CHAPTER 6 Electronic Commerce: Applications and Issues.
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Transcript of CHAPTER 6 Electronic Commerce: Applications and Issues.
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CHAPTER 6
Electronic Commerce: Applications and Issues
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CHAPTER OUTLINE
6.1 Overview of E-Business & E-Commerce
6.2 Business-to-Consumer (B2C) E- Commerce
6.3 Business-to-Business (B2B) E-Commerce
6.4 Electronic Payments
6.5 Ethical and Legal Issues in E-Business
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LEARNING OBJECTIVES
Describe electronic commerce, including its scope, benefits, limitations, and types.
Distinguish between pure and partial electronic commerce.
Understand the basics of how online auctions work.
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LEARNING OBJECTIVES (continued)
Differentiate among business-to-consumer, business-to-business, consumer-to-consumer, business-to-employee and government-to-citizen electronic commerce.
Describe the major e-commerce support services, specifically payments and logistics.
Discuss some ethical and legal issues relating to e-commerce.
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Chapter Opening Case
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Starbucks Pledge5
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6.1 Overview
Electronic Commerce (E-Commerce, EC)
E-Business
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Overview (continued)
Pure versus Partial Electronic Commerce depends on the degree of digitization involved. Brick-and-mortar organizations Virtual organizations Click-and-mortar organizations
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Bricks and Mortar, Partial EC, and Pure EC
Buy books at university bookstore: bricks and mortar
Order physical book from Amazon: partial EC
Order and download book from Amazon: pure EC
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Zappos and Twitter (IT’s About Business 6.1)
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Types of E-Commerce
Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Business-to-Employee (B2E) E-Government Mobile Commerce (m-commerce)
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B2B and B2C Electronic Commerce
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E-Commerce Business Models
Online direct marketing
Electronic tendering system
Name-your-own-price
Find-the-best-price
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E-Commerce Business Models (continued)
Affiliate marketing
Note the Sony logo at the top of this Web page
www.howstuffworks.com
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E-Commerce Business Models (continued)
Viral marketing
Group purchasing
Online auctions
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E-Commerce Business Models (continued)
Product customization
Deep discounters
Membership
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E-Commerce Business Models (continued)
Bartering online
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Major E-Commerce Mechanisms
Auctions
Forward Auctions
Reverse Auctions
Slides of electronic storefronts, electronic malls, and electronic marketplaces are in subsequent sections
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Forward and Reverse Auctions
Bid price
Bid price
Time Time
Forward Auction Reverse Auction
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Benefits of E-Commerce
Benefits to organizations Makes national and international markets
more accessible Lowering costs of processing, distributing, and
retrieving information Benefits to customers
Access a vast number of products and services around the clock (24/7/365)
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Benefits of E-Commerce (continued)
Benefits to Society Ability to easily and conveniently deliver
information, services and products to people in cities, rural areas and developing countries.
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Limitations of E-Commerce
Technological Limitations Lack of universally accepted security
standards Insufficient telecommunications bandwidth Expensive accessibility
Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers
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Business-to-Consumer (B2C) Electronic Commerce
Electronic storefronts
Electronic malls
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Leading E-Tailing Websites
B2C electronic commerce is also known as e-tailing. Examples of e-tailing Websites include:
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Online Service Industries
A key issue is disintermediation
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Disintermediation example
Online diamond broker
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Use Blue Nile’s decision support system to specify your own diamond
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Online Service Industries
Cyberbanking
Online securities trading
Online job market
Travel services
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The Long Tail
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Issues in E-Tailing
Channel conflict
Order fulfillment
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Multichannel Shopping
REI catalog
REI storeREI Web site
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Online Advertising
Advertising
Online Advertising methods Banners Pop-up ad Pop-under ad Permission marketing Viral marketing
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A closer look at Online Advertising
“We must accept the fact that there is no ‘mass’ in ‘mass media’ anymore.” Jim Stengel, Global Marketing, Proctor & Gamble.
“TV networks face upheaval because of ever-increasing incursions from digital media like Internet sites.” Jeff Zucker, chief executive of the NBC Universal Television Group.
“We never know where the consumer is going to be at any point in time, so we have to find a way to be everywhere. Ubiquity is the new exclusivity.” Linda Kaplan Thuler, Chief Executive at the Kaplan Thaler Group, a New York ad agency.
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Drivers of today’s online advertising
The emergence of “communitainment.” The increasing popularity of Usites. Mainstreaming of the Internet. Declining usage of traditional media. Fragmentation of content consumption. Consumers are multitasking and they do not
like ads.
Source: PiperJaffrey
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Communitainment
PiperJaffray, an investment bank, defines communitainment as the blending of community, communication, and entertainment into a new form of online activity driven by consumers.
The bank predicts that consumers will shift more than 50% of their content consumption over the next decade to communitainment formats (e.g., social networking, video, and photo sharing sites), displacing traditional forms of media content like TV, magazines, and large Internet sites.
This trend presents a major challenge for advertisers.
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Usites
PiperJaffray defines Usites as Web sites with user generated content comprising all or most of their content.
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Mainstreaming of the Internet
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Declining usage of traditional media
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Fragmentation of content consumption
Source: PiperJaffray
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And…consumers are multitasking
Source: PiperJaffray
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And…consumers don’t like ADS
Source: PiperJaffray
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Eight Types of Web sites for Advertising
Portals: most popular; best for reach but not targeting
Search: second largest reach; high advertising value
Source: PiperJaffray
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Eight types of sites (continued)
Commerce: high reach; not conducive to advertising
Entertainment: large reach; strong targetability
Mall of Hawai’i
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Eight types of sites (continued)
Community: emphasize being a part of something; good for specific advertising
Communications: not good for branding; low targetability
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Eight types of sites (continued)
News/weather/sports: poor targetability
Games: good for very specific types of advertising
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What the eight categories mean for advertisers
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A graphical look at the eight categories
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Viral Marketing
Word of mouth
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6.3 Business-to-Business (B2B) Electronic Commerce
In B2B e-commerce, the buyers and sellers are organizations.
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B2B Sell-Side Marketplace
Key mechanisms: electronic catalogs and forward auctions
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Ariba (sell-side marketplace)
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(Sell-side marketplace)
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(Sell-side marketplace)
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B2B Buy-Side Marketplace
Key mechanism: reverse auctions
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United Sourcing Alliance
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Electronic Exchanges
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Boeing PART
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PlasticsNet (Vertical Exchange)
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The Paper Site (Vertical Exchange)
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Horizontal Exchange
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Functional Exchange
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6.4 Electronic Payments
Electronic payment systems enable you to pay for goods and services electronically.Electronic checks (e-checks)
Electronic credit cards
Purchasing cards
Electronic cashStored-value money cards
Smart cards
Person-to-person payments
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How E-Credit Cards Work
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Electronic Payments (continued)
Electronic credit card Purchasing card
Pre-paid stored value money card
Smart card
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Ethical and Legal Issues
Ethical IssuesPrivacy
Disintermediation
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Legal Issues Specific to E-Commerce
Fraud on the Internet
Domain Names
Domain Tasting
Cybersquatting
Taxes and other Fees
Copyright
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Verizon and Cybersquatting
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Chapter Closing Case