside your organization: Specifying whether the
organization is ready to make the move online, what do the organization currently has that
will accommodate the move; what will it need to become a workable e-business.

The third step is to understand the environment and technology trends.

Finally, as a businessman, you have to develop your e-business design: Specify what kind of
model will be followed and how can it be well-matched with the organization.

The First Step

The miserable truth is that most managers don't really understand what their customers want.
Additionally, the relationship between the customer and profit is also cloudy to many businessmen.
If you take the time and make the effort to ask the hard questions about your customers' wants and
needs, you'll be able to design a profitable e-business solution.
A businessman needs to know the different customers within the broad group of customers. It's
necessary to break that huge group into smaller groups whose behaviour can be analyzed
systematically. Here's how your customers might break down: (This is just an example, you might
break down differently according to the needs of your organization)
Occasional customers: These customers buy at irregular intervals and usually just one at a time.
Regular customers: These customers buy at regular intervals (e.g. every week) and usually more than
one product.
Hardcore customers: These customers buy at frequent intervals (e.g. every day) and usually more
than one product.
After segmenting the customers, the following questions must be asked for each group:
9

What is important to each customer segment? The customers who buy from you may also buy a
number of other goods and services. By figuring out what's important to that segment, you can apply
this information to your e-business. While moving into the digital realm, a businessman will also have
to foresee what a new batch of customers will interact with the business.
What the customers in each segment want and need? The customers' needs are truly a moving
target. The skill in staying on top in business is realizing what your customer wants and needs, and
then reacting before they've moved on to something new. To understand what the customers want
and need, there's an easy, underused method listen to them. While moving into the digital realm,
you'll also have to anticipate what a new batch of customers who interact with you online will want
and need. The best way to look into the future is to look at the past. What were your customers like
five years ago? Based on how they've changed, what will they be like five years from now?
Is the organization meeting these needs? The question how do you add new forms of value is
important when migrating from a bricks-and-mortar company to a dot com. The customers want
value, innovation, and savings. The organization should have a new, exciting product that customers
will be hurried for or offer them some sort of savings or make things more convenient for them, etc.
The organization should use technology to serve the customers.
The Second Step
To find out if an organization is capable of making a jump into e-business, these two important
questions needs to be answered:
What are the Organization Abilities? A businessman should review the organization's strengths
and weaknesses. Take a look at the traits listed in Appendix I. In the ever-changing business world,
what is strength today may be a weakness tomorrow. Therefore, the list should be re-examined from
time to time.
When the organization is considering moves to e-business models, it should also consider how a
technology implementation can either help or delay an organization's ability to adapt to changing
business environments. It is also important to take a closer look at the IT department and determine
if they have a different business philosophy from management. This is one of the biggest points of
failure in companies where the application infrastructure is not in position with the business'
objectives.
How can the Organization Improve? The organization must develop solid enterprise
architecture, one that will provide a logical, consistent plan of activities and coordinated projects
that will lead the business applications and infrastructure from their current state to the final goal.
This is a comprehensive plan that must include the specifics of each department, plus a plan that will
allow them to develop in combination with one another. Further, the plan must include the overall
strategy and the movement steps. The plan should also include guidelines to show how integration
can occur.
The Third Step
The organization should be aware of how the industry and the marketplace are operating and
knowledgeable about technology trends. The organization should also be aware of its competitors in
the business environment. The organization needs to make sure that someone else can't offer the
customers something the organization should be offering.
Final step: Design the E-Business

10

Finally, the organization can start thinking about how the e-business will be designed. Designing the
e-business is a two-step process:
Choose a Design: First, a business should choose a design to model the e-business. Then, the
businessman should personalize it and make it its own. Appendix II shows the basic e-business
designs. A businessman should choose the one that is the closest to what the organization is trying to
accomplish. Once a design is found in which your e-business fits, next step is to customise it for the
company.
Make It Own: After selecting the model the e-business is suited to, a businessman should look
back to the first, second and third steps of the e-business plan to develop an accurate picture of the
e-business model so that it best suits the organization and its goals. By applying the information
discovered about the organization and the customers, a businessman will be able to customize and
add the own sources of value to these stock e-business models. Further, a businessman should
repeatedly analyze the e-business to ensure that it is unique.
Given all the variables, research, and study involved in developing your e-business, it's obvious that
this is not something that can be written in a few minutes before a meeting. To develop your ebusiness requires a fair amount of study and critical self-reflection. In the end, however, when
considering the benefits that come from a quality e-business solution, the work on it would be
profitable and make your company successful in the long run.

2.INTRODUCTION TO E-MARKETING
The Internet and the World Wide Web provide marketers with new tools and added convenience
that can increase the success of their marketing efforts. The Web offers several technologies and
applicati.ons that enhance customer service, marketing and advertising efforts with a reasonable
cost. The Internet could improve customer service by sending e-mails for order confirmation, product
announcements, and order tracking. The Web provides customer service through corporate web
sites, integrated call centres, online help desks, and online customer services.
In recent years, customers have been using business web sites for many different applications:
downloading forms, downloading product information and user manuals, software patches,
hardware drivers, minor upgrades to an existing software, and receiving on time answers to
frequently asked questions. All of these features have improved customer service and lowered costs
for both the business and its customers.
If you use well, Web is an effective marketing instrument. Different advertising and marketing tools
on the Web include banner advertisements, Web Forums, e-mail and registering e-mail, links on
other web sites, online classified advertisements, message boards and special interest shopping
centres, display screens, spot leasing, intelligent agents, advertising using search engines.
The Web helps in online customer research. Legal data about customers can be collected directly or
indirectly through cookies, intelligent agents and online questionnaires quickly and with minimum
cost. Intelligent agents are rule based software that can be used effectively in the e-trade
environment. Intelligent agents and shopping bots are increasingly used in the e-trade world to assist
customers in finding the cheapest possible prices for the customer. They are also a marketing tool for
collecting relevant information regarding customers purchasing habits and the sites they usually
visit.

11

2.1.

The Web as a Marketing Tool

The Web puts large and small organizations on the same foothold. Regardless of size or financial
strengths, any business can sell goods and services through the Web. In such a free environment,
customers have the power. They can respond individually to a marketing attempt or they can spread
the word to their associates. If they support, everything is fine; however, if they dislike, there is a
problem.
Customers could get unhappy by receiving materials they haven't asked for. Here are some
guidelines for successful Internet advertising.
x

Never send disturbing messages.

Use full agreement to conduct direct selling or promotions.

Obtain the consumers permission when carrying out research.

Take permission of the user prior to selling consumer data.

Never use Internet communications to hide real activities of the business.

Businesses successfully use passive advertising by setting up bulletin boards. This requires minimal
investment to cover the hardware and software costs. An alternative would be to publish
advertisements through an Internet service provider (ISP) such as SuperOnline or Claranet, a
directory such as Yahoo!, or a search engine such as Google. However, if you plan to deal with emarketing, a home page is the medium perhaps best suited for advertising on the World Wide Web.
Many companies have established home pages for business advertising. Here, the advantage is that
marketing messages can be individually customized for each customer. Companies are generally
making product information, press releases, e-mail index, and financial information available via the
Web. Some manufacturers includes an URL address on their cans or bottles or packets that a
customer can access for additional information on the product, such as information related to the
ingredients, nutritional facts, and so forth.
Basic Web Design Rules:
In order to have a successful business online, the visual presentation of your web site needs to stick
to the following rules:
Content: Focus your attention first on content and then on design.
Consistency: Design your site consistently without varying the content.
Density: Break up content into little pieces without tearing it apart.
Design: Use few colours without designing a monotone web site.
Size: Use small graphics with large impact.
Page-loading speed has a direct association with the number of visitors viewing the page; therefore,
complex graphics and large tables should be avoided at least in the initial page.
The increasing subscriptions to fibre optic networks and 3G is resulting in increased popularity and
business usage of the Web and allowing marketers to reach a more diverse range of customers.

12

2.2.

Marketing Tool: The Web

Any organization using the Web can advertise all over the world and sell 7-days a week, 24-hours a
day. The Web serves as a strong marketing tool for all types of organizations regardless of their size
and the types of products and services that they sell (Figure 2.1).

Virtual
Store- Front

Supporting
Marketing 4-P

Collecting
Marketing
Data

Advertising
Traditional
Products

MARKETING TOOL

Online
Marketing

The Web
Advertising
Digital
Products

C
Customization
Contact with
Customers

Matching

Figure 2.1 Web as a marketing tool

Collecting marketing data through the Web could improve the marketing efforts of any organization.
An organization using these data will be able to customize a particular product or service to the
specific needs and requirements of a potential buyer. Marketing data can be collected through
various tools available on the Web with reasonable cost. E-mail, online forms, online questionnaires,
Web Forums, cookies, and intelligent agents are among the popular tools that can be used for this
purpose.
Advertising traditional products to sell through the Web has become popular in recent years. Online
stores are able to offer a variety of choices and in many cases at lower prices than high-street prices.
With the introduction of e-wallets, e-cash, and other electronic payment systems (EPSs), customers
are able to pay for these products and services with improved security and convenience. This is
basically transferring the old trade model to the Web and taking advantage of all the technologies
and applications that the Web offers.
Advertising digital products to sell is a new way that businesses can generate revenue with
reasonable expenses. Downloading software, songs, magazine articles, books or movies are some
examples. These applications are expected to increase dramatically, with the increased popularity of
usage of fibre optic communication and mobile network and tighter security measures.
A good example to such digital products is Apples iTunes Store where the customers could
download songs, complete albums, TV shows, applications and movies. Between the period of April
2003 (when it was first opened) to January 2013 the store sold more than 16.5 billion songs and 2
billion applications.

13

Online marketing is becoming a popular application of Web marketing. Marketers are able to reach a
wide geographic base and collect marketing data with reasonable cost. These marketing data can be
used for testing various experiments, such as the attractiveness of an advertising campaign or the
strengths and weaknesses of a marketing medium, with moderate costs.
Supporting marketing 4P can be done by the help of the Web. Marketing is related with product,
price, promotion, and place (4P). The data related to the four factors of marketing can be collected
very rapidly with moderate cost. The Web provides unparalleled support for these 4Ps.
x

The product factor is concerned with the type of products and services that an e-business
plans to sell. These products and services could be brand new or a development over existing
products and services. The improvements might be price, features and/or usability.

The price factor is concerned with the most suitable price for the product or service.
Overpricing and under pricing are both undesirable. Collecting online data and analyzing a
competitor's offerings could help the e-business to establish a reasonable price for its
products or services.

The promotion factor aims to inform, convince, and remind customers regarding new
products and services and encourage repeat sales. Web technology is able to do this with
reasonable costs.

The place factor is concerned with the mechanisms that the e-business uses to get products
and services to customer. In many cases, the Web provides virtual storefronts for some
customers that otherwise could not have been able to do any transaction with a particular ebusiness. Customers in remote or rural areas or customers who are immobile and unable to
shop in traditional stores are some examples.

Customization can be provided by the Web with moderate cost. For example, Amazon.com displays
specific recommendations based on the customers previous purchases. These kinds of services are
very expensive in traditional marketing. The e-business can move from providing general products or
services to providing products or services customized to a customers needs, tastes and preferences
by the help of the Web. The following two technologies are commonly used to provide
customization/personalization:
x

Push technology (Also called server push or webcasting): The customer is automatically
delivered information using a set of predefined request parameters. The Web sends relevant
information to the customer workstation.

Pull technology: The customer must express a need in order to receive information. The Web
is able to implement this strategy very effectively with moderate cost.

Virtual storefronts -the Web servers- help the businesses to attract the customers. It is a form of
interactive marketing that allows customers to view and order goods on their computer screens. This
virtual site of a business can effectively express the unique offerings of an e-trade site to potential
visitors and can be easily modified to reflect the new offerings. Customers can browse through the
site at their own speed to find special products and services. Figure 2.2, Figure 2.3 and Figure 2.4
demonstrate the opening page of Ticketmaster.co.uk, Debenhams.com and ebay.com respectively.
Each storefront has diverse goals and purposes, and each one express a different message to its
customers. Browse through these sites to see how effectively they are using the Web for diverse
business purposes.

14

Figure 2.2 ticketmaster

Figure 2.3 Debenhams

Figure 2.4 eBay

Matching products and services to customers' needs is a powerful feature of Web marketing. The
internal search engines available on many of e-trade sites allow the customer to search for a
particular product and service.
15

Contact with customers is allowed by the Web to the e-businesses. Using e-mail and the company
web site, customers can freely state their opinions regarding the products and services sold by a
potential e-trade site, as the e-business and its customers are in close contact. In other words, the
Web offers an open forum for customers.
Appendix III gives some Web resources for conducting successful Web marketing and advertising.

2.3.

Supporting a Web Site

An e-business must first attract customers and visitors to its Web site to be able to sell its products
and services. The Web site can be powerfully marketed using the following suggestions:

x
x
x
x
x
x
x
x

The Web site can be registered with all (at least most popular) search engines and
directories. The site can be listed in popular search engines and directories such as Google,
Bing or in industry specific sites. When the site is registered, the location of the keyword in
the site (whether it's in the body or in the heading) and the frequency of the word's use will
have direct effect on the ranking of a page. A typical surfer usually looks at the top 10 to 20
listings after conducting a Web search. The Web site must make sure that the search engine
lists the site among the top 10; otherwise, the chances of being seen by many surfers are
low.
The Web site can be promoted by using banners and other Web advertising methods on
popular search engines, directories, and Web portals. For a brief list of banner advertising
rules, see Appendix IV.
The Web domain name can be written on all printed and written forms, letterhead,
envelopes, business cards, company cars, and equipment, and so forth.
The Web site can be advertised to existing customers. Present customers will be the first to
be glad about the added handiness of online business and pass the word to their friends and
families.
The Web site can be promoted by joining online discussion groups to people already
interested in the company's offerings.
URL links can be exchanged with other web sites that offer companion products or services.
The business can participate in free ad banner exchanges. Your company can agree to carry
banner advertising in exchange for other sites carrying your company ad banners.
E-mail lists can be used to send out notices or newsletters on the company's products and
services.
The company can offer bargain, competitions, quizzes, coupons.

While registering your domain name, try to keep it simple and choose something that is easy to
remember. A bad example is www.acunilicaliproduction.com which is very difficult to read especially
when it is shown briefly on the TV screen (The company wisely changed the domain name to
www.acunmedya.com later)!

16

2.4.

Web Marketing Tools

An e-trade site may use a combination of traditional and Web marketing tools to promote its
products/services. Obviously marketing methods that have the potential to reach the highest
number of prospective customers are more expensive. Each of the following techniques has
advantages and disadvantages and may be appropriate for a specific type of business:
Traditional Marketing Tools: Magazines, newspapers, posters, press releases, radio, and television
commercials, and word of mouth are the traditional methods that can be used to promote an emarketing/trading site. For instance, a television commercial can be very effective during popular
shows and programs; however, they are extremely expensive and usually beyond the budget of many
e-marketing/trading sites. Newspapers and magazines could be effective especially if the emarketing/trading site has a traditional business in place already.
E-Mail: E-mail is generally used for shipment confirmations, order confirmations, common
communication with customers and product announcements. Capturing customer information could
be necessary for repeat sales. Therefore, successful e-businesses register the customer's e-mail and
other relevant information using online forms. E-mail could be quite effective for repeat sales,
reminding the customer for the next purchase or for the next visit. As an example, consider an ebusiness that sells flowers. An automatic e-mail system can alert a customer that a particular
birthday is coming up. With a mouse click the customer can order flowers. However, with all these
advantages, e-mail must be used with caution. Customers should not be attacked with needless emails. The sale and the customer can be lost, if a customer gets irritated.
Web Forums: An e-business can subscribe to one or several discussions lists and post relevant
information regarding its products/services. Web Forums provide a strong advertising medium.
However, the organizations must first carry out careful analysis and find the most suitable list that
might be interested in the offerings of the e-marketing/trading site. Appendix V lists several
resources to find suitable Web Forum resources.
Banner Advertisements: A banner advertisement -an advertising image- is usually a graphic image
that displays the name or identity of a site. A banner can be clickable, which will transfer surfers to
another site, or just static, which shows some relevant information about a site, product/service
offered by the e-trade site. Banner advertising is one of the easiest ways of advertisement on the
web. Complex animations may be attractive, but most users wont be thankful for them. The simpler
it is, the more customers are able to understand what a business wants to achieve. A banner ad is
much less costly than TV ads. Where to put a banner ad is also very important. For instance, if the
site is selling insurance, then the banner ad should be placed in an online car dealer site or in a bank
site or a mortgage company site. The banners in msn sites on autos and entertainment, for example,
diverge consistently with the related Web site theme. (Figures 2.5 and 2.6) Banners should be placed
on sites that attract large traffic. However, it should be noted that the cost of banner ads varies with
the popularity and the traffic that the sponsoring site carries. Please have a look at Appendix V for
the rules to implement a successful online banner campaign.

17

Figure 2.5 MSN Auto

Figure 2.6 MSN Entertainment

Message Boards and Special Interest Malls: A product and or service can be listed in several of
message boards and special interest malls throughout the Web. Before you list a product or service a
complete search must be conducted in order to find the most suitable message board for the
intended product or service.
Links on Other Web Sites: An e-business could create a partnership with other e-businesses for link
exchange agreements. Your site creates a link to another site, and that site creates a link to your site.
Initial Web Site Page: An initial web site page which can display the e-business's corporate image
and brand in some cases captures the surfer's attention for a short period. It displays a message to
the surfer indicating the requirement for viewing the page, such as the browser type and the specific
software. This advertising medium that may use multimedia effects could be very effective for
attracting visitors to an e-business site.
Push Technology: Push technology means relevant information is pushed to the user based on his or
her prior inquiries, interests, or specifications. The Web works based on pull technology, meaning the
user searches the Web to find (to pull) information. However, push technology is more suitable for
the marketing of certain products/services. Using this technology, marketing information, product
lists, prices, and product updates can be directly updated in real time and sent to the customers.
18

Push technology can be effective for both business-to-consumer (B2C) and business-to-business
(B2B) marketing. For instance, a computer manufacturer may send the latest information on new
models, prices, features, and other related information to all of its dealers in real time. This could be
a major cost saving and it certainly improves business relations and customer service.

2.5.

Intelligent Agents

An intelligent agent is software that is capable of reasoning (using some form of artificial intelligent)
and rule-based meaning, by following a series of well-defined rules. Intelligent agents are capable of
performing certain tasks to assist the user. For example, a sophisticated mail agent can prioritize all
your e-mail messages and can even respond to some of them while you were not at work. It can sort
your messages by date, name, or subject or send them to your mobile phone.
The followings are some of the important capabilities of a sophisticated intelligent agent:
x

Mobility: The capability to migrate in a self-directed way from one platform to another.

Reactivity: The capability to selectively understand and act in a given situation.

Autonomy: The capability to be goal-directed, self-starting, and proactive.

Adaptability: The capability to learn from prior knowledge and go beyond what has been
given previously.

Humanlike interface: The capability to interact with users in a language similar to natural
language.

Collaborative behaviour: The capability to work with other agents to achieve a common
objective.

Intelligent agents perform many tasks in the e-business environment. An important application is
their use for Web marketing. Intelligent agents can collect relevant information about customers,
such as items purchased, customer profile, address, age, gender, purchase history, expressed
preferences, and unspoken preferences. This information can be effectively used by the e-business to
better market its products and services to customers. These software agents also called as productbrokering agents, or shopping bots are offering you a better and cheaper service than human agents.
They alert the customers about a new product or a new release of a product that might be of interest
to them. For example, agents of Amazon.com have been doing this successfully. The Amazon website
will offer you a list of books that you might like on the basis of what you're buying now and/or what
you have bought in the past. These software agents are also assisting Web marketing with smart or
interactive catalogues, also called virtual catalogues. A smart catalogue displays a description and
structure of a product based on the customer's prior experience and preferences. These catalogues
are kept up-to-date and created dynamically from source material, and they are searchable by
content using common concepts (similar to human behaviour) rather than navigated through links.

2.6.

Strategies for an Effective Marketing Plan

Below is a list that may help businessman to put together an effective Web marketing plan:

Identify the strategic goals and objectives of the organization related to Web marketing. The
e-business has to carefully define the types of products/services that will be sold through the
Web site. It has to recognize the competitors, the added benefits of its products and services
compared to the competitor. Furthermore, selection of the market (local, national or
19

international) that these products/services are going to be sold is also essential. Specification
of the price and customer services is another important factor that should be highlighted in
the marketing campaign.

Take corrective actions if the goals are not accomplished.

Establish a budget.

The first step is to bring customers to the site. A more important task is to keep the
customers at the site and encourage them to browse and shop. This can be done in a number
of ways. Good customer service, a help desk, availability of a live operator (in case), a clear
return policy, a clear statement regarding security concerns, ease of navigation, and the look
and appearance of the site, offering visitors alternative methods to buy (telephone, retail
shops, and through the Web) and personalization of the site all help to keep the customers
at the site and encourage them to return.

Use all or a combination of Web marketing tools discussed in section 2.3.

Utilize the ways discussed in section 2.4 to promote the e-trade site.

Make electronic catalogues available to your customers. Electronic catalogues enable

customers to browse through diverse groups of products/services and compare prices and
features. In addition, lower costs, higher speed of navigation by the customers, multimedia
options (animation, video, and audio), easier updating and availability of virtual interactive
catalogues that could match the product to the customer's taste and preferences are some
advantages offered by electronic catalogues compared with traditional catalogues.
Utilize the services of marketing agencies. The outsourcing of the marketing program to
agencies that provide these kinds of services is another option.

20

1. E-TRADE
3.1.

Introduction to E-trade

E-trade is buying and selling goods and services over the Internet. E-trade is an integral part of ebusiness as discussed in Section 1. E-business is a structure that includes not only those transactions
that centre on buying and selling goods and services to generate revenue, but also those transactions
that support revenue generation. These activities include generating demand for goods and services,
offering sales support and customer service, or facilitating communications between business
partners.
By the help of the flexibility offered by computer networks and the availability of the Internet, etrade develops on traditional trade. E-trade creates new opportunities for performing profitable
activities online. It promotes easier cooperation between different groups: businesses sharing
information to improve customer relations; companies working together to design and build new
products/services; or multinational companies sharing information for a major marketing campaign.
The followings are the business uses of the Internet. These services and capabilities are a core part of
a successful e-trade program. They are either parts of a value chain or are included as supporting
activities:
x

Buying and selling products and services.

Providing customer service.

Communicating within organizations.

Collaborating with others.

Gathering information (on competitors, and so forth).

Providing seller support.

Publishing and distributing information.

Providing software update and patches.

Airline and travel tickets, banking services, books, clothing, computer hardware, software, and other
electronics, flowers and gifts are some popular products and services that can be purchased online.
Several successful e-businesses have established their business models around selling these products
and services. E-trade has the potential to generate revenue and reduce costs for businesses and
entities. Marketing, retailers, banks, insurance, government, training, online publishing, travel
industries are some of the main recipients of e-trade.

3.2.

Comparing Traditional Trade and E-trade

In e-trade there may be no physical store and in most cases the buyer and seller do not see each
other. The Web and telecommunications technologies play a major role in e-trade. Although the
goals and objectives of both e-trade and traditional trade are the sameselling products and
services to generate profitsthey do it quite differently. Traditional trade presents product
information by using magazines and flyers. On the other hand, e-trade presents by using web sites
and online catalogues. Traditional trade communicates by regular mail, phone yet e-trade by e-mail.
Traditional trade checks product availability by phone, fax and letter. However, e-trade checks by e21

mail, web sites, and internal networks. Traditional trade generates orders and invoices by printed
forms but e-trade by e-mail, and web sites. Traditional trade gets product acknowledgments by
phone and fax. On the other hand, e-trade gets by e-mail, web sites, and Electronic Data Interchange
(EDI).
It is important to note that currently many companies operate with a mix of traditional and
electronic ways of trading. Just about all medium and large organizations have some kind of e-trade
presence.
E-trade and Value Chain:
Typical business organizations design, produce, market, deliver, and support their product(s)/
service(s). Each of these activities adds cost and value to the product/service that is eventually
distributed to the customer. The value-chain consists of a series of activities designed to satisfy a
business need by adding value (or cost) in each phase of the process. In addition to these primary
activities that result in a final product/service, supporting activities in this process also should be
included:
x

Managing company infrastructure.

Managing human resources.

Obtaining various inputs for each primary activity.

Developing technology to keep the business competitive.

For instance, in a furniture manufacturing company, the company buys wood (raw materials) from a
logging company and then converts the wood into chair (finished product); chairs are shipped to
retailers, distributors, or customers. The company markets and services these products. Those are
the primary activities (value-chain) that adds value and result in a final product/service for the
company. Value-chain analysis may highlight the opportunity for the company to manufacture
products directly. This means, for furniture manufacturer, it may enter in the logging business
directly or through partnership with others. The value chain may continue after delivering chairs to
the furniture store. The store, by offering other products/services and mixing and matching this
product with other products, may add additional value to the chair.
The Internet can increase the speed and accuracy of communications between suppliers,
distributors, and customers. Furthermore, the Internet's low cost allows companies of any size to be
able to take advantage of value-chain integration. E-trade may improve value chain by identifying
new opportunities for cost reduction. For instance, using e-mail to notify customers instead of using
regular mail helps for reducing cost. Selling to distant customers using the company web site may
allow revenue improvement or generation. These sales may not have been materialized otherwise
or selling digital products such as songs or computer software or distributing software through the
Web. Offering online customer service or new sales channel identification helps for product/service
improvement.
Today many companies generate a large portion of its revenue through the Web by eliminating the
middleman. By selling products/services over the Web, the companies improving revenue and
reducing cost. The companies providing logistics or courier services use the Internet to track loads
and packages that result in enhanced customer service.

22

3.3.

E-trade Business Models

As mentioned in Chapter 1, the ultimate goal of an e-business is to generate revenue and make a
profit, similar to traditional businesses. The Internet has improved productivity for almost all the
organizations that are using it. Nevertheless, the bottom line is that productivity must be converted
into profitability. To achieve this goal, different e-businesses or e-trade sites position themselves in
different parts of the value-chain. To generate revenue, an e-business either sells products/services
or shortens the link between the suppliers and consumers. Many business-to-business models try to
eliminate the middleman by using the Web to deliver products/services directly to their customers.
By doing this they may be able to offer cheaper products and better customer service to their
customers. The end result would be a differentiation between them and their competitors, increased
market share, and increased customer loyalty. Products sold by e-businesses could be either
traditional products, such as books and clothing, or digital products, such as songs, computer
software, or electronic books. Therefore, a business model is a group of shared or common
characteristics, behaviours, and methods of doing business that enables a firm to generate profits by
increasing revenues and reducing costs.
E-trade models are either an extension or revision of traditional business models, such as advertising
model, or a new type of business model that is suitable for the Web implementation, such as infomediary. Merchant, brokerage, advertising, info-mediary, subscription, affiliation and community are
the most popular e-trade models:

Merchant model
This model basically transfers the old retail model to the e-trade world by using the Internet. The
most common types of merchant model are similar to a traditional business model that sells goods
and services over the Web. There are different types of merchant models which can be categorized
in two groups; e-tailers and manufacturers. Amazon.com is a good example of the e-tailer type (see
Annex VIII). An e-business similar to Amazon.com uses the services and technologies offered by the
Web to collect orders from consumers and either sells products and services directly to the
consumers or pass the order to manufacturer or wholesaler for delivery. By offering good customer
service and reasonable prices, these companies establish a brand on the Web.
The merchant model is also used by manufacturers to sell goods and services over the Internet. (In
some classifications this model is defined as manufacturer model). These companies eliminate the
middleman by generating a portion of their total sale over the Web and by accessing difficult-toreach customers. Instead of selling the products over the intermediaries, companies establish direct
consumer relationships to increase market shares. Most of the airlines are successfully implement
this strategy in order to sell their tickets directly rather than using intermediaries such as travel
agents. thy.com and lufthansa.com can be given some as examples of the airline companies
According to Michael Rappa merchant and manufacturer models can be further detailed as; Virtual
Merchant - or e-tailer, Catalogue Merchant, Click and Mortar, Bit Vendor, purchase, lease, license,
brand integrated content types.

Brokerage model
The e-business brings the sellers and buyers together on the Web and collects a commission on the
transactions by using this model. This model plays a common role in both business-to-business (B2B),
business-to-consumer (B2C), and consumer-to-consumer (C2C) markets. The best examples of this
type are online auction sites such as eBay or webstore.com which also generate additional revenue
by selling banner advertisement on their sites.
23

According to Michael Rappa, brokerage models can be further detailed as; Marketplace Exchange,
Buy/Sell Fulfilment, Demand Collection System, Auction Broker, Transaction Broker, Distributor,
Search Agent, Virtual Marketplace models

Advertising model
This model is an extension of traditional advertising media, such as television and radio. Search
engines and directories such as Google and Yahoo provide contents (similar to radio and TV) and
allow the users to access this content for free. By creating significant traffic, these e-businesses are
able to charge advertisers for banner ads or leasing spots on their sites. Another example is
MSN.com which is one of the biggest content providers created by Microsoft. However, the
advertising model is also used by small-scale firms or even individual entrepreneurs as the entry to
the market is much easier in internet. Practically, anyone who has a good idea to attract people to
create traffic on his/her web site can use advertising model successfully. For example, this model has
been used by consultants such as financial advisers and lawyers, who might provide free articles
about topics specific to their expertise and practice. The banks would be interested in putting
advertising to such sites. (e.g. about mortgage loans.)
According to M. Rappa, advertising models can be further detailed as; Portal, Classifieds, User
Registration, Query-based Paid Placement, Contextual Advertising / Behavioural Marketing, ContentTargeted Advertising.

Info-mediary Model
E-businesses which use this model collect information on consumers and businesses and then sell
this information to interested parties for marketing purposes. For instance, Netzero.com provides
free Internet access; in return it collects information related to the buying habits and surfing
behaviour of customers. This information is later sold to advertisers for direct marketing.
eMachines.com offers free PCs to its customers for the same purpose.
According to M. Rappa, info-mediary models can be further detailed as; Advertising Networks
Audience Measurement Services Incentive Marketing Metamediary models.

Subscription model
This e-business model aims to generate revenue by means of using subscription, pay-per view, or
membership. In order to view the website content, the users are charged a periodic fee. (e.g. daily,
monthly) This model is commonly combined with the advertising model. Many media organizations
provide free content that are accompanied by advertisements and then attempt to sell further
services through subscription.
According to M. Rappa, subscription models can be further detailed as; Content Services, Person-toPerson Networking Services, Trust Services, Internet Services Providers.

Affiliation Model
The affiliation model involves payments to website operators for customers who find their way to a
companys site and either buy merchandise or services or perform some other action, such as
registering and providing certain information. This is done by offering percentage of the revenue to
affiliated partner sites for each transaction. For instance anyone can register to Amazon.com and
create an online link in his/her website. Amazon.com currently pays up to 10 percent of commission
to the website operator which sent the costumers.
According to M. Rappa, affiliation models can be further detailed as; Banner Exchange, Pay-per-click,
Revenue Sharing.
24

Community Model
The rationale of the community model is to generate revenue by means of establishing a community
and making people to participate into this community. Communities vary widely and can include
people trying to find their former school mates or sharing a common hobby or wishing to play an
online game. Revenue can be generated through advertising and subscription for premium services
as well as through donations. The social networking sites (such as Facebook) are good examples of
this model which are very popular today.
According to M. Rappa, community models can be further detailed as; Open Source, Open Content,
Public Broadcasting, and Social Networking Services.

3.4.

Major Types of E-trade

The several types of e-trade in use today are classified based on the nature of the transactions:
business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), consumer-tobusiness (C2B), non-business/not-for-profit, government, and organizational (intra-business).

Business-to-Consumer E-trade
In B2C e-trade, businesses sell a diverse group of products and services directly to customers. It is an
electronic retail business where the traditional trading companies took advantage of this by creating
electronic storefronts after discovering they could sell larger volumes of merchandise through B2C
models.

Business-to-Business E-trade
Business-to-Business e-trade holds electronic transactions among and between businesses. The
Internet and reliance of all businesses upon other companies for supplies, utilities, and services has
enhanced the popularity of B2B e-trade and made B2B the fastest growing segment within the etrade environment. In recent years extranets (more than one intranet) have been effectively used for
B2B operations. B2B e-trade creates dynamic interaction among the business partners; this
represents a fundamental shift in how business will be conducted in the 21st century.
Companies using B2B e-trade relationship observe cost savings by increasing the speed, reducing
errors, and eliminating many manual activities. Suppliers can access the inventory status in each
store online and put orders for required products in a timely manner. In a B2B environment,
purchase orders, invoices, inventory status, shipping logistics, and business contracts handled
directly through the network result in increased speed, reduced errors, and cost savings. B2B e-trade
reduces cycle time, inventory, and prices and enables business partners to share relevant, accurate,
and timely information. The end result is improved supply-chain management among business
partners.

Consumer-to-Consumer e-trade
Using C2C e-trade, consumers sell directly to other consumers using the Internet and web
technologies. Individuals sell a wide variety of services/products on the Web or through auction sites
such as eBay.com, and gittigidiyor.com through classified ads or by advertising. Consumers are also
able to advertise their products and services in organizational intranets and sell them to other
employees.

25

Consumer-to-Business E-trade
Consumer-to-business (C2B) e-trade that involves individuals selling to businesses may include a
service/product that a consumer is willing to sell. Individuals offer certain prices for specific
products/services.

Non-Business and Government E-trade

Political, social and not-for-profit organizations also use e-trade applications for various activities,
such as fundraising and political forums. These organizations also use e-trade for customer service
and for purchasing to decrease cost and get better speed. The e-trade applications in government
and many non-business organizations are also on the rise.

Intra-Business E-trade
The organization intranets provide the right platform for intra-business e-trade. Intra-business etrade involves all the e-trade-related activities that take place within the organization. These
activities may include exchange of information, goods, or services among the employees of an
organization. This may include selling organization products/services to the employees, offering
human resources services, conducting training programs, and much more.

3.5.

Advantages and Disadvantages of E-trade

Advantages of e-trade
The followings underline some of the selected advantages of e-trade:

x
x

Gaining extra knowledge about probable customers: Using various tools such as e-mail,
cookies, the e-trade site and the company web site, it is possible to gain additional
knowledge about probable customers. For example, the e-business is able know the
customer shopping behaviour, preferences, gender, age group, and so forth. This knowledge
could be successfully used to better market products/services.
Enhanced customer service: Many of the customers' questions and concerns are answered
using tools such as an online help desk, company web sites, and e-mail with minimum cost.
An e-trade site is able to improve customer service by using these tools. Printing forms
online, downloading software patches and reviewing frequently asked questions (FAQs) are
other examples of customer service.
Enhanced customer involvement: The customer can offer an online review of a product that
he/she has recently purchased from the e-trade site or the customer may participate in
various open forums, chat groups, and discussions. In the e-trade environment, customer
involvement could be significantly improved.
Enhanced relationships with the financial community: An e-trade site can improve its
relationships with the financial community through the timely transfer of business
transactions and a better understanding of the business partner's financial status.
Enhanced relationships with suppliers: E-trade technologies enable businesses to exchange
relevant information with their partners on a timely basis with minimum cost. Using B2B etrade assists businesses in managing a comprehensive inventory management system. A B2B
e-trade site can improve its relationships with suppliers.

26

x
x
x

Improved flexibility and case of shopping: The customer does not need to leave his/her
home or office and commute to purchase an item. Shopping tasks can be done from the
privacy of the home with a few clicks of mouse. Improved flexibility and ease of shopping is a
significant advantage of e-trade.
Increased return on capital/investment: An effective e-trade program is able to operate
with no inventory or with minimum inventory. By having no or minimal inventory, the etrade site could avoid devaluation in inventory due to the release of a new product, change
in fashion, season, and so forth. In many cases an e-trade site should be able to increase
return on capital and investment since no inventory is needed.
Increased number of customers: Customers from remote locations and those outside of the
business's geographical boundaries can purchase products/services from the e-trade site. An
e-business or a traditional business with an e-trade presence could increase its potential
customers.
Product and service customization: By collecting relevant information on different
customers, a particular product/service could be tailor-made to customer taste and
preference.
Personalized service: In many cases an e-trade site, by using various web technologies, is
able to offer personalized service to its customers and at the same time customize a product
or service to suit a particular customer
Doing business around the world 24 hours a day, 7 days a week: Customers in any part of
the world with an Internet connection can log onto the e-trade site and order a product or
service. Holidays, weekends, after hours, and differences in time zones do not pose any
problem. In the e-trade world, doing business around the globe 24 hours a day, 7 days a
week is a reality.

Disadvantages of e-trade
Many of the disadvantages of e-trade are related to technology and business practices. The following
lists some of the disadvantages of e-trade:

x
x

Potential capacity and bandwidth problems: Possible capacity and bandwidth problems
could be a serious problem. If the web site is responding slowly or not responding at all,
customers quickly get turned off.
Security concerns: Security issues are main worry for many consumers. Security issues and
measures are improving every year, through the use of media other than credit cards on the
Web, such as e-cash, and other payment systems, acceptance of digital signatures, more
widespread application and acceptance of encryption technology, and greater awareness
and understanding of customers' concerns.
Accessibility: Not everybody is connected to the Web yet. The reduction in cost of PCs and
other Internet appliances will further increase Internet applications and result in further
accessibility of e-trade. As the number of Internet users increase in time, the accessibility of
customers concern will definitely become more convenient.

27

x
x
x

Acceptance: Not everybody accepts the technology. The growth of the Internet and of online
shopping points helps to further acceptance of e-trade applications. However, acceptance of
e-trade by the majority of people will take time, similar to other technologies.
A lack of understanding of business strategy and goals: When the technology is fully
accepted, a company's e-business strategies and goals will also become better understood.
Initial cost: The cost of creating / building E-trade application may be very high. There could
be delay in launching the application because of mistakes and lack of experience.

As result, similar to traditional businesses, e-trade presents many advantages and disadvantages. The
advantages of e-trade significantly outweigh its disadvantages, if the e-trade is established based on
the correct business model.

3.6.

M-Trade

Fast developments in technology bring new concepts into our everyday life. After smart mobile
devices launched into the market, they allowed users to perform mobile trading applications, provide
access to on line trading platforms. These wireless devices have the ability to interact with computer
networks and conduct on-line merchandise purchases. Therefore trading over smart phones began
to take its place in the market.
Mobile trade services were first delivered in 1997, when the first two mobile-phones enabled Coca
Cola vending machines were installed in Helsinki, Finland. The machines accepted payment
via SMS text messages. The first mobile phone-based banking service was launched in 1997 by Merita
Bank of Finland, also using SMS. After these first attempts, the banks and airline companies started
to provide mobile services to their customers.
Kevin Duffey first described the M-commerce as the delivery of electronic commerce capabilities
directly into the consumers hand, anywhere, via wireless technology. in the Global Mobile
Commerce Forum which was held in November 1997.
Today, mobile trade is worth US$230 billion in the world where Asian countries represents almost
half of this figure. According to the Digi-Capitals August report which analyses the mobile internet,
mobile trade is expected reach US$700 billion in revenue by 2017. This vast development in wireless
environment will offer a high opportunity for the entrepreneurs and investors who enter into the
market early.

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REFERENCES
1. Allan, and C. L. Tucci, Internet Business Models and Strategies, McGraw-Hill-Irwin, Boston ,
Massachusetts , 2000
2. Canzer, e-Business: Strategic Thinking and Practice, Houghton Mifflin Company, New York,
2006, pp. 90-102
3. E-commerce Models - http://www.dcs.bbk.ac.uk/~gr/ecommerce_ism/infomodels.pdf , Last
visit: April 2013
4. E-commerce Tutorial - http://www.easystorecreator.com/ecommerce-tutorial.asp , Last visit:
April 2013
5. E-commerce Tutorial - www.webmonkey.com/category/web design and development , Last
visit: April 2013
6. H. Bidgoli, Electronic Commerce: Principles and Practice, Academic Press, New York , 2002,
ISBN: 0-12-095977-1
7. H. M. Deitel, P. J. Deitel and K.Steinbuhler, e-Business and e-Commerce for Managers,
Prentice-Hall, N.
8. J. G. Kobielus, BizTalk: Implementing Business-to-Business E-commerce, 2001, Prentice Hall,
NJ.
9. L. Fickel, Online Auctions: Bid Business CIO Web Business Magazine. June 1, 1999
10. M. Rappa, Business Models on the Web, http://digitalenterprise.org/models/models.html,
Last Visit: April 2013
11. R. Banham, The B2B, Journal of Accountancy, July 2000, pp. 26-30.
12. S. Krishanmurthy, E-Commerce Management: Texts and Cases, South-Western, Ohio, 2003,
pp. 72-99
13. www.webopedia.com , an online tech dictionary for IT professionals and educators, providing
definitions to words, phrases and abbreviations related to computing and information
technology.
14. www.techopedia.com , on line free resources, articles, tutorials, and dictionary.
15. https://www.techinasia.com/digi-capital-reports-asia-as-dominant-player-mcommerceindustry-insights/ Digi-Capital Report, Aug. 2014.
16. http://cryptome.org/jya/glomob.htm Global Mobile Commerce Forum

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APPENDIX I
Areas of Evaluation:
Employees
Skills
Training
Knowledge
Commitment by executives
Happiness
Infrastructure
Financial systems
Human resources
Research and development
LAN/WAN
Technology
Legacy applications
Networking
Web site and intranets
Security
IT skills
Customer Interactions
Sales
Marketing
Customer service
Call centres
Distribution channels
Production
Manufacturing
Supply chain management
Distribution
Production scheduling
Inventory management

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APPENDIX II
E-Business Models - Design Descriptions
Category killer: You want to use the Internet to define a new market by identifying a unique
customer need. If you're aiming for this model, be aware that you'll have to be one of the first to
market and stay in front of the group.
Example: Amazon.com, google.com
Channel reconfiguration: You want to use the Internet as a new channel to deal directly with
customers, which will include sales and order fulfilment. This model first aids and then replaces
physical distribution.
Example: Ikea.com
Transaction intermediary: You want to use the Internet to process purchases. This model performs
all the end-to-end functions that a customer would need from searching to comparing with other
products to sales.
Example: eBay.com, debenhams.com, hepsiburada.com
Channel mastery: You want to use the Internet for sales and service. This model is used to support
existing sales rather than supplant them.
Example: Xerox.com copiers and printers bundled with maintenance or customer support
services
Self-service innovator: You want to use the Internet to provide human resources services that your
customer's employees can use directly. This model allows them to develop a personalized
relationship.
Example: Ceridian.com
Supply-chain innovator: You want to use the Internet to make the transactions between all members
of a supply chain more efficient and streamlined.
Example: SupplyChainBrain.com

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APPENDIX III
Some Web Resources for Conducting Successful Web Marketing
http://www.digitalbusiness.gov.au/marketing-tips a platform guiding SMEs getting on line.
http://www.getuwired.us/Small-Business-Web-Marketing/2011/07/conducting-successful-webmarketing-campaigns/: Small business web development
Smart Insights http://www.smartinsights.com/: A platform helping business get info from digital
marketing.
Kaiser the Sage http://kaiserthesage.com/seo-strategies-resources/ personal journal by Jason
Acidre covers online marketing and search engine optimization strategies.
http://www.webmarketingexpo.in/about-web-marketing-expo/: A platform created for trainers,
entrepreneurs, students, job seekers employers.

APPENDIX IV
Banner Advertising Rules
In order to implement a successful online banner campaign the following rules may help:
Keep banners small: The message must be visible within a few seconds even on slow connections.
Invest in Design: Use a brief design to display your message.
Avoid complex animations: Animations are attractive, but take up a lot of time for downloading.
Make it readable: Dont use funny fonts. Display your message in such a way that everyone is able to
read it.
Make sure the link works: Even the best banner ad is useless if the link doesnt work.
Design a forceful message: Make a short, forceful statement on your product or service.

APPENDIX V
Some Web Resources for Marketing the Product/Services of a Web Site
http://www.webcom.com Provides wide-ranging information resources about e-businesses
http://www.o-a.com Focuses on professional discussion of online advertising strategies, results,
studies, tools, and media coverage
https://forums.digitalpoint.com/: Online internet marketing and search engine optimization forum
http://www.webhostingtalk.com :Advertising forum

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APPENDIX VII
Industry Connection: Amazon.Com Corporation
Amazon.com is one of the leaders in B2C e-trade. Amazon.com opened its virtual stores in July 1995
with a mission to use the Internet to transform book buying into the fastest and easiest shopping
experience possible. Amazon.com offers numerous products and services including books, CDs,
videos, DVDs. toys, games, electronics, free electronic greeting cards, online auctions, and much
more. In addition to an extensive catalogue of products, Amazon.com offers a wide variety of other
shopping services and partnership opportunities.
Amazon.com's business model is based on the merchant model. By creating customer accounts,
using shopping carts, and using the 1-click technology, Amazon.com makes the shopping experience
fast and convenient. E-mail is used for order confirmation and customer notification when new
products that suit a particular customer become available. Allowing customers to post their own
book reviews, creates an open forum between the storefront and its customers. Using Amazon.com
a prospective shopper can do the following:
Search for books, music, and many other products and services
Browse virtual aisles in hundreds of product categories from audio books, jazz, and video
documentaries to coins and stamps available for auction.
Get instant personalized recommendations based on the shopper's prior purchases as soon as the
shopper logs on.
Sign up for the Amazon.com e-mail subscription service to receive the latest reviews of new titles in
categories that interest the customer.
Amazon.com offers a safe and secure shopping experience by guaranteeing its shopping and auction
services. It also offers 24-hour-a-day, 7-days-a-week help desk services to assist shoppers who
experience difficulties.

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