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E-Business: Doing
Business Online
 n g G oa l s
Learni
Define e-business and discuss
1 how it can help achieve business
success.
2 Distinguish between a corporate
and a marketing Web site.
3 List the major forms of B2B
e-business.
Explain B2C e-business and
4 identify the products most often
sold online.
5 Describe some of the challenges
associated with e-business.
Discuss how organizations use
6
Internet communications to
advance their objectives.
7
Discuss Web sites and identify
methods for measuring
Web site effectiveness.
8 Explain the global scope
of e-business.
 s E -B u s i n e s s ?
W ha t i

Electronic business (e-business) - Conducting business

via the Internet.
1. E-tailing, or virtual storefronts on Web sites.
2. Online business-to-business transactions.
3. Electronic data interchange (EDI), the business-to-business
exchange of data using compatible software.
4. E-mail, instant messaging, and other Web-enabled communication
tools and their use as media for reaching prospective and existing
customers.
5. The gathering and use of demographic, product, and other
information through Web contacts.
 i li t ie s a n d
Capab s
E - B u si ne s
Benefits of
• 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.
 B u si n es s
Some E-
Successes
 s s W e b S i t e s
Bu s i n e
 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.
 to- B u si n ess
Business-
(B2B)
• Business-to-business e-business (B2B) Electronic business
transactions between businesses using the Internet.

• B2B transactions total $2.5 trillion.

• By some estimates, account for 90% of all e-commerce activities.

• Can reduce cost of B2B transactions by almost 25 percent.

 In t er c h an ge s,
le c t ro n i c D ata
E E xc h an g es
e ts , & P rivat e
Ex t ra n

• Electronic data interchange (EDI) is a

computer-to-computer exchange of invoices,
purchase orders, price quotations and other
sales information.
• Extranets offer an efficient way for business to
collaborate with vendors, partners and
customers.
• Private Exchanges are the next generation of
extranets where all types of data related to e-
business is shared.
 opp i ng an d
Online Sh
B2 C

• 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.
 on li n e b u yers
Wh o ar e
an d se l l er s?

 Typical user is young, highly

educated, urban or suburban,
and affluent.
 Demographics are shifting;
there is decreasing difference
in Internet purchasing habits
among groups.
 f it s o f B 2 C
Bene
E -B u s in es s

Lower Prices
• Many products cost less online.
• Internet allows customers to easily compare prices from multiple
sellers.
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.
 g Sa f e O n l i ne
Dev el opi n
t S y s te m s
Paymen

• 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.
 s Chal len g es
E-B u sin es
(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.
 s C ha l len g es
E-B u sin es
et F r a u d)
(Intern
• 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.
 s C h al len g e s
E- B u si n es
bsit e d e si g n )
(p o o r w e
• 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.
 n g th e W e b’ s
Usi o n
c a ti o n F u n c ti
Co mm u n i

• 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
 m u n i cati on
Web Com
Blogs
• Blog - short for Web log, an online journal written by
a blogger.
• 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.
 m u n i cati o n
Web Com io n
as ed P ro m o t
We b B
• 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.
 v ir on m en t of
G lob a l E n
E -B u s in ess

 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...
 r ld In ter n e t
Wo
Statistics
 Dev el o p in g a
f ul W e b sit e
Success

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
 i n g a W e b s i t e
Ma n a g

• 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.