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MBA IS- 4th SEM MI0039 e-Commerce 4 Credits Assignment Set- 2 Q.

1 Warigon is a retail company and they want to automate the payment system. Assume that you are the design engineer of that company. What are the factors that you would consider while designing the electronic payment system?

Q.2 Discuss the working concepts of EDI Answer: Working concepts of EDI discuss the step by step process: 1. Preparation of electronic documents: The first step in any sequence of Electronic Data Interchange is the collection and organisation of data by ABCs internal application systems. Instead of printing out purchase orders, ABCs system builds an electronic file of purchase orders. 2. Outbound translation: The electronic file is then translated into a standard format. The result is a data file that contains a series of structured transactions related to the purchase orders. ABCs EDI translation software will produce a separate file for each manufacturer. 3. Communication: ABCs computer automatically makes a connection with its Value Added Network, and transmits all the files that have been prepared. Each file is processed by the VAN and is routed to the appropriate electronic mailbox for each manufacturer. Several manufacturers do not subscribe to the ABCs VAN, so files are automatically routed to the appropriate network service. 4. Inbound translation: The manufacturers retrieve the files from their electronic mailboxes at their convenience, and reverse the process that ABC went through, translating the file from the standard format into the specific format required by the manufacturer's application software. 5. Processing electronic documents: Each manufacturer will process the purchase orders received in their internal application systems. In the example, we saw the EDI process between a supplier and its vendors. The process will be similar in a wide variety of other business relationships, whether for goods or services. Now let us take a more detailed look at these steps, to get a better idea of the range of possibilities and situations where EDI can be submitted. 1. Preparation of electronic documents: The most demanding part of implementing EDI in any business is preparing the electronic documents. There are a number of different methods to generate electronic documents as there are many different numbers of businesses and applications. Some methods of generating electronic documents are: Transcribing data: Data from printed reports is manually entered into a small computer based software package by users. Most small businesses need to communicate information electronically to their customers or vendors, but they do not have the computing resources to automatically generate information. A computer might be the only computing resource. In this case, a relatively inexpensive "off-the-shelf" EDI software packages can be used. This requires only a modem and a computer. Most of these products include options to allow users to generate entry forms, permitting them to enter information via the keyboard. Reformatting existing computer based data: Data base products or spread sheets are commonly used by small businesses. These data processing tools can be used to export data for EDI transactions. It is also possible with inexpensive commercially available computer software to read electronic report files from other applications and re-format them into data files that can be used by EDI packages. Updating existing applications: Companies that have active application systems can consider having the applications enhanced to generate output in a format that could be easily translated. Custom software development is required for this approach. The enhancement of the existing software depends on the extent of the existing software portfolio. Generation of purchase order data is done by making use of a program to read existing files from a purchasing system and extracting the necessary information. The existing software can be modified to create new output files. Purchasing software: If a company wants to purchase software that ensures that it will meet their EDI requirements then it should be predetermined as an evaluation requirement. Many software vendors include such

capability in packages of basic software. If the capabilities are not included, then the vendor can also provide the additional functionality at a cost that will be less expensive than in-house modifications. From the above discussion, we can arrive at a conclusion that participation in EDI trading partnerships can be accomplished by any business. It does not require a heavy investment in computing resources, and a sophisticated portfolio of business applications software to begin using EDI. If a company has already developed its business applications, the capabilities of that existing software can be enhanced to provide even more benefits. 2. Outbound translation EDI can be simply defined as electronic exchange of data in a mutually agreed-upon format. There are numerous application software packages creating purchase orders, all constructed for specific needs and based on different industry and data requirements. Hence, there arises a need to provide a common definition of data formats. However, the difficulty of accomplishing this is evident. Twenty different companies will almost certainly yield twenty different definitions of how a part number should be formatted. This issue could be avoided in a simple one-to-one EDI relationship by providing the schematic layout of the data to the receiver, and simply transmitting the data to the receiver without any translation. The receiver can alter and reformat the data to suit their purpose. The sender and the receiver will agree upon a common file definition for their use. Many EDI relationships started out using similar methods. However, if we consider the example, ABC has several hundred suppliers, and the chance of getting them all to agree upon ABCs definition of a purchase order format is quite small, particularly if those suppliers are also dealing with hundreds of other customers. There has to be a unique set of rules for each partnership. The resulting confusion would quickly drive customers and suppliers to return to paper forms regardless of the benefits or savings. The solution to this would be to have a comprehensive set of national and international standards. The standards are developed by specific industry or business groups. The standards provided commonly agree upon formats for use in virtually every type of business communication. Using these types of standards, information can be organised in a transaction format with definitions for the format. An internal system or a separate software package can be used to translate data into a standard format. Irrespective of the means used for translation, the end result of the process will be an output file generated in a specific format that any subscriber to the standard can understand. 3. Communication Transferring data in a one-to-one EDI relationship can be as easy as connecting a modem and transferring the file. This would become impractical with more number of vendors. If a manufacturer has to send out hundreds of purchase orders each week to hundreds of suppliers, it would require many employees and a very tight schedule, to transmit all of their purchase orders. Even if the manufacturer had an extensive private network available for successful transmission, it is necessary that all vendors be linked into the network. These problems can be avoided by a connection allowing receivers to access the senders systems and collect the necessary data, but it poses a serious security issue. With careful control it will work on a limited base including separate hardware to isolate the system being accessed by third parties. Some companies might accept these approaches, but this would lead to chaos, and once again most EDI users would quickly return to preparing printed documents, so that they could rely on the mail to distribute all their documents. To overcome these issues, EDI users can make use of third-party network services, commonly referred to as "Value Added Networks" or VAN's. The VAN works as a clearing house for electronic transactions. It serves as a private electronic mail service. A company can send all of their purchase order files to a single destination. Each vendor's data is routed to their own electronic mailbox by the VAN. If the recipient of the file does not subscribe to the particular VAN used by the sender then the transaction can be routed from one VAN to the other. The security issue is resolved by using a VAN. It allows trading partners to trade information, but at the same time avoid giving information away. Both the parties cannot access each others systems. However, they can still freely exchange agreed-upon information. The implementation process can be made even easier by using a full service VAN, which provide other services, including translation, standards compliance checking, and EDI software. 4. Inbound translation

The inbound translation process is the reverse of outbound translation. Once the purchase orders have been transferred to the electronic mailboxes by the VAN, the vendor can retrieve them at their convenience. The files will be translated into a specific format required by the vendor's application. This is called as de-map process. The usage of a standard format makes it easier for the vendor to recognise, which company the transaction is from, and then which type of transaction it is. Once the translation is complete, then it can be made usable in any desired format to the receiver's internal applications. 5. Processing the electronic document The vendor base will range from large corporations with sophisticated application systems to small shops with only a modem and a computer to a large manufacturer. A vendor with a highly automated process may process the information directly into their applications and act upon it without any interference. The small business may print reports. In both the case, and regardless of the scale, EDI can be successfully implemented. The final step is to close the loop by transmitting an acknowledgment transaction back to the vendor. Q.3 What are the four Ps of marketing? Explain how it is applied to internet marketing Answer: The four Ps - Product, Price, Place and Promotion are widely used to divide marketing. Let us now discuss the four Ps in terms of e-marketing in order to understand the full significance of the internet in marketing. Product: Various factors have to be thought upon by online marketers with respect to the products they sell. The most obvious fact is that in e-marketing the customers cannot see or touch products in the same way they can when they visit a store or showroom. That is the reason why products such as books, CDs, and computer goods have traditionally fared better than food and clothes. The integration of products with useful content is another significant factor which needs to be considered. Internet experts term this consideration as information product, which aims at increased product value by offering relevant and exclusive information. Price: The internet has helped towards lowering of prices for certain products. The chances for comparative shopping have been increased by the internet. Some online- markets like www.priceline.com allow customers to set their own prices. Lower prices are a way of encouraging customers to make their first online purchase as it involves minimal risk on the part of internet users. Pricing is an important factor in getting users to buy products online, but it is not the only factor. Websites that encourage useful information and two-way interaction are likely to attract customers even if their prices are not low. Place: Location is considered as the most important factor when it comes to real world marketing. The location of a shop in a commercial area or the prestigious address of an office does have an impact on marketing success rate in the real world. However, on the internet the real world business location becomes irrelevant. Irrespective of business location you will be able to reach people around the globe. Geographical limitations are completely eliminated but cultural differences are increased. For example, if your business is targeting international audience, you will have to consider including currency converters and options for different languages in your website. Promotion: On the internet, promotion of a business is completely dependent on the business owner or company itself. There is no need to rely on advertising or print media to get the message across.The internet puts the promotion of a companys business on its own terms. Instead of relying on advertising or journalists to get its message across, it can communicate directly with its audience. For e-marketing, free marketing methods such as search engine submissions and discussion group contributions are more effective than paid advertising. Word of mouth is one of the most powerful online promotions, referred to as viral marketing. Since, internet markets are networked, both positive and negative publicity can spread with great speed. The promotional message must always be in tune with, and must incorporate, the voice of the market Marketing implications of internet technologies: Internet technology was integrated with marketing practices by earlier marketers who understood what internet technology could do. Let us now discuss some of the internet properties and their marketing implications.

These properties of the internet can be compared to properties of the telephone. The telephone is a mediating technology, has global reach, and has network externality, but the internet has properties that create opportunities beyond other communication media, like telephone, television or radio. The earlier marketers were excited by these differences and wanted to capitalise on them. These internet properties not only allow for a more effective and efficient marketing strategy, but also change the way marketing is being conducted.

Q.4 Analyze the structure of a website Answer: The website structure is similar to the human skeleton or nervous system. A website is connected through a network of links into something that provides form and function to the site. In order to analyse the web structure, we first have to understand the basic web structure. A website consists of three main areas or three tiers, which is the home page, the main sections and subsections as shown in figure One of the factors for the success of a websites structure is the ease with which the viewers can navigate the site. A common understanding is that it should take not more than three clicks for visitors to find what they want. Let us now discuss and analyse each section in detail. Home page: The home page creates the first impression to the visitors. It should convey to the visitor what the site is all about. Questions such as Who, What and Why about the sites purpose should be explained by the home page. A sitemap or table of contents that guides visitors to the information they need should be included in the home page. Visitors will definitely view the website again, if they can find the information quickly and easily.

The home page should not contain more than 400 words. The purpose of the home page is to provide an overview of the site, giving the visitor a clear picture of what is available and how to get there. The home page must be short and to the point Main section: The main sections are the headings of specific bodies of data. These are the gateways to particular areas of the web site. For example if a company is selling automobiles the main section might be non-gear bikes, gear bikes, and cars. The subsections will further break down into categories such as models, price, colour and so on. This tier of the website structure forms the backbone of the of the websites navigation system. These are links that take visitors deeper into the website. One click access to the subsections must be provided by these. This main section is basically a collection of links that provide access to the main content in the subsections of the site. Every main section should cover a specific subject or data base which is focused on a single topic. Sub sections: Once the main sections of the website are developed and navigation schemes are decided, the data should be grouped into subsections. Every subsection contains significant data relevant to the main sections. The subsection of a website forms the body and central message of the site. A visitor who wants to look further into a site must be directed into the subsections through a navigation scheme that allows one click access to subsections. Web structure analysis: Analysing the web structure involves tracing the navigational habits of visitors on a web site to determine methods for improving the structure by reorganisation, and web site design to better fit the visitors need. This can be accomplished by analysing the web server logs. Statistics such as time between page accesses, average access time, and hits per page can be generated from the server logs. Companies can use scripts on each web page to monitor the visitors such as which links are clicked, how long the visitors stay active and a form to ask the visitors whether or not their search was successful. This form also asks what they were looking for. This information and the information generated by the web server log helps companies to reorganise the web structure, increase traffic and improve business. Figure explains the basic web structure.

Figure: Basic web structures

Q.5 List the benefits of online catalogue Answer: An online catalogue is a list or itemised display, as of titles, course offerings, or articles for exhibition or sale, usually including descriptive information or illustrations. It is a time saving tool that provides valuable information to the prospective customers about your product specifications. It facilitates the potential customers to locate the products according to their specifications. Let us analyse the meaning of catalogue with an example. You are planning to buy a car. Using a computer connected to the internet, you launch an inquiry with the help of knowledge gathering software assistant that roams the global networks. It identifies cars in various vendor catalogues that fit certain specified parameters such as safety, price, quality, and so on. On-line catalogues are usually in the form of brochures and CD-ROMs. Currently most on-line catalogues are some form of electronic brochures also known as softads or interads. Electronic brochures are a multimedia replacement for direct mail paper and diskette brochures used in the business to business marketing arena. They consist of a highly interactive program using still images, graphics, animation, sound, text, and data. Toll-free telephone numbers are frequently given for ease of phone-in orders. Some industrial catalogues are intended for use by sales representatives and contain a complete listing of all products sold by that company. Some industrial catalogues are intended for use by sales representatives and contain a complete listing of all products sold by that company. This type of catalogue does not have strong promotional copy or design as in consumer catalogues. In case of On-line catalogue the customers find the marketer, rather than the marketer finding them. Consequently, on-line catalogue customers tend to differ demographically and in purchase behaviour from print catalogue customers. Retailers such as department stores are getting into the catalogue business because it enables them to reach a larger market and to sell without the overhead costs of a store. The benefits of an online catalogue are that it:  Facilitates the buyer to buy at anytime and tracks the product line interest.  Broadens your market reach locally and globally.  Saves customers time and money with the help of online capability.  Lowers marketing overheads like ordering, processing, and status-check costs.  Improves order accuracy i.e. decline in unwanted calls, non-desirable faxes.  Provides detailed, accurate, and updated product information, including images, descriptions, and prices.  Increases brand awareness, product usage, generates print catalog request, collects prospect addresses, demographics, and provides two way communications with customers.  Improves leading categories like travel and entertainment ticketing, entertainment merchandise (books, magazines, videos, and music), grocery and drugstore sales, computer software, and computer hardware. Q.6 Define m-commerce? Describe the areas of potential growth and future of m-Commerce? Answer: m-commerce does not have any precise definition. m-Commerce and its definition varies from every individual. m-Commerce is called as next generation e-commerce. The process of buying and selling of goods and services through wireless devices such as cellular telephone and personal digital assistants (PDAs) is called as mcommerce. The newly appearing technology behind m-commerce is based on the Wireless Application Protocol (WAP). The traditional e-commerce is replaced by the m-commerce. Anywhere anytime is the important feature of m-commerce that leads us to implement m-commerce in place of e-commerce. Areas of potential growth and future for m-commerce: New Channels of banking services are emerging and are working on m-commerce technologies. These new channels can facilitate deposits, payments, transfers and withdrawals. If the operational costs of the banking sector in m-commerce is reduced drastically then, efficiency in the transaction processing can be increased. The travel industry is concentrating more on m-commerce. m-Commerce will allow customers to schedule, reschedule, plan trips through their mobile devices instantly before they give a second thought. Traders in the retail sector focus more on how to locate customers more easily and will be able to provide secure payment methods through mobile digital certificates or voice recognition. Some of the today s and up-coming attributes of m-commerce are discussed in the table