Electronic Commerce

ELECTRONIC COMMERCE

Strategies for the New Economy

THE GROWTH OF E-COMMERCE

What is Commerce?

        Commerce is an activity where people are buying and selling products and services from and to each other.

What is E-commerce?

• E-commerce is commerce that is accelerated and enhanced by information technology (IT), in particular the internet
• E-commerce enables customers, consumers, and companies to form powerful new relationship that would not be possible without the enabling technologies

The Four Categories for E-commerce:

                                           Business originating from...

        E-commerce sales are expected to grow up (and only up) but digital divide expresses the fact that different peoples, cultures, and areas of the world or within a nation do not have the same access to information and telecommunications technology.

THE ADVANTAGES OF BUSINESS TO CONSUMER E-COMMERCE

(Knowing when to use it, how to use it effectively, and when to use it in combination with other channels, is key)

1. Shopping can be faster and more convenient.

• E-tailer- internet retail site

• Pure plays- internet retailers that have no physical stores
• Clicks-and-mortar- has both an internet presence and one or more physical stores

• M-commerce- describes e-commerce conducted over a wireless device such as a cell  phone.

1. Offerings and prices can change instantaneously.
2. Call centers can be integrated with the Web site.

• Interactive chat- lets you engage in real-time typed exchange of information between you and one or more individuals over the internet.
• Internet telephony- combination of hardware and software that uses the internet as the medium for transmission of telephone calls in place of traditional telephone networks.

1. Broadband telecommunications will enhance the buying experience.

KEYS TO SUCCESS IN BUSINESS TO CONSUMER E-COMMERCE

1. Commoditylike items work best.

• People tend to be more comfortable buying items on the internet that are commoditylike, that is, uniform.

E.g. of commodity items: laundry detergents or breakfast cereals.

E.g. of noncommodity items: produce and fish

1. Digital Products are the best of all.

The reasons we say that digital products ae best suited for B2C e-commerce are the following:

1. They are commoditylike products.
2. They can be mass-customized and personalized.
3. They can be delivered at the time of purchase.
4. They foster disintermediation.
5. They have global reach.

Micro-payments are techniques to facilitate the exchange of small amounts of money for an Internet transaction.

1. Attracting and retaining customers.

• Designing an attractive Website that is easy to use is one of the key factors in the success of a B2C venture.

Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. 

In the B2C e-commerce space, there are additional techniques for attracting customers using the Internet itself. Some of these include:

1. Registering with search engine

• Many Web surfers use search engines to find what they need.

1. Online Ads

• Many Web sites use banner ads, a small ad on one Web site that advertises products and services of another business, usually another dot-com business.

1. Viral Marketing

• Viral marketing is a technique that gets around spam. Spam is unsolicited email. Viral marketing encourages users of a product or service supplied by a B2C company to ask friends to join as well.

1. Affiliate programs

• Affiliate programs are arrangements made between e-commerce sites that direct users from one site to the other.
• Click-troughs are a count of the number of people who visit one site, click on an ad, and are taken to the site of the advertiser.

1. Selling to existing customers

• One of the keys to success in the B2C space is to encourage customers to continue buying from you. As in traditional businesses, B2C entrepreneurs call this “repeat business”.

1. Remembering the importance of merchandising.

• A B2C business must do an effective job of merchandising. That means it must understand its customer base well enough to be able to select products that will appeal to them and that are attractively displayed.

1. You must execute well.

• Executing well simply means that when a customer places an order on your Web site, you have to follow through and execute the necessary business processes to get the right item to the customer in a timely fashion.

1. Watch the competition.

• Watching the competition is good advice for any business, but it’s especially important for B2C businesses. The reason for this is that, retaining customers is one of the keys to e-commerce success.

BUSINESS TO BUSINESS E-COMMERCE 

Business to Business E-Commerce

– defines e-commerce which take place between organizations

Value networks

– is all of the resources behind the click on the Web in which the customer couldn’t see but together create the customer relationship.

Intermediaries – specialist companies which provide services better than the company themselves.

Complementors – provide products and services which compliments the offerings of the enterprise thus extending its value-adding capabilities.