E-Business: Doing Business Online

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E-Business Doing Business Online
Chapter 7
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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
e-business.
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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.

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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.

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Some E-Business Successes
University of Phoenix FreshDirect Boston Symphony
Orchestra
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Business Web Sites

• Increase a firms visibility, promote its
  offerings, and provide information to interested
  parties.
• 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
  jobs.
• Provide e-mail communication.
• .

Web sites are frequently used for marketing to
attract visitors/customers.
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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
  percent.

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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
  information.
• 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.

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Online Shopping and B2C

• Business-to-consumer (B2C)
• E-tailing accounts for 4 of all U.S.
  sales.
• 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.

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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
  groups.

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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
  transactions.
• Personalization
• Emphasis on personalized, one-on-one marketing to
  increase repeat purchases.

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Developing Safe Online Payment Systems

• Through encryption, data is encoded for security
  purposes.
• 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.

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E-Business Challenges (privacy)

• Privacy is among the top concerns of Internet
  users.
• 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
  required.
• Employees also have concerns that employers are
  monitoring their Internet behavior.
• Companies worry about data theft.

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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
  information.
• Vishing, or voice phishing, involves phone calls
  to credit card customers to obtain personal and
  banking information.
• Payment fraud is growing.

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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.

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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.

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Web Communication Blogs

• Blog - short for Web log, an online journal
  written by a blogger.
• May incorporate wikis, a Web page that anyone can
  edit.
• 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.

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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.

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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
  marketplace...

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World Internet Statistics
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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

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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.