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E-Business: Doing Business Online


Internet allows customers to easily compare prices from multiple sellers. Convenience Can order products from around the world anytime, day or night. – PowerPoint PPT presentation

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Title: E-Business: Doing Business Online

E-Business Doing Business Online
Chapter 7
Learning Goals
Define e-business and discuss how it can help
achieve business success. Distinguish between a
corporate and a marketing Web site. List the
major forms of B2B e-business. Explain B2C
e-business and identify the products most often
sold online.
Describe some of the challenges associated with
e-business. Discuss how organizations use
Internet communications to advance their
objectives. Discuss Web sites and identify
methods for measuring Web site
effectiveness. Explain the global scope of
What is E-Business?
  • Electronic business (e-business) - Conducting
    business via the Internet.
  • E-tailing, or virtual storefronts on Web sites.
  • Online business-to-business transactions.
  • Electronic data interchange (EDI), the
    business-to-business exchange of data using
    compatible software.
  • E-mail, instant messaging, and other Web-enabled
    communication tools and their use as media for
    reaching prospective and existing customers.
  • The gathering and use of demographic, product,
    and other information through Web contacts.

Capabilities and Benefits of E-Business
  • Global Reach. Goods and services can be sold to
    customers worldwide.
  • Personalization. Companies can customize products
    and reduce inventory.
  • Interactivity. Customers and suppliers can
    negotiate prices online.
  • Right-time and integrated marketing. Online
    retailers provide products when and where
    customers want them and promotions can be
    directed to individual customers.
  • Cost savings. E-business can reduce costs.

Some E-Business Successes
University of Phoenix FreshDirect Boston Symphony
Business Web Sites
  • Increase a firms visibility, promote its
    offerings, and provide information to interested
  • Build customer goodwill and assist retailers and
    other resellers in their marketing efforts.
  • Disseminate financial information to investors.
  • Enable prospective employees to apply online for
  • Provide e-mail communication.
  • .

Web sites are frequently used for marketing to
attract visitors/customers.
Business-to-Business (B2B)
  • Business-to-business e-business (B2B) Electronic
    business transactions between businesses using
    the Internet.
  • B2B transactions total 2.5 trillion.
  • By some estimates, account for 90 of all
    e-commerce activities.
  • Can reduce cost of B2B transactions by almost 25

Electronic Data Interchanges, Extranets,
Private Exchanges
  • Electronic data interchange (EDI) is a
    computer-to-computer exchange of invoices,
    purchase orders, price quotations and other sales
  • Extranets offer an efficient way for business to
    collaborate with vendors, partners and customers.
  • Private Exchanges are the next generation of
    extranets where all types of data related to
    e-business is shared.

Online Shopping and B2C
  • Business-to-consumer (B2C)
  • E-tailing accounts for 4 of all U.S.
  • Growing at a rate of 18.
  • Services like banking and brokerage are key
    aspects of e-tailing
  • Many retailers have electronic storefronts.
  • Growth of broadband is aiding e-tailing.

Who are online buyers and sellers?
  • Typical user is young, highly educated, urban or
    suburban, and affluent.
  • Demographics are shifting there is decreasing
    difference in Internet purchasing habits among

Benefits of B2C E-Business
  • Lower Prices
  • Many products cost less online.
  • Internet allows customers to easily compare
    prices from multiple sellers.
  • Convenience
  • Can order products from around the world anytime,
    day or night.
  • Can register customer information to streamline
  • Personalization
  • Emphasis on personalized, one-on-one marketing to
    increase repeat purchases.

Developing Safe Online Payment Systems
  • Through encryption, data is encoded for security
  • Many companies use Secure Sockets Layer (SSL)
    technology to encrypt information and verify
    senders and receivers.
  • An electronic wallet contains credit card and
    identification information. Customers can avoid
    retyping purchase information.

E-Business Challenges (privacy)
  • Privacy is among the top concerns of Internet
  • E-business sites often require passwords and use
    electronic signatures, an electronic form of
    identity verification.
  • Companies can track customers shopping and
    viewing habits through cookies.
  • Customers usually prefer that companies do not
    share their personal information. Merchants have
    responded by joining privacy organizations.
  • Privacy protections may soon become legally
  • Employees also have concerns that employers are
    monitoring their Internet behavior.
  • Companies worry about data theft.

E-Business Challenges (Internet Fraud)
  • Internet Crime Complaint Center logs more than
    200,000 complaints annually.
  • 50 of the complaints referred to law enforcement
    agencies deal with online auctions.
  • Phishing is a growing form of Internet fraud that
    uses e-mail or pop-up messages to get
    unsuspecting victims to disclose personal
  • Vishing, or voice phishing, involves phone calls
    to credit card customers to obtain personal and
    banking information.
  • Payment fraud is growing.

E-Business Challenges (poor website design)
  • 50 of shopping carts are abandoned before any
    purchase is made.
  • Lack of Information
  • Inability to find the information they need
  • Feeling overwhelmed by too much information
  • Companies that have brick-and-mortar experience
    often have better success satisfying customers
    than Internet-only retailers.
  • Online sales can compete with business partners
    such as retailers and distributors causing
    disputes called channel conflict.

Using the Webs Communication Function
  • Web has four main functions e-business,
    entertainment, information, and communication.
  • Communication is Webs most popular function.
  • Firms use e-mail to communicate with customers,
    suppliers, and other partners.
  • Online Communities Internet forums, newsgroups,
    electronic bulletin boards, and Web communities
    that appeal to people who share common interests.
  • Spam is junk e-mail.

Web Communication Blogs
  • Blog - short for Web log, an online journal
    written by a blogger.
  • May incorporate wikis, a Web page that anyone can
  • Some incorporate podcasts, video audio
    recordings. Feedburner services more than
    200,000 podcasts.
  • Corporate blogs can help build brand trust.
  • Example Apples iLounge builds the iPod brand
    and gives Apple ideas for product improvement.
  • Employee blogs may present ethical issues.

Web Communication Web Based Promotion
  • Banner Ads messages placed on frequently
    visited websites
  • Pop-up Ads ads that appear in separate windows
  • Pre-roll Video Ads advertisements that roll as
    soon as a page is loaded
  • Search marketing companies pay for top
    visibility in search results
  • Some companies, such as ValPak Marketing Systems,
    offer virtual, searchable coupons.

Global Environment of E-Business
  • Future growth of many companies is linked to a
    global strategy that incorporates e-business.
  • U.S. leads world in Internet users but ranks only
    5th in Internet penetration.
  • E-Bay may dominate most markets, but Chinese
    company Alibaba.com has 83 of the auction
    business in China.
  • Three of four Web pages are written in English.
  • E-business can heighten competition in the global

World Internet Statistics
Developing a Successful Website
  • It is easier to create a bad website than a good
    one. Organizations must think about
  • Planning and Preparation
  • Content and Connections
  • Costs and Maintenance

Managing a Website
  • Click-through rate - percentage of people
    presented with a Web banner ad who click on it.
  • Conversion rate - percentage of visitors to a
    website who make a purchase.
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