MKelect 3- E-Commerce and

Internet Marketing

Course Outline:
Parallels study of basic marketing and
explores key marketing concepts in the from
solving e-marketing problems to interviewing
a professional and creating a web site.
Exposes students to the development or
evaluation of a strategic marketing plan for a
product or product mix offering on the
internet and the development or evaluation
of the companys e-strategy and web site.

Grading System:
PRELIM
Class performance (HW & SW)
-15%
Ecommerce Project
-15%
ENDTERM
Quizzes
-30%
Exam
-40% Class performance (HW & SW)100% 10%
Ecommerce Project
-20%
MIDTERM
Quizzes
-30%
Class performance (HW & SW)
-10%
Presentation of Ecommerce P.
Ecommerce Project
-20%
-40%
100%
Quizzes
-30%
Exam
-40% Prelim
30%
100% Midterm
30%
Endterm
100%

40%

Electronic Commerce:
Second Wave
Started its humble beginnings in in the mid-

1990s
Electronic Commerce grew rapidly until
2000
From 2000-2003, many industries used ecommerce
In 2003 E-commerce showed signs of a
new life, because many industries are
gaining profits; new investments are coming
in.

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

Why Study Ecommerce?

Electronic commerce means shopping on the part of

the Internet called the World Wide Web. This also includes
many activities such as business trading with other
businesses and internal processes that companies use to
support their buying, selling, hiring, planning and other
activities.
E-commerce technology is different, more powerful than

previous technologies
E-commerce bringing fundamental changes to commerce
Traditional commerce:
Passive consumer
Sales-force driven
Fixed prices
Information asymmetry

Electronic Commerce Categories

1.
2.
3.
4.
5.

Business-to-consumer
Business-to-business
Business Processes
Consumer-to-consumer
Business-to-government

Elements of E-commerce
Business-to-business
e-commerce

B2C ecommerce

Business
processes that support
selling and purchasing
activities

Key characteristics of the first two waves of

Ecommerce
Electronic
Commerce
Characteristics

First Wave

Second Wave

International
character of
electronic
commerce

Dominated by US
companies

Global enterprise in many

countries participating in
electronic commerce

Languages

in English

In multiple languages

Funding

Many new companies

started with outside
investor money

Established companies
funding electronic
commerce initiatives with
their own capital

Connection
technologies

Slow Internet
connections

Rapidly increasing use of

broadband technologies

B2B technologies

Relied on a patchwork of
disparate communication
and inventory
management

Integrated with Radio

Frequency Identification
and biometric devices to
manage information and

Electronic
commerce
characteristics

First wave

Second wave

E-mail contact with

customers

Unstructured e-mail
communication with
customers

Customized e-mail
strategies now integral to
customer contact

Advertising and
electronic commerce
integration

Overreliance on simple
forms of online
advertising as main
revenue source

Use of multiple
sophisticated advertising
approaches and better
integration of electronic
commerce with existing
business processes and
strategies

Distribution of digital
products

Widespread piracy due to

ineffective distribution of
products

New approaches to the

sales and distribution of
digital products

First-mover
advantage

Rely on first-mover
advantage to ensure
success in all types of
markets and industries

Realize that first-mover

advantage leads to
success only for some
companies in certain
specific markets and
industries.

Well suited to
Suited to
electronic commerce combination of
electronic and
traditional
commerce
strategies

Well suited to
tradtional
commerce

Sale/purchase of books
and CDs

Sale/purchase of
impulse items for
immediate use

Sale/purchase of
automobiles

Sale/purchase of goods Online banking

that have strong brand
reputations

Low-value transaction
(total sale/purchase
under $10)

Online delivery of
software

Roommate-matching
services

Sale/purchase of used,
unbranded goods

sale/purchase of travel
service

Sale/purchase of
residential real estate

Online shipment of
tracking

Sale/purchase of
high-value jewelry
and antiques

Sale/purchase of
investment and

Role of Merchandising
Product/Process Suitability to

Electronic Commerce
Commodity item
a product or service that is hard to
distinguish from the same product or
services provided by other sellers; its
features have become standardized and
well-known.
Shipping profile
the collection of attributes that affect how

Virtual community
- gathering of people who
share a common interest , but
instead of physical world it takes
place on the Internet.

Economic Forces and Electronic

Commerce
Two MARKET conditions
Hierarchical business organizations
Transaction costs the total of all costs that a

buyer and seller incur as they gather

information and negotiate a purchase-and-sale
transaction.
Network economic structure where
companies coordinate their strategies,
resources, and skill sets by forming long-term,
stable relationships with other companies and
individuals based on shared purposes.

Law of diminishing returns vs. network effect

Value chain a way of organizing the activities

that each strategic business unit undertakes to

design, produce, promote, market, deliver and
support the products or services it sells.
Primary activities of each SBU
Identify customers
Design
Purchase materials and supplies
Manufacture product or create service
Market and sell
Deliver
Provide after-sale service and support

Support activities
Finance and administration activities
Human resource activities
Technology development activities

 Trust issues on the Web

Language issues
Translation vs. localization
localization - a translation that considers multiple elements

of the local environment, such as business and cultural

practices, in addition to local dialect variations in the
language.

Cultural Issues
Combination of language and customs

Culture and government

Infrastructure Issues
Internet infrastructure includes the computers and software

connected to the internet and the communications network

over which the communication packets travel

Freight forwarder a company that

arranges shipping and insurance for
international transactions
Custom broker a company that
arranges the payment of tariffs and
compliance with custom laws for
international shipments.

Bonded warehouse

a secure location
where incoming international shipments can be
held until customs requirements are satisfied or
until payment requirements are completed