国际商务英语Chapter12E-commerce.ppt

Chapter 12,E-commerce,1. What is E-commerce?,Definitions Electronic commerce is an emerging concept that describes the process of buying and selling or exchanging of products, services, and information via computer networks including the Internet. It can be defined from these perspectives: From a communications perspective, EC is the delivery of information, products/ services, or payments over telephone lines, computer networks, or any other electronic means. From a business process perspective, EC is the application of technology toward the automation of business transactions and work flow.,From a service perspective, EC is a tool that addresses the desire of firms, consumers, and management to cut down service costs while improving the quality of goods and increasing the speed of service delivery. From an online perspective, EC provides the capability of buying and selling products and information on the Internet and other on-line services.,e-business The term commerce is viewed by some as transactions conducted between business partners. Therefore, the term electronic commerce seems to be fairly narrow to some people. Thus, many use the term e-business. It refers to a broader definition of EC, not just buying and selling but also serving customers and collaborating with business partners, and conducting electronic transactions within an organization. In this book we use the term electronic commerce in its broadest scope, which is basically equivalent to e-business.,The E-commerce Field,Classification of the EC Field by the Nature of the Transactions Business-to-business (B2B): Most of EC today is of this type. It includes the IOS transactions and electronic market transactions between organizations. Business-to-consumer (B2C): These are retailing transactions with individual shoppers. The typical shopper at A is a consumer, or customer. Consumer-to-consumer (C2C): In this category a consumer sells directly to consumers. Examples are individuals selling classified ads and selling residential property, cars, and so on. Advertising personal services on the Internet and selling the knowledge and expertise is another example of C2C. Several auction sites allow individuals to put items up for auctions. Finally, many individuals are using intranets and other organizational internal networks to advertise items for sale or services.,Consumer-to-business (C2B): This category includes individuals who sell products or services to organizations, as well as individuals who seek sellers, interact with them, and conclude a transaction. Nonbusiness EC: An increased number of non-business institutions such as academic institutions, not-for-profit organizations, religious organizations, social organizations, and government agencies are using various types of EC to reduce their expenses (e.g., improve purchasing) or to improve their operations and customer service. Intrabusiness (Organizational) EC: This category includes all internal organizational activities, usually performed on intranets, which involve exchange of goods, services or information. Activities can range from selling corporate products to employees to online training and cost-reduction activities.,2. Retailing in E-commerce,electronic marketing structure Electronic marketing can be classified as consumer-oriented (B2C) and business oriented electronic marketing (B2B). If a manufacturers site does not have high visibility, just opening a home page and passively waiting for customers access may not contribute greatly to sales. Therefore, it is necessary for companies to heavily advertise their Web sites address. Any cost-effective advertisement can be employed for this purpose. One may link the site to famous electronic directories, and most manufacturers need the directory service of intermediaries. These intermediary sites are called electronic shopping malls (or e-mails). We can observe two types of electronic shopping malls: electronic distributors and electronic brokers (e-broker). If the e-mail takes responsibility for order fulfillment, it is an electronic distributor-for example, Amazon and Online JCPenney. In contrast, electronic brokers only help the search process, for example, Internet Mall. The actual order is forwarded to a manufacturer or distributor.,Business models applied to electronic marketing to consumers,Direct marketing versus indirect marketing Direct marketing means that manufacturers advertise and distribute their own products to customers via the Internet-base electronic store (or other telemarketing media) without intervention of any intermediaries. On the other hand, indirect marketing means the products are distributed through third-party intermediaries such as e-mails. Full cyber marketing versus partial cyber marketing Full cyber marketing (or pure cyber marketing) means the companies like Amazon sell their products and services only through the Internet, whereas partial cyber marketing means the companies like Barnes & Noble sell not only through the Internet but also through traditional physical stores.,Electronic distributor versus electronic broker Among electronic intermediaries, let us distinguish the electronic distributors from electronic brokers depending upon whether an electronic intermediary is responsible for order fulfillment and guarantee. Electronic brokers only introduce suppliers who deal with the items that the customers are looking for. Electronic store versus electronic shopping mall It is not easy to define the difference between an electronic store (e-store) and an electronic shopping mall (e-mail). In the physical world, a shopping mall is a collection of stores, and the stores in the mall are independent distributors. In this sense, the role of electronic directory broker along with the associated e-stores matches with that of electronic mall. However, many online department stores call their sites electronic shopping malls instead of electronic stores. The term electronic shopping mall is sometimes used as wide umbrella a term of electronic shop and store as well as a mall.,Generalized e-malls/stores versus specialized e-mall/stores The generalized e-mall/stores deal with various categories of items, so the supplying items are very wide. Online department stores belong to this category. On the other hand, the specialized e-malls/stores focus on only special types of items. Proactive versus reactive strategic posture toward cyber marketing Proactive strategic posture toward cyber marketing means that a companys main distribution channel is the Internet and internal management such as inventory and operations management is focused to capitalize on the benefit of cyber marketing. In contrast, a reactive strategic posture toward cyber marketing means that the traditional physical distribution channel continues to be its main one even though the company has opened an online distribution channel. So the traditional internal management style is left unchanged.,Global versus regional marketing Even though the Internet is connected to the entire world, some products and services cannot be provided globally. For instance, perishable item like groceries can not be delivered long distances. Peapod (), a grocery delivery service based in Evanston, Illinois, belongs to this category. Delivery costs can limit the range of service to a certain region; legal boundaries limit range of service, as in the case of banking and insurance; and language can also limit business range. So management must decide the geographical range of business considering these factors. Sales versus customer service The web sites of some companies are used mainly or solely for customer service. All major computer hardware and software companies provide customer service sites, which can enhance customer satisfaction which reducing the cost of maintaining call center personnel. Intel, for example, used its site until 1998 primarily for customer service. Some companies use two sites: one for sales and one for service.,EC Consumers,Electronic Commerce consumers can be divided into two types: individual consumers, who get much of the media attention, and organizational buyers, who do most of the shopping in cyberspace. Organizational buyers include governments, private corporations, resellers, and public organizations.,Consumer behavior,Utilitarian shopping carrying out a shopping activity “to achieve a goal” or “complete a task”; Hedonic shopping carrying out a shopping activity because “it is fun and I love it”,Types of consumers,Impulsive buyers, who purchase products quickly; patient buyers, who purchase products after making some comparisons; analytical buyers, who do substantial research before making the decision to purchase products or services;,The Impact of EC on Traditional Retailing Systems,disintermediation & re-intermediation By using the Internet, manufacturers can sell directly to customers and provide customer support on-line. In this sense, the traditional intermediaries are eliminated. Let us call this phenomenon disintermediation. However, new electronic intermediaries-e-mall and product selection agents-are emerging instead. Occurrence of a new breed of electronic intermediaries is called re-intermediation. In response to this change, traditional intermediaries like department stores are joining the bandwagon of the new opportunity but still keeping their traditional way of doing business. However, the traditional distribution business can never be the same again, because it has to provide something that the electronic intermediaries can not provide. On the other hand, some manufactures like automakers still need to cooperate with dealers in a different way (see the Ford case earlier in the chapter). These phenomena are another evolution toward re-intermediation rather than disintermediation.,Disintermediation is a new term that refers to the removal of organizations or business process layers responsible for certain intermediary steps in a given value chain. In the traditional distribution channel, there are intermediating layers, such as wholesaler, distributor, and retailer, between the manufacturer and consumer. In Japan, there sometimes exist 10 layers, which add a 500 percent markup. Owing to the presence of the Internet as a marketing and product selection vehicle, customers are beginning to question the value offered by the distribution channels, when they can theoretically obtain the same products directly from the manufacturer. If manufacturers are able to connect directly with consumers and shorten the traditional distribution chain they used to depend on, it is theoretically possibly to get rid of the inefficiencies of the current structure. A logical alternative to disintermediation is re-intermediation, which actually points to the shifting or transfer of the intermediary function, rather than the complete elimination of it. In the EC era, the intermediaries such as e-mail, directory and search engine services, and comparison-shopping agents can create the role of re-intermediation. These new intermediaries replace the role of traditional intermediary layers. Another re-intermediation can emerge by differentiating the service of traditional intermediaries from on-line intermediation. This can be realized, for instance, by offering entertainment during shopping and by upgrading the shopping as pleasant as hobby. In a word, customers have more choices of alternative intermediaries.,Impact on Manufacturers Distribution Strategy,In addition to disintermediation and re-intermediation, an interesting emergence of manufacturers distribution strategies is the following: Manufacturers monopolistic Internet-based distribution: Levis does not allow anyone else to sell the Levis product on the Internet. This is possible because Levis has such a name value, and customers like to have a single contact point in cyberspace. Coexistence with the dealers: This is the case in car distribution. Automakers need to keep the traditional dealers as test-drive servers even though they sell on the Internet. Regionally mixed strategy: In a certain region a particular company may sell on the Internet, while in another region it sells through the traditional retailer. For instance, Nike sells on the Internet but only in the United States. Nike provides physical retailing stores abroad. The policy depends upon the maturity of Internet-based customer groups. Mass customization for make-to-order: Manufacturers have to adapt to the customized orders of ultimate consumers. This means the manufacturer should be ready for mass customization. Powerful suppliers: According to Fortune, Aug. 16, 1999, Home Depot sent a letter to its major suppliers (), reminding them that Home Depot has the right not to carry their products if they will sell on-line, directly to customers.,3. E-banking,E-banking is the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels. E-banking includes the systems that enable financial institution customers, individuals or businesses, to access accounts, transact business, or obtain information on financial products and services through a public or private network, including the Internet.,Two primary types of Internet websites: informational and transactional.,Informational Websites Informational websites provide customers with access to general information about the financial institution and its products or services. Transactional Websites Transactional websites provide customers with the ability to conduct transactions through the financial institutions website by initiating banking transactions or buying products and services.,E-banking Components,E-banking systems can vary significantly in their configuration depending on a number of factors. Financial institutions should choose their e-banking system configuration, including outsourcing relationships, based on four factors: Strategic objectives for e-banking; Scope, scale, and complexity of equipment, systems, and activities; Technology expertise; and Security and internal control requirements.,Ways of determining the overall system configuration for the various components of an e-banking system. First, one or more technology service providers can host the e-banking application and numerous network components . Second, the institution can host all or a large portion of its e-banking systems internally.,Electronic Authentication,Verifying the identities of customers and authorizing e-banking activities are integral parts of e-banking financial services. Since traditional paper-based and in-person identity authentication methods reduce the speed and efficiency of electronic transactions, financial institutions have adopted alternative authentication methods, including: Passwords and personal identification numbers (PINs), Digital certificates using a public key infrastructure (PKI), Microchip-based devices such as smart cards or other types of tokens, Database comparisons (e.g., fraud-screening applications), and Biometric identifiers.,Payments for E-commerce,Many businesses accept various forms of electronic payments for their products and services. Financial institutions play an important role in electronic payment systems by creating and distributing a variety of electronic payment instruments, accepting a similar variety of instruments, processing those payments, and participating in clearing and settlement systems. However, increasingly, financial institutions are competing with third parties to provide support services for e-commerce payment systems. Among the electronic payments mechanisms that financial institutions provide for e-commerce are automated clearing house (ACH) debits and credits through the Internet, electronic bill payment and presentment, electronic checks, e-mail money, and electronic credit card payments. Additional information on payments systems can be found in other sections of the IT Handbook.,Most financial institutions permit intra-bank transfers between a customers accounts as part of their basic transactional e-banking services. However, third-party transfers with their heightened risk for fraud often require additional security safeguards in the form of additional authentication and payment confirmation.,Person-to-Person Payments,Electronic person-to-person payments, also known as e-mail money, permit consumers to send “money” to any person or business with an e-mail address. Under this scenario, a consumer electronically instructs the person-to-person payment service to transfer funds to another individual. The payment service then sends an e-mail notifying the individual that the funds are available and informs him or her of the methods available to access the funds including requesting a check, transferring the funds to an account at an insured financial institution, or retransmitting the funds to someone else. Person-to-person payments are typically funded by credit card charges or by an ACH transfer from the consumers account at a financial institution. Since neither the payee nor the payer in the transaction has to have an account with the payment service, such services may be offered by an insured financial institution, but are frequently offered by other businesses as well.,Wireless E-Banking,Wireless banking is a delivery channel that can extend the reach and enhance the convenience of Internet banking products and services. Wireless banking occurs when customers access a financial institutions network(s) using cellular phones, pagers, and personal digital assistants (or similar devices) through telecommunication companies wireless networks. Wireless banking services in the United States typically supplement a financial institutions e-banking products and services.,Electronic Payment System,E