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Chapter 5 sec 5.1-5.7 and web 2.0

Chapter 5 sec 5.1-5.7 and web 2.0. B2B E-Commerce. Learning Objectives. Describe the B2B field. Describe the major types of B2B models. Discuss the characteristics of the sell-side marketplace, including auctions. Describe the sell-side models.

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Chapter 5 sec 5.1-5.7 and web 2.0

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  1. Chapter5sec 5.1-5.7 and web 2.0 B2B E-Commerce

  2. Learning Objectives • Describe the B2B field. • Describe the major types of B2B models. • Discuss the characteristics of the sell-side marketplace, including auctions. • Describe the sell-side models. • Describe the characteristics of the buy-side marketplace and e-procurement. • Explain how reverse auctions work in B2B. • Describe B2B aggregation and group purchasing models.

  3. Learning Objectives • Describe other procurement methods. • Define exchanges and describe their major types. • Describe B2B portals. • Describe third-party exchanges. • Describe partner relationship management (PRM). • Describe how B2B can benefit from social networking and Web 2.0. • Describe Internet marketing in B2B, including organizational buyer behavior.

  4. Concepts, Characteristics, and Models of B2B E-Commerce • business-to-business e-commerce (B2B EC) Transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks; also known as eB2B (electronic B2B) or just B2B • THE BASIC TYPES OF B2B TRANSACTIONS AND ACTIVITIES • Sell-side – one seller to many buyers • Buy-side – one buyer to many sellers • Exchanges – many sellers to many buyers • Supply chain improvements and collaborative commerce e.g industry consortium

  5. B2B Growth SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b; authors’ estimates.

  6. Concepts, Characteristics, and Models of B2B E-Commerce • THE BASIC TYPES OF B2B E-MARKETPLACES AND SERVICES • One-to-Many and Many-to-One: Private E-Marketplaces • company-centric EC E-commerce that focuses on a single company’s buying needs (many-to-one, or buy-side) or selling needs (one-to-many, or sell-side)

  7. Concepts, Characteristics, and Models of B2B E-Commerce • Many-to-Many: Exchanges • exchanges (trading communities or trading exchanges) Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other • public e-marketplaces Third-party exchanges open to all interested parties (sellers and buyers)

  8. Concepts, Characteristics, and Models of B2B E-Commerce • B2B CHARACTERISTICS • Parties to the Transaction: Sellers, Buyers, and Intermediaries • online intermediary An online third party that brokers a transaction online between a buyer and a seller; may be virtual or click-and-mortar

  9. Concepts, Characteristics, and Models of B2B E-Commerce • Types of Transactions • spot buying The purchase of goods and services as they are needed, usually at prevailing market prices e.g commodities, stock, etc • strategic (systematic) sourcing Purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers e.g G2B

  10. Concepts, Characteristics, and Models of B2B E-Commerce • Types of Materials Traded • direct materials Materials used in the production of a product (e.g., steel in a car or paper in a book) • indirect materials Materials used to support production (e.g., office supplies or light bulbs)

  11. Concepts, Characteristics, and Models of B2B E-Commerce • The Direction of the Trades • vertical marketplaces Markets that deal with one industry or industry segment (e.g., steel, fordaq.com (timber)) • horizontal marketplaces Markets that concentrate on a service, material, or a product that is used in all types of industries (e.g., grainger.com, techdata.com) • SERVICE INDUSTRIES ONLINE IN B2B e.g. online travel services for businesses, online commercial real estate, etc

  12. One-to-Many: Sell-Side E-Marketplaces • sell-side e-marketplace A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet • B2B Sellers e.g stapleslink.com • Customer Service • SALES FROM CATALOGS • Configuration and Customization • Benefits and Limitations of Online Sales from Catalogs • Channel conflicts • Difficulty in finding buyers

  13. Selling Via E-Auctions • USING AUCTIONS ON THE SELL SIDE • Forward auctions offer the following benefits to B2B sellers: • Revenue generation • Cost savings • Increased “stickiness” • Member acquisition and retention • AUCTIONING FROM THE COMPANY’S OWN SITE e.ggmonlinauctions.com,auctions.samsclub.com • USING INTERMEDIARIES IN AUCTIONS e.gasset-auctions.com Exampls of Forward Auction • Whirlpool Corp. sold $ 20 million in scrap metal in 2003 via asset- auctions. com, increas-ing the price received by 15 percent. • SAM’s Club ( samsclub. com) auctions thousands of items ( especially electronics) at auctions. • ResortQuest, a large vacation rental company, uses auctionanything. com to auction rental space.

  14. One-from-Many: Buy-Side E-Marketplaces and E-Procurement • buy-side e-marketplace A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method

  15. One-from-Many: Buy-Side E-Marketplaces and E-Procurement • PROCUREMENT METHODS • E-Procurement Organizations and Types • E- sourcing. Identifying new suppliers for a specific category of purchasing requirements. • E- tendering. Sending RFI and prices to known suppliers and receiving the suppliers’ responses and bids. • E- reverse auctioning. Using Internet to buy goods and services from a number of known or unknown suppliers. • E- informing. Gathering and distributing purchasing information both from and to internal and external parties. • Web- based ERP ( electronic resource planning). Creating and approving purchasing requisitions, placing purchase orders, and receiving goods and services by using a software system based on Internet technology.

  16. One-from-Many: Buy-Side E-Marketplaces and E-Procurement • THE GOALS AND BENEFITS OF E-PROCUREMENT • e-procurement The electronic acquisition of goods and services for organizations

  17. Buy-Side E-Marketplaces: Reverse Auctions • request for quote (RFQ) The “invitation” to participate in a tendering (bidding) system • CONDUCTING REVERSE AUCTIONS • E-Tendering by Governments • GROUP REVERSE AUCTIONS e.g. http://www.imarketkorea.com/en_HD/index.html

  18. Other E-Procurement Methods • internal procurement marketplace The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog • Benefits of Internal Aggregated (Consolidated) Catalogs • Quickly find what desired offering • check availability and delivery times • complete electronic requisition forms using fewer suppliers • Avoid Maverick/unplanned Buying

  19. Other E-Procurement Methods • desktop purchasing for small ticket items Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department • group purchasing The aggregation of orders from several buyers into volume purchases so that better prices can be negotiated • Internal Aggregation of Purchasing Orders • External Aggregation for Group Purchasing e.g buyerzone.com

  20. B2B in the Web 2.0 Environment and Social Networking • THE OPPORTUNITIES • Discover new business partners • Improve recruitment e.glinkedin • Enhance ability to learn about new technologies, competitors, etc. • Find sales prospects • Improve participation in industry association activities • Better networking amongst employees

  21. B2B in the Web 2.0 Environment and Social Networking • THE USE OF WEB 2.0 TOOLS IN B2B (e.g blogs, wikis, RSS feeds, etc) • FUTURE of SOCIAL NETWORKS IN THE B2B MARKETPLACE • According to eMarketer ( 2008), advertising on social networking sites will grow from $ 15 million in 2007 to $ 240 millions in 2012 • EXAMPLES OF OTHER ACTIVITIES OF B2B SOCIAL NETWORKS • IBM currently has approximately 116,000 employees registered on LinkedIn • Microsoft has around 25,000 as of November 2008.

  22. Internet Marketing in B2B EC • ORGANIZATIONAL BUYER BEHAVIOR • A Behavioral Model of Organizational Buyers • THE MARKETING AND ADVERTISING PROCESSES IN B2B e.g online directory services, matching services, the marketing and advertising • METHODS FOR B2B ONLINE MARKETING • Targeting Customers e.g using trade magazines and or trade association records • Electronic Wholesalers • DATA MINING

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