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Transcript of 08 E Commerce Systems - Copy
E-Commerce Systems
Chapter 8
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
8-2
Learning Objectives
Identify the major categories and trends of e-commerce applications
Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications
Identify and give examples of key factors and Web store requirements needed to succeed in e-commerce
8-3
Learning Objectives
Identify and explain the business value of several types of e-commerce marketplaces
Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives
8-4
Case 1: KitchenAid & Royal Bank of Canada
Companies doing business online must police unauthorized use of brand names, logos, and trademarks to protect their investments
Companies such as BrandProtect, MarkMonitor, and NameProtect help companies fight for control of their brands and reputations
Brand protection challenges have grown exponentially
– Using logos without permission is easy; go to a web site, grab a logo, and put it somewhere else
8-5
Case Questions
Consider your online shopping patterns
– How much weight do you place on the presence of a name, logo, or other trademark on a Web site when purchasing goods or services?
– Do you stop to consider whether you may have been misled?
– How could you tell the difference?
8-6
Case Questions
Brian Maynard of KitchenAid notes that development of the Internet changed the problem of brand policing
– What are some of these changes?
– What challenges can you think of that did not exist in the pre-online world?
8-7
Case Questions
The companies mentioned in the case (Kitchen-Aid, RBC, Disney, Coke) were well established and enjoyed strong brand recognition well before the advent of the Internet
– Do you think online-only companies face the same problems as they do?
8-8
Introduction to e-Commerce
Internet and other information technologiessupport every step of the process
Selling
Marketing
Developing Servicing
Delivering
Acceptingpayments
E-commerce encompasses
the online process of…
E-commerce encompasses
the online process of…
8-9
Scope of e-Commerce
8-10
E-Commerce Technologies
8-11
Categories of e-Commerce
Business-to-Consumer
(B2C)
Virtual storefront
Multimedia catalogs
Interactive order processing
Electronic payments
Online customer support
Consumer-to-Consumer
(C2C)
Online auctions
Posting to newspaper sites
Personal websites
E-commerce portals
Business-to-Business (B2B)
Electronic business
marketplaces
Direct links between
businesses, auctions, and
exchanges
8-12
Essential e-Commerce Architecture
8-13
Access Control and Security
Encryption key
Digital certificates and signatures
User names and passwords
E-commerce processes must establish mutual trust, secure access between parties
Restricted company data
Webmaster administration areas
Other people’s accounts
Restricted access areas
8-14
Profiling and Personalizing
Profiling gathers data on you and your website behavior and choices– User registration– Cookie files and tracking software– User feedback
Profiling is used for– Personalized (one-to-one) marketing– Authenticating identity– Customer relationship management– Marketing planning– Website management
8-15
Search Management
Search processes help customers find the specific
product or service they want
E-commerce software packages often include a website
search engine
Customized search engine may be acquired from companies like Google or Requisite Technology
Searches are often on content or by parameters
8-16
Content and Catalog Management
Content Management Software– Helps develop, generate, deliver, update,
and archive text and multimedia information at e-commerce websites
Catalog Management Software– Helps generate and manage catalog content
Catalog and content management software works with profiling tool to personalize content– Product configuration and mass customization
8-17
Workflow Management
E-business & e-commerce management depends on a workflow software engine– Software model of business processes
Workflow models express predefined
– Sets of business rules– Roles of stakeholders– Authorization requirements– Routing alternatives– Databases used– Task sequences
8-18
Example of Workflow Management
8-19
Event Notification
Most e-commerce applicants are event driven
Responds to customer’s first website visit, payments, and so on
Monitors all e-commerce processes
Records all relevant events, including problem situations
Notifies all involved stakeholders
Works in tandem with user-profiling software
8-20
Collaboration and Trading
Processes support vital collaboration arrangements and trading services– Needed by customers, suppliers, and other
stakeholders to accomplish e-commerce transactions
Online communities of interest– E-mail, chat, discussion groups– Enhances customer service
– Builds loyalty
8-21
Electronic Payment Example
8-22
Securing Electronic Payments
Network sniffers easily recognize credit card formats
Take sensitive information
off-line
Encrypt data between
customer and merchant
Encrypt data between
customer and financial
institution
8-23
E-Commerce Application Trends
8-24
Case 3: Driving the “Buzz” on the Web
Find embryo trends, then help influentials discover them
Find embryo trends, then help influentials discover them
Old Thinking
Old Thinking
New Thinking
New Thinking
Influentials drive proactive behavior in others
Influentials drive proactive behavior in others
Social networks contain “influentials”
Social networks contain “influentials”
Influentials can’t be influenced in a way that accelerates a word-of-mouth campaign
Influentials can’t be influenced in a way that accelerates a word-of-mouth campaign
8-25
Case Study Questions
How can companies benefit from the “cultural assessments” regularly performed by Mattel?– How could the information obtained be used
to create business value for those organizations?
In spite of disconfirming evidence as to the effectiveness of targeting online opinion leaders, companies are increasing their efforts to identify and contact them– Why do you think this is the case?
8-26
Case Study Questions
One of the participants in the case states that “you want to ride the wave, rather than trying to start one of your own”
– What does she mean by that?
– If companies are not starting these “waves,” where are they coming from?
8-27
B2C E-Commerce Success Factors
Community relationships
Community relationships
Advertising and incentives
Advertising and incentives
Selection & valueSelection & value
Security and reliability
Security and reliability
Performance and service
Performance and service
Great consumer communicationsGreat consumer communications
Personal attentionPersonal attention
Look and feelLook and feel
8-28
Differences in Marketing
8-29
Web Store Requirements
8-30
B2B E-Commerce
B2B is the wholesale and
supply side of the commercial
process
Businesses buy, sell, or trade with other businesses
Relies on multiple electronic
information technologies Catalog systems
Trading systems
Data interchange
Electronic funds transfers
8-31
E-Commerce Marketplaces
One to Many
Sell-side marketplaces
One supplier dictates product offerings and prices
Many to One
Buy-side marketplaces
Many suppliers bid for the business of a buyer
Some to Many
Distribution marketplaces
Unites suppliers who combine their product catalogs to attract a larger audience
8-32
E-Commerce Marketplaces
Many to Some
Procurement marketplaces
Unites major buyers who combine purchasing catalogs
Attracts more competition, which lowers prices
Many to Many
Auction marketplaces
Dynamically optimizes prices
8-33
B2B E-Commerce Web Portal
8-34
Clicks and Bricks
Success will go to those who can integrate Internet initiatives with traditional operations– Merging operations has trade-offs
8-35
Integrated vs. Separate e-Business
8-36
Other Clicks and Bricks Strategies
Partial e-commerce integration– Joint ventures and strategic partnerships
Complete separation– Spin-off of an independent e-commerce
company
Barnes and Noble’s experience with spin-off– Gained venture capital, entrepreneurial culture,
flexibility– Attracted quality management– Accelerated decision making– Failed to gain market share
8-37
E-Commerce Channel Choices
An e-commerce channel is the marketingor sales channel created by a company
for its e-commerce activities
There is no universal strategy ore-commerce channel choice
Both e-commerce integration and separationhave major business pros and cons
Most businesses are implementing somemeasure of clicks-and-bricks integration
8-38
E-Commerce Strategy Checklist
Questions to ask and answer– What audiences are we attempting to reach?– What action do we want audiences to take?– Who owns the e-commerce channel within
the organization?– Is the e-commerce channel planned alongside
other channels?– Is there a process for generating, approving,
releasing, and withdrawing content?– Will our brand translate to the new channel?– How will we market the channel itself?
8-39
Case 2: Entellium, Digg, Peerflix, Zappos, Jigsaw
For many Internet companies, the second-mover advantage is substantial
For many Internet companies, the second-mover advantage is substantial
Second-movers can use the same
approach as first movers, but with
better products and services, at much
lower cost
Another strategyis to use combinationsof successful business
models
8-40
Case Study Questions
Is the second-mover advantage always a good business strategy?
– Defend your answer with examples of the companies in this case
What can a front-runner business do to foil the assaults of second movers?
– Defend your answer using examples of the front-runner companies in the case
Do second movers always have the advantage
in Web based business success? – Evaluate the five strategies in the case, and the
companies that used them, to defend your answer