(BCA-3005)
E- COMMERCE AND APPLICATIONS
Module-7
Dr. B. B. Sagar
Dept. of Computer Science & Engineering
BIT Mesra-Ranchi, Noida Campus
Module -VII
Issues
of
Trademarks
and
Domain
Names,
Management Challenges in On-line Retailing, Supply
Chain Management Fundamentals, Online Auctions, ECommerce Portals, and Barriers to Growth of ECommerce in India.
Supply Chain Management
Fundamentals
BUSINESS FOCUS
E-BUSINESS
•SCM
•CRM
•BPR
•ERP
Customer
centric
Who are the customers?
Where are the customers?
Their purchasing habits
Demands
Products
What they need/want?
How many they need/want?
When they need/want?
How to reach them?
Product Life Cycle
• The product life cycle (PLC) concept is
based on four premises:
1.Products have a limited life
2.Product sales pass thru distinct stages,
each with different marketing implications
3.Profits from a product vary at different
stages in the life cycle
4.Products require different strategies at
different life cycle stages
The Product Life Cycle
Introductory
Stage
Growth
Stage
Maturity
Stage
Decline Stage
Total
Market
Sales
Time
Total
Market
Profit
7.1 E-Supply Chains
• The success of organizations (private, public,
and military) depends on their ability to
manage the flow of materials, information,
and money into, within, and out of the
organization
– Such a flow is referred to as supply chain
• Supply chain involves activities that take
place during the entire product life cycle
including the movement of information,
money and individuals involved in the
movement of a product or a service
FIVE BASIC SUPPLY CHAIN
MANAGEMENT COMPONENTS
Plan
Source
Make
Deliver
Return
• Best Buy checks inventory levels at each of its 750 stores in North America as
often as every half-hour with its SCM system, taking much of the guesswork out
of inventory replenishment
• Supply chain management improves ways for companies to find the raw
components they need to make a product or service, manufacture that product or
service, and deliver it to customers
• Plan – This is the strategic portion of supply chain management. A company must
have a plan for managing all the resources that go toward meeting customer
demand for products or services. A big piece of planning is developing a set of
metrics to monitor the supply chain so that it is efficient, costs less, and delivers
high quality and value to customers (marketing, sales depts)
• Source – Companies must carefully choose reliable suppliers that will deliver
goods and services required for making products. Companies must also develop a
set of pricing, delivery, and payment processes with suppliers and create metrics
for monitoring and improving the relationships.
•
Make – This is the step where companies manufacture their products or
services. This can include scheduling the activities necessary for
production, testing, packaging, and preparing for delivery. This is by far the
most metric-intensive portion of the supply chain, measuring quality levels,
production output, and worker productivity.
•
Deliver – This step is commonly referred to as logistics. Logistics is the set
of processes that plans for and controls the efficient and effective
transportation and storage of supplies from suppliers to customers. During
this step, companies must be able to receive orders from customers, fulfill
the orders via a network of warehouses, pick transportation companies to
deliver the products, and implement a billing and invoicing system to
facilitate payments.
•
Return – This is typically the most problematic step in the supply chain.
Companies must create a network for receiving defective and excess
products and support customers who have problems with delivered products
(service dept).
E-Supply Chains
• Definitions and Concepts
– supply chain
The flow of materials, information, money, and
services from raw material suppliers through
factories and warehouses to the end customers
– e-supply chain
A supply chain that is managed electronically,
usually with Web technologies
E-Supply Chains
(Suppliers)
(Firms)
E-Supply Chains (cont.)
• Supply chain parts
– Upstream supply chain
• activities of a manufacturing company with its suppliers (1st
tiers) and their connections to their suppliers (2nd tiers)
• procurement is the major activity
– Internal supply chain
• in-house processes for transforming the inputs from the
suppliers into the outputs
• major concerns are production management,
manufacturing, and inventory control
– Downstream supply chain
• activities involved in delivering the products to the final
customers
• attention is directed at distribution, warehousing,
transportation, and after-sale service
BASICS OF SUPPLY CHAIN
• Organizations must embrace technologies
that can effectively manage supply chains
What is (are) the elements added in the model?
Involvement
(integration)
The Value System:
Interconnecting relationships between organizations
Upstrea
m
value
Firm
value
Downstream
value
N
E-Supply Chains
• supply chain management (SCM)
A complex process that requires the
coordination of many activities so that the
shipment of goods and services from supplier
right through to customer is done efficiently
and effectively for all parties concerned.
SCM aims to minimize inventory levels,
optimize production and increase throughput,
decrease manufacturing time, optimize
logistics and distribution, streamline order
fulfillment, and overall reduce the costs
associated with these activities
E-Supply Chains
• e-supply chain management (e-SCM)
The collaborative use of technology to
improve the operations of supply chain
activities as well as the management of
supply chains
• The success of an e-supply chain depends
on:
– The ability of all supply chain partners to view
partner collaboration as a strategic asset
– A well-defined supply chain strategy
– Information visibility along the entire supply chain
– Speed, cost, quality, and customer service
– Integrating the supply chain more tightly
E-Supply Chains
• Activities and infrastructure of E-SCM
–
–
–
–
–
–
–
–
Supply chain replenishment
E-procurement
Supply chain monitoring and control using RFID
Inventory management using wireless devices
Collaborative planning
Collaborative design and product development
E-logistics
Use of B2B exchanges and supply webs
E-Supply Chains
• e-procurement
The use of Web-based technology to support
the key procurement processes, including
requisitioning, sourcing, contracting, ordering,
and payment. E-procurement supports the
purchase of both direct and indirect materials
and employs several Web-based functions such
as online catalogs, contracts, purchase orders,
and shipping notices
• collaborative planning
A business practice that combines the business
knowledge and forecasts of multiple players
along a supply chain to improve the planning
and fulfillment of customer demand
E-Supply Chains
• Infrastructure for e-SCM
– Electronic Data Interchange (EDI)
– Extranets
– Intranets
– Corporate portals
– Workflow systems and tools
– Groupware and other collaborative tools
E-Supply Chains
• Determining the Right Supply Chain
Strategy
– Functional products are staple products (e.g.,
groceries and gasoline) that have stable and
predictable demand and call for a simple, efficient,
low-cost supply chain
– Innovative products (e.g., fashion and hightechnology) tend to have higher profit margins,
volatile demand, and short product life cycles.
These products require a supply chain that
emphasizes speed, responsiveness, and flexibility
rather than low costs
7.2 Supply Chain Problems
and Solutions
•
Typical problems along the supply chain
1. Slow and prone to errors because of the
length of the chain involving many
internal and external partners
2. Large inventories without the ability to
meet demand
 Incorrect demand forecasting
3. Insufficient logistics infrastructure
 Vehicle failures to road conditions
4. Poor quality
Supply Chain Problems and
Solutions (cont.)
• Bullwhip effect : Erratic shifts in orders
up and down supply chains
– Creates production and inventory problems
– Stockpiling can lead to large inventories
• Effect is handled by information sharing
- collaborative commerce (c-Commerce)
N
The Bullwhip
Effect
customer
External Demand
Retailer
Delivery lead time
Order lead time
Wholesaler
Order lead time
Delivery lead time
Distributor
Order lead time
Delivery lead time
Factory
Production lead time
Supply Chain
Problems and Solutions
• The Need for Information Sharing
along the Supply Chain
• EC Solutions along the Supply Chain
– Order taking
– Order fulfillment
– Electronic payments
– Managing risk
– Inventories can be minimized
– Collaborative commerce
7.3 Key Enabling Supply Chain
Technologies: RFID and Rubee
• radio frequency identification (RFID)
Tags that can be attached to or
embedded in objects, animals, or
humans and use radio waves to
communicate with a reader for the
purpose of uniquely identifying the
object or transmitting data and/or
storing information about the object
Key Enabling Supply Chain
Technologies: RFID and Rubee
Key Enabling Supply Chain
Technologies: RFID and Rubee
Key Enabling Supply Chain
Technologies: RFID and Rubee
Key Enabling Supply Chain
Technologies: RFID and Rubee
• LIMITATIONS OF RFID
– For small companies, the cost of the system may
be too high
– The restriction of the environments in which RFID
tags are easily read
– Different levels of read accuracy at different
points along the supply chain
– Concerns over customer privacy
– Agreeing on universal standards
– Connecting the RFIDs with existing IT systems
Key Enabling Supply Chain
Technologies: RFID and Rubee
• RuBee
– Bidirectional, on-demand, peer-to-peer
radiating transceiver protocol under
development by the Institute of Electrical
and Electronics Engineers
– It relies on low-frequency magnetic waves
to track products and transfer information.
– It excels in situation where RFID has
limitations.
Key Enabling Supply Chain
Technologies: RFID and Rubee
Trademarks and Domain Names
What
is
a
trademark?.
A trademark is a name or logo used by a company to
identify its goods or services. For example, eBay® is the
name of our company, but it is also a trademark used on
our site and on various eBay products. Coca Cola® is a
trademark used in the sale of soft drinks. Many trademarks
are registered, but a trademark need not be registered for
an owner to protect it. Trademark laws are primarily
designed to protect consumers from confusing one
company's goods or services with those of another.
What is trademark infringement?
Trademark infringement usually involves using someone's trademark
on a good or service in a way that may confuse others about the
source or affiliation of the goods or services. For example, if a seller
unauthorized by or unaffiliated with Nike® sells sports clothes called
"Nikestuff," the seller is probably infringing Nike’s trademark. There
are other ways to infringe a trademark, including registering domain
names that are substantially similar to the name of a trademark
owner.
Domain names and trademark infringement
• A domain name is an address that is used for identifying and locating
computers on the Internet (for example, www.ebay.com and
www.ebaymotors.com). Many companies register domain names that
contain their trademarks. For example, eBay owns www.ebay.com.
The Coca Cola Company owns www.cocacola.com and
www.coke.com. Read more information on eBay domain names.
• If a person operates a website using a domain name that contains
someone else's trademark (for example, "www.nikestuff.com"),
people who see or visit that domain name are likely to be confused
and believe that the site is affiliated with Nike when it is not. People
may also mistakenly go to this website thinking it's connected with
the other company, only to find out that it is not. Intentional
misspellings of and similarities to trademarked names (for example,
www.wwwebay.com, www.amizon.com) may also be considered
trademark infringements. Just because a company hasn't registered
all variations of its name or trademark as domain names doesn't
mean that others can use those domain names. If the domain names
are likely to confuse consumers, they're probably infringing.
A TRADEMARK IS MADE OF :
Any Distinctive Words, Letters,
Numerals, Pictures, Shapes, Colors,
Logotypes, Labels
• Examples:
What is a Trademark?
• A BRAND NAME - A KIND OF VISIT CARD THAT
PROMOTES THE IMAGE OF A COMPANY
AND ITS RANGE OF GOODS & SERVICES.
• “A sign distinguishing goods or services
produced or sold by one enterprise (from
those of other enterprises)”.
Less traditional forms
• Single colors
(Louis Vuitton)
• Three-dimensional signs
• (shapes of products
• or packaging)
• Audible signs (sounds)
• Olfactory signs (smells)
Types of Trademarks?
• Trade marks: to distinguish goods (*)
• Service marks: to distinguish services
• Collective marks: to distinguish goods or
services by members of an association
• Certification marks
• Well-known marks: benefit from stronger
protection
• Tradename (Brand name)
(*)
The function of a Trademark
• Allows companies to mark A TERRITORY,
EXPRESSING specific functions among similar
products in the market.
• Ensures that consumers can identify a line of
products.
• Ensures extension of the mark through licensing
or franchising process.
The value of a Trademark?
• A marketing tool
• A source of revenue through licensing
• A crucial component of franchising agreements
• Useful for obtaining banks or third part finance
• A valuable business asset
The Value of Trademarks
• Global Brand Scoreboard
•
1.
Coca-cola
67.52$ billion
•
2.
Microsoft
59.95$ billion
•
3.
IBM
53.37$ billion
•
4.
GE
46.99$ billion
•
5.
Intel
35.58$ billion
•
(German survey January 17, 2006)
PRACTICAL ASPECTS
• Create or buy a trademark (after searching worldwide
to find out that there are no similar registered ones avoid claims- refusals or oppositions
• Protect your trademark through your national or
regional office and then extend it to the world (WIPO
Madrid & Protocol System)
• Use and maintain your trademark(s) (paying fees,
following notification of refusals, extending territory)
• Enforce your trademark(s), innovate (develop new
products)
What to avoid when selecting a
Trademark
• Generic terms: CHAIR to sell chairs
•
Descriptive terms: SWEET to sell chocolates
•
Deceptive terms: “ORWOOLA” or “Pure whool”
for 100% synthetic material
•
Marks and terms contrary to public order/morality
•
Do not use flags, armorial bearings, official
hallmarks, emblems without a legal authorization
What to Remember when selecting
Trademark?
• Create inherently distinctive mark
• Think about fanciful names as: “Kodak”
– Arbitrary marks and logos as: “apple” for computers
– Suggestive marks as : SUNNY for heaters
• A mark easy to memorize and pronounce, with a positive
connotation and that fits product or image of the business
• Has no legal restrictions or reasons for rejection
– TM search>not identical or confusingly similar to existing
• Suitable for export markets with a corresponding domain
name which is not already used
Protecting a TM
through registration
• The applicant can file a request at his national office and then
at WIPO which offers free assistance, information &
guidelines for:
– Filing application forms, contact details, fees
– Registration and certificate valid for 10 years
– Renewal services & publication (CD-ROMs /Gazette)
• The IP national office is the only authority in charge of :
– Formal examination
– Substantive examination
– Publication and opposition
Protecting a TM
through registration
•
While filling in a TM application, it is critical to register your
trademark in all classes in which you use or intend to use your
trademark.
•
The most widely used classification system (Nice has 34 classes for
goods and 11 for services - a total of 45 classes of goods and
services).
•
Some TM offices such as in US and Canada require the proof that
the TM is used.
A substantive examination may be required to avoid conflict with an
existing and similar Mark, previously registered.
•
•
Some countries publish the TM in a journal allowing 3rd parties to
make an opposition (during a certain period of time).
•
Once it is decided that there are no grounds for refusal, a certificate
is issued with a validity of 10 years.
•
Registration can be renewed indefinitely but may be cancelled if TM
is not actively used for a certain period stated in the TM law.
•
USING A TRADEMARK
• Actively using a TM
• Using/maintaining a TM in marketing and advertising
• Using the mark on the internet
• Using the mark as a business asset
ACTIVELY USING A
TRADEMARK
• Offering the goods or services
• Affixing the mark to the goods or their packaging
• Importing or exporting the goods under the mark
• Using it on business papers or in advertising
USING A TRADEMARK IN
ADVERTISING
• Shall be used exactly as registered
• Protect TM from becoming generic
– Set apart from surrounding text
– Specify font, size, placement and colors
– Use as an adjective not as noun or verb
– Not plural, possessive or abbreviated form
– Use a trademark notice in advertising and labeling ®
• Monitor authorized users of the mark
• Review portfolio of trademarks
• An evolving trademark
USING A TM ON THE
INTERNET
• Use of TM on internet may raise controversial legal
problems
• Conflict between trademarks and domain names(internet
addresses) - cyber squatting
• WIPO procedure for domain name dispute
(http://arbiter.wipo.int.domains)
USING A TRADEMARK AS
A BUSINESS ASSET
• Licensing: owner retains ownership and agrees to the
use of the TM by other companies in exchange of
royalties > licensing agreement (business
expansion/diversification)
• Franchising: licensing of a TM central to franchising
agreement.The franchiser allows franchisee to use his
way of doing business (TM, know-how, customer service,
s/w, shop decoration, etc)
• Selling/assigning TM to another company (merger &
acquisitions/raising of cash)
ENFORCING
TRADEMARKS
• Responsibility of TM owner to identify infringement
and decide on measures
• “ Cease and desist letter” to alleged infringer (s)
• Search and seize order
• Cooperation with customs authorities to prevent
counterfeit trademark goods
• Arbitration and mediation (preserve business relations)
Management Challenges in
Online Retailing
• Retail advertising & marketing issues:
•
•
•
•
Advertising
Product display
Brand & category
Pricing & incentives
• Retail operations issues:
• Inventory management
• Customer service quality
• Retail management issues:
• Location & decision making (site selection)
• Retail policies
53
Management Challenges in Online
Retailing : Retailing Strategy
•
•
•
•
•
•
•
•
Qualifying a customer
Learning the customer needs
Understanding the customer purchasing process
Making the presentation based on customer interaction
Handling objections, negotiations with the customer
Closing the sale
Building an ongoing relationship through the service
Retailers lifestyle, voice, image
54
Management Challenges in Online
Retailing
•
•
•
•
•
•
Manage channel conflict
Learn to price online products/ services
Deliver a satisfying shopping experience
Design the layout of online store
Mange brands
Create the right incentives
55
The Online Retail Sector Today
• Smallest segment of retail industry (5%)
• Growing at faster rate than offline segments
• Revenues flat during recession, expected to
continue growth between 2010–2013
• 70% Internet users bought online in 2009
• Primary beneficiaries:
– Established offline retailers with online presence
(e.g., Staples)
– First mover dot-com companies (e.g., Amazon)
56
Online Retail and B2C Ecommerce Is Alive and Well
Figure 9.2, Page 580
SOURCES: eMarketer, 2009a; U.S. Department of
Commerce, 2009; Forrester Research, 2008; authors’
estimates.
57
E-tailing Business Models
• Four main online retail business models:
1. Virtual merchant
• Amazon
2. Bricks-and-clicks
• Wal-Mart, J.C. Penney, Sears
3. Catalog merchant
• Lands’ End, L.L. Bean, Victoria’s Secret
4. Manufacturer-direct
• Dell
58
Common Themes in Online
Retailing
• Online retail fastest growing channel on revenue
basis
• Profits for startup ventures have been difficult to
achieve
• Disintermediation has not occurred
• Most significant online growth: offline general
merchandiser giants extending brand to online
channel
• Second area of rapid growth:
– Specialty merchants with high-end goods, e.g., Blue Nile
59
Industry Consolidation and Integrated Financial
Services
60
Online Financial Consumer
Behavior
• Consumers attracted to online financial sites
because of desire to save time and access
information rather than save money
• Most online consumers use financial services
firms for mundane financial management
– Check balances
– Pay bills
• Greatest deterrents are fears about security
and confidentiality
61
Online Banking and Brokerage
• Online banking pioneered by NetBank and
Wingspan; no longer in existence
• Established brand-name national banks
have taken substantial lead in market
share
• Over 100 million people use online
banking; expected to rise to 192 million in
2013
• Early innovators in online brokerage
62
The Growth of Online Banking
Figure 9.4, Page 610
SOURCE: eMarketer, Inc., 2008a; authors’ estimates.
63
Online Insurance Services
• Online term life insurance:
– One of few products for which Internet lowered search costs,
increased price comparison, and resulted in lower prices
• Other insurance product lines:
– Web gives insurance companies new opportunities for product
and service differentiation and price discrimination
– Online use is more for discovering prices and terms of policies
than purchasing policies online
– Reduced search and price discovery costs
• Industry affected by being regulated at state as
opposed to federal level
64
Online Real Estate Services
• Early vision: local, complex, and agent-driven
real estate industry would transform into
disintermediated marketplace where buyers and
sellers would transact directly
• However, major impact is influencing of
purchases offline
– Impossible to complete property transaction online
– Main services are online property listings, loan calculators,
research, and reference material
• Despite revolution in available information, there
has not been a revolution in the industry value 65
Online Travel Services
• One of most successful B2C e-commerce
segments
• 2007: first year online bookings greater than
offline
• 2009: online travel bookings declined slightly
due to recession but expected to grow to $118
billion by 2013
• For consumers: more convenient than traditional
travel agents
• For suppliers: a singular, focused customer pool66
E-commerce in Action:
Amazon.com
• Vision:
– Earth’s biggest selection, most customer-centric
• Business model:
– Amazon Retail, Third Party Merchants, and Amazon Web
Services (merchant and developer services)
• Financial analysis:
– Greatly improved, profitable; still heavy long-term debt
• Strategic analysis/business strategy:
– Maximize sales volume, cut prices
• Strategic analysis/competition:
– Online and offline general merchandisers
67
E-commerce in Action:
Amazon.com
• Strategic analysis/technology:
– Largest, most sophisticated collection of
online retailing technologies available
• Strategic analysis/social, legal:
– Antitrust, sales tax, patent lawsuits
– Toys’R’Us lawsuit
• Future prospects:
– In 2008, net sales grew 30%
– Ranks among top five in customer service,
speed, accuracy
68
E-Commerce Portals
Barriers to Growth of
E-Commerce in India