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B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
UNIT II PUSH AND PULL STRATEGIES
When shoul !ou use "ush m#r$et%n&' #n (hen shoul !ou use "ull m#r$et%n& )or
!our ecommerce bus%ness*
+et,s be&%n b! e-n%n& both. Push ar!eting %s (hen !ou #ct%/el! "ush !our
"rouct to(#r # t#r&ete #u%ence0 In some c#ses' !ou l%ter#ll! cre#te # m#r$et )or
!our "rouct0 1or e"am#le' !ou h#/e l#unche # (ebs%te )e#tur%n& !our o(n
custom m#e #n es%&ne b#b! clothes20then !ou #/ert%se th%s cloth%n& #n
!our (ebs%te (%th 33C' %s"l#! #s' etc0 In th%s c#se' !ou #re cre#t%n& # m#r$et )or
!our "rouct #n "ush%n& consumers to(#r %t0
3ush m#r$et%n& %s usu#ll! &e#re %rectl! to the bu!er0 3ull m#r$et%n& %n/ol/es
cre#t%n& # em#n )or !our "rouct0 4 &oo e"am#le o) th%s (oul be the %n)#mous
T%c$le Me Elmo # )e( !e#rs #&o' or the 5hu 5hu "ets th%s "#st hol%#! se#son0 6%s
s#( these to!s on TV #n (#nte them0 Usu#ll!' !ou s%n$ # cons%er#ble sum o)
mone! %n "ull m#r$et%n& bec#use !ou must #ct%/el! bu%l # em#n # es%re )or the
"rouct' (h%ch &ener#ll! t#$es # lot o) #/ert%s%n&7
There %s # "l#ce )or both $%ns o) m#r$et%n&---both "ush #n "ull---to hel" &ro( !our
onl%ne bus%ness0
The best o) #ll "oss%ble (orls' thou&h' %s to use both t!"es o) m#r$et%n& s%e b!
s%e0
Here #re some e"am#les o) "ush8"ull m#r$et%n& str#te&%es !ou coul use.
3ull. 9ou cre#te #n onl%ne commun%t! #ssoc%#te (%th !our onl%ne bus%ness0 4s more
members jo%n #n "#rt%c%"#te %n the )orum' the! become %n/ol/e (%th !our (ebs%te
#n !our "rouct8s0 In th%s (#!' %nterest %s tr#nsl#te %nto bu!%n&' #n bu!%n& %nto
customer lo!#lt!0
3ull. St#rt # blo& )or !our bus%ness #n cons%stentl! "ost &oo :u#l%t!' (ell (r%tten
#n %n)orm#t%/e #rt%cles rele/#nt to !our %nustr! %n some (#!0 B! el%/er%n&
%n)orm#t%on th#t %s o) /#lue to re#ers' !ou #ttr#ct #ttent%on to !our bus%ness #n
"roucts throu&h "eo"le (ho re# !our blo&0
3ush. e M#%l m#r$et%n& %s # "r%me e"am#le o) "ush m#r$et%n&0 Sen%n& out em#%l
ne(sletters #n em#%ls tell%n& subscr%bers #bout s#les' s"ec%#ls' "romot%ons'
contests or other note(orth! h#""en%n&s on !our (ebs%te th#t m%&ht bene-t the
re#er %s # &re#t (#! to use "ush m#r$et%n& (%thout s"en%n& much mone!0
3ush. 3#% #/ert%s%n& such #s "#! 3er Cl%c$ #n b#nner %s"l#! #s %s #n e"am#le
o) "ush m#r$et%n&' #lthou&h not %ne;"ens%/e0
9ou c#n use "ush #n "ull m#r$et%n& to bu%l #n &ro( !our onl%ne bus%ness7
E$%&ER%E 'USINESS &DELS
4 (usiness model %s # set o) "l#nne #ct%/%t%es <bus%ness "rocess= es%&ne to
result %n # "ro-t %n # m#r$et"l#ce0
4 (usiness #lan %s # ocument th#t escr%bes # -rm,s bus%ness moel0
4n e$commerce (usiness model #%ms to use #n le/er#&e the un%:ue :u#l%t%es o)
the Internet and )e(*
EIGHT +E, ELEENTS &- A E$%ommerce 'USINESS &DEL
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
I) !ou ho"e to e/elo" # success)ul bus%ness moel %n #n! #ren#' not just e-
commerce' !ou must m#$e sure th#t the moel eCect%/el! #resses the e%&ht
elements0
.* Customer V#lue 3ro"os%t%on /* >e/enue Moel
0* M#r$et O""ortun%t! 1* Com"et%t%/e En/%ronment
2* Com"et%t%/e 4/#nt#&e 3* M#r$et Str#te&!
4* Or&#n%D#t%on#l Ee/elo"ment 5* M#n#&ement Te#m
.* %UST&ER 6ALUE PR&P&SITI&N78h9 should customer (u9 from
9ou:;
4 <alue #ro#osition e-nes ho) a com#an9=s #roduct or ser<ice ful>lls the
needs of customers* To e/elo" #n #n#l!De # -rm,s # -rm,s /#lue "ro"os%t%on'
!ou nee to unerst#n (h! customers (%ll choose to bus%ness (%th the -rm %nste#
o) #nother com"#n! #n (h#t the -rm "ro/%es th#t other -rms o not #n c#nnot0
1rom the consumer "o%nt o) /%e(' success)ul e-commerce /#lue "ro"os%t%ons %nclue
3erson#l%D#t%on o)
3roucts
Custom%D#t%on o)
3roucts
>euct%on o) 3rouct
Se#rch Costs
>euct%on o) 3r%ce
E%sco/er! Cost
1#c%l%t#t%on o) tr#ns#ct%ons b! M#n#&%n&
3rouct Eel%/er!
E"am#les. Pi??ahut 6alue Pro#osition - el%/er! o) 3%DD# (%th%n AF #n
h#l) m%n0
-resh Direct 6alue Pro#osition 7%on<enience and sa<e time;
OCer%n& customers the )reshest )oo %n Ne( 9or$' %rect )rom the &ro(ers #n
m#nu)#cturers' #t the lo(est "r%ce' el%/ere to the%r homes #t #!8n%&ht0
Ama?on 6alue Pro#osition <Un#aralleled Selection and
%on<enience= 4m#Don m#$es %t "oss%ble )or boo$ lo/ers to sho" )or /%rtu#ll!
#n! boo$ %n "r%nt )rom the com)ort o) the%r home or oGce' ?B hours # #! #n
to $no( %mme%#tel! (hether # boo$ %s %n stoc$ or not0
/* RE6ENUE &DEL 7Ho) )ill 9ou earn mone9:;
4 -rms re<enue model escr%bes ho( the -rm (%ll e#rn re/enue' &ener#te
"ro-ts #n "rouce # su"er%or return on %n/este c#"%t#l (e use the terms
re/enue moel #n -n#nc%#l moel %nterch#n&e#ble0 The )unct%on o) bus%ness
or&#n%D#t%ons %s both to &ener#te "ro-ts #n to "rouce returns on %n/este
c#"%t#l th#t e;cee #ltern#t%/e %n/estments0
Pro>ts #lone #re not suGc%ent to m#$e # com"#n! success)ul0 In orer to be
cons%ere success)ul' # -rm must "rouce returns &re#ter th#n #ltern#t%/e
%n/estments0 1%rms th#t )#%l th%s test &o out o) e;%stence0
>et#%lers' )or e"am#le' sell # "rouct' such #s # "erson#l com"uter' to #
customer (ho "#!s )or the com"uter us%n& c#sh or # cre%t c#r0 Th%s
"rouces re/enue0 The merch#nts t!"%c#ll! ch#r&e more )or the com"uter
th#n %t "#!s out %n o"er#t%n& e;"enses' "rouc%n& # "ro-t0
4lthou&h there #re m#n! %Cerent e-commerce re/enue moels th#t h#/e
been e/elo"e' most com"#n%es rel! on one' or some comb%n#t%on' o) the
)ollo(%n& m#jor re/enue moels.
Ad<ertising
Re<enue odel
Su(scri#tion
Re<enue odel
Transaction -ee
Re<enue odel
Sales Re<enue A@liate Re<enue odel
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
odel
$ Ad<ertising Re<enue odel. 4 Web s%te th#t oCers %ts users content'
ser/%ces' #n 8or "roucts #lso "ro/%es # )orum )or #/ert%sements #n
rece%/es )ees )rom #/ert%sers0 Those (eb s%tes th#t #re #ble to #ttr#ct the
&re#test /%e(ersh%" or th#t h#/e # h%&hl! s"ec%#l%De #n #re #ble to
ret#%n user #ttent%on #re #ble to ch#r&e h%&her #/ert%s%n& r#tes0 9#hoo'
4O+' MSN )or %nst#nce' er%/es # s%&n%-c#nt #mount o) re/enue )rom
se#rch en&%ne #n other )orms o) onl%ne #/ert%s%n&0
$ Su(scri#tion Re<enue odel. 4 (ebs%te th#t oCers %ts users content or
ser/%ces ch#r&es # su(scri#tion fee )or #ccess to some or #ll o) %ts
oCer%n&s0 1or %nst#nce' the onl%ne /ers%on o) consumer re#orts #n
8SA*com "ro/%es #ccess to %ts content onl! to subscr%bers' (ho h#/e #
cho%ce o) "#!%n& # B2*C2 monthl! subscr%"t%on )ee or # B/3*DD #nnu#l
)ee00 9#hoo' )or %nst#nce' h#s bro#ene %ts bus%ness moel to %nclue #
number o) %Cerent t!"es o) "rem%um subscr%"t%on ser/%ces' such #s
!#hoo7 >e#l T%me Huote' #n 9#hoo7 1%n#nce0
$ Transaction -ee Re<enue odel. 4 com"#n! rece%/es # )ee )or
en#bl%n& or e;ecut%n& # tr#ns#ct%on0 1or e"am#le' eBay "ro/%es #n
onl%ne #uct%on m#r$et"l#ce #n rece%/es # sm#ll tr#ns#ct%on )ee )rom #
seller %) the seller %s success)ul %n sell%n& the %tem0 E* Trade' #n onl%ne
stoc$bro$er' rece%/es tr#ns#ct%on )ees e#ch t%me %t e;ecutes # stoc$
tr#ns#ct%on on beh#l) o) # customer0
$ Sales Re<enue odel. com"#n%es er%/e re/enue b! sell%n& &oos'
%n)orm#t%on' or ser/%ces to customers0 Com"#n%es such #s #m#Don <(h%ch
sells boo$s' mus%c' #n other "roucts=' ++Be#n0com' #n I#"0com #ll
h#/e s#les re/enue moels0 Other e"am#les #re. Eell0com' 4cer0com'
Son!0com' 1resh%rect0com' Web/#n0com etc0
$ A@liate Re<enue odel. S%tes th#t steer bus%ness to #n J#Gl%#teK
rece%/e # re)err#l )ee or "ercent#&e o) the re/enue )rom #n! result%n&
s#les0 1or e"am#le' 9#oints*com m#$es mone! b! connect%n&
com"#n%es (%th "otent%#l customers b! oCer%n& s"ec%#l e#ls to %ts
members0 When the! t#$e #/#nt#&e o) #n oCer #n m#$e # "urch#se'
members e#rn J"o%ntsK the! c#n reeem )or )reeb%es' #n 9Points*com
rece%/es # )ee0 Commun%t! )eeb#c$ s%tes such #s E#inions #n
A(out*com rece%/e much o) the%r re/enue )rom steer%n& <&u%%n&=
"otent%#l customers to (eb s%tes (here the! m#$e # "urch#se0
0* ar!et &##ortunit9 78hat mar!ets#ace do 9ou intend to ser<eE and
)hat is its si?e:;
The term m#r$et o""ortun%t! re)ers to the com"#n!,s %ntene
m#r$ets"#ce<%0e0 #n #re# o) #ctu#l or "otent%#l commerc%#l /#lue= #n the
o/er#ll "otent%#l -n#nc%#l8re/enue o""ortun%t%es #/#%l#ble to the -rm %n th#t
m#r$ets"#ce0 The m#r$et o""ortun%t! %s usu#ll! %/%e %nto sm#ller m#r$et
n%ches<se&ments= The realistic mar!et o##ortunit9 %s e-ne b! the
re/enue "otent%#l %n e#ch o) the m#r$et se&ments (here !ou ho"e to
com"ete0
For instance, lets assume you are analyzing a software training
company that creates software- learning systems for sale to
corporations over the Internet
The o/er#ll s%De o) the so)t(#re tr#%n%n& m#r$et )or #ll m#r$et se&ments %s
#""ro;%m#tel! LF@ b%ll%on0 The o/er#ll m#r$et c#n be bro$en o(n' ho(e/er'
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
%nto t(o m#jor m#r$et se&ments. instructor$led training #roducts' (h%ch
com"r%se #bout F@M o) the m#r$et <B1C (illion %n re/enue=' #n com#uter$
(ased training' (h%ch #ccounts )or N@M <B/. b%ll%on =0
There #re )urther m#r$et n%ches (%th%n e#ch o) those m#jor m#r$et se&ments'
such #s the -ortune 2DD com#uter$(ased training m#r$et #n the small
(usiness com#uter$(ased training m#r$et0 Bec#use the -rm %s # startu#
>rm' %t c#nnot com"ete eCect%/el! %n the l#r&e bus%nessO com#uter (ased
training mar!et <#bout B.2 (illion0= +#r&e br#n-n#me tr#%n%n& -rms
om%n#te th%s n%che<Se&ment=0 The St#rtu" -rm,s real mar!et o##ortunit9
%s to sell to the thous#ns o) sm#ll bus%ness -rms (ho s"en #bout B3 (illion
on com#uter$(ased soft)are training #n (ho es"er#tel! nee # cost-
eCect%/e tr#%n%n& solut%on0 Th%s %s the s%De o) the -rm,s realistic mar!et
o##ortunit90
1* %&PETITI6E EN6IR&NENT78ho else occu#ies 9our intended
mar!et s#ace;
4 -rm,s com#etiti<e en<ironment re)ers to the other com"#n%es sell%n&
similar products #n operating in the same mar!et space0 It #lso re)ers
to the "resence o) subst%tute "roucts #n "otent%#l ne( entr#nts to the
m#r$et' #s (ell #s the "o(er o) customers #n su""l%ers o/er !our bus%ness0
The com"et%t%/e en/%ronment )or # com"#n! %s %nPuence b! se/er#l )#ctors.
how many competitors are active how large their operations are
competitor how proftable these frms
are
how they price their products
the market share of each competitor
1%rms t!"%c#ll! h#/e both direct #n indirect com"et%tors0 Direct
com#etitors #re those com"#n%es th#t sell "roucts #n ser/%ces th#t #re
/er! s%m%l#r #n %nto the s#me m#r$et se&ment0 -or e"am#leE Priceline #n
Travelociy' both o) (hom sell %scount #%rl%ne t%c$ets onl%ne' #re %rect
com"et%tors bec#use both com"#n%es sell %ent%c#l "roucts che#" t%c$ets0
Indirect com#etitors #re com"#n%es th#t m#! be %n diFerent industries
but st%ll com#ete indirectl9 bec#use the%r "roucts c#n su(stitute )or one
#nother0 1or %nst#nce' #utomob%le m#nu)#cturers #n #%rl%ne com"#n%es
o"er#te %n %Cerent %nustr%es' but the! st%ll com"ete %n%rectl! bec#use the!
oCer consumers #ltern#t%/e me#ns o) tr#ns"ort#t%on0
%&PETITI6E AD6ANTAGE 78hat s#ecial ad<antages does 9our >rm
(ring to the mar!et#lace:;
>ccm8?@AB0
LQb%ll%on R
LASb%ll%on
LATb%ll%on R
LN@b%ll%on
B1C 'illion
Start u# >rm
sim#l9 ignore this
Segment
4D 'illion
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B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
1%rms #ch%e/e # com#etiti<e ad<antage (hen the! c#n "rouce # su"er%or
"rouct #n 8 or br%n& the "rouct to m#r$et #t # lo(er "r%ce th#n most' or #ll'
o) the%r com"et%tors0 1%rms #lso com"ete on
sco"e<RegionalGNationalGGlo(al=0 Some -rms c#n e/elo" global market'
(h%le other -rms c#n onl! e/elo" # national or regional m#r$et 0 1%rms th#t
c#n "ro/%e superior products at lowest cost on # &lob#l b#s%s #re trul!
#/#nt#&e0
1%rms #ch%e/e com"et%t%/e #/#nt#&es bec#use the! h#/e someho( been
#ble to obt#%n %Cerent%#l #ccess to the factors of #roduction th#t #re
en%e to the%r com"et%tors #t le#st %n the short term0 3erh#"s the -rm h#s
been #ble to obt#%n /er! )#/or#ble terms )rom su##liers' shi##ers' or
sources of la(or0 Or "erh#"s the -rm h#s more e"#erienced'
!no)ledgea(le' #n lo9al em#lo9ees th#n #n! com"et%tors0 M#!be the
-rm h#s # #atent on # "rouct th#t others c#nnot imitate' or #ccess to
in<estment ca#ital throu&h # net(or$ o) )ormer bus%ness colle#&ues or #
(rand name #n #o#ular image th#t other -rms c#nnot u"l%c#te0
4n as9mmetr9 e;%sts (hene/er one "#rt%c%"#nt %n # m#r$et h#s more
resources >nancial (ac!ing' !no)ledge' %n)orm#t%on' #n 8 or "o(er
th#n other "#rt%c%"#nts0 4s!mmetr%es le# to some -rms h#/%n& #n e&e o/er
others' "erm%tt%n& them to come to m#r$et (%th (etter #roducts' faster
than com#etitors' #n somet%mes #t lo)er cost0
Some com#etiti<e ad<antages #re c#lle Junfair0K 4n un)#%r com"et%t%/e
#/#nt#&e occurs (hen one -rm e/elo"s #n #/#nt#&e b#se on # )#ctor
th#t other -rms c#nnot "urch#se0 1or %nst#nce' # (rand name c#nnot be
"urch#se #n %s %n th#t sense #n Jun)#%rK #/#nt#&e0 Br#ns #re bu%lt u"on
lo9alt9' trust' relia(ilit9' #n Hualit90 Once obt#%ne<br#n= the! #re
%Gcult to co"! or %m%t#te' #n the! "erm%t -rms to ch#r&e "rem%um "r%ces
)or the%r "roucts0
2* AR+ET STRATEG, 7Ho) do 9ou #lan to #romote 9our #roducts or
ser<ices to attract 9our target audience:;
No m#tter ho( tremenous # -rm,s :u#l%t%es' %ts mar!eting strateg9 #n
e"ecution #re o)ten just #s %m"ort#nt0 The best bus%ness conce"t' or %e#'
(%ll )#%l %) %t %s not "ro"erl! m#r$ete to "otent%#l customers 0
Everything you do to promote your companys products and services to
potential customers is known as marketing0 M#r$et str#te&! %s the #lan !ou
"ut to&ether th#t et#%ls e;#ctl! ho( !ou %nten to enter # ne( m#r$et #n
#ttr#ct ne( customers0
3#rt o) 1reshE%rect,s str#te&! ' )or %nst#nce' %s to e/elo" close su""l! ch#%n
"#rtnersh%"s (%th gro)ers #n manufacturers so %t "urch#ses &oos #t
lo(er "r%ces %rectl! )rom the source 0 Th%s hel"s 1reshE%rect lo(er %ts "r%ces
)or consumers0 B! "#rtner%n& (%th su""l%ers th#t coul bene-t )rom
1reshE%rect,s #ccess to consumers' 1reshE%rect %s #ttem"t%n& to e;ten %ts
com"et%t%/e #/#nt#&e0
Other com"#n%es' such #s ,ahoo' h#/e use # %Cerent m#r$et%n& str#te&!0
The! %n/est he#/%l! %n #/ert%s%n&<on t/' Ne(s"#"er etc0= to &et the (or out
#bout the%r s%te0 A&L use s#m"l%n& o) m%ll%ons o) )ree c-roms to #ttr#ct ne(
users0 4O+ enclose c (%th )ree tr#%l oCers %n m#&#D%nes #n ne(s"#"ers
#cross the countr!0
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
3* &RGANIIATI&NAL DE6EL&PENT 78hat t9#es of organi?ational
structures )ithin the >rm are necessar9 to %ar9 out the (usiness
#lan;
4lthou&h #n! entre"reneur%#l /entures #re st#rte b! one /%s%on#r!
%n%/%u#l' %t %s r#re th#t one "erson #lone c#n &ro( #n %e# %nto # mult%-
m%ll%on oll#r com"#n!0 In most c#ses' )#st-&ro(th com"#n%es es"ec%#ll! e-
commerce bus%nesses nee em#lo9ees #n # set of (usiness
#rocedures0 In short' #ll -rmsne( ones %n "#rt%cul#r nee #n
organi?ation to eGc%entl! %m"lement the%r bus%ness "l#ns #n str#te&%es0
M#n! e-commerce -rms #n m#n! tr#%t%on#l -rms (ho #ttem"t #n e-
commerce str#te&! h#/e )#%le bec#use the! l#c$e the or&#n%D#t%on#l
structures #n su##orti<e cultural /#lues re:u%re to su""ort ne( )orms o)
commerce0
Com"#n%es th#t ho"e to &ro( #n succee nee to h#/e # "l#n )or
or&#n%D#t%on#l e/elo"ment th#t escr%bes ho( the com"#n! (%ll or&#n%De
the (or$ th#t nees to be #ccom"l%she0 T!"%c#ll!' (or$ %s %/%e %nto
)unct%on#l e"#rtments' such #s #roduction' shi##ing' mar!eting'
customer su##ort' #n >nance0 Uobs (%th%n these )unct%on#l #re#s #re
e-ne' #n then recruitment be&%ns )or s"ec%-c job t%tles #n
res"ons%b%l%t%es0 T!"%c#ll!' %n the be&%nn%n&' &ener#l%sts (ho c#n "er)orm
multi#le tas!s #re h%re0
1or %nst#nce' eB#! )ouner 3%erre Om%!#r st#rte #n onl%ne #uct%on s%te'
#ccor%n& to some sources' to hel" h%s )r%en tr#e 3E5 %s"ensers (%th other
collectors' but (%th%n # )e( months the /olume o) bus%ness h# )#r e;ceee
(h#t he alone coul h#nle0 So he be&#n h%r%n& "eo"le (%th more bus%ness
e;"er%ence to hel" out0 Soon the com"#n! h# m#n! em#lo9ees'
de#artments' #n managers (ho (ere res"ons%ble )or o/ersee%n& the
/#r%ous #s"ects o) the organi?ation0
4* ANAGEENT TEA 78hat !inds of e"#eriences and (ac!ground are
im#ortant for the com#an9=s leaders to ha<e:;
The s%n&le most %m"ort#nt element o) # bus%ness moel %s the management
team res"ons%ble )or m#$%n& the moel (or$0 4 stron& m#n#&ement te#m
&%/es # moel %nst#nt cre%b%l%t! to outs%e %n/estors' mar!et s"ec%-c
!no)ledge' #n e"#erience %n %m"lement%n& bus%ness #lan0 4 stron&
m#n#&ement te#m m#! not be #ble to s#/e # (e#$ bus%ness moel' but the
te#m shoul be #ble to ch#n&e the moel #n ree-ne the bus%ness #s %t
becomes necess#r!0
E/entu#ll!' most com"#n%es &et to the "o%nt o) h#/%n& se/er#l sen%or
e;ecut%/es or m#n#&ers00 The ch#llen&e %s to -n "eo"le (ho h#/e both the
e"#erience #n the a(ilit9 to #""l! th#t e;"er%ence to ne( s%tu#t%ons0
To be #ble to %ent%)! &oo m#n#&ers )or # bus%ness st#rtu"' -rst cons%er
the !inds of e"periences that would #e helpful to manager $oining
your company. 8hat !ind of technical (ac!ground is desira(le: %hat
!ind of supervisory e"perience is necessary& Ho) man9 9ears in a
#articular function should (e reHuired:
AA&R 'USINESS$T&$%&NSUER7'/%; 'USINESS &DELS
'usiness$to$consumer 7'/%; e-commerce' %n (h%ch onl%ne bus%ness see$
to re#ch %n%/%u#l consumers' %s the most (ell-$no(n #n )#m%l%#r t!"e o) e-
commerce0
.* 3ort#l /* E-T#%lers
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
0* Content 3ro/%er 1* Tr#ns#ct%on Bro$er
2* M#r$et Cre#tor 3* Ser/%ce 3ro/%er
4* Commun%t! 3ro/%er
.* P&RTAL
$ 3ort#ls such #s 9#hoo' MSN8W%no(s +%/e ' #n 4O+ oCer users "o(er)ul
(eb se#rch tools #s (ell #s #n %nte&r#te "#c$#&e o) content #n
ser/%ces' such #s ne(s' em#%l' %nst#nt mess#&%n&' c#len#rs' sho""%n&'
mus%c o(nlo#s' /%eo stre#m%n& #n more' #ll %n one "l#ce0
$ "ort#ls sou&ht to be /%e(e #s J&#te(#!sK to the Internet0 To#!'
ho(e/er' the "ort#l bus%ness moel %s to be # est%n#t%on s%te0 The! #re
m#r$ete #s "l#ces (here consumers (%ll (#nt to st#rt the%r (eb
se#rch%n& #n ho"e)ull! st#! # lon& t%me to re# ne(s' -n entert#%nment'
#n meet other "eo"le0
$ Portals do not sell #n!th%n& %rectl!0 The m#r$et o""ortun%t! %s /er!
l#r&e0
$ 3ort#ls &ener#te re/enue "r%m#r%l! b! ch#r&%n& ad<ertisers for ad
#lacement' collecting referral fees )or steer%n& customers to other
s%tes #n ch#r&%n& )or #remium ser<ices0
$ "ort#ls #re #lso Internet Ser<ice Pro<iders <IS3,s= th#t "ro/%e #ccess
to the Internet #n the Web # #n #%t%on#l re/enue stre#m. monthly
subscription fees for access.
?0 E$Tailer $ Onl%ne ret#%l stores' o)ten c#lle e-t#%lers' come %n #ll s%Des' )rom
&%#nt Ama?on to t%n! loc#l stores th#t h#/e (eb s%tes0 E$tailers #re s%m%l#r
to the t!"%c#l (ric!s$ and mortar store)ront e;ce"t th#t customers onl!
h#/e to connect to the Internet to chec$ the%r %n/entor! #n "l#ce #n orer0
Some e-t#%lers' (h%ch #re re)erre to #s J(ric!s$and$clic!s'K #re subs%%#r%es
or %/%s%ons o) e;%st%n& "h!s%c#l stores #n c#rr! the s#me "roucts0
ASPenne9' 'arnes V No(le' 8al-art' #n Sta#les #re )our e"am#les o)
com"#n%es (%th com"lement#r! onl%ne stores0 Others' ho(e/er' o"er#te onl!
%n the <irtual<Cl%c$ - #n-Cl%c$= (orl' (%thout #n! t%es to "h!s%c#l loc#t%ons0
Ama?on' 'lueNile*com' #n Drugstore*com #re e"am#les o) th%s t!"e o)
e$tailers0 Se/er#l other <ariations o) e-t#%lers such #s onl%ne /ers%ons o)
direct mail catalogs' online malls' #n manufacturer$direct online
s#les #lso e;%st0
N0 %&NTENT PR&6IDER $ 4lthou&h there #re m#n! %Cerent (#!s the %nternet
c#n be use)ul' J%n)orm#t%on content'K (h%ch c#n be e-ne bro#l! to %nclue
#ll )orms o) %ntellectu#l "ro"ert!' %s one o) the l#r&est t!"es o) %nternet us#&e0
Intellectual #ro#ert9 re)ers to #ll )orms o) hum#n e;"ress%on th#t c#n be
"ut %nto # t#n&%ble me%um such #s te;t' CE,S or the (eb0 Content 3ro/%ers
%str%bute %n)orm#t%on content' such #s %&%t#l /%eo' mus%c' "hotos' te;t' #n
#rt(or$' o/er the (eb0
Content "ro/%ers m#$e mone! b! ch#r&%n& # su(scri#tion )ee0 1or %nst#nce
%n the c#se o) WSU0COM ' H#r/#r Bus%ness >e/%e(' #n m#n! others' ch#r&e
customers )or content o(nlo#s %n #%t%on to or %n "l#ce o) # subscr%"t%on
)ee0 icro#a9ment s9stems technolo&! "ro/%es content "ro/%ers (%th #
cost-eCect%/e metho )or "rocess%n& h%&h /olumes o) /er! sm#ll monet#r!
tr#ns#ct%ons <#n!(here )rom L0?S to LS0@@ "er tr#ns#ct%on=0
B0 TRANSA%TI&N 'R&+ER $ S%tes th#t "rocess tr#ns%t%ons )or consumers
norm#ll! h#nle %n "erson' b! "hone' or b! m#%l #re tr#ns%t%on bro$ers0 The
l#r&est %nustr%es us%n& th%s moel #re >nancial ser<ices' tra<el ser<ices'
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college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
#n Jo( #lacement ser<ices0 The onl%ne tr#ns#ct%on bro$er,s "r%m#r! /#lue
"ro"os%t%ons #re s#/%n&s o) mone! #n t%me0 In #%t%on' most tr#ns#ct%on
bro$ers "ro/%e t%mel! %n)orm#t%on #n o"%n%ons0 S%tes such #s onster0com
oCer job se#rchers # n#t%on#l m#r$et"l#ce )or the%r t#lents #n em"lo!ers #
n#t%on#l resource )or th#t t#lent0 Both em"lo!ers #n job see$ers #re
#ttr#cte b! the con/en%ence #n currenc! o) %n)orm#t%on0 &nline stoc!
(ro!ers ch#r&e comm%ss%ons th#t #re cons%er#bl! less th#n tr#%t%on#l
bro$ers' (%th m#n! oCer%n& subst#nt%#l e#ls' such #s c#sh #n # cert#%n
number o) )ree tr#es' to lure ne( customers0
S0 AR+ET %REAT&R $ M#r$et cre#tors bu%l # %&%t#l en/%ronment %n (h%ch
bu!ers #n sellers c#n meet' %s"l#! "roucts' se#rch )or "roucts' #n
est#bl%sh "r%ces0 4 "r%me e"am#le %s Priceline' (h%ch #llo(s consumers to
set the "r%ce the! #re (%ll%n& to "#! )or /#r%ous tr#/el #ccommo#t%ons #n
other "roucts <some t%mes re)erre to #s # re/erse #uct%on= #n e'a9' the
onl%ne #uct%on s%te ut%l%De b! both bus%nesses #n consumers0
Q0 SER6I%E PR&6IDER $ Wh%le e-t#%lers sell "roucts onl%ne' ser/%ce "ro/%ers
oCer ser/%ces onl%ne0 There,s been #n e;"los%on %n onl%ne ser/%ces th#t %s
o)ten unreco&n%De0 Web ?0@ #""l%c#t%ons such #s "hoto sh#r%n&' /%eo
sh#r%n&' #n user-&ener#te content <%n (logs #n social net(or$%n& s%tes =
#re #ll ser/%ces "ro/%e to customers0
Ser/%ce "ro/%ers use # /#r%et! o) re/enue moels0 Some ch#r&e # )ee' or
monthl! subscr%"t%ons' (h%le others &ener#te re/enue )rom other sources'
such #s throu&h #/ert%s%n& #n b! collect%n& "erson#l %n)orm#t%on th#t %s
use)ul %n %rect m#r$et%n&0
Some ser/%ces #re )ree but #re not com"lete0 1or %nst#nce' Ioo&le #"" b#s%c
e%t%on %s )ree' but # J3rem%erK moel (%th /%rtu#l con)erence rooms #n
#/#nce tools costs L2D "er em"lo!ee # 9ear0 Much l%$e ret#%lers (ho tr#e
"roucts )or c#sh' ser/%ce' "ro/%ers tr#e !no)ledge' e"#ertise' #n
ca#a(ilities' )or re/enue0
F0 %&UNIT, PR&6IDER $ Commun%t! "ro/%ers #re s%tes th#t cre#te #
%&%t#l onl%ne en/%ronment (here "eo"le (%th s%m%l#r %nterests c#n tr#ns#ct
<bu! #n sell &oos=O sh#re %nterests' "hotos' /%eosO commun%c#te (%th l%$e-
m%ne "eo"leO rece%/e %nterest-rel#te %n)orm#t%onO #n e/en "l#! out
)#nt#s%es b! #o"t%n& onl%ne "erson#l%t%es c#lle #/#t#rs0 The soc%#l
net(or$%n& s%tes m!s"#ce' )#ceboo$' )r%enster' #n hunres o) other
sm#ller' n%che s%tes such #s oost#n&' t(%tter' #n &oo&le buDD' #ll oCer users
commun%t! bu%l%n& tools #n ser/%ces0
-ace(oo! %s r#"%l! &#%n%n& on %ts r%/#l M!S"#ce b! encour#&%n& users to
bu%l the%r o(n re/enue "rouc%n& #""l%c#t%ons th#t run on the%r "ro-les #n
e/en t#$e %n #/ert%s%n& #n #Gl%#te re/enues0
Onl%ne commun%t%es ten to rePect oW%ne rel#t%onsh%"s (hen !our )r%ens s#!
the! h#/e # "ro-le on 1#ceboo$ #n #s$ !ou to /%s%tO !ou #re encour#&e to
bu%l !our o(n onl%ne "ro-le0
AA&R 'USINESS$T&$'USINESS7'/'; 'USINESS &DELS
Bus%ness to Bus%ness e-commerce ' %n (h%ch bus%nesses sell to other bus%nesses' %s
more th#n ten t%mes the s%De o) Bus%ness to Customer e-commerce' e/en throu&h
most o) the "ubl%c #ttent%on h#s )ocuse on B?C0
.* E$Distri(utor /* E$Procurement
0* E"change 1* Industr9 %onsortium
2* Pri<ate Industrial Net)or!s
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renaissance
college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
.* E$Distri(utor $ Com"#n%es th#t su""l! "roucts #n ser/%ces %rectl! to
%n%/%u#l bus%nesses #re e-%str%butors0 W0(0Ir#%n&er' )or e"am#le' %s the
l#r&est %str%butor o) m#%nten#nce' re"#%r' #n o"er#t%ons <M>O= su""l%es #re
thou&ht o) #s %n%rect %n"ut to the "rouct%on "rocess #s o""ose to %rect
%n"uts0 In the "#st' Ir#%n&er rel%e on c#t#lo& s#les #n "h!s%c#l %str%but%on
centers %n metro"ol%t#n #re#s0 Its c#t#lo& o) e:u%"ment (ent onl%ne %n ATTS #t
Ir#%n&er0com' &%/%n& bus%nesses #ccess to more th#n ??@'@@@ %tems0
Com"#n! "urch#s%n& #&ents c#n se#rch b! t!"e o) "rouct' such #s motors'
HV4C' or Pu%s' or b! s"ec%-c br#n n#me0
E-%str%butors #re o(ne b! one com"#n! see$%n& to ser/e m#n! customers0
Ho(e/er' #s (%th e;ch#n&es' cr%t%c#l m#ss %s # )#ctor 0 W%th e-%str%butors' the
more "roucts #n ser/%ces # com"#n! m#$es #/#%l#ble on %ts s%te' the more
#ttr#ct%/e th#t s%te %s to "otent%#l customers0 One sto" sho""%n& %s #l(#!s
"re)er#ble to h#/%n& to /%s%t numerous s%tes to loc#te # "#rt%cul#r "#rt or
"roucts0
/* E$Procurement $ Uust #s e-%str%butors "ro/%e "roucts to other
com"#n%es ' e-"rocurement -rms cre#te #n sell #ccess to %&%t#l electron%c
m#r$ets0 1%rms such #s 4r%b#' )or %nst#nce' h#/e cre#te so)t(#re th#t hel"s
l#r&e -rms or&#n%De the%r "rocurement "rocess b! cre#t%n& m%n%-%&%t#l
m#r$ets )or # s%n&le -rm0 4r%b# cre#tes custom %nte&r#te onl%ne c#t#lo&s
<(here su""l%er -rms c#n l%st the%r oCer%n&s= )or "urch#s%n& -rms0 On the sell
s%e' 4r%b# hel"s /enors sell to l#r&e "urch#sers b! "ro/%%n& so)t(#re to
h#nle c#t#lo& cre#t%on sh%""%n&' %nsur#nce' #n -n#nce0 Both the bu! #n
sell s%e so)t(#re %s re)erre to &ener%c#ll! #s J/#lue ch#%n m#n#&ementK
so)t(#re0
0* E"change $ In theor!' e;ch#n&es m#$e %t s%&n%-c#ntl! less e;"ens%/e #n
t%me-consum%n& to %ent%)! "otent%#l su""l%ers' customers #n "#rtners' #n
to o bus%ness (%th e#ch other0 4s # result' the! c#n lo(er tr#ns#ct%on costs
the cost o) m#$%n& # s#le or "urch#se0 E;ch#n&es c#n #lso lo(er "rouct
costs #n %n/entor! c#rr!%n& costs <the cost o) $ee"%n& # "rouct on h#n %n #
(#rehouse0=0 In re#l%t! B?B e;ch#n&es h#/e h# # %Gcult t%me con/%nc%n&
thous#ns o) su""l%ers to mo/e %nto s%n&ul#r %&%t#l m#r$ets (here the! )#ce
"o(er)ul "r%ce com"et%t%on' #n #n e:u#ll! %Gcult t%me con/%nc%n&
bus%nesses to ch#n&e the%r "urch#s%n& beh#/%or #(#! )rom truste lon&-term
tr#%n& "#rtners0 4s # result' the number o) e;ch#n&es h#s )#llen to less th#n
?@@' o(n )rom o/er AS@@ %n ?@@? ' #lthou&h the sur/%/%n& h#/e e;"er%ence
some success0
1* Industr9 %onsortium $ Inustr! consort%# #re %nustr! o(ne /ert%c#l
m#r$et"l#ces th#t ser/e s"ec%-c %nustr%es' such #s the #utomob%le'
#eros"#ce' chem%c#l' Por#l' or lo&&%n& %nustr%es0 In contr#st' hor%Dont#l
m#r$et"l#ces sell s"ec%-c "roucts #n ser/%ces to # (%e r#n&e o)
com"#n%es0 )or e"am#le ' EXOST4> %s #n onl%ne tr#%n& e;ch#n&e )or the
#eros"#ce #n e)ense %nustr!' )oune b! B4E S!stems' Boe%n& ' +oc$hee
M#rt%n' >#!theon' #n >olls->o!ce %n ?@@@0 E;ost#r connects (%th o/er N@@
"rocurement s!stems %n ?@ %Cerent countr%es #n h#s re&%stere more th#n
?B' @@@ tr#%n& "#rtners (orl(%e0
2* Pri<ate Industrial Net)or!s $ 3r%/#te %nustr%#l net(or$s <some t%mes
re)erre to #s "r%/#te tr#%n& e;ch#n&es or 3TXs= const%tute #bout FSM o) #ll
B?B e;"en%tures b! l#r&e -rms #n )#r e;cee the e;"en%tures )or #ll )orms
o) net m#r$et"l#ces0 3r%/#te %nustr%#l net(or$s #re %&%t#l net(or$s<o)ten but
not #l(#!s %nternet-b#se net(or$s= es%&ne to coor%n#te the Po( o)
commun%c#t%ons #mon& -rms en&#&e %n bus%ness to&ether0 B?B e-commerce
>ccm8?@AB0
renaissance
college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
rel%es o/er(helm%n&l! on # technolo&! c#lle electron%c #t# %nterch#n&e
<EEI=0 EEI %s not es%&ne )or these t!"es o) rel#t%onsh%"s0 There #re t(o
t!"es o) "r%/#te %nustr%#l net(or$s.
#0 Single -irm $ S%n&le -rm "r%/#te %nustr%#l net(or$s #re the most common
)orm o) "r%/#te %nustr%#l net(or$0 These s%n&le -rm net(or$s #re o(ne b!
# s%n&le l#r&e "urch#s%n& -rm' such #s W#l-M#rt or 3rocter V I#mble0
b0 Industr9$)ide $ Inustr! (%e "r%/#te %nustr%#l net(or$s o)ten e/ol/e out o)
%nustr! #ssoc%#t%ons0 These net(or$s #re usu#ll! o(ne b! # consort%um o)
the l#r&e -rms %n #n %nustr! #n h#/e the )ollo(%n& &o#ls. "ro/%%n& #
neutr#l set o) st#n#rs o) or commerc%#l commun%c#t%ons o/er the %nternet O
h#/%n& sh#re #n o"en technolo&! "l#t)orms )or sol/%n& %nustr! "roblemsO
#n %n some c#ses' "ro/%%n& o"er#t%n& net(or$s th#t #llo( members o) #n
ent%re %nustr! to closel! coll#bor#te0
'USINESS &DELS IN EERGING E$%&ER%E AREAS
When (e th%n$ #bout # bus%ness' (e t!"%c#ll! th%n$ o) # bus%ness -rm th#t "rouces
# "rouct or &oo #n then sells %t to # customer0 But the (eb h#s )orce us to
reco&n%De ne( )orms o) bus%ness' such #s
.* Consumer to Consumer <C?C=
Bus%ness Moels
/* 3eer to 3eer<3?3= Bus%ness
Moel
0* M-Commerce<Mob%le Commerce=
Bus%ness Moels

A0 %&NSUER T& %&NSUER 7%/%; 'USINESS &DELS $ C?C /entures
"ro/%e # (#! )or consumers to sell to e#ch other' (%th the hel" o) #n onl%ne
bus%ness0 The -rst #n best e"am#le o) th%s t!"e o) bus%ness %s eB#!' ut%l%D%n& #
m#r$et cre#tor bus%ness moel0
Be)ore eB#!' %n%/%u#l consumers use &#r#&e s#les' Pe# m#r$ets' #n thr%)t
sho"s to both %s"ose o) #n #c:u%re use merch#n%se0
?0 PEER T& PEER7P/P; 'USINESS &DEL $ +%$e the C?C moels' 3?3
bus%ness moels l%n$ users' en#bl%n& them to sh#re -les #n com"uter resources
(%thout # common ser/er0 The )ocus %n 3?3 com"#n%es %s on hel"%n& %n%/%u#ls
m#$e %n)orm#t%on #/#%l#ble )or #n!one,s use b! connect%n& users on the (eb0
H%stor%c#ll!' "eer-to-"eer so)t(#re technolo&! h#s been use to #llo( the sh#r%n&
o) co"!r%&hte mus%c -les %n /%ol#t%on o) %&%t#l co"!r%&ht l#(0 The ch#llen&e )or
3?3 /entures %s to e/elo" /%#ble ' le&#l bus%ness moels th#t (%ll en#ble them
to m#$e mone!0 E%Gcult%es )#ce b! 6#D##' one o) the most "rom%nent
e"am#les o) # 3?3 bus%ness moel %n #ct%on0
N0 $%&ER%E7&'ILE %&ER%E; 'USINESS &DELS $ M-commerce'
short )or mob%le commerce' t#$es tr#%t%on#l e-commerce moels #n le/er#&es
emer&%n& ne( (%reless technolo&%es to "erm%t mob%le #ccess to the (eb0
W%reless (eb technolo&! (%ll be use to en#ble the e;tens%on o) e;%st%n& (eb
bus%ness moels to ser/%ce the mob%le (or$ )orce #n consumer o) the )uture0
W%th the %ntrouct%on o) the %3hone' mob%le se#rch #""l%c#t%ons #re l%$el! to
become more "o"ul#r0 Consumer #""l%c#t%ons #re #lso be&%nn%n& to #""e#r %n
h%&h /olume "erson#l tr#ns#ct%on #re#s' such #s eB#!,s #n!(here s!stem' #n
mob%le "#!ment "l#t)orms such #s 3#!"#l,s Mob%le chec$out0
M-commerce bus%ness moels th#t ho"e to rel! on "ush #/ert%s%n&0
-----------
>ccm8?@AB0
renaissance
college of commerce and management
B-COM VI SEM [Hons] UNIT -II Subject E-Commerce
>ccm8?@AB0