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Chapter 11 Understanding Computers, 11th Edition

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11th Edition TODAY AND TOMORROW 11 E-Commerce CHAPTER – PowerPoint PPT presentation

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Title: Chapter 11 Understanding Computers, 11th Edition


1
11th Edition
TODAY AND TOMORROW
  • 11

E-Commerce
CHAPTER
2
Learning Objectives
  • Explain what e-commerce is and describe some of
    the benefits and risks involved with implementing
    e-commerce.
  • Discuss the types of Web sites that can be used
    to implement e-commerce.
  • Identify a variety of e-commerce business models
    and discuss their similarities and differences.

3
Learning Objectives, Contd
  • List several strategies for implementing
    e-commerce using the Web, including some of the
    decisions that need to be made, the options
    available for accepting payments, and the process
    of designing and developing an effective Web
    site.
  • Outline some sales and marketing strategies that
    can be used in conjunction with an e-commerce Web
    site.
  • Discuss some security issues related to
    e-commerce transactions

4
Overview
  • This chapter covers
  • Potential advantages and disadvantages of
    e-commerce
  • Types of e-commerce Web sites and e-commerce
    business models
  • Steps for implementing Web-based e-commerce
  • Sales and marketing strategies for e-commerce Web
    sites
  • E-commerce security issues

5
What Is E-Commerce?
  • E-commerce act of doing business transactions
    over the Internet or similar technology
  • E-commerce in the U.S. has continued to grow at a
    steady pace
  • M-commerce (mobile commerce) is growing
  • U-commerce (universal commerce) trend being
    strongly supported by Visa is on the rise

6
Advantages of E-Commerce
  • To businesses
  • Reduced costs
  • Dot-coms are less expensive than brick-and-mortar
    store because there is no physical storefront to
    maintain
  • Increased customer satisfaction
  • If shopping experience is convenient (open all
    the time, no driving, etc.
  • More effective sales and marketing tools
    (personalized e-mails, customer relationship
    management tools, etc.)
  • Potentially higher sales

7
Advantages of E-Commerce, Contd
  • To customers
  • Convenience
  • Easier comparison shopping
  • Higher number of merchants to choose from
  • Geographical location is not an issue
  • Shopping bots and other comparison shopping tools
    are available
  • Higher degree of selection
  • Potential cost savings

8
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9
Disadvantages of E-Commerce
  • To businesses
  • Pressure to be always open
  • Lost business due to customer hesitation to shop
    online
  • Risk of fraudulent credit card transactions
  • Ease of entry for competitors

10
Disadvantages of E-Commerce, Contd
  • To customers
  • Fraud and other potential security problems
  • Not being able to see or touch the goods
  • Possible expense to the customer of returning
    merchandise

11
Types of E-Commerce Web Sites
  • Manufacturer and e-tailer sites sell products
    and services directly to the end user

12
Types of E-Commerce Web Sites, Contd
  • Brokerage sites sites that bring buyers and
    sellers together
  • Online auction sites sites where individuals
    auction products to other individuals
  • Buyers bid and highest bidder at the time the
    auction closes buys the item
  • Seller pays a listing fee and a selling fee based
    on the final price
  • Sellers set the starting bid and can specify a
    minimum sales price
  • Many sites bid automatically for each bidder up
    to his or her maximum stated price

13
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14
Types of E-Commerce Web Sites, Contd
  • Brokerage sites, contd
  • Financial brokerage sites (allow individuals to
    sell stocks, bonds, etc.
  • Market and commodity exchange sites (match up
    buyers and sellers of commodities, such as
    equipment, energy, cattle, etc.

15
E-Commerce Business Models
  • Business model description of how a company does
    business
  • E-commerce business model description of the
    types of buyers and sellers in an e-commerce
    company, such B2B, B2G, and so forth
  • Business-to-consumer (B2C) model
  • Business-to-business (B2B) model
  • Consumer-to-consumer (C2C) model
  • Business-to-government (B2G) model
  • Intermediary hub model
  • Vertical hub
  • Horizontal hub

16
Implementing Web-Based E-Commerce
  • Step 1 Select appropriate business models and
    types of Web sites
  • More than one model and type of Web site can be
    selected
  • Some businesses at additional types later on
  • Step 2 Select the desired e-commerce
    applications
  • Determine electronic customer relationship
    management (eCRM) activities to be included
  • Determine which other business systems the Web
    site will be linked to

17
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18
Implementing Web-Based E-Commerce, Contd
  • Step 3 Develop procedures for handling
    electronic financial transactions
  • Need to determine which types will be accepted
  • Most sites accept credit cards

19
Implementing Web-Based E-Commerce, Contd
  • Other digital cash options include
  • Electronic checks funds come out of customers
    checking account
  • Online payment accounts (such as PalPal) funds
    can be transferred to others from the customers
    account
  • Can transfer funds ahead of time or have money
    transferred from a credit card or bank account as
    needed

20
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21
Implementing Web-Based E-Commerce, Contd
  • Other digital cash options, contd
  • Electronic gift certificates, gift cards, and
    coupons
  • Appropriate codes are entered into the Web site
    at time of purchase
  • Smart cards holds a cash value
  • Typically read by readers attached to a PC
  • Smart card readers may become common on vending
    machines, in taxis, and other public locations

22
Implementing Web-Based E-Commerce, Contd
  • Other digital cash options, contd
  • Digital wallets electronic file that holds
    information to speed online transactions
  • Can hold credit card numbers, passwords, address,
    etc. to be automatically or manually transferred
    to an online order form as needed
  • Site-specific digital wallets store this
    information for each customer on a business Web
    server for use with purchases on that site only

23
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24
Implementing Web-Based E-Commerce, Contd
  • Special considerations for B2B financial
    transactions because of the volume of
    transactions businesses may consider using
  • B2B transaction processing
  • Can take care of transaction processing for a
    business, including processing payments,
    electronic billing, etc.
  • Order-fulfillment companies
  • Take care of physically filling orders for a
    business including order management,
    distribution, CRM services, etc.

25
Implementing Web-Based E-Commerce, Contd
  • Step 4 Design and develop an effective Web site
  • Sites should be carefully designed
  • Can consider using
  • Storefront software facilitates the creation of
    an online store (either packaged or Web-based)
  • Shopping cart software designed to add only
    ordering capabilities to an existing Web site

26
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27
Implementing Web-Based E-Commerce, Contd
  • Step 5 Implement appropriate sales and marketing
    strategies
  • Include adequate customer service features
  • Collect taxes from customers if required by law
  • Display a privacy policy and security statement
  • Use an appropriate domain name and URL
  • URL should be easy to remember and type
  • Visitors should not have to type a page name
    (such as index.html) to view the home page of the
    site

28
Implementing Web-Based E-Commerce, Contd
  • Step 5 Implement appropriate sales and marketing
    strategies, contd
  • Promote your Web site sufficiently
  • Use appropriate meta tags
  • Submit your site to search sites
  • Consider paying for sponsored listings on search
    sites
  • Consider using banner ads on other sites
  • Update your site regularly and consider adding
    incentives for return visits (contests, coupons,
    etc.)

29
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30
Implementing Web-Based E-Commerce, Contd
  • Step 5 Implement appropriate sales and marketing
    strategies, contd
  • Data warehousing and mining
  • Data warehouse a collection of data about a
    company and its customers
  • Data mining the use of intelligent software to
    analyze a data warehouse to find patterns and
    relationships that would not otherwise be obvious

31
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32
Security Issues
  • Security is essential for e-commerce Web sites
  • Some guidelines for e-commerce sites
  • Secure financial transactions (use a secure Web
    server)
  • Secure sensitive documents and files (use
    encryption)
  • Authenticate online business partners (use
    digital certificates and digital signatures)

33
Summary
  • What Is E-Commerce?
  • Types of E-Commerce Web Sites
  • E-Commerce Business Models
  • Implementing Web-Based E-Commerce
  • Security Issues
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