Chapter 5
Electronic Commerce: Strategies for
the New Economy
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
STUDENT LEARNING OUTCOMES
1.
2.
3.
Define and describe the 9 major ecommerce business models.
Identify the differences and similarities
among customers and their perception of
value in B2B and B2C e-commerce.
Compare and contrast developing a
marketing mix in B2B and B2C e-commerce.
5-2
STUDENT LEARNING OUTCOMES
4.
5.
Summarize ways of moving money in ecommerce and related issues.
Discuss major trends that are impacting both
the e-commerce world and society in
general.
5-3
WHAT’S REPLACING THE DAY AFTER
THANKSGIVING FOR SHOPPING SALES?
 Black
Friday is traditionally a big day for
retailers
 It’s when Christmas shoppers spend a lot of
money, moving retailers out of the red and
into the black
 But Black Friday may soon be replaced by
Cyber Monday
 Cyber Monday is the Monday after
Thanksgiving when people go back to work
and buy products online
5-4
WHAT’S REPLACING THE DAY AFTER
THANKSGIVING FOR SHOPPING SALES?
 The
“e” in e-commerce changes a lot of
things
 For example, Black Friday is a brick-andmortar concept; Cyber Monday is an “e”
(electronic) concept
 No matter, any kind of commerce is still just
commerce
 And all businesses must execute well to
survive and thrive
5-5
WHAT’S REPLACING THE DAY AFTER
THANKSGIVING FOR SHOPPING SALES?
1.
2.
3.
Do you shop for gifts online? If so, at what
sites and for what occasions?
What’s your take on people spending time at
work to shop for personal items?
How can brick-and-mortar retailers take
advantage of Cyber Monday?
5-6
INTRODUCTION
 E-commerce
is changing everything
 Electronic commerce (e-commerce)
5-7
INTRODUCTION
 But
e-commerce is still commerce
5-8
CHAPTER ORGANIZATION
1.
E-Commerce Business Models

2.
Understand Your Business, Products,
Services, and Customers

3.
Learning outcome #1
Learning outcome #2
Find Customers and Establish Relationships

Learning outcome #3
5-9
CHAPTER ORGANIZATION
4.
Move Money Easily and Securely

5.
Learning outcome #4
E-Business Trends

Learning outcome #5
5-10
E-COMMERCE BUSINESS MODELS
5-11
B2B E-Commerce
 Business
to Business (B2B) e-commerce
5-12
B2C E-Commerce
 Business
to Consumer (B2C) e-commerce
5-13
C2B E-Commerce
 Consumer
to Business (C2B) e-commerce
5-14
C2C E-Commerce
 Consumer
to Consumer (C2C) e-
commerce
5-15
B2G E-Commerce
 Business
to Government (B2G) ecommerce
5-16
C2G E-Commerce
 Consumer
to Government (C2G) e-
commerce
5-17
G2B E-Commerce
 Government
to Business (G2B) e-
commerce
5-18
G2C E-Commerce
 Government
to Consumer (G2C) e-
commerce
5-19
G2G E-Commerce
 Government
to Government (G2G) e-
commerce
 Vertical
govt integration
 Horizontal
govt integration
)
 Mainly
about information sharing, not
commerce
5-20
UNDERSTAND YOUR BUSINESS,
PRODUCTS, SERVICES, & CUSTOMERS
 To
be successful, you must…
5-21
Who Are Your Customers?
 Business
 Other
to Business
businesses
 Business
to Consumer
 Individuals
 Each
is different and has different needs and
wants
5-22
Customer Product and Service
Value Perception
5-23
B2C: Convenience Versus
Specialty
 Convenience
 Specialty
5-24
B2C: Commoditylike and Digital
 Commoditylike
 Digital
5-25
B2C: Mass Customization
 Mass
customization
5-26
B2B: MRO Versus Direct
 Maintenance,
repair, and operations
(MRO) materials (indirect materials)
5-27
MRO Materials
 Buyers
in B2B make large purchases
 Can then demand a discount (not true in
B2C)
 Can team up with other buyers to create
demand aggregation
 Demand aggregation
5-28
Direct Materials
 Direct
materials
5-29
Direct Materials
 Buyers
can participate in reverse auctions for
direct materials
 Reverse auction
5-30
B2B: Horizontal Versus Vertical
 B2B
e-commerce takes advantage of emarketplaces
 Electronic marketplace (e-marketplace)
5-31
E-Marketplaces
5-32
Horizontal E-Marketplace
 Horizontal
e-marketplace
5-33
Vertical E-Marketplace
 Vertical
e-marketplace
5-34
To Summarize
 B2C
5-35
To Summarize
 B2B
5-36
FIND CUSTOMERS AND ESTABLISH
RELATIONSHIPS
5-37
Business to Consumer
 Need
to determine your marketing mix
 Marketing mix
5-38
B2C Marketing Mix Tools
5-39
Registering with Search Engines
5-40
Online Ads
 Online
ads (banner ads)

 Two
variations are:
 Pop-up
ad
 Pop-under
ad
5-41
Online Ads
Banner ad
for a loan
lending
services
5-42
Viral Marketing
 Viral
marketing
5-43
Affiliate Programs
 Affiliate
program
5-44
Affiliate Programs
 Click-throughs
and conversion rates are
important
 Click-through
 Conversion
rate
5-45
Affiliate Programs
5-46
Business to Business Marketing
5-47
Business to Business Marketing
5-48
To Summarize
 B2C
5-49
To Summarize
 B2B
5-50
MOVE MONEY EASILY &
SECURELY
5-51
B2C Payment Systems
5-52
Financial Cybermediaries
 Financial
cybermediary
5-53
Financial Cybermediaries
5-54
Electronic Checks
 Electronic
check
5-55
Electronic Bill Presentment &
Payment
 Electronic
Bill Presentment and Payment
(EBPP)

5-56
Smart Cards
 Smart
card
5-57
B2C Payment Systems
 Must
move money and other information such
as shipping address
 Digital wallets can help
 Digital wallet
5-58
Digital Wallets
5-59
B2B Payment Systems
5-60
EDI
 Electronic
data interchange (EDI)
5-61
EDI and a VAN
5-62
Financial EDI
 Financial
EDI
5-63
Security: The Pervading Concern
5-64
Encryption
 Encryption
 Often
through public key encryption (PKE)
5-65
Public Key Encryption
5-66
Secure Sockets Layers
 Secure
Sockets Layer (SSL)…
 Denoted
by lock icon on browser or https://
(notice the “s”)
5-67
Secure Sockets Layers
The “s” in
https and
the padlock
5-68
Secure Electronic Transactions
 Secure
Electronic Transaction (SET)
5-69
To Summarize
 B2C
5-70
To Summarize
 B2B
5-71
To Summarize
 B2C
and B2B – security…
 Overriding
concern
 Encryption, SSLs, SET, and others
5-72
E-BUSINESS TRENDS
5-73
E-Business Trend - Youth
 Screenager
 Digital
native
5-74
E-Business Trend – M-Commerce
 Mobile
computing
 M-commerce
5-75
E-Business Trend – Long Tail
 Long
Tail
5-76
E-Business Trend – Long Tail
5-77
E-Business Trend – Long Tail
5-78