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32 views93 pages

E-Marketing All Chapters

This is E-commerce course alla chapter material
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER ONE

OVERVIEW OF E-CMMERCE
1. Introduction
There is no doubt about it—the Internet has changed the world we live in. Never before has it been so
easy to access information; communicate with people all over the globe; and share articles, videos,
photos, and all manner of media.

The Internet has led to an increasingly connected environment, and the growth of Internet usage has
resulted in the declining distribution of traditional media: television, radio, newspapers, and magazines.
Marketing in this connected environment and using that connectivity to market is e marketing.

Today, e-commerce has become the platform for media and new, unique services and capabilities that
aren’t found in the physical world. There is no physical world counterpart to Facebook, Twitter, Google
search, or a host of other recent online innovations from Pinterest and iTunes to Tumbler.
The rapid movement toward an e-commerce economy and society is being led by both established
business firms such as Walmart, Ford, IBM and newer entrepreneurial firms such as Google, Amazon,
Apple, Facebook, Yahoo, Twitter and YouTube. Students of business and information technology need
a thorough grounding in electronic commerce in order to be effective and successful managers in the
next decade.

1.1. Definition of E- Commerce

Commerce: The buying and selling of products and services between firms, usually in different status
or countries.
E-commerce: - e-commerce means buying and selling of products or services over electronic systems
such as the internet and other computer networks.
The use of Electronic transmission medium (Tele communication) to engage in the exchange
including: buying and selling, of products and services either physically or digitally, from location to
location. The key element of E-commerce is information processing. This information processing
activity is in the form of business transactions. Some of the business transactions are:-
1. Transactions between company and the consumer over networks for the purpose of home shopping
and home banking.
2. Transactions between trading partners.
3. Transactions for information distribution.
Difference between E-business and E-commerce:-

1
In both cases , E stands for “Electronic networks “ and describes the applications of Electronic
network technology – including internet and electronic data interchange (EDI) – to improve and
change business process .
E-commerce covers outward - facing processes that touch customers, suppliers and external partners,
including sales, marketing, order taking, delivery, customer service, purchasing of raw materials.
E-business includes E-commerce but also covers internal process such as production, inventory
management, products development, finance, human resources, E-business strategy is more complex,
productivity and cost savings.
1.2. Scope of internet on the web
So pervasive is the internet today that it is difficult to appreciate what’s been achieved in twenty short
years. Over a trillion web pages are thought to exist, a meaningless figure until we realize that someone
spending just one second on each page would need 32,000 years to surf existing web space. Beyond the
accessible web lies the deep web, perhaps even larger-no one really knows what’s locked away in
government, institutional and business intranets and databases. The web is everywhere. web pages serve
youngsters following their music bands, students gather their materials for their essays, families
following their members’ activities through social media sites, journalists researching their articles,
academics putting up course notes for students, the elderly looking up details of the drugs prescribed
them…. the list endless.

More used than search engines for websites are emails over 3 million accounts and social media sites.
Beyond social media, emails, and web pages, the internet has a host of other uses including: business
intelligence system, blogs, cloud computing, content management systems, distance learning, expert
system, internet TV, music and video, search engines, video conferencing, no country is without internet
access, and the information it conveys has the potential to make the world a better informed, friendlier
and more democratic place.

1.3. How to reach customers through internet

Physically, the Internet uses a portion of the total resources of the currently existing
public telecommunication networks. Technically, what distinguishes the Internet is its use of a set of
protocols called Transmission Control Protocol/Internet Protocol (TCP/IP). Two recent adaptations of
Internet technology, the Intranet and the extranet, also make use of the TCP/IP protocol.
The Internet can be seen as having two major components: network protocols and hardware. The
protocols, such as the TCP/IP suite, present sets of rules that devices must follow in order to complete
tasks. Without this common collection of rules, machines would not be able to communicate.
The protocols are also responsible for translating the alphabetic text of a message into electronic signals
that can be transmitted over the Internet, and then back again into legible, alphabetic text.
2
Hardware, the second major component of the Internet, includes everything from the computer
or smartphone that is used to access the Internet to the cables that carry information from one device to
another. Additional types of hardware include satellites, radios, cell phone towers, routers and servers.
These various types of hardware are the connections within the network. Devices such as computers,
smartphones and laptops are end points, or clients, while the machines that store the information are
the servers. The transmission lines that exchange the data can either be wireless signals from satellites
or 4G and cell phone towers, or physical lines, such as cables and fiber optics.
The process of transferring information from one device to another relies on packet switching. Each
computer connected to the Internet is assigned a unique IP address that allows the device to be
recognized. When one device attempts to send a message to another device, the data is sent over the
Internet in the form of manageable packets. Each packet is assigned a port number that will connect it to
its endpoint.
A packet that has both a unique IP address and port number can be translated from alphabetic text into
electronic signals by travelling through the layers of the OSI model from the top application layer to the
bottom physical layer. The message will then be sent over the Internet where it is received by the Internet
service provider's (ISP) router. The router will examine the destination address assigned to each packet
and determine where to send it.
Eventually, the packet reaches the client and travels in reverse from the bottom physical layer of the OSI
model to the top application layer. During this process, the routing data -- the port number and IP address
-- is stripped from the packet, thus allowing the data to be translated back into alphabetic text and
completing the transmission process.
In general, the Internet can be used to communicate across large or small distances, share information
from any place in the world and access information or answers to almost any question in moments.
Some specific examples of how the Internet is used include:
 Social media and content sharing;
 E-mail and other forms of communication, such as Internet Relay Chat (IRC), Internet
telephony, instant messaging, video conferencing
 education and self-improvement through access to online degree programs, courses and workshops
and
 searching for jobs -- both the employer and applicant use the Internet to post open positions, apply
for jobs and recruit individuals found on social networking sites like LinkedIn.
Other examples include:
 Online discussion groups and forums
 Online dating
 Online gaming

3
 Research
 Reading electronic newspapers and magazines
 Online shopping, or e-commerce.
Difference between the World Wide Web and the Internet

The key difference between the Internet and the World Wide Web (WWW or the Web) is that the
Internet is a global connection of networks while the Web is a collection of information that can be
accessed using the Internet. In other words, the Internet is the infrastructure and the Web is a service on
top.

The Web is the most widely used part of the Internet. Its outstanding feature is hypertext, a method of
instant cross-referencing. In most Web sites, certain words or phrases appear in text of a different color
than the rest; often this text is also underlined. When a user selects one of these words or phrases, they
will be transferred to the related site or page. Buttons, images, or portions of images are also used as
hyperlinks.
The Web provides access to billions of pages of information. Web browsing is done through a
Web browser, the most popular of which are Google Chrome, Firefox and Internet Explorer. The
appearance of a particular Web site may vary slightly depending on the browser used. Later or more
updated versions of a particular browser are able to render more complex features, such as animation,
virtual reality, sound and music files.

SEVEN UNIQUE FEATURES


OF E-COMMERCE
TECHNOLOGY
Dimension of E-commerce
Technology
Significance in Business
Ubiquity
4
Internet/Web technology
is available
everywhere: at work, at
home, and
elsewhere via mobile
devices, anytime.
The marketplace is
extended beyond
traditional boundaries and
is
removed from a temporal
and geographic location.
“Marketspace” is
created; shopping can take
place anywhere. Customer
convenience is

5
enhanced, and shopping
costs are reduced.
Global Reach
The technology reaches
across national
boundaries, around the
earth.
Commerce is enabled
across cultural and
national boundaries
seamlessly and without
modification.
“Marketspace” includes
potentially billions of
consumers and millions of
businesses
worldwide.
6
Universal Standards
There is one set of
technology standards,
namely internet standards.
There is one set of
technical media standards
across the globe.
Richness
Video, audio, and text
messages are
possible.
Video, audio, and text
marketing messages are
integrated into a
single marketing message
and consuming experience.
Interactivity
7
The technology works
through
interaction with the users.
Consumers are engaged
in a dialog that
dynamically adjusts the
experience to the
individual, and makes the
consumer a co-
participant in the process of
delivering goods to the
market.
Information Density
The technology reduces
information
costs and raises quality

8
Information processing,
storage, and
communication costs drop
dramatically, while
currency, accuracy, and
timeliness improve
greatly. Information
becomes plentiful, cheap
and accurate
Personalization /
Customization
The technology allows
personalized
messages to be delivered
to individuals
as well as groups.

9
Personalization of
marketing messages and
customization of products
and services are based on
individual characteristics.
1.4. features of e-commerce
1. Ubiquity
The marketplace is extended beyond traditional boundaries and is removed from a temporal and
geographic location. “Markets pace” is created; shopping can take place anywhere. Customer
convenience is enhanced, and shopping costs are reduced.
2. Global Reach
Commerce is enabled across cultural and national boundaries seamlessly and without
modification. “Market space” includes potentially billions of consumers and millions of businesses
worldwide.
3. Universal Standards
There is one set of technical media standards across the globe.
4. Richness
Video, audio, and text marketing messages are integrated into a single marketing message and
consuming experience.
5. Interactivity
Consumers are engaged in a dialog that dynamically adjusts the experience to the individual,
and makes the consumer a co-participant in the process of delivering goods to the market.

6. Information Density
Information processing, storage, and communication costs drop dramatically, while currency,
accuracy, and timeliness improve greatly. Information becomes plentiful, cheap and accurate.
7. Personalization / Customization

10
Personalization of marketing messages and customization of products and services are based on
individual characteristics.

11
• Electronic commerce
lowers telecommunication
cost the internet is much
cheaper than value
added networks.
• Other benefits include
improved image, improved
customer service, new
found business partners,
simplified processes,
compressed cycle and
delivery time, increased
productivity, eliminating

11
paper, expediting access to
information, reduced
transportation costs, and
increased flexibility.
1.5. Benefits of E—commerce

11
• Electronic commerce
lowers telecommunication
cost the internet is much
cheaper than value
added networks.
• Other benefits include
improved image, improved
customer service, new
found business partners,
simplified processes,
compressed cycle and
12
delivery time, increased
productivity, eliminating
paper, expediting access to
information, reduced
transportation costs, and
increased flexibility.
Benefits to Consumers
The benefits of E-
Commerce to consumers
are as follows:
• Electronic commerce
enables customers to shop
or do other transactions 24
hours a day, all year
round, from almost any
location.

13
• Electronic commerce
provides customer with
more choices; they can
select from many vendors
and from many more
products.
• Electronic commerce
frequently provides
customers with less
expensive products and
services by
allowing them to shop in
many places and conduct
quick comparisons.
• In some cases, especially
with digitized products, E-

14
Commerce allows quick
delivery.
• Customers can receive
relevant and detailed
information in seconds,
rather than days or weeks.
• Electronic commerce
makes it possible to
participate ate in virtual
auctions.
• Electronic commerce
allow customers to interact
with other customers in
electronic communities
and exchange ideas as well
as compare experiences.

15
• E-commerce facilitates
competition, which results
in substantial discounts..
Benefits to Society
The benefits of E-
Commerce to society are as
follows:
• Electronic commerce
enables more individuals
to work at home and to
do less traveling for
shopping, resulting in less
traffic on the roads and
lower air pollution.
• Electronic commerce
allows some merchandise

16
to be sold at lowest prices,
so less affluent people
can buy more and increase
their standard of living.
• Electronic commerce
enables people in third
world countries and rural
areas to enjoy products
and services that otherwise
are not available to them.
• Electronic commerce
facilitates delivery of
public services, such as
health care, education, and
distribution of government
social services at a

17
reduced cost and/or
improved quality. Health
care services, e.g., can
reach patients in rural
areas.
Benefits to Organizations
The benefits to
organizations are as
follows:
• Electronic commerce
expands the market place
to national and
international market with
minimal
capital outlay, a company
can easily and quickly

18
locate more customers, the
best suppliers, and
the most suitable business
partners worldwide.
• Electronic commerce
decreases the cost of
creating, processing,
distributing, storing, and
retrieving paper-based
information. For example,
by introducing an
electronic procurement
system, companies can cut
the purchasing
administrative costs by as
much as 85 percent.

19
• Ability for creating highly
specialized businesses. For
example, dog toys which
can be purchased
only in pet shops or
department and discounts
stores in the physical world
are sold now in a
specialized
www.dogtoys.com (also see
www.cattoys.com).
• Electronic commerce
allows reduced inventories
and overhead by facilitating
“pull” type supply
chain management. In a
pull-type system the
20
process starts from
customer orders and uses
just-
in-time manufacturing.
• The pull-type
processing enables
expensive customization
of products and services
which
provides competitive
advantage to its
implementers.
• Electronic commerce
reduces the time between
the outlay of capital and
the receipt of products
and services.
21
• Electronic commerce
initiates business processes
reengineering projects By
changing processes,
productivity of
salespeople, knowledge
workers, and
administrators can
increase by 100
percent or more.
Benefits to Organizations
The benefits to organizations are as follows:
• Electronic commerce expands the market place to national and international market with minimal
capital outlay; a company can easily and quickly locate more customers, the best suppliers, and the
most suitable business partners worldwide.
• Electronic commerce decreases the cost of creating, processing, distributing, storing, and
retrieving paper-based information. For example, by introducing an electronic procurement
system, companies can cut the purchasing administrative costs by as much as 85 percent.
• Ability for creating highly specialized businesses. For example, dog toys which can be purchased
only in pet shops or department and discounts stores in the physical world are sold now in a
specialized www.dogtoys.com (also see www.cattoys.com).
• Electronic commerce allows reduced inventories and overhead by facilitating “pull” type supply
chain management. In a pull-type system the process starts from customer orders and uses just-in-time
manufacturing.

22
• The pull-type processing enables expensive customization of products and services which
provides competitive advantage to its implementers.
• Electronic commerce reduces the time between the outlay of capital and the receipt of products and
services.
• Electronic commerce initiates business processes reengineering projects By changing processes,
productivity of salespeople, knowledge workers, and administrators can increase by 100 percent
or more.
• Electronic commerce lowers telecommunication cost the internet is much cheaper than value
added networks.
• Other benefits include improved image, improved customer service, new found business partners,
simplified processes, compressed cycle and delivery time, increased productivity, eliminating paper,
expediting access to information, reduced transportation costs, and increased flexibility.
Benefits to Consumers
The benefits of E-Commerce to consumers are as follows:
• Electronic commerce enables customers to shop or do other transactions 24 hours a day, all year
round, from almost any location.
• Electronic commerce provides customer with more choices; they can select from many vendors and
from many more products.
• Electronic commerce frequently provides customers with less expensive products and services by
allowing them to shop in many places and conduct quick comparisons.
• In some cases, especially with digitized products, E-Commerce allows quick delivery.
• Customers can receive relevant and detailed information in seconds, rather than days or weeks.
• Electronic commerce makes it possible to participate ate in virtual auctions.
• Electronic commerce allow customers to interact with other customers in electronic communities and
exchange ideas as well as compare experiences.
• E-commerce facilitates competition, which results in substantial discounts..
Benefits to Society
The benefits of E-Commerce to society are as follows:
• Electronic commerce enables more individuals to work at home and to do less traveling for
shopping, resulting in less traffic on the roads and lower air pollution.
• Electronic commerce allows some merchandise to be sold at lowest prices, so less affluent people
can buy more and increase their standard of living.
• Electronic commerce enables people in third world countries and rural areas to enjoy products and
services that otherwise are not available to them.

23
• Electronic commerce facilitates delivery of public services, such as health care, education, and
distribution of government social services at a reduced cost and/or improved quality. Health care
services, e.g., can reach patients in rural areas.
Chapter two
Internet marketing environment
Basic forms of virtual business
More customers are spending an increasing part of their lives in the virtual world. Marketers need to
analyze demand by consumers for online services and respond to customers’ needs in this new connected
world.
Business Model for Electronic Commerce
A business model is a set of planned activities designed to result in a profit in a market place. An
electronic commerce business model aims to use and leverage the unique qualities of the internet and the
World Wide Web.
2.1. Key Elements of Business Model
There are eight key ingredients of a business model that are of interest for this particular course. These
are:

2.1.1. Value proposition


From firm’s point of view it defines how company’s product or service fulfills the needs of customers.
The following questions should be adequately answered.
- Why will customers choose to do business with your firm instead of another company?
- What will your firm provide that other firms do not and can’t?
From customer’s point of view, electronic commerce value proposition refers to personalization,
customization, and reduction of search costs.
2.1.2. Revenue Model
It describes how the firm will earn revenue, produce profit, and produce a superior return on invested
capital. There are five revenue models:
Advertising Revenue model: A web site that offers its users content, services, and/or products also
provides a forum for advertisements and receive fee from advertisers. The best example is
www.yahoo.com.
Subscription Revenue Model: A web site that offers its users content or services charges a
subscription fee for access to some or all of its offerings. Examples include www.bbc.com.uk,
www.newsweek.com, wall street journal, financial times etc.
Transaction Revenue Model: A company receives a fee for enabling or executing a transaction.
E.g. www.ebay.com

24
Sales Revenue model: Companies derive revenue by selling goods, information, or services to
customers.
Affiliate Revenue Model: Web sites that steer business to an “affiliate” receive referrals fee or
percentage of the revenue from any resulting sales. E.g. www.mypoint.com

2.1.3. Market Opportunity


It refers to the company’s intended market space and the overall potential financial opportunities
available to the firm in that market space.
2.1.4. Competitive Environment
It refers to the other companies operating in the same market space selling similar products. It is
influenced by:
 How large their operations are;
 How many competitors are active;
 What the market share of each competitor is;
 How profitable these firms are; and
 How they price their products
 Direct competitors – companies that sell products or services that are very similar and into the same
market segment
- Example: Priceline.com and Travelocity.com
 Indirect competitors – companies that may be in different industries but that still compete indirectly
because their products can substitute for one another
- Example: CNN.com and ESPN.com
2.1.5. Competitive Advantage
It is achieved by a firm when firms can produce a superior product and/or bring the product to market at
a lower price than most, or all, or its competitors.
Competitive advantage may arise due to asymmetry; the firm in the market has more resources-
Financial backing, knowledge, information, and/or power- than other participants.
Companies leverage their competitive assets when they use their competitive advantages to achieve more
advantage in surrounding markets
The asymmetry can be:
 Patent;
 Connection;
 Image; and
 First mover advantage
Types of competitive advantage include:

25
- First mover advantage – results from a firm being first into a marketplace
- Unfair competitive advantage – occurs when one firm develops an advantage based on a factor
that other firms cannot purchase

2.1.6. Market Strategy


It is plan that a company put together that details exactly how it intend to enter a new market and attract
new customers. For example, www.yahoo.com advertises aggressively to attract more number of users
where as some companies partner each other.
2.1.7. Organizational Development
It describes how the company will organize the work that needs to be accomplished. Work is divided
into the following:
o Functional departments;
o Defined area within the function;
o Responsibilities; and
o Hiring people
2.1.8. Management Team
It refers to the employees of the company responsible for making the business model work. The
management team’s ability and credibility to outside investors, immediate market-specific knowledge,
and experience in implementing business plans are key factors for success.
In pooling effective management team, the following questions should be answered:
 What kind of technical background is desirable?
 What kind of supervisory experience is necessary?
 Which job functions should be filled first? Marketing, operations, finance, etc
Do prospective senior managers have experience and contacts for raising financing from outside
investors?

2.2 THE SELLING AND BUYING PROCESS OVER E-COMMERCE


1. Information step
How does the process start? The first variant is, that the customer becomes active. Even here we have
to differentiate because the starting point may be different:
• Product/service is clear, the supplier has already been selected,
• Product/service is clear; the supplier has not yet been selected,
• Product/service has to be determined.

26
The customer may enter the process via search engines, marketplaces/multi-shops, communities, rating
platforms or known providers respectively their websites or online shops.
2. Initiation step
When customer and supplier at the end of the information step know that they want to conduct a business
transaction together, then they initiate it according to the specific nature of the goods to be sold
respectively bought.
If standardized products without individual offers are sold then an electronic shopping cart is provided.
The customer picks up interesting products or services and puts them into his shopping cart.
If goods or services have to be personalized then this is done via requests and offers.
3. Contract conclusion step
At the end, both, the supplier as well as the customer, have to “sign” a contract. Initially all relevant data
have to be put together. The customer has to be identified and his name and contact data have to be
documented. Then invoicing address, delivery address and payment data must be selected. If the
customer has previously bought from the supplier then these data may be available in the supplier’s
customer database or CRM system.
4. Delivery/fulfilment step
If real goods have been sold, then the contract between supplier and customer is followed by the
compilation of the ordered goods. If goods are not in stock of the online shop they have to be
ordered at the producer and either they can be taken from the producer’s warehouse or they have to be
produced. When the ordered goods are available they must be consigned, packed and forwarded to
transportation
5. Billing/invoicing step
After the confirmation of delivery the billing and invoicing step can be started..
6. Service/support step
To be successful in E-Commerce does not only depend on interesting products, low prices and fast
delivery. To generate a high customer satisfaction presumes a professional service and support. There
must be an effective complaints management. Supplementary and replacement deliveries, including
return consignments, must be in place and run smoothly if needed.

2.3. Electronic Business Models Based on Relationship of Transaction Parties

Choosing and applying the right e-commerce business model is complicatedespecially if it is a new
product / service not been launched by anybody else. These models vary depending on the target
customer (or ‘buyer’), available resources, and capabilities of both the seller and the customer. For an
easy revision, the general e-commerce business models, based on the category of the customers are
summarized herewith.
27
1. Business - to - Consumer (B2C) E-commerce

B2C model of e-commerce is primarily for those business entities (retailers, whole sellers and
manufacturers) who want to sell their products(or services) directly to their consumers using online
stores. For example, Laxme India is a product based B2C FMCG (fast-moving consumer goods)
company that has its online presence too in India to connect to its customers.

1. Examples of B2C: Amazon, , Meta (formerly Facebook), and Walmart

Flip kart

Firms reach individual consumers through the following business-to-consumer models:

I. Portal: They offer users powerful web search tools as well as integrated package of content and
service such as news, e-mail, instant messaging, calendars, shopping, music downloads, video,
business information, all in one place. Portals do not sell anything directly and in that sense
they can present themselves as unbiased. They generate revenue primarily by charging advertisers
for advertising placement, collecting referral fees for steering customers to other sites, and charging
for premium services.
Portals fall into two categories:

 Horizontal/General portals: They define their markets space to include all users of the internet.
Good examples in this case are www.yahoocom, www.americanonline.com, www.msn.com ,
www.google.com etc. They seek to be user’s home base.
 Verticals/specialized: They focus around a particular subject matter or subject market or market
segment. E.g. www.iboat.com, www.sailnet.com etc.

28
29
II. Electronic Tailer: It is online retail store where time-starved customers can shop at any hour of
the day or night without leaving home or office. The different type of electronic tailers are
discussed as under:
 Virtual Merchant: Online version of retail store, where customers can shop at any hour
of the day or night. A very good example is www.amazon.com.
 Click-and-Mortar: online distribution channel for company that also has physical stores.
E.g. www.walmart.com.
 Catalog Merchant: online version of direct mail catalogue. E.g. www.landsend.com,
www.llbean.com
 Manufacturer Direct: Online sales made directly by the manufacturer itself. E.g.
www.dell.comand www.compaq1`.com.
III. Content Providers: They are information and entertainment companies that provide digital
content over the Web. A way of internet service provision that can be defined broadly to
include all forms of intellectual property. They distribute information content such as digital
news, music, photo, video, and art work over the web. They make money by charging
subscribers a subscription fee. Some make money by selling advertising spaces. It is the
second largest source of B2C e-commerce revenue in 2002. Examples are www.sportsline.com,
www.cnn.com, www.espn.com, etc.
IV. Transaction Broker: Sites that process transactions for consumers normally handled in
person, by phone, or mail. The largest industries using this model are financial services, travel
services, and job placement services. The online transaction broker’s primary value
propositions are saving of money and time. Online stock brokers receive commissions that are
considerably less than traditional brokers, with many offering substantial deals. Transaction
brokers make money each time a transaction occurs. Examples include www.ethiojobs.net,
www.etrade.com etc.

30
V. Market Creator: It builds a digital environment where buyers and sellers can meet, display
products search for products and establish price for products. E.g. www.priceline.com,
www.ebay.com, www.amazon.com etc.
VI. Service Provider: They are companies that make money by selling users a service, rather than
a tangible product. Examples are www.myconsulting.com, www.lawinfo.com, www.cfo.com
etc.
VII. Community Providers: They are sites that create a digital online environment where people
with similar interests can transact (buy and sell goods), communicate with like minded people,
receive interest related information, and even play out fantasies by adopting online
personalities. It rely on a hybrid revenue model that includes subscription fees, sales
revenues, transaction fee, affiliate fees and advertising fees from other firms who are
attracted by a tightly focused audience.
E.g.www.village.com,www.blackplanet.com,www.epinions.com, www.oxygen.com, and
www.about.com etc.
2. Business-to-Business (B2B) E-commerce

Business-to-business (B2B) e-commerce portal is the one where the business is conducted
between two business entities using this portal, such as between a wholesaler and retailer. The
retailer could connect to the customer separately, using another online store or using a physical
store. As is evident, B2B transactions happen, where one business entity, say an automobile
company purchases its varied accessories from various suppliers using a dedicated web
portal/website/app. For example, Toyota motors have their own B2B web portal to connect to all its
business partners which is not accessible to the individual buyers. Drop Box is a service based B2B
e-commerce model where all the team members have access to the work account created in Drop
Box to store, share, and collaborate on files.

31
B2B Platforms Examples

 Amazon Business.
 Made-in-China.
 E-bay Business

It includes the following: for their existence. They can be of two


1) Marketplace/Exchange (B2B Hub): It type:
is digital/electronic market place where  Vertical market places that
suppliers and commercial purchasers serve specific industries, for
can conduct transaction. Business-to- example. www.e-steel.com
Business Hubs make it possible to  Horizontal marketplaces that
gather information, check out suppliers, sell specific products to a wide
collect prices, and keep up-to-date on range of companies. E.g,
the latest happening all in one place. www.tradeout.com etc.
Sellers, on the other hand, benefit from 2) Electronic Distributor: They are
expanded access to buyers. They make companies that supply products and
transaction and inventory carrying cost services directly to individual
lower. B2B hubs rely on transaction fee businesses. Whereas Business-to-
32
business hubs pull together many cooperative connections and realize
businesses, making it possible for them business opportunities that mutually
to do business with other companies, benefit both partiesCompanies that
electronic distributors are set up by one make money by linking other
company seeking to serve many companies and taking cut of any
customers. With electronic distributors, business that occur via a transaction or
the more products and services a usage fee are called matchmakers. For
company makes available on its site, the example, www.iship.com compares
more attractive that site to potential prices among shipping companies.
customers. E.g. www.grainger.com Once a company has the cheapest
shipper for its particular package, it
3) Business-to-Business Service pays www.iship.com a fee in order to
providers: They sell services to other get service the shipments.
firms. Traditional business-to-business 5) Inform diary: It is a company that
service providers offer online would act as custodian, agents, and
equivalents to common business broker of customer information
services such as accounting, financial marketing it to businesses on
services, human resource management consumer’s behalf while protecting
(HRM), printing, and so on. The other their privacy at the same time. They
category may include can be classified into two:
www.salesforce.com and  Audience Brokers: they capture
www.corio.com which rent internet- information about customers and use
based software applications to it to help advertisers find the most
businesses and collect rental fee. appropriate audience. The source of
4) Match makers: Business revenue is sales of information. E.g.
matchmaking is a method to identify www.doubleclick.com
and connect (match) companies and  Lead Generators: They gather
people with common business customers data from which they then
interests, complementary services, create customer profile or reference.
expertise, technologies or business They then direct vendors of products
strengths. The goal is to create and services that fit the profiles of the

33
customer. The source of revenue here interlinked networks, channels and node
is referral fee. businesses are involved in the provision
of products and services required by end
customers in a supply chain. Supply chain
management has been defined as the
“design, planning, execution, control, and
monitoring of supply chain activities with
the objective of creating net value,
B2B software systems: building a competitive infrastructure,
1. Enterprise resource planning (ERP) ERP leveraging worldwide logistics,
(Ganesh et al 2014) is a category of synchronizing supply with demand and
business-management software – measuring performance globally.”
typically a suite of integrated 3. Supplier relationship management
applications – that an organization can (SRM) SRM is defined as the
use to collect, store, manage and interpret management of the relations between an
data from many business activities, organization and its suppliers. The
including: objective is to link all suppliers to the
• Product planning, organization, to support the procurement
• Manufacturing or service delivery, management for the total procurement
• Marketing and sales, process. SRM uses methods and
• Inventory management approaches of CRM but now from the
• Shipping and payment. customer’s point of view. SRM is a sub-
area of SCM.
2. Supply chain management (SCM) SCM
A SRM system contains information
(Chakravarty 2014 and Kurbel 2013) is
about all sources of supply and all
the management of the flow of goods and
procurement information like deliverable
services. It includes the movement and
products, possible risks, terms and
storage of raw materials, work-in-process
conditions or quality. SRM can be
inventory, and finished goods from the
considered as an advancement of E-
point of origin to the point of
Procurement. Added value is generated
consumption. Interconnected or
through bundling of all information about

34
procurement and resources and  Transport,
providing it to the total organization.  Invoicing,
 G Payment,
 Additionally: All functions which can
be offered centrally for various
4. Marketplace: A (digital) marketplace is market actors,
a piece of software with comprehensive  Interfaces (Provider, customer,
E-Commerce functionality. It can be forwarding and shipping agency,
characterized by m suppliers and n other service providers, e.g. insurance
customers (m>1, n>1). Process and firms).
software are under control of the
3. Consumer - to –Consumer (C2C) E-
marketplace owner. It uses portal
Commerce
technologies and enables the cooperation
There was a time when C2C ecommerce
of different suppliers and different
platforms almost didn’t exist. Buyers used to
customers. Providing and demanding
doubt the quality they might receive online
organizations act autonomously. It is
and sellers weren’t sure if they would be able
possible, that members are at the same
to make a sale online. But during the
time providing and demanding
pandemic, C2C ecommerce has made a
organizations.
global impact in the ecommerce world.
Main functions of a (digital) marketplace are: Nowadays, millions of people sell their
 Data management (master data, unwanted goods online. And to enable them
transaction data, catalogue), to sell directly to buyers, more and more
 Pricing (market, calling for bids, entrepreneurs are creating C2C ecommerce
tender offer, auction, negotiations, stores.
power shopping: Consumers build a Consumer-to-consumer (C2C) ecommerce is
group), a commerce model in which one consumer
 Buying (E-Sourcing, E-Procurement, sells his goods or services to other consumers
workflow), online. It is one of the four pivotal
 Sales (ordering, order management), ecommerce business models, the other three
 Stock exchange, being B2B (business-to-business), C2B

35
(consumer-to-business), and B2C (business-
to-consumer). When individuals want to sell b. EBay
their own services, or a product (usually the
used / second hand/ pre-owned products) EBay is a popular shopping website in which
using Internet then they use C2C e-commerce customers buy and sell a large variety of
web sites/ portals goods and services worldwide. And do you
Transaction that is made between two know this website is not only built for
customers is led by a third party, basically by customers? Businesses can also enjoy the
online actuation, social media platform, or great benefits of eBay.
ecommerce website, that looks after Meaning, apart from using C2C ecommerce
transaction status, payments, and other model, eBay also utilizes B2C business
aspects. It helps sellers as well as buyers to model. This website has been in the industry
find each other by charging a small fee or for a long time and has great market
commission. acknowledgment.
C2C E-Commerce Example
There are many C2C ecommerce business
c. OLX
examples already involved in several
One of the greatest C2C ecommerce platform
different industries. Here are the popular
examples emerge from India. OLX is almost
ones:
similar to eBay. OLX has made it so easy for
a. Etsy people to buy, sell, and exchange new as well
as used goods and services online. One major
difference between these two websites is that

It is a very popular multivendor C2C it doesn’t use a B2C business model.

ecommerce store that allows customers Another difference is that unlike eBay, which

(especially those independent artists and asks you for an insertion fee when you create

crafters) to sell their goods to other a listing and a final value fee when your item

customers. sells, OLX is mostly free. This C2C

Etsy focuses on handmade toys, collectibles, ecommerce website also has its own mobile

art, home goods, vintage furniture, clothing, application

and jewelry. d. AliExpress

36
Another great C2C ecommerce example is C2B platforms like ‘Up work online
Alibaba allows customers to sell their transaction platform’ and ‘Fiverr’ who
products to other customers worldwide. Also ‘crowd source’ freelancing services from
known for using the B2C ecommerce model, individuals and pass it on to the businesses
this giant trading platform is built specifically who need it, obviously on contract and short-
for Chinese customers who want to sell and term basis. Also, C2B concept is also used to
ship their products outside of China. monetise the ‘influencing’ quotient of a
AliExpress has over 150 million customers popular individual to ‘sell’ or ‘brand’ a
all over the world including US, Canada, business. Influencers with high social media
India, Russia, UK, and other countries. following, encourages their fans and
followers to buy a particular product/service
or to take an action. With present social
media hype, influencer-matching
marketplaces like ‘Ifluenz’ are on the rise as
new, innovative forms of C2B. In India,
‘Influencer.in’, ‘Plixxo’ and ‘Chat box’ are
some of the popular influencer marketing
platforms.

4. Consumer- to - Business (C2B):


In the C2B model, individuals (customers)
sell their products or services to a business.
Using this model, a business entity can
typically extract values from the customers
by taking their business suggestions or by
getting their feedback or reviews on the
existing products.
Apart from gathering feedback or reviews or
press releases written by consumers for
5. Peer-to-Peer E-commerce
consumers, there are dedicated freelancer
37
A peer-to-peer marketplace is a phenomenal  Uber with its $72 billion valuations it
business model that falls under the is considered the most successful
ecommerce umbrella. It is an online platform marketplace in the market for on-
that connects (i) people who want to sell/rent demand taxi services and one of the
any kind of product or service and, (ii) people fastest-growing businesses in the
who need that product or service. When world.
come to existence it link users, enabling them
to share files and computer resources without The main difference between C2C and P2P is
a common server. For example, that with C2C, there is a company or other
www.groovenetwork.com help its workers third party in between the buyer and the
share files, calendars, work schedules, and seller (or sender and receiver). In a P2P
plans without burdening central servers. platform, counterparties transact directly
People who are artists, mechanics, car renters, or with one another without that intermediary.
booksellers all can become vendors via a P2P
marketplace. 2.4 M-Commerce (Mobile Commerce)
Popular Peer-to-Peer Marketplaces It is a short form of mobile commerce which
permits mobile access to the web. Wireless
networks utilize newly available bandwidth
and communication protocols to connect
mobile users to the internet. M-Commerce is
commonly understood as the usage of mobile
devices for business purposes, especially
mobile phones and PDA’s (Personal Digital

 Task Rabbit is an American online Assistants).

marketplace that matches freelance Main features of M-Commerce are:

labor with local demand. It allows • Location independence of (mobile)

consumers to find immediate help customers,

with everyday tasks, including • High availability of services through

cleaning, moving, delivery, and well-established mobile phone networks,

handyman work. • Increasing computing power of


mobile devices,

38
• Interactivity of mobile devices (voice e-governance there are no distinct
boundaries.
and data transfer),
• Security (when using mobile phone 1. Business - to - Government (B2G)
networks),
B2G model is a variant of B2B model. Such
• Localization of customers through cell websites are used by government to trade
and exchange information with various
structure,
business organizations. Such websites are
• Accessibility of customers, accredited by the government and provide a

medium to businesses to submit application


• Potential of personalized forms to the government.
services/offers.
2. Government - to - Business (G2B)
2.5 E-Governance:
Government uses B2G model website to
E-governance is the application of approach business organizations. Such
information and communication websites support auctions, tenders and
technology (ICT) for delivering application submission functionalities.
government services, exchange of
information communication 3. Government - to - Citizen (G2C)
transactions, integration of various
stand-alone systems and services Government uses G2C model website to
between government-to-customer approach citizen in general. Such
(G2C), government-to-business websites support auctions of vehicles,
(G2B), government-to-government machinery or any other material. Such
(G2G) as well as back office website also provides services like
processes and interactions within the registration for birth, marriage or death
entire government framework. certificates. Main objectives of G2C
Through e-governance, government website are to reduce average time for
services will be made available to citizens fulfilling people requests for various
in a convenient, efficient and transparent government services.
manner. The three main target groups
that can be distinguished in
Governance concepts are government,
citizens and businesses/interest groups. In

39
Chapter 3

Online Business Strategies

3.1. Internet objectives.

Main Objectives of Internet Marketing

Almost all business owners today know that


Internet marketing is essential, but not all of
them understand the end results that can or
should be obtained through online strategies.
As a result, it can be tough for them to
calculate the ROI of their campaigns.

If you’re one of the many marketers or


business owners who don’t have clear-cut
objectives for your online efforts, you’re
probably struggling to evaluate your success.

Here are some common Internet marketing


objectives that may fit your company’s goals:

1: Increase revenue

The primary goal of any marketing strategy is


ultimately to increase revenue, and Internet
marketing is no exception. Thankfully, the
Internet provides plenty of opportunities for
every business to improve their bottom line.

By combining search engine optimization, or


SEO, with pay-per-click ads, or PPC, your
company can improve the chances that
potential customers find you online. And with
strategies like content marketing and social
media marketing, you can position yourself

40
as an expert in your field who also cares This means optimizing various elements on
about your clients. their sites in order to attract local customers
who are looking for the services they provide.
2: Build a brand
Although the number of searches that include
Internet marketing objectives often include both your industry and your town or city is
building a brand. This means not only undoubtedly lower than those that just specify
establishing your logo and company name in a product or business type, those searches
the minds of consumers, but also what your tend to generate much more qualified traffic.
company stands for. If a user is already looking for businesses
Well-known brands are typically trusted more where you are, chances are high that they’ll
by customers, especially when paired with be willing to come to your physical location.
positive associations. The Internet is a great 4: Increase qualified traffic
tool for building that trust, because it has a
wide reach and allows you to directly connect Every business owner wants to see numbers
with individuals. rise in terms of visitors to their site and
landing pages. However, those numbers are
Social media is particularly useful when meaningless if they aren’t the right kinds of
building a brand, because it allows companies traffic.
to create and post with a more personal feel.
Not every visitor to your site is going to make
Organizations have discovered that this kind a purchase. That’s just the way of the
of brand-building can be fostered by the use Internet, and should be accepted. However, if
of social media channels such as Facebook, none of your site visitors make purchases (or
Twitter, Instagram and Pinterest. In addition contact you), you are likely attracting
to organic posts on these sites, companies can “unqualified” traffic, or visitors who have no
build brand recognition by paying for intent of becoming a customer.
advertisements and placements. This takes
patience on the part of the organizational By targeting your marketing to specific
leaders, because trust and loyalty are personas and aiming to attract specific,
developed over many months, and sometimes qualified people, you can increase the ROI of
years. The key is to stay focused on the your marketing efforts—as well as your
results. bottom line.

3: Improve local SEO 5: Manage online reputation

Many small businesses, as well as companies In an age when anyone with a computer or
focused on increasing sales in specific Smartphone can post their opinions about
geographic region, focus much of their companies, products, and services for the
marketing efforts on improving their local whole world to see, it’s important for
SEO. businesses to maintain a solid online
reputation. This means monitoring your
41
company’s name, maintaining social profiles, For instance, an influential company might
and responding to bad reviews accordingly. write and share blog posts and articles on a
regular basis. Their CEO and other top
One bad review doesn’t mean that your employees might keep their LinkedIn and
company’s reputation is shot, but one bad other social profiles up to date and share them
reaction to a bad review might. The way you as well. The company might offer free
publicly respond to customer complaints will webinars on up-and-coming industry news.
show them (and all other current and All of these efforts combined can position
potential customers) how much you care them as an expert not only in the eyes of
about their opinions. But as intimidating as other industry professionals, but also in the
that may sound, all it takes is a bit of respect eyes of potential clients.
and concern for your customer base.
Is it possible to achieve all of these
For some companies who’ve already made objectives?
errors in this department, their objective is
simply to remove any negative associations The possibilities with Internet marketing are
with their company and show customers that plenty, and it’s entirely possible to achieve all
they’ve seen the errors of their ways. Though of these objectives. That being said, without a
the improvements won’t happen overnight, dedicated Internet marketing team, it can be
and bad online PR can be difficult to get rid difficult.
of, the Internet is a solid tool for repairing
damaged reputations. 3.2 Internet Presence

What Is An Internet Presence?


Many feel they need to get their
business/organization "on the internet". Often
they aren't sure exactly what this means, but
6: Become an influencer in your field
think they should be doing it.
Every industry has a few well-known Being "on the internet" is a bit vague and
individuals or companies that others look to could mean many different things. We use the
as thought leaders. They stay at the forefront term "Internet Presence" to describe all or
of new technologies and ideas, and are often any of the possibilities, but more specifically,
the first to share new information. being "present" and visible on the internet so
that other people can find you. Here are some
Unfortunately, every industry only has a of the things your internet presence might
particular amount of room at the top. The include:
people who become experts and influencers
are those who strategically position  Access to the internet
themselves to give out great advice and  E-mail address
information, often without much obvious  Website
monetary gain.  Listings in directories, search
engines, etc
42
 Other communication tools  People to have a good chance of
finding you on the internet.
Do I Need An Internet Presence?  Your business/organization to have
Some organizations really don't have much a professional image.
use for the internet; in fact many small  To sell goods or services over the
businesses survive without a computer at all. internet.
However, if you're in business or if you
represent an organization of any kind, then There are many other reasons to have a
we can almost guarantee that some sort of website but these are the most common.
internet presence will benefit you. It may be a 3.3 Direct selling
full-blown website, it may be a lower-cost
alternative, it may be a simple listing in a There are many terms thrown around in home
directory. In any case it makes sense to business, several of which frequently get
explore the options. confused or used interchangeably with others.
What if I Don't Use the Internet? One such term is Direct Selling.
It doesn't matter. You don't necessarily need Definition of Direct Selling
to use the internet to have an internet
presence, just as you don't need to read the Direct selling refers to selling products
phone book to be listed in it. Just remember directly to the consumer in a non-retail
that most other people do use the internet -- environment. Instead, sales occur at home,
more and more use it as their main source of work, or other non-store location. This
information. If you're not there, you're slowly system often eliminates several of the
becoming invisible. middlemen involved in product distribution,
Do I Need E-mail? such as the regional distribution center and
Do you need a postal address or a telephone? wholesaler. Instead, products go from
If not then maybe you don't need an email manufacturer to the direct sales company, to
address. Otherwise you certainly should be the distributor or rep, and to the consumer.
considering it. Even if you've never needed
The products sold through direct sales are
an email address you may be surprised at how
usually not found in typical retail locations,
useful it can be.
which means finding a distributor or rep is
Do I Need A Website?
the only method to buy the products or
This is a more difficult question and you
services.
should probably to talk to someone with
experience if you want the best answer. Direct selling is usually associated with
Generally speaking, you should have a party-plan and/ or network marketing
website if any of these criteria apply to you if companies; however these aren't the only
you like: types of companies that use direct selling.
Many businesses that sell business-2-business
 To provide information about your
(B2B), use direct selling to target and sell to
business/organization to the public.
their end customer. For example, many
companies that sell advertising or office
43
supplies will send their reps directly into the These get-togethers are usually referred to as
stores that can use their services. parties. But, according to the company’s
marketing, they may be called cooking
Don't confuse direct selling with direct shows, workshops, tasting, makeovers, etc.
marketing. Direct selling is when individual It’s very common for these parties to be held
salespeople reach out to consumers directly, at a customer’s home – the host. This host
whereas direct marketing is when a company will be rewarded with discounts or free
markets directly to the consumer. products in exchange for inviting their friends
Types of Direct Selling and acquaintances as guests to the party.
The objective is to present the products in a
There are a variety of ways business owners fun, relaxing environment. And this model
can sell directly to consumers through direct ensures the power of social proof: whenever a
selling. person buys something, it encourages the rest
to do the same.
 Single-level direct sales: This type of
Examples of businesses: Scentsy and Stella &
sales is done one-on-one, such as
Dot.
through door-to-door or by doing in-
person presentations. Sales can be
 Network or multi-level marketing
done online or through catalogs, as
It associates the methods used in both single-
well. Generally income is earned on
level and party-plan sales since the income is
sales commissions, with possible
earned through commissions on the rep’s
bonuses. Usually, the salesperson is
sales as well as on the sales made by the
an independent contractor, who takes
partners they recruited into the business.
the order that will be shipped directly
to the end customer by the company
It’s, thus, a network structure, designed to
they represent. In single-level sales, a
move products among independent reps, both
salesperson earns a commission for
for personal use and sales. So, anyone can
trading products. For instance, an
join the network either to earn money or to
advertising agency’s employee gets a
get a discount on their purchases.
certain commission from the sum of
Companies can grow large and sell good
services they sold.
amounts of products through a wide range of
 Hostess or Party Plan Performed network members, who order the
before a group, the rep or distributor merchandise on a regular basis, for as long as
brings together potential customers in they see value in the partnership and in the
the same place (online or offline) and product. A representative not only sells
make a presentation of their product products but also recruits new salespeople.
or service. Income is based on They get remuneration both for their own
commissions and on the recruitment sales and for sales made by people they have
of other reps. recruited. This approach is popular among
MLM-companies.

44
Examples of businesses: Mary Kay and or services. Transparency in business
Amway. practices is also important, so consumers trust
3.4 Electronic Retailing (E-tailing)? and stay loyal to a company.
Electronic retailing (E-tailing) is the sale of There are many ways companies can earn
goods and services through the internet. E- revenue online. Of course, the first income
tailing can include business-to- source is through the sales of their product to
business (B2B) and business-to- consumers or businesses. Both B2C and B2B
consumer (B2C) sales of products and companies can earn revenue by selling their
services. services through a subscription-based
E-tailing requires companies to tailor model such as Netflix (NFLX), which
their business models to capture internet charges a monthly fee for access to media
sales, which can include building out content.
distribution channels such as warehouses, Revenue can also be earned through online
internet webpages, and product shipping advertising. For example, Meta (FB),
centers. formerly Facebook Inc., earns money
Notably, strong distribution channels are mainly from ads placed on its Facebook
critical to electronic retailing as these are the website by companies looking to sell to the
avenues that move the product to the millions who are "on Facebook," regularly
customer. checking their pages.
How Electronic Retailing (E-tailing) Types of Electronic Retailing (E-tailing)
Works Business-to-Consumer (B2C) E-Tailing
Electronic retailing includes a broad range of Business-to-consumer retailing is the most
companies and industries. However, there are common of all e-commerce companies and
similarities between most e-tailing companies the most familiar to most Internet users. This
that include an engaging website, group of retailers includes companies selling
online marketing strategy, efficient finished goods or products to consumers
distribution of products or services, and online directly through their websites. The
customer data analytics. products could be shipped and delivered from
Successful e-tailing requires strong branding. the company's warehouse or directly from the
Websites must be engaging, easily navigable, manufacturer. One of the primary
and regularly updated to meet consumers' requirements of a successful B2C retailer is
changing demands. Products and services maintaining good customer relations.
need to stand out from competitors' offerings Business-to-Business (B2B) E-tailing
and add value to consumers' lives. Also, a Business-to-business retailing involves
company's offerings must be competitively companies that sell to other companies. Such
priced so that consumers do not favor one retailers include consultants, software
business over another just for price reasons. developers, freelancers, and wholesalers.
E-tailers need distribution networks that are Wholesalers sell their products in bulk from
prompt and efficient. Consumers cannot wait their manufacturing plants to businesses.
for long periods for the delivery of products These businesses, in turn, sell those products

45
to consumers. In other words, a B2B necessary to handle online returns and
company such as a wholesaler might sell customer disputes.
products to a B2C company. Also, e-tailing does not provide the
Advantages and Disadvantages of immersive, emotional experience that
Electronic Retailing (E-tailing) physical stores can offer. E-tailing does not
E-tailing includes more than just e- give the consumer a chance to smell, feel, or
commerce-only companies. More and more try on products before purchasing them—
traditional brick-and-mortar stores are sensory experiences that often result in a
investing in e-tailing. Infrastructure costs are decision to buy; browsing is also more
lower with electronic retailing versus pleasurable in person, and lends to increased
operating brick-and-mortar stores. spending. Personalized customer service and
Companies can move products faster and interaction can also be an advantage to brick-
reach a larger customer base online than with and-mortar stores.
traditional physical locations. E-tailing also Real World Examples of E-Tailing
allows companies to close unprofitable stores Amazon.com (AMZN) is the world's largest
and maintain the profitable ones. online retailer, providing consumer products
Automated sales and checkout cut down on and subscriptions through its website.
the need for staff and sales personnel. Also, Amazon's website shows the company
websites cost less than physical stores to generated more than $280 billion in revenue
open, staff, and maintain. E-tailing reduces in 2019 while posting more than $11.6 billion
advertising and marketing expenses as in profit or net income.1 Other e-tailers that
customers can find the stores through search operate exclusively online and compete with
engines or social media. Data analytics is like Amazon include Overstock.com and JD.com.
gold for e-tailers. Alibaba Group (BABA) is China's largest e-
Consumer shopping behavior can be tracked tailer, which operates an online commerce
to determine spending habits, page views, and business throughout China and
length of engagement with a product, service, internationally. Alibaba has adopted a
or website page. Effective data analytics can business model that not only includes both
decrease lost sales and boost client B2C and B2B commerce, but it also connects
engagement, which can lead to increased Chinese exporters to companies around the
revenue. world looking to buy their products. The
There are disadvantages to running an e- company's rural Taobao program helps rural
tailing operation, though. Creating and consumers and companies in China sell
maintaining an e-tailing website, while less agricultural products to those living in urban
expensive than a traditional retail location, areas. For the fiscal year 2020, Alibaba
can be expensive. Infrastructure costs can be generated nearly $72 billion in annual
substantial if warehouses and distribution revenue while posting just under $19.8 billion
centers need to be built to store and ship the in profit
products. Also, adequate resources are
3.5 Online marketplace

46
Definition Vertical online marketplaces sell multiple
An online marketplace is a type of products from multiple sellers. But these
ecommerce store where products are listed products all fall under the same
and sold by a selection of third-party vendors. category/type. An example may be an online
Examples of online marketplaces include marketplace for clothing or an online
Amazon, eBay, and Etsy. marketplace for cars.

Online marketplace characteristics Horizontal online marketplaces


Most online marketplaces share common Horizontal online marketplaces sell products
characteristics that distinguish them from from multiple different categories. However,
other ecommerce shops. These characteristics these products are all linked by another
include: common factor. Take Etsy for example. Etsy
 Products from many different third- sells many different types of products, but
party sellers they’re all handmade.
 Easily accessible product reviews
from other users Global online marketplaces
 User accounts with a variety of By contrast, global online marketplaces sell
features, and often social functionality an almost unlimited selection of products.
These features generally make the shopping They don’t limit the selection of products by
experience more interactive. They also help category or product type. As a result, they
instill trust that the customer will get what tend to be much bigger, with a higher volume
they're paying for, which can sometimes be a of shoppers/users. Sites like eBay and
concern with online marketplaces. This is Amazon are prime examples of global online
because buying from third-parties is riskier marketplaces.
and less reliable when it comes to product
quality and customer service. Benefits of online marketplaces for sellers
The online marketplace format has risen to
Types of online marketplace popularity because it offers a variety of
Generally, you can split online marketplaces benefits to sellers and shoppers alike. Firstly,
into three different models - vertical, online marketplaces allow sellers to reach a
horizontal, and global online marketplaces. large potential customer base without having
They can be distinguished from one another to spend lots of money to set up their own
in the following ways: online sales infrastructure. They do have to
pay a fee for selling on the online
Vertical online marketplaces marketplace, but that’s more than offset by
increased sales.
Secondly, it’s a lot easier to sell via an online
marketplace. After a simple application and
verification process, sellers can sell their
goods and services via the existing platform

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infrastructure. Listing products and changing product. Online marketplaces are often able
pricing is all managed by an easy-to-use to offer products at cheaper prices.
seller account/backend software. Meanwhile, customers also benefit from
various buyer protections that ensure they get
Benefits of online marketplaces for buyers what they pay for. And, they often benefit
Shoppers, on the other hand, get a huge from more efficient logistical infrastructure,
selection of products on one, easy-to-use which provides quicker, cheaper delivery
platform. It’s much easier to find what
they’re looking for, even if it’s a specialist

Chapter 4
Internet marketing Objectives and Strategies
Most business owners and managers have heard about the marketing mix or the 4Ps of marketing.
What to focus on is how the 7Ps integrate with digital marketing strategies. Specifically, what is
the digital marketing mix?
Also known as the 7Ps of marketing, this concept was coined in the 1960s and has been a go-to
model for marketing strategies. But, times have changed. With the arrival of the Internet and
smartphones the concepts of product, price, place, promotion, people, process and physical
evidence also need to change.
The Digital Marketing Mix
The seven P’s of the digital marketing mix are:
Product
The online world offers a host of new opportunities and prompts these product-related questions:
What benefits do you deliver to your customers? Can they be delivered online? What other benefits
might your customers like? Can these benefits be delivered online? What is your business? Can it
be delivered online?
Digital Products
A midst the ‘e’ explosion, Ghosh (1998) suggested that companies should consider how to modify
product and add digital value. These are two huge questions that, even today, can reshape your
whole business.
Digital value
Developing new products or adding digital value to customers. Companies should ask:
1. Can I afford additional information or transaction services for my existing customer base?
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2. Can I address the needs of new customer segments by repackaging my current information
assets or by creating new business propositions using the Internet?
3. Can I use my ability to attract customers to generate new sources of revenue such as
advertising or sales of complementary products?
4. Will my current business be significantly harmed by other companies providing some of the
value I currently offer?
Analyze each feature of your product or service and ask how can each of these features be
improved or adapted online. These changes can be substantial – one such example an oil drilling
tool company, which discovered that it, had much more lucrative online oil drilling advisory
service.
It’s not just digitizable products and digitizable services that extend themselves into the online
world, but any products from any business. The product or customer experience is increasingly
important online, as there is a school of thought that suggests that all products eventually become
services.
Products are consumed (and created) differently – many customers want to interact with the brand
and with other customers in new-found communities of kindred spirits who want to share
information, ideas, problems, challenges and solutions, and maybe even friendship.
Perhaps the online need for communities is a reflection of the offline breakdown of communities.
Some companies set their production processes according to UGC (user-generated content).
Online Value Proposition
The online value proposition (previously called Internet value proposition) can be different to the
offline proposition. Ideally, the proposition should exploit some of the unique advantages of being
online which include: immediacy, interactivity and depth of content, faster, more convenient, easier
as well as cheaper to buy online, better experience online, new experiences online, more resources
or information online.

1. Price
Companies which can offer digital products such as written content, music or videos now have
more flexibility to offer a range of purchase options at different price points, including:
 Subscription. This is a traditional publisher revenue model, but subscription can potentially
be offered for different periods at different price points; e.g. 3 months, 12 months or 2
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years.
 Pay Per View. A fee for a single download or viewing session at a higher relative price than
the subscription service. Music service Napster offers vouchers for download in a similar
way to a mobile phone company ‘Pay As You Go’ model.
 Bundling. Different channels or content can be grouped at a reduced price compared to Pay
per View.
 Ad-supported content. There is no direct price set here; instead, the publisher’s main
revenue source is through adverts on the site (either CPM display advertising on-site using
banner ads and skyscrapers; or CPC which stands for ‘Cost Per Click’, more typical of
search ad networks). Other options include affiliate revenue from sales on third-party sites
or offering access to subscriber lists.
Prices are complex; options for the price package include: Basic price, Discounts, Add-ons and
extra products and services, Guarantees and warranties, Refund policies, Order cancellation terms,
Revoke action buttons.

Online Pricing Comparison

Another factor to consider is online pricing. Consumers are able to price check and compare offers.
Consumers are able to gather more information to determine the value of a product and if it is
worth the sacrifice. It’s not always practical to show your prices online, especially if there are
many variables that could affect the final sales number. Some prices are custom, based on the
unique needs of each consumer. Just be aware that consumers are looking for ways to measure
value online and the price is a quick signal to identify that. If users are researching prices, your
business should highlight that value as quickly as possible. Are your competitors showing prices?
What is your Online Value Proposition (OVP)?

With ecommerce websites and online suppliers, overhead costs (e.g. cost of a physical location) are
reduced. This, in turn, can lower product prices, attracting potential consumers and allowing for
your business to be more competitive. Example: Custom Real-Time Pricing Update

Websites can create custom pricing options for the specific segments that they are marketing to.
For instance, each state has different tax rules, which affect the total price. Suppliers can now

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adjust prices in real-time to best cater to the users in certain locations.

2. Place
Place refers to where the consumer is able to access your products or service. It is about putting the
right product in the right place? Traditionally, this includes newspapers or retail stores. With digital
marketing, there are many more channels available to meet the user’s specific needs. This makes
the placement of products challenging because there are more options for consumer experience.
Online business has added more complexities to the ‘places’ in the marketing mix. Which
distribution channel is most likely to convert into a lead or sale?
Places and Relationships

Platforms such as social media, online forms, emails, etc. have added relationship factors, changing
how modern business is conducted. For example, the ability to:

 Respond instantly to users asking questions on Facebook


 Add insightful recommendations via Quora
 Respond to negative reviews on Yelp

Businesses can interact right were the user is being most influenced, harnessing the power of
relationship-building based on where their clientele is active.

Places and Accessibility

The Internet and smartphones allow the consumer to have a 24/7 marketplace right in their hand,
accessible at any time. It is critical that businesses not just to be online, but also be easily found
online, by the right audience.
Examples of Online Places Include:
 Online marketplaces; amazon, eBay, flip kart
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 Websites displaying interactive ads
 Search engines highlighting shopping ads
 Google search results
 Emails
 Social channels such as Facebook, Instagram, or Pinterest
With so many digital avenues available to reach users, businesses can tailor the experience. This
can be based on behavior, convenience, demographics, etc.

Making your products accessible to the users at a time and place that is most convenient to them
will give you a competitive advantage. How certain are you that you are putting the right product in
the right place?

Integrated Marketing Approach is best


Businesses need to ensure that they don’t put all their eggs in one basket. In other words, don’t just
use one digital marketing channel to distribute your products. If that channel fails, then the whole
campaign fails. Make sure to include a diverse number of channels to reach a larger audience and
learn more about user interactions. It is best to create an integrated marketing approach.
3. Promotion
For many businesses, a lot of time and effort is put into the promotion element of the digital
marketing mix. However, this is only one-quarter of the picture. Promotion does not equal
marketing. Businesses need to integrate their marketing approach and include all four basic
elements. This is how your business can grow its market share.
Jim Blyth explains promotion as “the marketing communications used to make the offer known to
potential customers and persuade them to investigate it further.” In short, it is the medium that is
used to directly communicate/engage with the user. This includes Google My Business listings,
sponsored ads, Instagram posts, email newsletters, and much more.

Technology and Communication

Thanks to modern technology, businesses have more channels than ever to communicate through.
Business can segment their audiences according to a mobile device, browsers, operating systems,
and more. This allows the business to tailor their message to a specific user and communicate how

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the product will satisfy their needs. In short, digital marketing channels are allowing for
personalized marketing.

Which Channels to Use


When deciding on communication channels businesses need to make sure that it is the correct fit.
The communication platform needs to be appropriate to the product and consumer.

Major Online promotion Channels:


 Search Engines
o Organic search results (e.g. Google and Bing)
o Paid/sponsored listings (e.g. Google and Bing)
 Display Ads
o Banner Ads
o Interactive Ads
 Social Media (posts and Ads)
o Facebook
o Instagram
o Twitter
o Pinterest
 Digital word-of-mouth
o Forums (e.g. Reddit)
o Wikis
o Influencers (e.g. bloggers)
o Business listing (e.g. Yelp)

a. Email Marketing: You can send newsletters, information, offers, seasonal promotions and
invitations to your customers through email. Ensure the emails are opened and read by your
customers through Email Marketing Services. Send responsive emails to customers, which
increase the chances of engagements. Boost opening rates by using actionable subject lines and
attract clicks on links to landing pages through compelling content.
b. Content Marketing: The lifeline of Digital Marketing is high-quality content. It provides your
customers with relevant information and establishes the value of your business. Create 100%
original content which is optimized to ensure higher ranking on search engines. In addition to
boosting your website’s ranking the keyword rich content drives more quality traffic to the
website. Deliver informative content that adds value to your website and helps in building a
strong brand image of your business.
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c. Graphic Designing & Visual Content: There has been a rapid increase in consumption rates
of video content and high definition images. The change in customer buying behavior needs
you to put up informative pictures, graphics and videos about your products and services on
your website and social media platforms. Graphic designers who create info graphics and video
content such as product demonstrations, reviews and tutorials for your business. Customized
and high definition visual content increases interest of potential buyers leading to higher
conversion rates.
d. Search Engine Optimization (SEO): Visibility is the key to establishing your brand and
generating revenue through your website. SEO to improve the visibility of your website.
Optimizing your website by using relevant keywords, SEO is tagging and internal link building.
An optimized website gives your business competitive advantage over others in your industry.
It improves your website’s ranking building customer’s trust in your brand.
e. Social Media Optimization (SMO): Increase in the number of mobile phone and smart
gadgets users has increased the popularity of social media platforms. People hangout on these
platforms and you can use them to increase the awareness about your business. Social Media
Managers work on your RSS feeds, social media sites, video and blogging sites to create viral
publicity.
5. People
People as marketing decision in online marketing mix is crucial. Great products and businesses
require people that are involved in the online distribution and personnel who are in direct contact
with customers. To accurately answer the question of people in your marketing mix is to measure
and evaluate the interactions between a business and its customers and the interactions between
personnel and customers. In the end, it’s the people involved in the company that represents the
values of a brand.
How we do, customer service is vital in an online setting when interactions are not physical.
Designing better customer support systems where your customers and your employees can interact
with each other seamlessly and scalably, enables us to produce a more consistent experience for
both.
There are many options and combinations of online support you can introduce into your business
workflow. For example, at the most basic, you can integrate social media as a channel for customer
support or utilize online reviews (like Google My Business) as well.

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Depending on the place in your marketing mix, you need to get the most appropriate way of
support that functions effectively in that place. For example, an online store or online consulting
firm can use chat software to connect support personnel with customers directly on the website.
How we plan our responses and our strategy of keeping our customers happy at all times is a
critical marketing decision that, when unanswered will seriously harm any business when they
reach a critical mass.

6. Process
The process as a marketing decision in the online marketing mix defines the needed procedures and
its optimization of delivering online products and the core experiences of it. What task are
necessary for a product to provide its core experience for its users.
Process optimization relies on collected data and measuring the data with key performance
indicators (KPIs) in mind. To have an optimized process, a constant need for tracking the success
of your operations in your marketing mix is essential.
The better the process we have in place, the more ready we are at scale, and documenting every
step we take, increases our chances of understanding the health of a business through the online
marketing perspective.
Tracking processes and the performance of the overall system enables us to find critical errors at
best before they happen or, at the very least, finding them very early before any significant failures
have occurred.
Contextualizing online marketing processes in everything we do in our strategies helps us
understand the core principles that make our approach viable at any given time.
7. Physical Evidence (Online Evidence)
In the extended marketing mix, physical evidence refers to the different elements of service
experience, such as facilities, interior designs, livery, and post-purchase artifacts (souvenirs).
In an online setting, these pieces of evidence will not have a physical element to them. However,
the digitalization of this physical evidence is still possible, and an important marketing decision to
have.
Online brand awareness across multiple channels is an excellent example of online evidence. How
well these channels expand service experiences, for instance, through the number of followers,
likes, and other social engagement metrics.

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A website’s design is essential online evidence as, in most cases, it’s the most important channel
for an online business. The elements of your website’s design crucially impact the non-human
service experiences your customers will face when interacting with your online business.
A controlled and complete multi-channel online experience enables us to enhance our online
evidence in a way that improves our marketing decisions significantly.

ONLINE BRANDING
Definition- Online branding is defined as a brand management technique that uses online channels
as a powerful medium to position a brand in the target market. You may also understand it as
internet branding or online marketing.

It can also be understood as a digital-centric method for developing brand presence and
conversions. As the online platform is advancing, internet marketing channels have become
the opportunity for expanding the identity online. It uses search or social platforms to grow
businesses. No matter what is the specialization of the business, the internet can prove to be
beneficial for every niche. Most of the companies have now chosen to expand their brands by
making an identity online. Key uses of building an internet branding campaign are-

 Creating and Sharing a Brand story


 Identifying the target customer base
 Optimizing Brand awareness
 Building a dialogue with target audiences
 Creating and sharing the Value proposition of the brand
 Widening reach, boosting lead generations, and driving sales
RACE Framework of an Online Brand

For branding a business on the web, a RACE Framework is used that revolves around four stages
to connect and convert target audiences. The 4 stages of the RACE framework of internet branding
are-
 R- Reach
 A- Act
 C- Convert
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 E- Engage
It is useful in planning, managing, and optimizing online marketing practices.

Key Factors of Online Branding

1. Customer – The branding on the web starts with the customer. Your customers’
inclinations, age, gender, availability, etc are crucial for designing an effective
branding strategy

2. Brand identity – Branding is also associated with the kind of identity a brand has.
Accordingly, different visual elements of branding like logo, taglines, etc play a crucial role
in sharing the brand voice with the target audience. It is useful in creating curiosity,
interest, affinity, and relations with prospects.
3. Competitors – Analysis of the competitors is essential for designing an effective brand
strategy on the web. It guides about the relevant channels, strategies, and practices, plus it
suggests better ways to stand out from the competition.
4. Online Messaging – How a brand shares its messages with its customers is very important
in branding campaigns online. Messaging should support brand vision, product, service,
and customer value.
5. Location – Deciding where your business should be based, analyzing where audiences live,
the kinds of language they speak, sorts of location-specific details are the deciding factors
of branding campaigns.
6. People – The way people or employees working for a brand understand and deliver
the brand promises is crucial for ensuring success for a brand. Therefore brands should be
educating, training, monitoring, and recruiting the right people in the organization.
7. Product or Service – The kind of product or service that a brand offers is also central to
the effectiveness of the branding campaigns. How a product or service is adding value to
the lives of consumers is integral in optimizing the branding on the web.

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Steps for Online Branding

Letting the target audiences be aware of the brand can be a discreet strategy for brands to capture.
When everyone is trying to make their presence felt online in a result 0-driven manner, it becomes
a difficult job to catch them. Social networks can be a great way to reach out to the audience, but
blogs can be the best way to go in case of building credibility. Here are few tips noted down that
every business should follow to make their internet branding even better-

1. Unique blog design

The first step should be to make the businesses online hit the right spot of their audiences and stand
out in the crowd. A perfect blog relating to the niche and providing solutions to the audience can do
the magic to allow people to notice any business.

The blog should be unique enough not only in the content but also in the case of the website’s
visual design. The visual design must be attractive enough to hold the public to go further for
reading the blog content. This ability would allow the blogs to stand out.

The blog isn’t expected to be overly fancy for the audience to avoid the brand’s values. The logo of
any brand should be perfectly blended with the texts and colors that the audience can connect with.
A simple logo can also do the magic the brands are expecting. It helps in imprinting the brand and
its values in people’s minds.

2. Create a tagline

After the logo is created, it does create the necessary impact, but accompanying it with a tagline
can make magic happen. These phrases can let the target audience quickly understand the brand’s
message, which they are trying to express.

The tagline should be simplified rather than creating a twisted one. It should be kept simple so that
the audience can easily understand what the brands are trying to express.

3. Create an “About me” page

After the audience reaches out to the blog, if impressed, they land up to knowing the brand. The
about us page can allow the audience to know about the brand deeply. This is the place where the

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brands can talk about themselves to convert their leads to full-fledged customers.

This platform should be more about the audience rather than explaining the positive points of the
brand. The brands should express how their brand is best for solving customer issues, which turns
out to be a give-and-take situation.

The brands must make sure to convert these visitors into someone who at least subscribed to the
brand’s email. Later on, the brands can then quickly go for pitching these customers through email.

4. Add Social media

Online branding is about making the brand’s identity online on every platform. There can be
instances that the target audiences of these businesses have found them through search platforms
rather than the social media one. So, the brand must let these customers reach out to their social
media pages as well.

So, adding the links of social platform handles wherever the businesses are available should be
mentioned. It should be made sure that the brands add link of these handles just in case the
audience have to reach out to the business this can be the most accessible medium.

5. Publish online videos

Everyone is aware that video is the king when it comes to building credibility and attracting an
audience. Whether talking about experts like Chris Ducker or Neil Patel, they add videos on their
blog pages.

The blogs can be a step to win people’s hearts, while videos can be used to hold them and convert
them into loyal customers. The blogs can include links to the videos of YouTube or any social
media platform. This will eventually also increase the reach of the brands’ YouTube or social
media platforms reach.

6. Creating convincing content

All the benefits of the content can only be availed when the content seems pleasing and convincing
to the audience. So, the importance of the blog needs to be carefully expressed by the audience and
seem clear to them for opting for the audience.

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The brands must help the audience tackle their issues by providing them real-life solutions. This
will let the audience create a positive mindset of the audience for the brand and its services or
products.

7. Gifts

If possible, the brands should opt for providing their customers few gifts in the beginning. Though
the businesses must check their budget and then accordingly go for deciding the benefits they can
provide to the people.

Online communities

An online community is a group of people who interact online around a shared interest, challenge,
or goal. People with a shared sense of belonging use these spaces to share knowledge, learn, build
networks, or simply discuss their interests without meeting face-to-face. These communities have
their own rules and norms that vary depending on their use. They can form organically, but they are
often started by individuals or brands who want to encourage virtual interaction around a particular
topic.

Branded online communities can be a powerful way to increase product awareness, create deeper
relationships with customers, and build authority in your industry.

Most communities have these features

Online communities have many tools and features to connect people, but given below is a list of
commonly found features:

 Posting lets people ask questions and start discussions.


 Threads let people comment on these discussions.
 Points systems let people reward high-quality content.
 Groups within a community let people discuss subtopics.
 Users can interact through messaging or tagging.
 Members can share multimedia posts, not just text.
 Notifications alert members to new content.

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This set of features drives discussion and engagement, ensuring members get maximum value from
their time.

Types of online community


At Tribe, we help many brands create different types of online communities. Here are the four
kinds we see most often.
A. Community of practice
A Community of Practice (CoP) is a space for people with a shared interest—usually a profession
—to gather. These are excellent spaces to learn and share knowledge and best practices about a
particular industry. These communities are also a great way to build networks.
The MO Pros community for marketing operations professionals is a great example of this type of
community. It is an exclusive community that encourages discussion, Q&A’s, and collaboration
around marketing operations-related challenges.
B. Support community
Support communities (or customer communities) are built around particular products or pieces of
software. Users share tips and tactics about how to get the most from these products.
In many cases, the brand behind the company will also offer support to community users.
There are several benefits to running a support community over other forms of customer support.
 You create a library of support tickets that people can use as a self-service reference to
overcome challenges. One answer can help multiple customers.
 Other users may answer questions. This takes the strain away from your support agents.
You can serve more customers without increasing the size of your team.
 Businesses can collect feedback and suggestions from customers directly from the
community. And leverage the community as a channel to share progress and updates.
 Community posts will be indexed by search engines like Google. This increases the
visibility of your community. People searching for relevant queries may see the community
and join it.
Convert Kit has a great support community. It aims to help creators who use the platform get the
most out of the software. Convert Kit encourages this by sharing resources and providing support
to members, thus improving the customer experience.

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C. Internal communities
Internal communities are those used inside an organization to help people connect and work
together.
These communities are perhaps the simplest to grow and run.
You already have a membership base—the people in your community. The key to ensuring people
use it is identifying organizational challenges and building the community around these goals.
IBM did this through its CSR Influencers Network—a group of IBM employees committed to
making a social impact. The organization already had social impact initiatives, but it knew these
leaders would benefit from a space to organize and discuss their activities.
The active community now does a great job of encouraging and motivating participation in these
programs.
D. Social community
Not all virtual communities form around professional needs. Many are built around interests,
hobbies, or social groups.
Members of these communities benefit by being able to connect with people with similar interests.
While brands gain significant awareness among a passionate community and create loyal brand
advocates.
The Love Wellness community is a good example. It’s a space where women can discuss their
passion for wellness. It enables them to learn from others, share their stories, and get expert advice
around topics such as nutrition, pregnancy, and self-care.

CHAPTER 5
MOBILE ELECTRONIC COMMERCE
5.1 Wireless industry
The wireless industry is a collection of businesses involved in the development and use of various
electronic devices that can receive and send information wirelessly. While it once primarily
included those companies that produced the hardware and software for mobile phones, it has
expanded to the use of tablets and similar devices. This does not typically include other wireless
devices, such as wireless routers, which require a physical connection and then transmit a wireless
signal to other devices. The wireless industry includes hardware manufacturers of devices, which

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employ engineers and software designers, as well as companies that produce software applications
for such devices.
Much like the entertainment industry, the wireless industry does not necessarily refer to a set
number of companies with any established business model, but to a group of businesses that
produce wireless technology. Mobile telephones primarily led the way in this industry, especially
with the development of smart phones that utilized 3G specifications and the increased
functionality that those devices provided for users. As the wireless industry has grown, however, it
has come to include developers of other devices such as wireless tablets, which combine numerous
functions to act as a hybrid between a smart phone and a laptop computer.

As the functionality offered by wireless devices has developed and become more sophisticated,
more and more software companies have joined the wireless industry. While firmware may be the
backbone of many wireless devices, numerous software applications have been introduced and
become a standard function for many devices. These applications can be anything from games and
calendars that can be downloaded to a device to real time maps and driving directions, lists of
restaurants in a certain area with reviews and menus listed, and software used to follow popular
websites and entertainment outlets. As technology continues to grow and evolve, new businesses
and features may become part of the wireless industry as well such as video game developers and
the music industry.

5.2 Types of Wireless Communication Systems/platforms


Today, people need Mobile Phones for many things like talking, internet, multimedia etc. All these
services must be made available to the user on the go i.e. while the user is mobile. With the help of
these wireless communication services, we can transfer voice, data, videos, images etc.
Wireless Communication Systems also provide different services like video conferencing, cellular
telephone, paging, TV, Radio etc. Due to the need for variety of communication services, different
types of Wireless Communication Systems are developed. Some of the important Wireless
Communication Systems available today are:
 Television and Radio Broadcasting  Satellite Communication

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 Radar  Bluetooth
 Mobile Telephone System (Cellular  Paging
Communication)  Cordless Phones
 Global Positioning System (GPS)  Radio Frequency Identification
 Infrared Communication (RFID)
 WLAN (Wi-Fi)
There is much other system with each being useful for different applications. Wireless
Communication systems can be again classified as Simplex, Half Duplex and Full Duplex. Simplex
communication is one way communication. An example is Radio broadcast system.
Half Duplex is two way communications but not simultaneous one. An example is walkie – talkie
(civilian band radio). Full Duplex is also two way communication and it is a simultaneous one.
Best example for full duplex is mobile phones.
The devices used for Wireless Communication may vary from one service to other and they may
have different size, shape, data throughput and cost. The area covered by a Wireless
Communication system is also an important factor. The wireless networks may be limited to a
building, an office campus, a city, a small regional area (greater than a city) or might have global
coverage.
We will see a brief note about some of the important Wireless Communication Systems.
Television and Radio Broadcasting
Radio is considered to be the first wireless service to be broadcast. It is an example of a Simplex
Communication System where the information is transmitted only in one direction and all the users
receiving the same data.
Satellite Communication
Satellite Communication System is an important type of Wireless Communication. Satellite
Communication Networks provide worldwide coverage independent to population density.
Satellite Communication Systems offer telecommunication (Satellite Phones), positioning and
navigation (GPS), broadcasting, internet, etc. Other wireless services like mobile, television
broadcasting and other radio systems are dependent of Satellite Communication Systems.
Mobile Telephone Communication System
Perhaps, the most commonly used wireless communication system is the Mobile Phone
Technology. The development of mobile cellular device changed the World like no other

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technology. Today’s mobile phones are not limited to just making calls but are integrated with
numerous other features like Bluetooth, Wi-Fi, GPS, and FM Radio.
The latest generation of Mobile Communication Technology is 5G (which is indeed successor to
the widely adapted 4G). Apart from increased data transfer rates (technologists claim data rates in
the order of Gbps), 5G Networks are also aimed at Internet of Things (IoT) related applications and
future automobiles.
Global Positioning System (GPS)
GPS is solely a subcategory of satellite communication. GPS provides different wireless services
like navigation, positioning, location, speed etc. with the help of dedicated GPS receivers and
satellites.
Bluetooth
Bluetooth is another important low range wireless communication system. It provides data, voice
and audio transmission with a transmission range of 10 meters. Almost all mobile phones, tablets
and laptops are equipped with Bluetooth devices. They can be connected to wireless Bluetooth
receivers, audio equipment, cameras etc.
Paging
Although it is considered an obsolete technology, paging was a major success before the wide
spread use of mobile phones. Paging provides information in the form of messages and it is a
simplex system i.e. the user can only receive the messages.

Wireless Local Area Network (WLAN)


Wireless Local Area Network or WLAN (Wi-Fi) is an internet related wireless service. Using
WLAN, different devices like laptops and mobile phones can connect to an access point (like a Wi-
Fi Router) and access internet.
Wi-Fi is one of the widely used wireless network, usually for internet access (but sometimes for
data transfer within the Local Area Network). It is very difficult to imagine the modern World
without Wi-Fi.
Infrared Communication

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Infrared Communication is another commonly used wireless communication in our daily lives. It
uses the infrared waves of the Electromagnetic (EM) spectrum. Infrared (IR) Communication is
used in remote controls of Televisions, cars, audio equipment etc.
5.3 Facilitators of wireless environment
In order to facilitate a mobile e-commerce environment, participation of several partners is
required, namely:
o Independent hardware vendors (IHVs) o Service providers (SPs)
o Independent software vendors (ISVs) o Wireless operators (or carriers)[1]
o Mobile device manufacturers
Connecting all these participants together to create a viable solution are systems integrators with
focused practices in mobile e-commerce implementation.

5.4 What Does Mobile Enterprise Mean?


Mobile enterprise is a broad term that refers to the business practice of using mobile platforms to
get core operations done. Nearly any kind of task or process that is accomplished on a mobile
device, over a mobile platform, constitutes mobile enterprise.
Mobile enterprise involves many different things, but the key feature is the use of a mobile device
such as a smartphone or a tablet in performing office tasks.
Mobile enterprise has exploded in the business world, along with the quick adoption of mobile
devices in the last 10 years. There is even a trend called "bring your own device" (BYOD), where
companies encourage employees to use their personal mobile devices for business. Businesses have
also started to migrate security to mobile platforms, as well as data handling and processes in other
ways, such that mobile enterprise is now a central part of operations for a large portion of
companies across the board.
Some IT professionals question the boundaries of mobile enterprise, especially that mobile point-
of-sale (POS) solutions have become common, too. There is an issue whether mobile POS is part
of mobile enterprise or whether it is its own category of mobile platform use.

What is Mobile Commerce?


Mobile commerce, also called m-commerce, includes any monetary transaction completed using a
mobile device, such as a cell phone or tablet.

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It is an advancement of ecommerce, enabling people to buy and sell goods or services from almost
anywhere, simply using a mobile phone or tablet device.
But mobile commerce is more than just a simple evolution of electronic commerce.
It has also served as a trigger for new industries and services or helped existing ones grow,
including:
 Mobile money transfers.  Contactless payments and in-app
 Electronic ticketing and boarding payments.
passes.  Location-based services.
 Digital content purchases and  Mobile marketing, coupons and
delivery. loyalty cards.
 Mobile banking.

Types of Mobile Commerce


While m-commerce covers a wide variety of transactions, they can all be categorized as one of
three types:
1. Mobile shopping.
This is mostly similar to ecommerce but accessible via your iPhone or Android. Mobile shopping
is now possible through mobile optimized websites, dedicated shopping apps and even social
media platforms.
Mobile shopping in Ethiopia

Deliver Addis

Deliver Addis is a premier food delivery service startup in Ethiopia also now delivers Drinks,
Flowers and as well groceries. Deliver Addis works with more than 70 restaurants in Addis Abeba.
At Delivery Addis you can order online and pay either in cash on delivery or use mobile Banking
payment options available which include CBE, Nib, Zemen, and Amole. Delivery price ranges
from 50 to 90 ET based on kilometer. ( This pricing is a discounted one because of COVID19 ).
Deliver Addis is available on Web, Play Store, and App Store.

Zmall

Zmall is a product for ETTA ( which also provides Ride-hailing and Music Streaming services)
and is one of the fast-growing eCommerce platform. Zmall delivers food from various restaurant,
groceries from major supermarkets and as well Beverages, Flowers and beauty supplies. Zmall
accept Amole and cash on delivery and it’s available on web, play store and App store. Delivery
price starts usually from 50 ETB( 0-3 km ) and additional 10 ETB per km.
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Asebeza

Asbeza Delivery is an Online Grocery Shopping and Delivery Service with all categories ranging
from fruits, vegetables and groceries. Asebeza accept cash on Delivery as well as Paypal and they
are available on Web, Play Store and App Store. Up to 1,000 Birr orders for the next day delivery,
the delivery price is 96birr. And for the same-day delivery, the delivery price is 160 Birr. The
delivery fee increases as your order quantity increases.

HellooMarket

Helloomarket is a product of Belcash ( the company behind Hellocash and other hello services ). It
is a market place for various products that range from apparel & accessories to tools & hardware.
HelloMarket claims to deliver all over Ethiopia. It’s available on the Web and on phone( 8420).
You can pay via a HelloCash as well us by cash.

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Addis Mercato

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Addis Mercato is a end-to-end e-commerce and logistics company that offers a wide range of high-
quality products – from grocery shopping, electronics, men’s and women’s clothing, Ethiopian arts
and crafts to high end indoor and outdoor furniture and appliances. Addis Mercato is available on
the Web. You can pay via CBE Birr, Mpesa, PayPal, Visa/MasterCard.

Mercato Online

Mercato Online is a marketplace for a variety of products from Apparels to Electronics. Mercato
Online delivers within a 5km radius of the sellers. It’s can be found on the Web, play store as well
as on the phone.

DHL Africa e-shop

After DHL launched an e-commerce platform called DHL Africa eShop for global retailers to sell
goods to Africa’s consumers markets, it also included Ethiopia as one the markets it is serving.
DHL Africa e-Shop allows you to shop from 200 U.S. and U.K. retailers from Amazon to Macy’s.
Your product is delivered through DHL Express in 5 – 14 days in Ethiopia. The only available
payment option now is only international cards ( Visa, MasterCard ) and Paypal.

Fetan Mart

Fetan Mart is a fairly new e-commerce platform with a unique model. Fetan manages the whole
process from Inventory to online order and delivery which is free.

Fetan has it’s own warehouse, delivery van, motorcycles and it is targeting to sell a single item
over and over again to the specific niche market. Fetan currently is providing a Home appliances
targeting the medium-income households.

Brundo

Brundo is an E-commerce platform that serves as a mediator between buyers and sellers. Brundo
claims to handle delivery all over Ethiopia and accept CBE Birr and helloCash through Yenepay,
as well as Amole and EnquPay. For international payment it accepts PayPal with Visa and
MasterCard. It has an in house wallet system for instant payments and gift transfers.

Brundo also provides a virtual online store that is customizable to sellers wishing to sell their
products online. It also provides online charity fund collection systems, an online ticket selling
platform with check-in tracking services.

Deamat

Deamat is an online shopping platform for agricultural products. Deamat connect small holders
farmers with end consumers. Launched from Mekelle and now operates in Addis Abeba as well.

Deamat offers vegetables, fruits, herbs, meat and etc. Delivery price in Mekell is 30 ETB but being
offered for free as of the moment while in Addis it ranges from 130 to 190 ETB based on the
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distance. Deamat accepts cash on delivery, Amole, M-birr and Hello Cash an the platform in
Available on Web and Phone.

Utopia

Utopia is an eCommerce platform that delivers food and drink, health and beauty, household and
baby care products across Addis Abeba.

Utopia accepts Cash on delivery and is available on Web and Phone call. Delivery is free for all
orders above 1000 ETB. If not, delivery fee is 100 ETB for delivery between 2- 4 hours while
delivery in 24 hours will reduce it to 50 ETB.

Qefira

Qefira is a major online marketplace where you can find diversified products and as well services
providded by may sellers around the country. Youc can find properties, Vehicles, Home tools, baby
products, and apartments to rent even.

Sheger.Net

A sister platform of the well know platforms like ,Mekina.net ( Number one Car selling abd buying
platform in Ethiopia ) and Betoch ( Property buying and selling ), Sheger.net is a marketplace for
Electronics, Households, Clothing. It’s available on the Web.

FloMart ( Flobiller )

Flobiller know for being a primarily a bill payment platform is providing eCommerce service in its
app. Flomart is ( Flobiller ) is now provides a food delivery as well us online shopping for various
good and services. It is currently available on PlayStore. You can also pay via International Car
and CBE Birr.

2. Mobile banking.

Mobile banking isn’t too different from online banking; however you may find some transaction
types are limited or restricted on mobile devices. Mobile banking usually involves a dedicated app,
though some banks have started experimenting with the use of chat bots and messaging apps.
Mobile banking service includes:

 Account information access

 Transactions

 Investments

 Support services
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 Content and news

3. Mobile payments.
There are so many diverse mobile payment options that we have. CBE-Birr, Hello Cash, H-Birr
and M-BIRR, tele birr

How Mobile Commerce Works?


With most m-commerce enabled platforms, the mobile device is connected to a wireless network
that can be used to make online product purchases. For those in charge of developing an M-
commerce application, important key performance information (KPI’s) to monitor include the total
mobile traffic, the total amount of traffic on the application, average order value, and the value of
orders over time.
Similarly, tracking the mobile add to cart rate will help developers examine, if visitors are
becoming customers. M-commerce developers may also be interested in logging average page
loading times, mobile cart conversion rates and SMS subscriptions.
In terms of mobile payment products, they operate through a form of peer-to-peer (P2P) sharing.
Once a mobile device is paired with a bank card’s information, the pho
ne can be waved over a payment terminal to pay for a product. This contact less payment via a
mobile device is feasible due to the use of Near Field Communication (NFC).

Applications of Mobile Commerce


Mobile commerce has entered into all spheres of our daily lives like- finance, retail,
telecommunication, healthcare, information technology, sales and services. Need for M-commerce
has increased multi-fold in recent times because of the ease of functioning and accessibility they
offer.
Some of the applications of mobile commerce are-
M-Commerce for finance M-commerce for mobile entertainment
M-Commerce for Retail and after sale M-commerce for hotel reservations
Services M-commerce for Healthcare & Medicine
M-commerce & Mobile ticketing M-commerce for Information
M-commerce & Mobile marketing M-commerce for Gaming
M-commerce for Intra-office communication

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M-commerce pros
Wide coverage
With an increasingly large and dominant user base, m-commerce expands potential sales
opportunities by connecting with them online via mobile devices.
Insightful customer data
Mobile commerce can collect consumer data and gain better insights into the customer journey.
With brick-and-mortar retail, the customers come to the store, make a purchase, and leave. Very
few details are noted and saved for statistics and analysis, like why they buy.
With mobile commerce, businesses connect with your customers from the moment they visit your
stores, consider the products, and make a purchase. These are all valuable signals, from purchase
intent to an order.
Right timing
Mobile commerce allows businesses to reach customers at the right time, rather than every time.
Ad technology based on demographics or geographies can help you connect with customers in the
moment before they decide to make a purchase, increasing the likelihood of completing a purchase.
Fast browsing and transactions
Time is money, so businesses look for ways to help customers get a faster and more convenient
buying experience. Offering faster transactions to your customers is the biggest benefit and one of
the driving forces behind the growth of mobile commerce.
With mobile commerce, shopping applications have faster processing speed than traditional
websites. Or if you can’t invest to build apps yet, you can also consider an advanced technology
called PWA storefront that turns your website into an app-like interface with outstanding features,
including:
Easy installation Offline work mode
Add to home screen Self-updates
Push notifications Security
Full responsiveness
Better user experience with faster speed leads to a huge increase in online sales through mobile
devices.

M-commerce cons

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Highly competitive marketplace
In recent years, many companies have shifted their focus to investment and success in mobile
commerce. If you start today, you’ll meet thousands of existing competitors along the way. As a
store owner, you need to find a clearly targeted market or a niche market to have a competitive
advantage.
Ad fraud risk
Ad fraud is always the biggest prejudice in mobile commerce. Meanwhile, the majority of
businesses are not well prepared to deal with this risk. According to Huff Post, more than 60% of
marketers confess that they don’t have any preparation to block out fraud on mobile marketing.
Businesses should ensure their compliance with MRC (Media Rating Council)
and TAG (Trustworthy Accountability Group) standards. This is the first step to showing your
customers that you are aware of mobile ad fraud and are working to take steps to head off it.
Customer privacy
When customers allow you more access to their data, m-commerce businesses take on a greater
responsibility to protect personal information. You must ensure that your company and any of your
partners adhere to strict user protection terms. Then, make it transparent to your customers about
what and how their data is shared, collected, and stored.
Not personalized connection
Online shopping and mobile commerce are still considered low-personality. Therefore, commerce
businesses are still trying harder to connect with their customers. Giving consumers a personalized
message or reward based on their date of birth and preferences are some of the suggestions for
creating a greater sense of belonging and appreciation.

To address the limitations, mobile commerce should be seen as an enhancement to the traditional
shopping journey, not a replacement. One of the best ways to deal with both the pros and cons of
mobile commerce is by building a mobile-first site or shopping mobile app so you can connect with
consumers and stand out from your competitors. Your mobile site and app give you the opportunity
to gain access to important customer purchase data, from which to choose the right timing and
messaging for your customers. Data is also an important component when you want to scale your
business and find new markets.

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Chapter 6
E-Commerce Payment Systems
E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by;
 reducing the paperwork,
 Transaction costs and labor cost.
 Being user friendly and
 less time-consuming than manual processing,
 It helps business organization to expand its market reach/expansion.
Business to consumer e-payment systems
A. Credit Card
Payment using credit card is one of most common mode of electronic payment. Credit card is small
plastic card with a unique number attached with an account. It has also a magnetic strip embedded
in it which is used to read credit card via card readers. When a customer purchases a product via
credit card, credit card issuer bank pays on behalf of the customer and customer has a certain time
period after which he/she can pay the credit card bill. It is usually credit card monthly payment
cycle. Following are the actors in the credit card system.
 The card holder − Customer
 The merchant − seller of product who can accept credit card payments.
 The card issuer bank − card holder's bank
 The acquirer bank − the merchant's bank
 The card brand − for example, visa or Master card.

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Credit Card Payment Process

Step Description

Step 1 Bank issues and activates a credit card to the customer on his/her request.

Step 2 The customer presents the credit card information to the merchant site or
to the merchant from whom he/she wants to purchase a product/service.

Step 3 Merchant validates the customer's identity by asking for approval from the
card brand company.

Step 4 Card brand company authenticates the credit card and pays the transaction
by credit. Merchant keeps the sales slip.

Step 5 Merchant submits the sales slip to acquirer banks and gets the service
charges paid to him/her.

Step 6 Acquirer bank requests the card brand company to clear the credit amount
and gets the payment.

Step 6 Now the card brand company asks to clear the amount from the issuer
bank and the amount gets transferred to the card brand company.
B. Debit Card
Debit card, like credit card, is a small plastic card with a unique number mapped with the bank
account number. It is required to have a bank account before getting a debit card from the bank.
The major difference between a debit card and a credit card is that in case of payment through
debit card, the amount gets deducted from the card's bank account immediately and there should
be sufficient balance in the bank account for the transaction to get completed; whereas in case of
a credit card transaction, there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card
readily. Having a restriction on the amount that can be withdrawn in a day using a debit card
helps the customer to keeps a check on his/her spending.
C. Smart Card
Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or
personal information. Smart cards are also used to store money and the amount gets deducted
after every transaction.

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Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards
are secure as they store information in encrypted format and are less expensive/provides faster
processing. Mondex and Visa Cash cards are examples of smart cards.
D. E-Money
E-Money transactions refer to situation where payment is done over the network and the amount
gets transferred from one financial body to another financial body without any involvement of a
middleman. E-money transactions are faster,convenient, and saves a lot of time.
Online payments done via credit cards, debit cards, or smart cards are examples of e-money
transactions. Another popular example is e-cash. In case of e-cash, both customer and merchant
have to sign up with the bank or company issuing e-cash.
D. Electronic Fund Transfer
It is a very popular electronic payment method to transfer money from one bank account to
another bank account. Accounts can be in the same bank or different banks. Fund transfer can be
done using ATM (Automated Teller Machine) or using a computer.
Nowadays, internet-based EFT is getting popular. In this case, a customer uses the website
provided by the bank, logs in to the bank's website and registers another bank account. He/she
then places a request to transfer certain amount to that account. Customer's bank transfers the
amount to other account if it is in the same bank, otherwise the transfer request is forwarded to
an ACH (Automated Clearing House) to transfer the amount to other account and the amount is
deducted from the customer's account. Once the amount is transferred to other account, the
customer is notified of the fund transfer by the bank.
F. Mobile Payments
Mobile payments are widespread in countries with a low credit card and banking penetration. For
example, some areas of Asia, Africa, and Latin America. Mobile payments allow customers to
purchase on e-commerce websites quickly and hassle-free. They are commonly used on
browser games, donation portals, and social media networks (dating sites, where customers
can pay with SMS. Keep in mind that regardless payment method you choose, opening an
internet merchant account is crucial.
G. E-Wallet
An e-wallet acts as a web treasury that stores a customer’s personal data and funds. The
money can later be used to purchase from online stores and websites. Getting an e-wallet is fast

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and easy, with customers demanded just to submit their information once for purchases. The
most popular e-wallets vary from country to country. To get an overall understanding of e-
wallets’ popularity, consider the fact that there are 7,600,000 active QIWI accounts in Russia.
How e-wallet functions once a merchant adds it as a payment method:
 On the checkout page, the consumer selects an e-wallet as a payment method.
 The user gets redirected to the e-wallet payment page.
 The user enters his password to log in and complete the payment.

Business to Business payment systems


Simply, B2B payments are payments made between companies for goods or services. For
example, a company might pay a supplier for office equipment, or a restaurant owner might pay
for vegetables, fruits, meats from their providers. In general, whenever one business invoices
another one, it creates a B2B payment scenario.
Business to business payments represents considerable opportunities. Here are the industries that
process the highest volume of B2B payments
 Manufacturing – $3.53 trillion (28.8 percent)
 Professional and business services – $2.60 trillion (21.2 percent)
 Finance, insurance, real estate, rental, and leasing – $2.19 trillion (17.8 percent)
 Mining – $685 billion (5.6 percent)
 Wholesale trade – $643 billion (5.2 percent)
In spite of such plenty of opportunities for disruption, B2B payment solutions are lagging behind
consumer payments, and paper checks are still the most popular way for business transactions.
So why does this happen?
That is because B2B payment is influenced by several factors that do not exert any impact on
consumer payment.
Volume: Payments between merchants convey higher values than payments between consumers
Frequency: The contracts between businesses often come with regular and recurring
transactions.
Industry: Certain industries have their own payment needs (which can be seen from the revenue
of industries listed above)
The number of people in the business cycles: There are many people involved in each B2B
transaction because of its complexity.

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Payment delay: B2B payment cycles often last 30-90 days. That is so much longer than the
personal transaction, which is right on-site or just a few minutes.

The different kinds of B2B payment


Cash Although businesses have used cash to pay each other over the years, this seems to be
gradually obsolete. Today, it seems weird to come and pay a supplier a briefcase full of bills.
How can you handle this if the contracts cost billions of dollars?
E-Checks: In the world of B2B business, paying by checks is relatively easy. Basically, this
category includes traditional paper checks and electronic checks issued by a purchaser to a seller.
Only after the check is deposited, the payment request from the buyer’s bank will be sent to the
seller’s bank.
Interestingly, while we are not using check much in our personal lives, they still dominate the
business world.
Wire transfers: Wire transfers were first introduced over 150 years ago by Western Union. The
fund transfers between the banks will be electronically routed through a financial network
like SWIFT and Fed wire. In spite of being quite expensive, this payment can process the
payment between businesses within hours.
Credit cards: Credit card adoption is not accepted by all vendors, especially small businesses or
startup because of the processing fee. While it allows the seller to receive the payment quickly,
the buyer can postpone their payment for more than one billing cycle.
Payment gateways: The payment gateways are such as PayPal, Stripe, Square and Bill. Come
allows the buyers to pay for good and services online during the checkout process.

The Obstacles for B2B Payments


Aside from the support of modern payment solutions to break old habits and facilitate millions of
requirements for invoicing, B2B companies still face a whole host of obstacles when using
finding and choosing the most suitable one.
Payment mediums variety
The availability of various payment methods for the B2B sector comes with its drawbacks.
Whether they choose to compare BNB to USD prices and use digital coins or send payment
cheques, possibilities are endless. Because every business has its own approach to payments, one
business may prefer to use the one that is not be accepted by the vendor. For example, a

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customer wants to pay you by wire transfer, but you do not want to absorb the high fees.
Obviously, the interoperability between different platforms makes business owners hesitate to
apply modern payment tools to consolidate payments.
Security issue
Data security remains an incredibly important concern when it comes to online payments,
especially in the world of B2B commerce, where transactions are made frequently, and any
breaches can open the door to fraud. A study conducted by Deloitte shows that 22% of the
middle market business have been attacked by payment fraud in recent years.
To avoid the loss of funds, more and more B2B businesses are moving to modern payment
systems.
Transparency
The ability to know the status of a transaction at any given time is paramount for any business to
control cash flow. The lack of visibility of digital transactions between firms will lead to errors,
inefficiencies, and higher headcount.
Time
Because of the complex process and the considerable numbers of B2B payment transactions
every day, sometimes, it is time-consuming to get all the payment made as expected.
On average, it takes more than 40 days to process a B2B payment. It is particularly difficult
when most organizations are managing payment cycles differently. For example, one company
may cut checks two times a month while the other payout accounts monthly.
Cost
The fee for transaction and account maintenance is one of the critical factors that business
owners consider when finding a way to pay to others. If you use wire transfer or credit cards, you
have to be willing to pay significant fees for payment services. Otherwise, if you choose to pay
with bills and collect checks as payment, it will cost you a considerable amount of time for
managing cash inflows and outflows. As we have seen that a large business might be able to
afford the cost, but most small ones won’t.

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Chapter 7
E-commerce Security and Controls

What is e-Commerce or electronic commerce security?

E-Commerce security is the guidelines that ensure safe transaction through the internet. It
consists of protocols that safeguard people who engage in online selling and buying of goods and
services. You need to gain your customers’ trust by putting in place e-Commerce security basics.
Such basics include:
 Privacy  Authentication
 Integrity  Non-repudiation
1. Privacy
Privacy includes preventing any activity that will lead to the sharing of customers’ data with
unauthorized third parties. Apart from the online seller that a customer has chosen, no one else
should access their personal information and account details.

A breach of confidentiality occurs when sellers let others have access to such information. An
online business should put in place at least a necessary minimum of anti-virus, firewall,
encryption, and other data protection. It will go a long way in protecting credit card and bank
details of clients.

2. Integrity

Integrity is another crucial concept of e-commerce Security. It means ensuring that any
information that customers have shared online remains unaltered. The principle states that the
online business is utilizing the customers’ information as given, without changing anything.
Altering any part of the data causes the buyer to lose confidence in the security and integrity of
the online enterprise.

3. Authentication

The principle of authentication in e-Commerce security requires that both the seller and the
buyer should be real. They should be who they say they are. The business should prove that it is
real, deals with genuine items or services, and delivers what it promises. The clients should also
give their proof of identity to make the seller feel secure about the online transactions. It is
possible to ensure authentication and identification. If you are unable to do so, hiring an expert
will help a lot. Among the standard solutions include client logins information and credit card
PINs.

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4. Non-repudiation

Repudiation means denial. Therefore, non-repudiation is a legal principle that instructs players
not to deny their actions in a transaction. The business and the buyer should follow through on
the transaction part that they initiated. E-Commerce can feel less safe since it occurs in
cyberspace with no live video. Non-repudiation gives e-Commerce security another layer. It
confirms that the communication that occurred between the two players indeed reached the
recipients. Therefore, a party in that particular transaction cannot deny a signature, email, or a
purchase.

Common Ecommerce Security Issues


1. Lack of trust in the privacy and e-Commerce security

Businesses that run e-Commerce operations experience several security risks, such as:

 Counterfeit sites– hackers can easily create fake versions of legitimate websites without
incurring any costs. Therefore, the affected company may suffer severe damage to its
reputations and valuations.
 Malicious alterations to websites– some fraudsters change the content of a website.
Their goal is usually to either divert traffic to a competing website or destroy the affected
company’s reputation.
 Theft of clients’ data– The e-Commerce industry is full of cases where criminals have
stolen the information about inventory data, personal information of customers, such as
addresses and credit card details.
 Damages to networks of computers– attackers may damage a company’s online store
using worm or viruses attacks.
 Denial of service– some hackers prevent legit users from using the online store, causing
a reduction in its functioning.
 Fraudulent access to sensitive data– attackers can get intellectual property and steal,
destroy, or change it to suit their malicious goals.
2. Malware, viruses, and online frauds
These issues cause losses in finances, market shares, and reputations. Additionally, the clients
may open criminal charges against the company. Hackers can use worms, viruses, Trojan horses,
and other malicious programs to infect computers and computers in many different ways. Worms
and viruses invade the systems, multiply, and spread. Some hackers may hide Trojan horses in
fake software, and start infections once the users download the software. These fraudulent
programs may:
 hijack the systems of computers
 erase all data
 block data access
 Forward malicious links to clients and other computers in the network.

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3. Uncertainty and complexity in online transactions
Online buyers face uncertainty and complexity during critical transaction activities. Such
activities include payment, dispute resolution, and delivery. During those points, they are likely
to fall into the hands of fraudsters.
Businesses have improved their transparency levels, such as clearly stating the point of contact
when a problem occurs. However, such measures often fail to disclose fully the collection and
usage of personal data.
Ethics, Social and Political issues
Defining the rights of people to express their ideas and the property rights of copyright owners
are just two of many ethical, social, and political issues raised by the rapid evolution of e-
commerce.

The ethical, social, and political issues raised in e-commerce, provide a framework for
organizing the issues, and make recommendations for managers who are given the responsibility
of operating e-commerce companies within commonly accepted standards of appropriateness.
Understanding Ethical, Social, And Political Issues in E-Commerce Internet and its use in e-
commerce have raised pervasive ethical, social and political issues on a scale unprecedented for
computer technology.

We live in an “information society,” where power and wealth increasingly depend on


information and knowledge as central assets. Controversies over information are often in fact
disagreements over power, wealth, influence, and other things thought to be valuable. Like other
technologies such as steam, electricity, telephones, and television, the Internet and ecommerce
can be used to achieve social progress, and for the most part, this has occurred. However, the
same technologies can be used to commit crimes, despoil the environment, and threaten
cherished social values. Before automobiles, there was very little interstate crime and very little
federal jurisdiction over crime. Likewise with the Internet: Before the Internet, there was very
little “cyber-crime.”

Many business firms and individuals are benefiting from the commercial development of the
Internet, but this development also exacts a price from individuals, organizations, and societies.
These costs and benefits must be carefully considered by those seeking to make ethical and
socially responsible decisions in this new environment.

Public Policy Issues in E commerce

The major ethical, social, and political issues that have developed around e commerce over the
past seven to eight years can be loosely categorized into four major dimensions: information

83
rights, property rights, governance, and public safety and welfare. Some of the ethical,
social, and political issues raised in each of these areas include the following:

 Information rights: What rights to their own personal information do individuals have
in a public marketplace or in their private homes, when Internet technologies make
information collection so pervasive and efficient? What rights do individuals have to
access information about business firms and other organizations?

 Property rights: How can traditional intellectual property rights be enforced in an


internet world where perfect copies of protected works can be made and easily distributed
worldwide in seconds?

 Governance: Should the Internet and e-commerce be subject to public laws? And if so,
what law-making bodies have jurisdiction - state, federal, and/or international?

 Public safety and welfare: What efforts should be undertaken to ensure equitable access
to the Internet and ecommerce channels? Should governments be responsible for ensuring
that schools and colleges have access to the Internet? Is certain online content and
activities - such as pornography and gambling - a threat to public safety and welfare?
Should mobile commerce be allowed from moving vehicles?

84
85
SEVEN UNIQUE
FEATURES OF E-
COMMERCE
TECHNOLOGY
Dimension of E-
commerce Technology
86
Significance in Business
Ubiquity
Internet/Web technology
is available
everywhere: at work, at
home, and
elsewhere via mobile
devices, anytime.
The marketplace is
extended beyond
traditional boundaries
and is
removed from a temporal
and geographic location.
“Marketspace” is
87
created; shopping can
take place anywhere.
Customer convenience is
enhanced, and shopping
costs are reduced.
Global Reach
The technology reaches
across national
boundaries, around the
earth.
Commerce is enabled
across cultural and
national boundaries

88
seamlessly and without
modification.
“Marketspace” includes
potentially billions of
consumers and millions
of businesses
worldwide.
Universal Standards
There is one set of
technology standards,
namely internet
standards.
There is one set of
technical media

89
standards across the
globe.
Richness
Video, audio, and text
messages are
possible.
Video, audio, and text
marketing messages
are integrated into a
single marketing
message and consuming
experience.
Interactivity
The technology works
through
90
interaction with the
users.
Consumers are engaged
in a dialog that
dynamically adjusts the
experience to the
individual, and makes
the consumer a co-
participant in the process
of delivering goods to the
market.
Information Density
The technology reduces
information
costs and raises quality
91
Information processing,
storage, and
communication costs
drop
dramatically, while
currency, accuracy, and
timeliness improve
greatly. Information
becomes plentiful, cheap
and accurate
Personalization /
Customization
The technology allows
personalized

92
messages to be
delivered to individuals
as well as groups.
Personalization of
marketing messages and
customization of
products
and services are based
on individual
characteristics.

93

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