Electronic (e-) and Mobile

(m-) Commerce
E-BUSINESS
E-business process
Involves the use of electronic or digital technologies, often based on the Internet or World
Wide Web, to accomplish some business task
A company advertises job openings on its web site to recruit new employees

E-business
A company where a significant or substantial part of its business is based on the utilization
of e-business processes
Companies vary in their use of e-business processes

E-commerce
The use of e-business process for the specific purpose of buying or selling goods and
services → e-commerce is a form of e-business
Adoption of e-business practices increases productivity and efficiency
B2C
Managing channel conflict
A conflict between an online selling channel and
physical selling channels
Sellers that are click-and-mortar companies face
a conflict with their regular distributors when
they circumvent those distributors by selling
online directly to customers
Resolving conflicts within click-and-mortar
organizations
Conflicts may arise in areas such as pricing of
products and services, allocation of resources
(e.g., advertising budget), and logistics services
provided by the offline activities to the online
activities (e.g., handling of returns of items
bought online)
ISSUES IN ONLINE RETAILING
Managing order fulfillment and logistics
Need to design systems to accept and process a
huge volume of small orders, physically pick
items from warehouse shelves and put them
into boxes, be sure that the correct labels are
applied, and the need to accept returns
Return process: referred to as reverse logistics
Determining viability and risk of online
retailers
Low entry barriers intensify competition in an
industry → need to determine how long to
operate while still losing money and how to
finance the losses
B2C
Identifying appropriate revenue (business) models
Revenue from advertising to keep the business afloat until the
customer base reached appropriate volume
This model did not always work → too many sites competing for too few
advertising dollars, which went mainly to a small number of well-known sites
Chicken-and-egg problem: sites could not get advertisers to come if
they did not have enough visitors
To succeed in e-commerce, it is necessary to identify appropriate
revenue models and modify those models as the market changes

ISSUES IN ONLINE RETAILING

B2B
Sell-side marketplace model
Organizations sell their products or services to other organizations from
their own private e-marketplace or from a third-party site → similar to the
B2C model in which the buyer is expected to come to the seller’s site, view
catalogs, and place an order, except that the buyer is an organization
Seller can be either a manufacturer, a distributor, or a retailer → seller uses e-commerce
to increase sales, reduce selling and advertising expenditures, increase delivery speed,
and reduce administrative costs
Model is especially suitable to customization → self-configuration of orders results in
fewer misunderstandings about what customers want and much faster order fulfillment
B2B
E-Sourcing
Refers to many procurement methods: auctions, RFQ processing, and
private exchanges
Also applies to all other secondary activities, which have added to the
cycle time and cost of procurement transactions: trading partner
collaboration, contract negotiation, and supplier selections
B2B
E - P R O CUREMENT
Refers to the re-engineered
procurement process using e-business
technologies and strategies
Corporate procurement, also called corporate
purchasing, deals with the buying of products
and services by an organization for its
operational and functional needs
P U B L I C A ND P R I VAT E E XCHA NGES
Exchanges: sites where many buyers
and sellers conduct business
transactions
May be public or private, depending on
whether or not they are open to the public
Vertical exchange: serves one industry along
the entire supply chain
Horizontal exchange: serves many industries
that use the same products or services
E-GOVERNMENT
E-Government
Use of Internet technology to deliver information and public services
to citizens, business partners and suppliers of government entities,
and people who work in the public sector
Improves the efficiency and effectiveness of the functions of government,
including the delivery of public services
Enables governments to be more transparent to citizens and businesses by
giving access to more of the information generated by government
Offers greater opportunities for citizens to provide feedback to government
agencies and to participate in democratic institutions and processes
E-GOVERNMENT
Categories
G2C: government agencies using the Internet to provide services to citizens →
electronic benefits transfer (EBT), in which governments transfer benefits, such as
Social Security and pension payments, directly to recipients’ bank accounts or to
smart cards
G2G: includes intra-government e-commerce (transactions between different
governments) as well as services among different governmental agencies
G2B or B2G: governments use the Internet to sell to or buy from businesses →
electronic tendering systems, using reverse auctions, are often mandatory to
ensure the best price and quality for government procurement of goods and
services
DIGITAL MARKETING
Market Research
Includes gathering information about topics such as the economy,
industry, firms, products, pricing, distribution, competition,
promotion, and consumer purchasing behavior
Goal is to find information and knowledge that describes the
relationships among consumers, products, marketing methods, and
marketers
Used to discover marketing opportunities, establish marketing plans, better
understand the purchasing process, and evaluate marketing performance
Objective is to turn browsers into buyers
DIGITAL MARKETING
Web/Online Advertising
Two major business models for advertising online are (1) using the Web as a
channel to advertise a firm’s own products and services and (2) making a
firm’s site a public portal site and using captive audiences to advertise
products offered by other firms
Interactive marketing
A consumer can click an ad to obtain more information or send an e-mail to ask a
question → enabled marketers and advertisers to interact directly with customers
Vendors also can target specific groups and individuals on which they want to spend
their advertising dollars
DIGITAL MARKETING
S E A R CH E NG INE O P T I MIZ ATIO N
(S E O)
A set of practices designed to increase
the chances that a company’s website
will appear in organic search results
Organic search results come from a company
designing or optimizing its web site to appeal
to the various algorithms used by search
engines to determine the order of listings in
search results
Google uses a patented PageRank™
algorithm (among other factors) to determine
organic search results
TYPES OF SEARCH ENGINE MARKETING
PAY P E R CL I CK ( P P C)
Involves paying search engines to
display PPC listings alongside organic
search results in areas designated for
paid or sponsored ads
Most search engines clearly identify organic
vs. PPC search listings through shading,
labels, or other identifiers
Google uses a program called Adwords to
manage its PPC business
DIGITAL MARKETING
Web Advertising Payment Scheme
Cost Per Impression
Advertiser pays for the number of users exposed to the ad, typically expressed as cost
per mille (CPM) or cost per thousand (CPT)
Both terms base the ad charge on how many thousands of users are exposed to the ad
Cost per click (or pay per click, PPC)
Advertiser pays based on how many people take actions by clicking on the ad which
often services as a hyperlink to the advertiser’s web site or a page promoting the
advertiser’s brand
Cost per Action (CPA)
Similar to cost per click, but here the qualifying action might be to watch a video, fill out
a lead form, purchase a product, visit a web site, make a donation, and so on
mCOMMERCE
Mobile eCommerce
Emphasizes the use of mobile app and mobile websites for carrying out transactions and
does not necessarily involve interaction with a traditional retail store
Mobile Retailing
The use of mobile technology to promote, enhance, and add to value to the in-store
shopping experience, but could include situations where the customer ultimately orders
from a web site or mobile app
Mobile Marketing
A variety of activities used by organizations to engage, communicate, and interact over
Wi-Fi and telecommunications networks with consumers using wireless, handheld
devices, and describes promotional strategies and tactics that encourage both Mobile
eCommerce and Mobile Retail
mCOMMERCE
Reasons for Slow Adoption
Relatively primitive mobile devices (compared to modern
smartphones and tablets)
Concerns about privacy and security
Slow network connection speeds
Limited market size
Limited and inconvenient mobile payment options
Lack of technological standardization (devices, OSs, browsers, etc.)
mCOMMERCE
Spark a customer’s interest using mobile
advertising or direct mail catalogs
Customer visits a brick-and-mortar store to
examine the product firsthand and speak to a
sales person → in-store purchases might be
made using one of several mobile payment
methods
If the store doesn’t have the particular size
or color of the product desired, the
customer can order thru eCommerce site
with a smartphone using a QR code
Product would be delivered through the mail
OMNI-CHANNEL IDEAL SCENARIO
Product returns could be handled through
the mail or returned to the store
depending on what is most convenient for
the customer
Customer service reps in a call center
would have a record of the customer’s
purchase regardless of which channel the
transaction had been completed through
Need to consider impact of social media
Customers interact with the brand on sites like
Facebook or Twitter and share brand
experiences with others in their social network
mCOMMERCE
In-Store tracking
Tracking how a customer moves through a store, noting what displays the
customer looks at or what departments the customer spends the most time in can
be extremely helpful for understanding individual consumer preferences as well as
creating optimal store layout
While the goal of in-store tracking is to provide an enhanced shopping experience for the
consumer, most people are likely to find this kind of monitoring a violation of privacy

Quick Response (QR) code

An easier alternative to typing a URL address into a mobile browser to access
product information from a mobile device
Marketers have used them in print advertising and direct mail ads with some success
MOBILE ELECTRONIC PAYMENT SYSTEMS

Wireless payment systems transform mobile phones into

secure, self-contained purchasing tools capable of instantly
authorizing payments over the cellular network
One advantage of many mobile payment systems over traditional
credit card systems is the ability to handle micropayments, or
transactions involving relatively small sums of money
MOBILE ELECTRONIC PAYMENT SYSTEMS
CHA R G E TO PHO NE B I L L WI T H S MS
CO NFIR MAT IO N
Requires users to set up an account with a
payment company
User will receive an SMS text message
with a secure PIN number that he must
enter on the eCommerce web site to
complete the transaction
Amount of the charge is then added to the
payer’s phone bill, and the telecom carrier
remits this amount to the payee
Telecom companies may deduct a service
charge from the amount paid
NE A R F I E L D CO MMUNI CAT IONS
( NF C)
Designed for payments in traditional retail
stores
At check out, mobile users simply pass or
tap their phone on a merchant terminal
and payment is transferred; users receive
an SMS text message confirmation
Only a small number of phones have the
required NFC feature
Additionally, the program is only available to
people with Citi MasterCard with PayPass or
Google’s Pre-Paid credit card
MOBILE ELECTRONIC PAYMENT SYSTEMS
P HO NE DISPLAYS B A R CO D E T HAT
R E TA IL ER SCA NS
Mobile payment systems that generate
a QR code on the user’s phone, which is
then scanned by the retailer
Starbucks uses this approach with its mobile
payment system: transfer money to a pre-
paid account → upon check out, users
activate the Starbucks app, which creates a
bar code that can be scanned at check out →
funds are deducted from the user’s account
CR E D I T CA R D & WE B F O R M
Using a mobile web browser, buyers
make online purchases by entering
their credit card number and other
identifying information just the way
they would if they were using a
personal computer
Process can be cumbersome given the smaller
screen and key boards on mobile devices
MOBILE ELECTRONIC PAYMENT SYSTEMS
T R A NSFE R FUNDS F R O M PAY ME NT
MO B I L E P HO NE CA R D R E A D E R
ACCO UNT USING S MS
User creates an account at a company Requires mobile phone users to insert a
and transfers money into it from a small card reader in the audio jack of
bank or credit card account their mobile device
Using a mobile phone and SMS, the user can Card reader allows those with accounts at
then transfer money to anyone else with a Square or PayPal to make or receive credit
mobile phone number card payments without a merchant account
Receiver must create an account at the
payment company in order to retrieve the
funds
End of Presentation