UNIT IV

CONSUMER ORIENTED APPLICATIONS:

Retailing is the end business transaction in the business chain or supply link between the manufacturer and the
consumser. It has become a tendency to get products at doorsteps due to the fast changing competitive world. The concept of
retailing slowly changing due to innovations in the field of internet technology

Some of the factors on which they are concentrating are:

1. Products that are suitable for online retailing.

2. Availability of interfaces or software programs for transactions.
3. Providing effective business transactions.
4. Complete transaction process
5. The method of pricing the products in online marketing
6. The method of accepting payments or marketing payments
7. Facing the competition in online marketing
8. Overcoming technological barriers in online transactions
9. Legal issues relating to online sales
10. Tax implications

Online retailing minimized the overbuilding and excess supply of stock in market. This turn reduces cost of production,
storage and distribution. Overbuilding is the concept, which has the effect of shortage of low cost workers in retail industry.
Changes in customer behaviour are also the main reasons for the rapid changes in the retail industry.

TRADITIONAL RETAILING:

The conventional or traditional retailing activities were based on the following aspects:

1. Conventional stores.
2. Shopping malls and departmental stores.
3. Super markets.
4. Manufacturers outlet.
5. Warehouse clubs.
6. Mail order business.
7. Catalog Shopping.

The conventional retailing aimed at providing all goods under one roof . They did not want to loose the customers
and hence tried to provide all types of services to the customers.

ONLINE RETAILING:

Online retailing is the electronic retailing channel through which retailing activities are carriedout. They are
generally divided into three major categories. They are:

1. Television based retailing

2. CD-ROM based retailing
3. Web-based retailing.

Television based

Online retailing models

Web based CD-ROM based

CUSTOMER ORIENTED APPLICATIONS:

E-Commerce provides various consumer oriented services. Some of them are

1. Home banking
2. Financial Services
3. News
4. Educations
5. Games
6. Video conferencing etc.

PERSONAL FINANCE AND HOME BANKING:

The newest technologies are direct deposit of payroll, on-line bill payment and telephone transfers.

Home banking is one of the basic services offered in E-Commerce. It may basic or advanaced service.

 Basic Service
Personal finance, Balance checking, Account statements, Reporting, ATM, Fund
transfer, Bill payment, Account verification.
 Intermediate Service
Household budgeting, updating, stock, portfolio values, Tax returns.
 Advanced services
Stock brokering, mutual funds, online trading, currency trading, Credit/Debit card
management etc.

ATM:

ATMs were introduced during 1970s. It was used to deposit and cash extractions. The first ATM was installed by
Citi-Corp for low bank balance customers. Now ATMs are more convenient to all types of customers.

TELEVISION BASED RETAILING:

In television based retailing, the show-hosting firms provide information relating to the products, quality, price,
availability, mode of payment, characteristics of product etc. The viewers can contact the show-hosting firms through
telephone and can have direct interaction, the firm will get orders over phone. The supply of goods will be done within a
specific period.

The women were considered the largest customers. Price seemed to be the primary factor and convenience was one
of the factors for preferring television based shopping. The present day TV based shopping provides a variety of goods
ranging from clothes, electronic goods, physical fitness devices, houes wares, Computers etc,

These organization provides free time use and money back guarantees. They accept major credit cards for such
purchases. They accept provide sophisticated services. The channels are specialized. However the cable shopping channels
are not interactive because phone lines are used to take order. Electronic retailing has enormous potential and many firms
have entered into the field.

CATALOG BASED SHOPPING:

The Catalog based shopping is slightly a different aspect in online retailing. If a consumer wants to buy equipment,
he can get details relating to various types, prices or manufacturing etc. In his computer, there will be a mobile software
agent. This agent roams the global network and identifies the various sellers’ catalogues that fit specific conditions such as
price, safety, quality etc.

The user can buy the product or switch over to some other products. If the products are too expensive, the
electronic token will be returned. The user cannot buy too expensive products if the terms and conditions are in such a
manner. The user has to use credit card or smart card for payements.

Catalog based online retailing requires CD-Rom Catalog, brochures and various online interactive catalogs,

The distribution online catalog are the most active areas online shopping. Electronic access to product computer
information is needed during design and manufacturing process.Distributed online catalog has three aspects:

(a) The components information.

(b) Transfer or information from either seller to the buyer, and
(c) Information integration into the customer’s computer aided design.

ONLINE-BASED SHOPPING:

The online based shopping is based on the networks and web. The retailers are generally divided into four groups
based on their online operations. They are:

1. Retailers with online storefronts.

2. Web-based catalog retailing.
3. New age retailers
4. Manufacturers-consumer retailers.

The web-catalog retailing is getting more popular and is based on catalog retailing. Some of the firms, Which have
succeeded in online retailing are:

1. Peapod
2. CUC International

Peapod is a famous online retailing store for food retailing services. It provides home shopping services to
customers. It has DOS based system with graphic future. CUC International was a direct marketing ware house.
The product that are normally sold by the organization are.
1.Shopping
2.Travel
3.Auto
4.Dining
The members are connected with toll-free telephone numbers.

ADVANTAGES OF ONLINE RETAILING: Some of the advantages of online retaling are:

1. Lesser time and less space

2. Mass customization
3. Creation of supply chain
4. Identification of specific needs
5. Maintaining higher renewal rates
6. High usage rates
7. Low operating cost
8. Minimum postage expenses
9. Low paper transactions and
10. Easier sales follow-up
MANAGEMENT ISSUES:

The online retailing has many business related problems. The retailers have to reach new customers with low
expenes. The service charges are to be reduced at minimum rates. The web and technology are to be integrated with the
online retailing process.

Consumer and online retailer

There are three major phases in consumer-online retailer model . They are

1. Pre purchase interaction

2. Purchase consummation
3. Post purchase interaction

In Pre purchase interaction, there is search for product in the space provided for information. Then comparisons are done
with reference to price, quality, usage etc. Negotiations take place in terms of price, delivery and payment mode.

In purchase consummation, order placements takes place, then payment authorization is done. The product will be
received in this stage.

In post purchase interaction, customer service and support will be provided.

Types of consumers

1. Impulse buyers : Purchase product quickly

2. Patient buyers: Purchase product after making comparisons
3. Analytical buyers: Do some analytical research for taking decision and then go in for purchases
4. Just-visitors: Who visit the shop but do not purchases.

HOME ENTERTAINMENT:

E-Commerce is related to the commercial activities through electronic components and activites are
extended to the home entertainment also. The user can watch a movie or any entertainment. For this purpose, the following
process is to be followed.

1. User selects an online entertainment

2. The entertainment may be form another server
3. The providing server sends the charge for the program
4. The user has to pay the cost through electronic tokens or credit card number
5. The providing server validates and accepts the payment and transfers the program on the TV set top with
necessary safe guards that prevents any copying of the program. Single player server games as well as multi
player games are also provided.

The user has a control over online entertainment programs. The entertainment on demand gives total control over
the time, mode and place of viewing the program.

HOME ENTERTAINMENT MARKET SIZE:

• Entertainment services are play a major role in e-commerce

• This prediction is underscored by the changing trends in consumer behavior.

• It is shown in Table Impact of Home entertainment on traditional industries:

• This will have devastating effects on theater business

• Economic issues might allow theaters to maintain an important role in the movie industry • Today average cable
bill is approximately $30 a month
Industry Estimates of consumer Expenditures

1980 ($4.7 bin) 1990 ($31.0 bin) 1993 ($37.8 bin)

Theaters 49.0% $2.3 14.5% $4.5 13.2% $5.0

Basic cable 35.0% $1.6 34.5% $10.7 36.9% $13.9

Premium cable 16.0% $0.8 16.5% $5.1 14.0% $5.3

Home video __ __ 33.8% $10.5 34.8% $13.2

Pay per view __ __ 0.7% $0.2 1.1% $0.4

Micro transactions of information:

• One change in traditional business forced by the on-line information business is the creation of a new transaction
category called small-fee transactions for micro services

• The customer by giving some information away for free and provide information bundles that cover the
transaction overhead

. • The growth of small-money transfers could foster a boom in other complementary information services

• The complexity is also increased in micro services when an activity named, reverification is entered.

• It means checking on the validity of the transaction after it has been approved

Desirable Characteristics of an Electronic marketplace

• Critical mass of Buyers and sellers: To get critical mass, use electronic mechanisms

• Opportunity for independent evaluations and for customer dialogue and discussion: Users not only buy and sell
products, they compare notes on who has the best products and whose prices are outrageous

• Negotiation and bargaining: Buyers and sellers need to able to haggle over conditions of mutual satisfaction,
money, terms & conditions, delivery dates & evaluation criteria

• New products and services: Electronic marketplace is only support full information about new services

• Seamless interface: The trading is having pieces work together so that information can flow seamlessly

• Resource for disgruntled buyers: It provide for resolving disagreements by returning the product.