Transcript CHAPTER_THREE (1)

E-Commerce: Support Services
Learning Objectives
1.
2.
3.
4.
5.
6.
Describe the elements of the EC Support Services.
Discuss the ‘people’ element and ‘people’s roles’.
List and discuss the major ‘Legal Issues’ of EC: IP,
Privacy, ethical and social issues, etc.
List and discuss the major concept of EC Marketing
and Advertisement: consumer behavior, decisionmaking process, segmentation, advertising, etc.
Describe the order fulfillment and logistics in EC.
Describe business partnership in EC and emarketplaces.
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1. People
 EC have different models based on the people involved
in the EC transactions: B2B, B2C, C2C, G2C, etc.
 So, sellers and buyers can be consumers, business,
governments, etc.
 Also, the relationships between these parties can be
either direct (Direct Marketing) or indirect (E-Tailing)
 E-Business manager have to have an IS team that can help
buyers and sellers if they face any technical problems
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2. Public Policy
 Legal issues
 Ethical and privacy issues
 Regulations
 Technical standards
 Compliances
 Taxes
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2. Public Policy – Legal Issues
 INTELLECTUAL PROPERTY IN E-COMMERCE
 Intellectual property(IP)
Creations of the mind, such as inventions,
literary and artistic works, and symbols,
names, images, and designs, used in commerce.
IP is divided into two:
1.
2.
Industrial Property: Which includes inventions(patents),
trademarks, industrial and geographic indications of source.
Copyright: Includes literary and artist works such as book,
poems, songs, films, photographs etc…
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2. Public Policy – Legal Issues
 Intellectual property law
Area of the law that includes patent law, copyright law,
trademark law, trade secret law, and other branches of
the law such as licensing and unfair competition
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2. Public Policy – Legal Issues
 Copyright
An exclusive right of the author or creator of a book,
movie, musical composition, or other artistic property to
print, copy, sell, license, distribute, transform to another
medium, translate, record, perform, or otherwise use

Infringement
Use of the work without
permission or contracting
for payment of a royalty
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2. Public Policy – Legal Issues
 Digital rights management (DRM)
Several arrangements that allow a vendor of content in electronic form
to control the material and restrict its usage.

Fair Use: The legal use of copyrighted material for non commercial purposes
without paying royalties or getting permission.
 Examples of DRM (Resource: http://computer.howstuffworks.com/drm1.htm)
 A company sets its servers to block the forwarding of sensitive e-mail.
 An e-book server restricts access to, copying of and printing of material
based on constraints set by the copyright holder of the content.
 A movie studio includes software on its DVDs that limits the number of
copies a user can make to two.
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2. Public Policy – Legal Issues
 Patent
A document that grants the holder exclusive rights to an
invention for a fixed number of years

What can be patented in e-commerce?
Business idea, process, design, etc.
 Trademark
A symbol used by businesses to
identify their goods and services;
government registration of the
trademark confers exclusive legal right to
its use and reduce trademark dilution.
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2. Public Policy - Ethical Issues
 Ethics
The branch of philosophy that deals with what is
considered to be right and wrong
 Privacy : The right to be left alone and free of
unreasonable personal intrusions. Example: Apple v’s
iPhone (http://www.nbcnews.com/tech/technews/fbi-can-t-force-apple-new-york-iphone-casejudge-n528446)
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2. Public Policy - Ethical
Issues
 ETHICAL PRINCIPLES AND GUIDELINES
 Example:

Who Owns User-Generated Content?

Collection of users information

Cookies (data file that collects information about the user’s
activities at a site)
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2. Public Policy - Ethical Issues
EC ETHICAL ISSUES
 Privacy
The right to be left alone and free of unreasonable personal intrusions
 Privacy Right and Protection
 opt-out
Business practice that gives consumers the
opportunity to refuse sharing information
about themselves
 opt-in
Agreement that requires computer users to
take specific steps to allow the collection of personal information
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2. Public Policy - Ethical Issues
 Ethical Issues and Social Networks
 Social Networks changing the landscape of privacy and
its protection
 Example: the location-based application vs. privacy
 Free speech online vs. Internet censorship

Internet Censorship: the control or suppression of the
publishing or accessing of information on the Internet
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2. Public Policy - Ethical Issues
 Business Ethics
A form of applied ethics that examines ethical
principles and moral or ethical problems that arise in a
business environment
 A business ethics identify how to deal with employees,
users, and other people. It may include:
 The Issues of Internet Abuse in the Workplace (personal use)
 Monitoring Employees (for example by using GPS tracking
systems)—Is It Ethical?
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2. Public Policy - Ethical Issues
 Codes of Ethics: States the rules and expected behaviors and actions
of employees.
 An internet – acceptable use policy (AUP) is something all
employees should sign and apply when joining the company. It
includes details of non work related internet surfing and , EC, social
networks and any IT related Topics.
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2- Public Policy – Ethical Issues
 Examples of how to protect sellers and buyers
online:
 electronic signature: Validates the sender and time
stamp of a transaction so it cannot be later claimed that
the transaction was unauthorized or invalid.
 Authentication: is verifying that the user is who he/she
claims to be. For example: username and password.
 Biometric Controls: using human characteristics and
traits to identify users
 Fraud Detecting Systems: such as the fraud of credit
cards
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2. Public Policy - Societal Issues
 Green IT
Begins with manufacturers producing environmentally
friendly products and encouraging IT departments to
consider more friendly options like virtualization, power
management, and proper recycling habits
 Virtualization: running two or more logical computer
systems on one set of physical hardware
 Power management: using alternative resources of energy
that is more safe to the environment.
 Recycling: donating old equipment to charity or recycle
them safely.
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3. Marketing and Advertising
 Consumer Behavior Online
 Consumer Purchasing Decision-Making Process
 Customer Satisfaction and Loyalty
 Mass marketing, Market Segmentation and Relationship
Marketing
 Personalization and Behavioral Marketing
 Market Research
 Web Advertising
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3. Marketing and Advertising
 CONSUMER BEHAVIOR ONLINE
 Helps understand the consumer behavior. The
consumer behavior online affected by two main factors:
1.
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Influential factors:
Consumer characteristics (Who the consumer is ..age,
gender, habits…..)
Environmental characteristics (Culture, social, legal…)
Merchant and intermediary factors (reputation, size,
trustworthiness…)
Product/service characteristics (type, availability, quality…)
EC Systems (payment options, delivery, up to date
information …)
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3. Marketing and Advertising
2.
Attitude -Behavior decision Process:
The consumer decision process usually starts with a positive
attitude and ends with the buyers decision to purchase or
not.
A favorable attitude would lead to a stronger buying intention
which in return would result in the actual buying.
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3. Marketing and Advertising
 Purchasing-Decision Process consists of five stages:
1. Need identification:
2. Information search
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product brokering: Deciding what product to buy
merchant brokering: Deciding from to buy a product
Evaluation of alternatives
4. Purchase and delivery
5. Post-purchase activities
3.
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3. Marketing and Advertising
 The post-purchase stage is very critical to a business
since it directly affect customer satisfaction
 Satisfied customers usually become loyal
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Marketing and Advertising
 Customer Loyalty
A deep commitment to repurchase a preferred
product/service continually in the future.
 e-loyalty
Customer loyalty to an e-tailer or loyalty programs delivered online or
supported electronically
 Loyalty in EC relies on E-Trust

online trust
The belief that an online website or other digital entities can
deliver what they promise so that the recipient trusts them
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3. Marketing and Advertising
 How to Increase Trust in EC

Reputation-based Systems
Systems used to computes and publishes reputation scores for
products and businesses to establish trust among members of
online communities such as rating systems

Online Word of Mouth such as reviews

Improve EC Website: Improve the quality of the website
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3. Marketing and Advertising
 Level of Online Market Segmentation
1. Mass Marketing and Advertising
Dealing with the consumer market as one segment
2. Market Segmentation
Dividing a consumer market into logical groups for
conducting marketing research and analyzing personal
information, so it can be used to build and maintain a
long-relationship with customers
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Mass Marketing, Market Segmentation,
and Relationship Marketing
3. Relationship Marketing: a marketing method that
focuses on building a long term relationship with
customers.
4. One-to-one marketing
Personalization: Marketing that treats each customer
in a unique way
 Personalization
The matching of services, products, and advertising
content with individual consumers and their preferences
using a user profile or cookies
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3. Marketing and Advertising
 Behavioral Targeting: Targeting that uses
information collected about an individual's Webbrowsing behavior, such as the pages they have visited
or the searches they have made, to select an
advertisement to display to that individual.
 Collaborative Filtering: A market research and
personalization method that uses customer data to
predict(‫ )تنبؤ‬, based on formulas derived from
behavioral sciences, what other products or services a
customer may enjoy; predications can be extended to
other customers with similar profiles.
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3. Marketing and Advertising
 Online Market Research
 Data Collection and Analysis
 Online Surveys
 Hearing directly from Customers (chat rooms, forums,
social media)
 Observing Customers’ Movements Online using:
 transaction log
A record of user activities at a company’s website
 clickstream behavior
Customer movements on the Internet
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3. Marketing and Advertising
 MAJOR CATEGORIES OF ADS
 Classified Ads
 Display Ads
 Interactive Ads (banner ads)
 banner
On a Web page, a graphic advertising display linked to
the advertiser’s Web page
 keyword banners
Banner ads that appear when a predetermined word is
queried from a search engine
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3. Marketing and Advertising
 Random banners
Banner ads that appear at random, not as the result of
the user’s action
 Live banners
A banner ad that is created dynamically (or whose
content is created dynamically) at the time of display,
instead of being preprogrammed with fixed content
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3. Marketing and Advertising
 pop-up ad
An ad that appears in a separate window before, after, or
during Internet surfing or when reading e-mail
 pop-under ad
An ad that appears underneath the current browser
window, so when the user closes the active window the ad
is still on the screen
 viral video
A video clip that gains widespread popularity through the
process of Internet sharing, typically through e-mail or IM
messages, blogs, and other media-sharing websites.
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3. Marketing and Advertising
 e-mail advertising
Adding advertisements to e-mail messages sent to
customers
 viral marketing (viral advertising)
Word-of-mouth marketing by which customers
promote a product or service by telling others about it
 Adver-gaming
The practice of using computer
games to advertise a product,
an organization, or a viewpoint
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3. Marketing and Advertising
 SOME BASIC INTERNET ADVERTISING
TERMINOLOGY
 ad views
The number of times users call up a page that has a
banner on it during a specific period; known as
impressions or page views
 Button and ad click
A small banner that is linked to a website; may contain
downloadable software that can be used to count how
many clicks are made on that ad.
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3. Marketing and Advertising
 CPM (cost per mille, i.e., thousand impressions)
The fee an advertiser pays for each 1,000 times a page
with a banner ad is shown
 conversion rate
The percentage of clickers who actually make a purchase
 click-through rate/ratio (CTR)
The percentage of visitors who are exposed to a banner
ad and click on it
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3. Marketing and Advertising
 Advertising Online and Its Advantages
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Cost is low
Richness of format
Personalization
Timeliness (On Time)
Location-based
 Advertising Online Implementation Issues

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Avoid Spamming
Permission advertising (opt-in)
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4. Support ServicesOrder Fulfillment and Logistics
 Order Fulfillment
All the activities needed to provide customers with their
ordered goods and services, including related customer
services
 back-office operations
The activities that support fulfillment of orders, such as
packing, delivery, accounting, and logistics
 front-office operations
The business processes, such as sales and advertising,
which are visible to customers
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Order Fulfillment and Logistics:
An Overview
 Logistics
The operations involved in the efficient and effective flow
and storage of goods, services, and related information
from point of origin to point of consumption
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Support ServicesOrder Fulfillment and Logistics
 THE EC ORDER FULFILLMENT PROCESS
 Activity 1: Making sure the customer will pay
 Activity 2: Checking for in-stock availability
 Activity 3: Arranging shipments
 Activity 4: Insurance
 Activity 5: Replenishment
 Activity 6: In-house production
 Activity 7: Use contractors
 Activity 8: Contacts with customers
 Activity 9: Returns (reverse logistics)
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Support ServicesOrder Fulfillment and Logistics
 INNOVATIVE E-FULFILLMENT STRATEGIES
 Merge-in-transit
Logistics model in which components for a product may
come from two (or more) different physical locations
and are shipped directly to the customer’s location
Example:
A World-Class Supply Chain and Order Fulfillment
system Works at Dell
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5. Business Partnership –
E-Marketplaces
 What is e-marketplace?
 e-marketplace players
 E-marketplace components
 E-marketplace mechanisms
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5. Business Partnership –
E-Marketplaces
 E-Marketplace (Market-space)
An online market, usually B2B, in which buyers and
sellers exchange goods or services;
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5. Business Partnership –
E-Marketplaces
 The major players in a market-space are:
 Customers
 Sellers
 Products and services
 Infrastructure
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5. Business Partnership –
E-Marketplaces
 MECHANISM AIDS FOR WEB 2.0 TOOLS:
 tag
A nonhierarchical key word or term assigned to a piece of
information (such as an Internet bookmark, digital image,
video clip, or any computer document)
 folksonomy (collaborative tagging, social tagging)
The practice and method of collaboratively creating,
classifying, and managing tags to annotate and categorize
content
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5. Business Partnership –
E-Marketplaces
 Mashup
Combination of two or more
websites into a single website
that provides the content of
both sites (whole or partial)
to deliver a novel product to consumers
 social bookmarking
Web service for sharing Internet bookmarks; the sites
are a popular way to store, classify, share, and search
links through the practice of folksonomy techniques on
the Internet and intranets
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