Muh.

Idil Haq Amir 5211100704

AN INTRODUCTION TO ELECTRONIC COMMERCE

Electronic commerce is the conducting of business activities (e.g., distribution, buying, selling, marketing, and servicing of products or services) electronically over computer networks such as the Internet, extranets, and corporate networks.

A. Business-to-Business (B2B) E-Commerce

Business-to-business (B2B) e-commerce is a subset of e-commerce where all the participants are organizations.

B. Business-to-Consumer (B2C) E-Commerce

Early business-to-consumer (B2C) e-commerce pioneers competed with the traditional brick-andmortar retailers in an industry selling their products directly to consumers. Business-to-Consumer (B2C) ECommerce is a form of e-commerce in which customers deal directly with an organization and avoid intermediaries. Disintermediation is the elimination of intermediate organizations between the producer and the consumer is called

C. Consumer-to-Consumer (C2C) E-Commerce

Consumer-to-consumer (C2C) e-commerce is a subset of e-commerce that involves consumers selling directly to other consumers.

D. e-Government
e-Government is the use of information and communications technology to simplify the sharing of information, speed formerly paper-based processes, and improve the relationship between citizens and government. Government-to-consumer (G2C), government-to-business (G2B), and government-to-government (G2G) are all forms of e-Government, each with different applications.

E. Multistage Model for E-Commerce

A successful e-commerce system must address the many stages that consumers experience in the sales life cycle. At the heart of any e-commerce system is the users ability to :

1. Search and Identification The employee prepares a list of needed items, the employee then logs on to the Internet and goes to the Web site of the preferred supplier.

Chapter 8 : Electronic and Mobile Commerce

Muh. Idil Haq Amir 5211100704

2. Selection and Negotiation After the price quotations have been received from each supplier, the employee examines them and indicates, the employee also specifies the desired delivery date. 3. Purchasing Products and Services Electronically The employee completes the purchase order specifying the final agreed-to terms and prices by sending a completed electronic form to the supplier. 4. Product and Service Delivery 5. After-Sales Service In addition to capturing the information to complete the order, comprehensive customer information is captured from the order and stored in the suppliers customer database. This information can include customer name, address, telephone numbers, contact person, credit, history, and some order details.

F. Supply Chain Management

As mentioned in Chapter 2, supply chain management (SCM) is increasingly accomplished using the Internet exchanges. An organization with many suppliers can use Internet exchanges to negotiate competitive prices and service.

G. Customer Relationship Management

As discussed in Chapter 2, customer relationship management (CRM) involves managing every aspect of an organizations interactions with its customers or clients including marketing and advertising, sales, customer service after the sale, and programs to retain loyal customers. CRM systems enable a company to collect customer data, contact customers, educate them about new products, and actively sell products to existing and new customers. CRM systems can also obtain and analyze customer feedback to help design new or improved products and services.

H. E-Commerce Challenges
A company must overcome many challenges to convert its business processes from the traditional form to e-commerce processes, especially for B2C e-commerce. This section summarizes three key challenges: 1) Defining an effective e-commerce model and strategy 2) Dealing with consumer privacy concerns 3) Overcoming consumers lack of trust The first major challenge is for the company to define an effective e-commerce model and strategy. Commerce involves consumers and businesses paying to purchase physical goods, information, or services that are posted or advertised online. A major challenge for companies moving to business-to-consumer ecommerce is the need to change distribution systems and work processes to manage shipments of individual units directly to consumers. This is the basic components of a successful E-Commerce model.

Chapter 8 : Electronic and Mobile Commerce

Muh. Idil Haq Amir 5211100704

In business-to-consumer e-commerce, companies need Split-Case Distribution, a distribution system that requires cases of goods to be opened on the receiving dock and the individual items from the cases to be stored in the manufacturers warehouse. In some cases, the compromise of personal data can lead to identity theft. According to the Federal Trade Commission (FTC), Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. Another tough challenge for e-commerce is the integration of new Web-based order processing systems with traditional mainframe computer-based inventory control and production planning systems. It is one thing to allow sales reps to place orders over the Web, but another to let them find out what products are in (or soon to be in) inventory and available for sale. A perception of trustworthiness can be created by implementing one or more of the following strategies: 1. Demonstrate a strong desire to build an ongoing relationship with customers by giving first-time price incentives, offering loyalty programs, or eliciting and sharing customer feedback. 2. Demonstrate that the company has been in business for a long time. 3. Make it clear that considerable investment has been made in the Web site. 4. Provide brand endorsements from well-known experts or well-respected individuals. 5. Demonstrate participation in appropriate regulatory programs or industry associations. 6. Display Web site accreditation by the Better Business Bureau Online or TRUSTe programs.

AN INTRODUCTION TO MOBILE COMMERCE

Mobile Commerce (M-Commerce) relies on the use of mobile, wireless devices, such as personal digital assistants, cell phones, and smartphones, to place orders and conduct business.

A. M-Commerce Web Sites

A number of retailers have established special Web sites for users of mobile devices.

Chapter 8 : Electronic and Mobile Commerce

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B. Technology Needed for Mobile Commerce

For m-commerce to work effectively, the interface between the wireless device and its user must improve to the point that it is nearly as easy to purchase an item on a wireless device as it is to purchase it on a PC. In addition, we need the network speed and security in transmission and trust transaction, and digital certificates to ensure the transaction.

ELECTRONIC AND MOBILE COMMERCE APPLICATIONS

E-commerce and m-commerce are being used in innovative and exciting ways. This section examines a few of the many B2B, B2C, C2C, and m-commerce applications in the retail and wholesale, manufacturing, marketing, investment and finance, online real estate services, and auction arenas.

A. Retail and Wholesale

Electronic retailing, sometimes called e-tailing, is the direct sale of products or services by businesses to consumers through electronic storefronts, which are typically designed around the familiar electronic catalog and shopping cart model. A cybermall is a single Web site that offers many products and services at one Internet locationsimilar to a regular shopping mall. A key sector of wholesale e-commerce is spending on manufacturing, repair, and operations (MRO) goods and servicesfrom simple office supplies to mission-critical equipment, such as the motors, pumps, compressors, and instruments that keep manufacturing facilities running smoothly.

B. Manufacturing
Electronic Exchange is an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations.

C. Marketing
Market Segmentation is the identification of specific markets to target them with advertising messages. Technology-enabled relationship management is a new twist on establishing direct customer relationships made possible when firms promote and sell on the Web. Technology enabled relationship management occurs when a firm obtains detailed information about a customers behavior, preferences, needs, and buying patterns and uses that information to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize its entire relationship with that customer.

D. Investment and Finance

The Internet has revolutionized the world of investment and finance. Perhaps the changes have been so significant because this industry had so many built-in inefficiencies and so much opportunity for improvement.
Electronic Bill Presentment is a method of billing whereby a vendor posts an image of your statement on the Internet and
alerts you by e-mail that your bill has arrived.

E. Auctions
There are two common types of online auctions. In an English auction, the initial price starts low and is bid up by successive bidders. In a reverse auction, sellers compete to obtain business by submitting successively lower prices for their goods or services. Reverse auctions are frequently used in B2B procurement.

F. Anywhere, Anytime Applications of Mobile Commerce

Because m-commerce devices usually have a single user, they are ideal for accessing personal information and receiving targeted messages for a particular consumer. Through m-commerce, companies can reach individual

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Muh. Idil Haq Amir 5211100704

consumers to establish one-to-one marketing relationships and communicate whenever it is convenientin short, anytime and anywhere. 1. Mobile Banking 2. Mobile Price Comparison 3. Mobile Advertising 4. Mobile Coupons

G. Advantages of Electronic and Mobile Commerce

1. Reduce Costs By eliminating or reducing time-consuming and labor-intensive steps throughout the order and delivery process, more sales can be completed in the same period and with increased accuracy. 2. Speed the Flow of Goods and Information When organizations are connected via e-commerce, the flow of information is accelerated because electronic connections and communications are already established. 3. Increase Accuracy By enabling buyers to enter their own product specifications and order information directly, human dataentry error on the part of the supplier is eliminated. 4. Improve Customer Service Increased and more detailed information about delivery dates and current status can increase customer loyalty.

H. Global Challenges for E-Commerce and M-Commerce

1. Cultural Challenges Countries and regional areas have their own cultures and customs that can significantly affect people and organizations involved in global trade. 2. Language Challenges Obviously, language differences can make it difficult for visitors to understand the information and directions posted on a Web site. 3. Time and Distance Challenges Time and distance issues can be barriers for people and organizations involved with global trade in remote locations. 4. Infrastructure Challenges The Web site must be displayed correctly in all the major Web browsers. 5. Currency Challenges Prices for all items offered for sale on the Web site must clearly indicate the currency. 6. Product and Service Challenges E-products such as software, music, and books and e-services such as customer support and advice can be delivered to customers electronically over the Internet. 7. State, Regional, and National Laws Every state, region, and country has a set of laws that governs commercial transactions.

I. THREATS TO ELECTRONIC AND MOBILE COMMERCE

Businesses must ensure that e-commerce and m-commerce transactions are safe and consumers are protected 1. Security Methods to increase security Address Verification System Card Verification Number technique Visas Advanced Authorization process Federal Financial Institutions Examination Councils Authentication in an Internet Banking Environment guidelines 2. Theft of Intellectual Property

Chapter 8 : Electronic and Mobile Commerce

Muh. Idil Haq Amir 5211100704

Intellectual property is works of the mind that are distinct somehow and are owned or created by a single entity. Digital rights management (DRM) is the use of any of several technologies to enforce policies for controlling access to digital media such as movies, music, and software 3. Fraud Phishing is sending bogus messages to pry personal information from customers by convincing them to go to a spoof Web site. Click fraud can arise in a pay-per-click online advertising environment when additional clicks are generated beyond those that come from actual, legitimate users. 4. Invasion of Consumer Privacy Online profiling is a practice of Web advertisers recording online behavior to produce targeted advertising. Clickstream data is data gathered based on the Web sites you visit and the items you click on. 5. Lack of Internet Access Digital divide is difference between people who do and people who do not have access or capability to use high-quality, modern information and communications technology to improve their standard of living. 6. Return on Investment Investment required for a large firm to establish and operate a B2B or B2C Web site can be in the millions of dollars. The common problem is difficult to forecast project costs and benefits. 7. Legal Jurisdiction When conducting e-commerce, sales must not violate county, state, or country legal jurisdictions. Examples: Selling stun guns and similar devices and selling cigarettes or alcohol to underage customers. 8. Taxation U.S. Supreme Court ruling internet-based merchants must apply sales tax only when buyers live in a state where the company has physical facilities, or nexus.

J. Strategies for Successful E-Commerce and M-Commerce

A company must develop an effective web siteone that is easy to use and accomplishes the goals of the company, yet is safe, secure, and affordable to set up and maintain. 1. Defining the Web Site Functions Decide which tasks the site must accomplish Create an attractive presence for the company Meet the needs of its visitors Redefining your sites basic business model to capture new business opportunities Establishing a Web Site Web site hosting companies Storefront broker 2. Building Traffic to Your Web Site Obtain and register a domain name Make your site search-engine-friendly Include a meta tag in your stores home page Use Web site traffic data analysis software Provide quality, keyword-rich content 3. Maintaining and Improving Your Web Site Personalization Explicit personalization Implicit personalization

K. Technology Infrastructure Required To Support E-commerce and M-commerce

1. 2. Hardware Web Server Software Security and Identification

Chapter 8 : Electronic and Mobile Commerce

Muh. Idil Haq Amir 5211100704

Retrieving and Sending Web Pages Web-Site Tracking Web Site Development Web Page Construction 3. E-Commerce Software Catalog Management Catalog management software combines different product data formats into a standard format for uniform viewing, aggregating, and integrating catalog data. Product Configuration Product configuration software tools were originally developed in the 1980s to assist B2B salespeople to match their companys products to customer needs. Shopping Cart Many e-commerce sites use an electronic shopping cart to track the items selected for purchase, allowing shoppers to view what is in their cart, add new items to it, or remove items from it. Web Services Web services Software modules supporting specific business processes that users can interact with over a network (such as the Internet) on an as-needed basis. 4. Electronic Payment Systems Digital Certificate is an attachment to an e-mail message or data embedded in a Web site that verifies the identity of a sender or Web site. Certificate Authority (CA) is a trusted third-party organization or company that issues digital certificates. Secure Sockets Layer Secure Sockets Layer (SSL) is a communications protocol is used to secure sensitive data during ecommerce. Electronic Cash Electronic Cash is an amount of money that is computerized, stored, and used as cash for ecommerce transactions. Credit, Charge, Debit, and Smart Cards Smart Card is a credit cardsized device with an embedded microchip to provide electronic memory and processing capability.

Chapter 8 : Electronic and Mobile Commerce