E-Business: Doing Business Online

1. E-Business: Doing Business Online Chapter 7 Safety, Convenience, Fraud, Marketing

2. 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.

3. 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.

4. Some E-Business Successes North South University Agora Direct Boston Symphony Orchestra

5. Business Web Sites • Increase a firm’s 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.

6. Business-to-Business (B2B) • Business-to-business e-business (B2B) Electronic business transactions between businesses using the Internet. • By some estimates, account for 90% of all e-commerce activities. • Can reduce cost of B2B transactions by almost 25 percent. • Compare with B2C

7. Electronic data interchange (EDI) • computer-to-computer exchange of invoices, purchase orders, price quotations and other sales information. • Quick Response, cost, Web services (Open Arch.) • Extranets • Accessible through firm’s website- offer an efficient way for business to collaborate with vendors, partners and customers • VPN • Private Exchanges (c-business) • the next generation of extranets where all types of data related to e-business is shared- more collaborative.

8. 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.

9. 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.

10. Benefits of B2C • Lower Prices • Many products cost less online. Internet allows customers to easily compare prices from multiple sellers. • Saves time & time constrains • 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. Midterm -127th June- Class Time Covers Ch 2, 4, 5, 7 20% MCQ 40% SQ 40% LQ

16. Using the Web’s Communication Function • Web has four main functions: e-business, entertainment, information, and communication. • Communication is Web’s 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.

17. Web Communication Blogs • Blog - short for Web log, an online journal written by a blogger. • Comments/questions section • 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: Apple’s iLounge builds the iPod brand and gives Apple ideas for product improvement. • Employee blogs may present ethical issues.

18. Web CommunicationWeb 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.

19. 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...

20. World Internet Statistics

21. 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

22. 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.

24. 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. 5 1 6 2 3 7 4 8