Chapter 6 B2B E-Commerce. Learning Objectives 1. Describe the B2B field. 2. Describe the major types...

Chapter 6B2B E-Commerce

Learning Objectives 1. Describe the B2B field.2. Describe the major types of B2B models.3. Discuss the characteristics of the sell-side

marketplace, including auctions.4. Describe the sell-side models.5. Describe the characteristics of the buy-

side marketplace and e-procurement.6. Explain how reverse auctions work in B2B.7. Describe B2B aggregation and group

purchasing models.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-2

Learning Objectives 8. Describe other procurement methods.9. Define exchanges and describe their

major types.10. Describe B2B portals.11. Describe third-party exchanges.12. Describe partner relationship

management (PRM).13. Describe how B2B can benefit from social

networking and Web 2.0.14. Describe Internet marketing in B2B,

including organizational buyer behavior.Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5-3

Concepts, Characteristics, and Models of B2B E-Commerce• business-to-business e-

commerce (B2B EC)Transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks; also known as eB2B (electronic B2B) or just B2B


Types of B2B transactions

1. Sell side- one seller to many

buyers

3. Supply chain improvements- supply chain, communication collaborating sharing

4.Exchanges- many sellers, many

buyers

2. Buy side- one buyer from many

sellers


Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7

Types of B2B e-

marketplaces and services

Private e-marketpla

ces

Supply chain

improves &

collaborative Exchanges

& public e-marketpla

ces

B2B Characteristic

Types of material traded: direct material, indirect material

Parties the transactions:

sellers,buyers, intermediaries

Directions of the trades: vertical marketplaces, horizontal marketplaces

Types of transactions: spot buying,

strategic sourcing

B2B Characteristic

Concepts, Characteristics, and Models of B2B E-CommerceTHE BASIC TYPES OF B2B E-

MARKETPLACES AND SERVICES1. Private E-Marketplaces One-to-

Many and Many-to-One company-centric EC

E-commerce that focuses on a single company’s buying needs (many-to-one, or buy-side) or selling needs (one-to-many, or sell-side)


Concepts, Characteristics, and Models of B2B E-Commerce

2. Exchanges & public e-marketplaces: Many-to-Many: • exchanges (trading communities or

trading exchanges)Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other. Third-party exchanges open to all interested parties (sellers and buyers)

3.Supply Chain Improvers and Collaborative Commerce

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

5-10


4-11

Concepts, Characteristics, and Models of B2B E-CommerceB2B CHARACTERISTICS

1. Parties to the Transaction: Sellers, Buyers, and Intermediaries online intermediary

An online third party that brokers a transaction online between a buyer and a seller; may be virtual or click-and-mortar.


5-12


2. Types of Transactions spot buying

The purchase of goods and services as they are needed, usually at prevailing market prices

strategic (systematic) sourcingPurchases involving long-term contracts that usually are based on private negotiations between sellers and buyers


5-13


3. Types of Materials Traded direct materials

Materials used in the production of a product (e.g., steel in a car or paper in a book)

indirect materialsMaterials used to support production (e.g., office supplies or light bulbs). MRO (maintenance, repair, and operation) Indirect materials used in activities that support production


5-14


4. The Direction of the Trades• vertical marketplaces

Markets that deal with one industry or industry segment (e.g., steel, chemicals)

• horizontal marketplacesMarkets that concentrate on a service, material, or a product that is used in all types of industries (e.g., office supplies, PCs)

• SUPPLY CHAIN RELATIONSHIPS IN B2B

• SERVICE INDUSTRIES ONLINE IN B2B


5-15


THE BENEFITS AND LIMITATIONS OF B2B◦ Benefits: sellers (S), buyers (B), both

(J)



5-17

One-to-Many: Sell-Side E-Marketplaces• sell-side e-marketplace

A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet–B2B Sellers–Customer Service

• SALES FROM CATALOGS–Configuration and Customization–Benefits and Limitations of Online Sales

from CatalogsCopyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

5-18


5-19

Selling Via E-Auctions• USING AUCTIONS ON THE SELL SIDE– Forward auctions offer the following benefits

to B2B sellers:• Revenue generation• Cost savings• Increased “stickiness”• Member acquisition and retention

• AUCTIONING FROM THE COMPANY’S OWN SITE

• USING INTERMEDIARIES IN AUCTIONS• EXAMPLES OF B2B FORWARD

AUCTIONS (page 227)Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

5-20

One-from-Many: Buy-Side E-Marketplaces and E-Procurementbuy-side e-marketplace

A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method


5-21

One-from-Many: Buy-Side E-Marketplaces and E-ProcurementPROCUREMENT METHODS

◦E-Procurement Organizations and Types E-sourcing E-tendering E-reverse auctioning E-informing Web-based ERP E-marketsites E-MRO


5-22


5-23

One-from-Many: Buy-Side E-Marketplaces and E-Procurement• INEFFICIENCIES IN TRADITIONAL

PROCUREMENT MANAGEMENT–procurement management

The planning, organizing, and coordinating of all the activities relating to purchasing goods and services needed to accomplish the organization’s mission–maverick buying

Unplanned purchases of items needed quickly, often at non–pre-negotiated higher prices


5-24

One-from-Many: Buy-Side E-Marketplaces and E-Procurement• THE GOALS AND BENEFITS OF E-PROCUREMENT– e-procurement

The electronic acquisition of goods and services for organizations


5-25


5-26

Questions1. Discuss the following : spot buying

versus strategic sourcing, direct materials versus indirect materials and vertical market versus horizontal markets.

2. List benefits of B2B.3. List the types of sell side B2B

transactions model4. What are buy side and sell side

transactions? How do they differ?Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 27

Questions5. Describe the direct online B2B

sales process from catalogs.6. List the benefits of using B2B

auctions for selling.7. List the benefits of using

auction intermediaries


Buy-Side E-Marketplaces: Reverse Auctionsrequest for quote (RFQ)

The “invitation” to participate in a tendering (bidding) system

CONDUCTING REVERSE AUCTIONS◦E-Tendering by Governments

GROUP REVERSE AUCTIONS


5-29


5-30

OTHER E-PROCUREMNET METHODS

INTERNAL PURCHASING MARKETPLAC

E

SELLERS’ E-AUCTIONS

GROUP PURCHASING

BUYING AT SELLERS’ SITES

AND COLLABORATIVE

COMMERCE

ACQUISITION VIA ELECTRONIC BARTERING


Other E-Procurement Methods

INTERNAL PUCHASING MARKETPLACE:i. internal agreegated catalog

The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog

Benefits of Internal Aggregated (Consolidated) Catalogs◦Quickly find what desired offering, check

availability and delivery times, and complete electronic requisition forms, using fewer suppliers Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall5-32

Other E-Procurement Methods

ii. desktop purchasing

Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department

GROUP PURCHASINGThe aggregation of orders from several buyers into volume purchases so that better prices can be negotiated◦ Internal Aggregation of Purchasing Orders◦ External Aggregation for Group Purchasing


5-33


5-34

Other E-Procurement Methods• BUYING AT SELLERS’ SITES AND

COLLABORATIVE COMMERCE• ACQUISITION VIA ELECTRONIC

BARTERING• bartering exchange

An intermediary that links parties in a barter; a company submits its surplus to the exchange and receives points of credit, which can be used to buy the items that the company needs from other exchange participants


5-35


5-36

B2B Electronic Exchanges: Definitions and Concepts

FUNCTIONS OF EXCHANGES

1. Matching buyers and sellers

2. Facilitating transactions

3. Maintaining exchange policies and infrastructure


B2B Electronic Exchanges: Definitions and Concepts• dynamic pricing

A rapid movement of prices over time and possibly across customers, as a result of supply and demand matching–Revenue Models• Transaction fees(based on commission paid)• Service fees-fee for services• Membership fees- fees is a fixed annual and

monthly fee• Advertising fees-fees for advertising• Other revenue sources-charge auction fees


5-38


5-39

B2B Portals, Directories, and Ownership of B2B Marketplaces• B2B portals

Information portals for businesses• vortals

B2B portals that focus on a single industry or industry segment; “vertical portals”

• OWNERSHIP OF B2B MARKETPLACES–consortium trading exchange (CTE)

An exchange formed and operated by a group of major companies in an industry to provide industry-wide transaction services


5-40


5-41

Partner and Supplier Relationship Managementpartner relationship

management (PRM)Business strategy that focuses on providing comprehensive quality service to business partners

E-COMMUNITIES AND PRM


5-42

B2B in the Web 2.0 Environment and Social NetworkingTHE OPPORTUNITIES

◦Discover new business partners◦Improve recruitment◦Enhance ability to learn about new

technologies, competitors, etc.◦Find sales prospects◦Improve participation in industry

association activities


5-43

B2B in the Web 2.0 Environment and Social Networking• THE USE OF WEB 2.0 TOOLS IN

B2B• SOCIAL NETWORKS IN THE B2B

MARKETPLACE• EXAMPLES OF OTHER ACTIVITIES

OF B2B SOCIAL NETWORKS• STRATEGY FOR B2B SOCIAL

NETWORKING–Participate–Monitor–Use existing applications


5-44

Internet Marketing in B2B EC• ORGANIZATIONAL BUYER BEHAVIOR–A Behavioral Model of Organizational Buyers

• THE MARKETING AND ADVERTISING PROCESSES IN B2B

• METHODS FOR B2B ONLINE MARKETING–Targeting Customers–Electronic Wholesalers

• AFFILIATE PROGRAMS, INFOMEDIARIES, AND DATA MINING


5-45


5-46

Managerial Issues

1. Which B2B model(s) should we use for e-procurement?2. Which B2B model(s) should we use for online B2B sales?3. Which exchange to join?4. Which solution vendor(s) should we select?5. What is the organizational impact of B2B?6. What are the ethical issues in B2B?7. How shall we manage the suppliers8. Which type of social network? Private (proprietary) or

public?9. Can we use B2C marketing methods and research in

B2B?


5-47

Chapter 6 B2B E-Commerce. Learning Objectives 1. Describe the B2B field. 2. Describe the major types...

Documents

Transcript of Chapter 6 B2B E-Commerce. Learning Objectives 1. Describe the B2B field. 2. Describe the major types...