internet marketing & e-commerce (1)

8/3/2019 Internet Marketing & E-commerce (1)

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What is E-commerce?

Use of Internet and Web to transact business

More formally:

Digitally enabled commercial transactions between and

among organizations and individuals


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E-Commerce

Transformation of economic activity into digitalmedia

Exchange information, content, agreements, and

services among parties that are connected to through

the Internet.

Enables new ways of creating, delivering and

capturing value to customers.

Superior information Convenience


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What is e-commerce?

Includes: Online business to business transactions

Online business to consumer transactions

Digital delivery of products and services

Online merchandising

Automated telephone transactions eg phone banking

Automated transfer systems


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E-commerce vs. E-business

E-business: Digital enablement of transactions and processes within

a firm, involving information systems under firms

control

Does not include commercial transactions involving an

exchange of value across organizational boundaries


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Why Study E-commerce?

E-commerce technology is different, morepowerful than previous technologies

E-commerce brings fundamental changes to

commerce

Traditional commerce:

Passive consumer

Sales-force driven Fixed prices

Information asymmetry


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Unique Features of E-commerce Technology

1. Ubiquity

2. Global reach

3. Universal standards

4. Information richness5. Interactivity

6. Information density

7. Personalization/customization

8. Social technology


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Web 2.0

Applications, technologies that allow users to: Create and share content, preferences, bookmarks, and online

personas

Participate in virtual lives

Build online communities Examples

YouTube, Photobucket, Flickr, Google, iPhone

MySpace, Facebook, LinkedIn

Second Life

Wikipedia


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Types of E-commerce

Classified by market relationship

Business-to-Consumer (B2C)

Business-to-Business (B2B)

Consumer-to-Consumer (C2C)

Classified by technology used

Peer-to-Peer (P2P)

Mobile commerce (M-commerce)


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Origins & Growth of E-commerce

Precursors: Baxter Healthcare

Electronic Data Interchange (EDI)

French Minitel (1980s videotext system)

None had functionality of Internet (1994)

1995: Beginning of e-commerce

First sales of banner advertisements

Since then, e-commerce fastest growing formof commerce in the United States as well as

other parts of the world


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The Growth of B2C E-commerce

SOURCES: eMarketer, Inc., 2009a; U.S. Census Bureau, 2009b


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The Growth of B2B E-commerce

SOURCE: U.S. Census Bureau, 2009


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Technology and E-commerce in Perspective

The Internet and Web: Just two of a long list oftechnologies that have greatly changed commerce

Automobiles

Radio

E-commerce growth will eventually cap as it

confronts its own fundamental limitations.


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Potential Limitations on the Growth of

B2C E-commerce

Expensive technology

Sophisticated skill set

Persistent cultural attraction of physical marketsand traditional shopping experiences

Persistent global inequality limiting access to

telephones and computers

Saturation and ceiling effects


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E-commerce: A Brief History

19952000: Innovation

Key concepts developed

Dot-coms; heavy venture capital investment

20012006: Consolidation Emphasis on business-driven approach

2006Present: Reinvention

Extension of technologies

New models based on user-generated content, social

networking, services


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Early Visions of E-commerce

Computer scientists: Inexpensive, universal communications and computing

environment accessible by all

Economists:

Nearly perfect competitive market and friction-free commerce

Lowered search costs, disintermediation, price transparency,

elimination of unfair competitive advantage

Entrepreneurs: Extraordinary opportunity to earn far above normal returns on

investmentfirst mover advantage


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Assessing E-commerce

Many early visions not fulfilled Friction-free commerce

Consumers less price sensitive

Considerable price dispersion

Perfect competition

Information asymmetries persist

Disintermediation

First mover advantage Fast-followers often overtake first movers


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Understanding E-commerce:

Organizing Themes

Technology: Development and mastery of digital computing and

communications technology

Business: New technologies present businesses with new ways of organizing

production and transacting business

Society: Intellectual property, individual privacy, public welfare policy


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Practical concerns

for e-commerce deals

Identity and capacity of seller or buyer

Authenticity of offer and acceptance (digital signatures)

When and where contract formed

Governing law

Terms and conditions (click through)


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Practical Concerns for

e-commerce deals(2)

Agreement on electronic payment system

Security of information exchanges

Consequences on breach

Storing electronic data to prevent alteration


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E-commerce Trends 20092010

New business models based on social technologies,consumer-generated content, and services

Post Recession, growth expected to resume

Broadband and wireless access continue to grow

Mobile e-commerce begins to take off with 3G

Traditional media losing subscribers

internet marketing & e-commerce (1)

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