ADITYA ENGINEERING COLLEGE (A)

Chapter 7
CONSUMER-ORINTED ELECTRONIC COMMERCE

By
Dr. S Rama Sree,
Professor in CSE & Dean
Academics,
Aditya Engineering College(A)
Surampalem.
 Aditya Engineering College (A)

TOPICS

1. Mercantile Process Models

2. Mercantile Models from the Consumer’s Perspective

3. Mercantile Models from the Merchant’s Perspective

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Process Model

Mercantile processes define interaction models between consumers
and merchants for online commerce.
 It is necessary because, in buying and selling goods, a buyer, seller
and other parties must interacts in standard business process.
 Communication between large number of stakeholders possible
through I-way in ecommerce.
 A well-established standard process for processing credit card
purchases, it incenses the use of credit cards widely.
 Designing and implementing the Mercantile process most powerful

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the Consumer’s perspective

 The online consumer expects quality, convenience, value, low
price, and control.
 To meet these consumer’s expectations and understand the
behaviour of the online shopping, there is a need of business
process model.
 Business process model provides a standard product/ services
purchases process from an interactive services and merchant
point of view.
 The business process model from a consumer’s perspective
consist of seven activities that can be grouped into three phases:
 Pre-purchase phase
 Purchase consummation and
 Post purchase interaction.
E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
1. Pre-purchase phase : It includes Search and Discovery in the
information phases, Comparison shopping and product selection based
on various attributes and negotiation of merchant’s suitable terms, like
Payment, availability, delivery schedule…etc.
2. Purchase consummation : Merchant’s protocols that specifies flow of
events. It Includes placement of order, Authorization of payment and
Receipt of product.
3. Post purchase interaction : It includes consumer’s Service and
Support to address consumer’s complaints, product return and product
defects.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)
Mercantile Models from the consumer’s perspective Cont…
Product / service search and Discovery in
the Information space
Comparison shopping and product Pre-purchase
selection based on various attributes phase

Negotiation of terms likes, Price,

availability, Delivery schedule…etc

Placement of Order

Purchase
Authorization of Payment consummation

Receipt of product

Customer service and support Post purchase

interaction
E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
1. Pre-purchase Preparation :
 In general E-Commerce applications business models are designed for
the Internet.
 Consumer needs to be reflected while designing.
 Considering the consumer, who are active in information search.
 Answer the several questions about the purchasing process
 In general consumers are categorized into three groups:
 Impulsive buyers – people who purchase quickly
 Patient buyers – People purchase product after comparisons
 Analytical buyers – make research before purchasing.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
 In fact, market research have isolated several types of purchases:
 Specifically planned purchases
 General Planned purchases
 Reminder Purchases
 Unplanned purchasers.
 Need to concentrate on consumer information search process.
 Organizing the search process
 Consumer search Experiences
 Information Broker and Borages

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
Purchase Consummation :
 After search and discover of a product, consumer buy that product.
 A merchant transaction defined as the exchange of information
between the buyer and seller followed by payment.
 Depending on the payment model, they may interacted by exchanging
the currency through third party (bank), or by transferring
authorizations from a credit billing organization (Visa or master card)
 So single mercantile model is not be sufficient to meet the needs of
everyone.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
A simple mercantile protocol would require the following
transactions:
1. Buyer contact vendor to purchase product or service, using
WWW, e-mail, offline through electronic catalog, or telephone.
2. Vendor states the price
3. Buyer and vendor may or may not engage in negotiation.
4. If satisfied, buyer authorizes the payment to the vendor with an
encrypted transaction containing digital signature for agreed price.
5. Vendor contact to his/her billing service to verify the encrypted
authorization for authentication.
6. Billing services decrypts authorization and checks buyer’s account
balance or credit and puts a hold on the amount of transfer.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
7. Billing service allows the vendor to deliver product and sends a
standardized message giving the details of transaction for
merchant’s record.
8. Vendor deliver the goods to buyer or in the case of information
purchase provides a ‘cryptokey’ to unlock the file.
9. On receiving the goods, buyer signs and delivers receipt.
10. At the end of the billing cycle, buyer receives the list of
transactions.
(1) Buy
Consumer with request Payment
need Merchant Initiation

(4) Delivery (3) Approval

(5) Monthly statement

Simplified online mercantile model
E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
Mercantile process using digital cash :
A bank or consortium of a banks issue electronic cash(e-cash)
This currency is keep secure by the use of cryptographic
techniques.
While purchase some amount of e-cash transfer to vendors account.
On receiving the e-cash vendor verifies, generate bill and exchange
goods.
The following is a generic mercantile protocol based on the use of
e-cash:
1. Buyer obtains anonymous e-cash from issuing of bank.
2. Buyer contacts seller to purchase products.
3. Seller state price
4. Buyer send e-cash to seller.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
5. Seller contact his bank or billing service to verify the validity of the
e-cash.
6. Bank gives okay signal to seller.
7. Seller deliver the product to buyer.
8. Seller then tells bank to mark the e-cash as “used” cash.
Mercantile Transactions using Credit Cards : consist two step process
a) Electronic Authorization and
b) Settlement
• At retailer it initiates Third-Party Processes(TPP) by capturing
information at the POS,
• Transfer information to the credit card issue of authorization,
• communicates a response to the merchant, and
• Electronically stores the information for settlement and reporting.

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

Mercantile Models from the consumer’s perspective

Cont…
Post purchase interaction :
 If there is any payment for purchasing product or service, there will be
refunds, disputes and other customers service issues, to be consider.
 Return and claims are an important part of purchasing process.

 Other complex customer challenges are:

 Inventory issues
 Database access and compatibility issues
 Customer service issues

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

8. Mercantile Models from the Merchant’s perspective

 To better understanding, it is necessary to examine the
Order Management Cycle (OMC)
 The OMC includes eight distinct activities
 The actual details of OMC vary from industry to industry
and also for individual products and services
 OMC has generic step:
1. Order planning & Order generation.
2. Cost estimation & pricing.
3. Order receipt & entry.
4. Order selection & prioritization.
5. Order Scheduling
6. Order fulfillment & delivery.
7. Order billing & account/payment management.
8. Post sales service.
E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

OMC in E-Commerce
Consumer inquiry and order planning and
generation Pre-sales
Interaction
Cost estimation and pricing of product, service

Order receipt and entry

Order selection and prioritization

Product service
production and
Order Scheduling delivery

Order fulfillment and Delivery

Order billing and account / payment

Post sales
management interaction
Customer service and support
E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021
 Aditya Engineering College (A)

End of the Unit - I

E-Commerce Dr. S Rama Sree, Professor of CSE dept. Wednesday, April 14, 2021