Transcript C7 E-businessx

Chapter 7
Safety, Convenience,
Fraud, Marketing
Adeyl Khan, Faculty, BBA, NSU
What is E-Business?
 Electronic business (e-business) - Conducting
business via the Internet.
 E-tailing, or virtual storefronts on Web sites.
 Online business-to-business transactions.
 Electronic data interchange (EDI), the business-to-
business exchange of data using compatible software.
 E-mail, instant messaging, and other Web-enabled
communication tools and their use as media for
reaching prospective and existing customers.
 The gathering and use of demographic, product, and
other information through Web contacts.
Adeyl Khan, Faculty, BBA, NSU
Capabilities and Benefits of E-Business
•
Global Reach. Goods and services can be sold to customers
worldwide.
•
Personalization. Companies can customize products and reduce
inventory.
•
Interactivity. Customers and suppliers can negotiate prices
online.
•
Right-time and integrated marketing. Online retailers provide
products when and where customers want them and promotions
can be directed to individual customers.
•
Cost savings. E-business can reduce costs.
Growing
Population
Adeyl Khan, Faculty, BBA, NSU
Widespread
Internet
Some E-Business Successes
North South University
Agora Direct
Boston Symphony Orchestra
Adeyl Khan, Faculty, BBA, NSU
Business Web Sites
 Increase a firm’s visibility, promote its offerings,
and provide information to interested parties.
 Build customer goodwill and assist retailers and
other resellers in their marketing efforts.
 Disseminate financial information to investors.
 Enable prospective employees to apply online for
jobs.
 Provide e-mail communication.
Web sites are frequently used for marketing to attract visitors/customers.
Adeyl Khan, Faculty, BBA, NSU
Business-to-Business (B2B)
 Business-to-business e-business
(B2B) Electronic business
transactions between businesses
using the Internet.
 By some estimates, account for
90% of all e-commerce activities.
 Can reduce cost of B2B
transactions by almost 25
percent.
 Compare with B2C
Adeyl Khan, Faculty, BBA, NSU
 Electronic data interchange (EDI)
 computer-to-computer exchange of invoices,
purchase orders, price quotations and other sales
information.
 Quick Response, cost, Web services (Open Arch.)
 Extranets
 Accessible through firm’s website- offer an efficient
way for business to collaborate with vendors, partners
and customers
 VPN
 Private Exchanges (c-business)
 the next generation of extranets where all types of
data related to e-business is shared- more
collaborative.
Adeyl Khan, Faculty, BBA, NSU
Online Shopping and B2C
 Business-to-consumer (B2C)
 E-tailing accounts for 4% of all
U.S. sales.
 Growing at a rate of 18%.
 Services like banking and
brokerage are key aspects of etailing
 Many retailers have electronic
storefronts.
 Growth of broadband is aiding etailing.
Adeyl Khan, Faculty, BBA, NSU
Shopping
Cart
Who are
online buyers
and sellers?
 Typical user is young, highly
educated, urban or
suburban, and affluent.
 Demographics are shifting;
there is decreasing
difference in Internet
purchasing habits among
groups.
Adeyl Khan, Faculty, BBA, NSU
Benefits of B2C
 Lower Prices
 Many products cost less online. Internet allows customers to
easily compare prices from multiple sellers.
 Saves time & time constrains
 Convenience
 Can order products from around the world anytime, day or
night.
 Can register customer information to streamline transactions.
 Personalization
 Emphasis on personalized, one-on-one marketing to increase
repeat purchases.
Adeyl Khan, Faculty, BBA, NSU
Developing Safe Online Payment
Systems
 Through encryption, data is encoded for security
purposes.
 Many companies use Secure Sockets Layer (SSL)
technology to encrypt information and verify
senders and receivers.
 An electronic wallet contains credit card and
identification information. Customers can avoid
retyping purchase information.
Adeyl Khan, Faculty, BBA, NSU
E-Business Challenges (privacy)
 Privacy is among the top concerns of Internet users.
 E-business sites often require passwords and use electronic





signatures, an electronic form of identity verification.
Companies can track customers’ shopping and viewing habits
through cookies.
Customers usually prefer that companies do not share their
personal information. Merchants have responded by joining
privacy organizations.
Privacy protections may soon become legally required.
Employees also have concerns that employers are monitoring their
Internet behavior.
Companies worry about data theft.
Adeyl Khan, Faculty, BBA, NSU
E-Business Challenges (Internet Fraud)
• Internet Crime Complaint Center logs more than
200,000 complaints annually.
• 50% of the complaints referred to law enforcement
agencies deal with online auctions.
• Phishing is a growing form of Internet fraud that
uses e-mail or pop-up messages to get unsuspecting
victims to disclose personal information.
• Vishing, or voice phishing, involves phone calls to
credit card customers to obtain personal and
banking information.
• Payment fraud is growing.
Adeyl Khan, Faculty, BBA, NSU
E-Business Challenges (poor website
design)
 50% of shopping carts are abandoned before any
purchase is made.
 Lack of Information
 Inability to find the information they need
 Feeling overwhelmed by too much information
 Companies that have brick-and-mortar experience
often have better success satisfying customers than
Internet-only retailers.
 Online sales can compete with business partners
such as retailers and distributors causing disputes
called channel conflict.
Adeyl Khan, Faculty, BBA, NSU
Covers Ch 2, 4, 5, 7
20% MCQ
40% SQ
40% LQ
Adeyl Khan, Faculty, BBA, NSU
15
Using the Web’s Communication
Function
• Web has four main functions: e-business,
entertainment, information, and communication.
• Communication is Web’s most popular function.
• Firms use e-mail to communicate with customers,
suppliers, and other partners.
• Online Communities: Internet forums, newsgroups,
electronic bulletin boards, and Web communities that
appeal to people who share common interests.
• Spam is junk e-mail.
Adeyl Khan, Faculty, BBA, NSU
Web Communication Blogs
 Blog - short for Web log, an online journal written by a
blogger.
 Comments/questions section
 May incorporate wikis, a Web page that anyone can edit.
 Some incorporate podcasts
 video & audio recordings.
 Feedburner services more than 200,000 podcasts.
 Corporate blogs can help build brand trust.
 Example: Apple’s iLounge builds the iPod brand and gives Apple
ideas for product improvement.
 Employee blogs may present ethical issues.
Adeyl Khan, Faculty, BBA, NSU
Web Communication
Web Based Promotion
 Banner Ads – messages placed on frequently visited
websites
 Pop-up Ads – ads that appear in separate windows
 Pre-roll Video Ads – advertisements that roll as
soon as a page is loaded
 Search marketing – companies pay for top visibility
in search results
 Some companies, such as ValPak Marketing
Systems, offer virtual, searchable coupons.
Adeyl Khan, Faculty, BBA, NSU
Global Environment of E-Business
 Future growth of many companies is linked to a
global strategy that incorporates e-business.
 U.S. leads world in Internet users but ranks only 5th
in Internet penetration.
 E-Bay may dominate most markets, but Chinese
company Alibaba.com has 83% of the auction
business in China.
 Three of four Web pages are written in English.
 E-business can heighten competition in the global
marketplace...
Adeyl Khan, Faculty, BBA, NSU
World Internet
Statistics
Adeyl Khan, Faculty, BBA, NSU
Developing a Successful Website
It is easier to create a bad website than a good one. Organizations must think
about:
Planning and Preparation
Content and Connections
Costs and Maintenance
Adeyl Khan, Faculty, BBA, NSU
Managing a Website
• Click-through rate - percentage of people presented with a
Web banner ad who click on it.
• Conversion rate - percentage of visitors to a website who make
a purchase.
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
23
Learning Goals
Define e-business and discuss
1 how it can help achieve business
5
Describe some of the challenges
associated with e-business.
6
Discuss how organizations use
Internet communications to
advance their objectives.
success.
2
Distinguish between a corporate
and a marketing Web site.
3 List the major forms of B2B
e-business.
4
Explain B2C e-business and
identify the products most often
sold online.
Adeyl Khan, Faculty, BBA, NSU
7
8
Discuss Web sites and identify
methods for measuring
Web site effectiveness.
Explain the global scope
of e-business.