ASSIGNMENT No.

ELECTRONIC COMMERCE
FOR
COL Executive MBA/MPA Programme
Code 5576

SUBMITTED TO:
Sir Mahboob Rahman

SUBMITTED BY:
Saad Farooqi
Roll No. AU517096
Semester: Spring, 2014

Question No. 1
Define E-Commerce and discuss its impact on entire business world and predict likely future
directions of E-Commerce.

E-commerce refers to the purchase and sale of goods and/or services via electronic channels,
such as the Internet. Online retail is convenient due to its 24-hour availability, global reach and
ease of customer service.
Though purchasing items online is a major facet, e-commerce is more than that. This type of
commerce can be useful at the enterprise level as well. E-commerce is not just on the Web it
was first introduced in the 1960s via electronic data interchange (EDI) through value-added
networks (VANs). In the mid-1990s, e-commerce was transformed with the introduction of
Amazon and eBay.
Electronic commerce or e-commerce is a term for any type of business, or commercial
transaction that involves the transfer of information across the Internet. It covers a range of
different types of businesses, from consumer based retail sites, through auction or music sites,
to business exchanges trading goods and services between corporations. It is currently one of
the most important aspects of the Internet to emerge.
Ecommerce allows consumers to electronically exchange goods and services with no barriers
of time or distance. Electronic commerce has expanded rapidly over the past five years and is
predicted to continue at this rate, or even accelerate. In the near future the boundaries between
"conventional" and "electronic" commerce will become increasingly blurred as more and
more businesses move sections of their operations onto the Internet.
A type of business model, or segment of a larger business model, that enables a firm or
individual to conduct business over an electronic network, typically the internet. Electronic
commerce operates in all four of the major market segments: business to business, business to
consumer, consumer to consumer and consumer to business. It can be thought of as a more

advanced form of mail-order purchasing through a catalog. Almost any product or service can be
offered via ecommerce, from books and music to financial services and plane tickets.

IMPACT OF E-COMMERCE ON ENTIRE BUSINESS WORLD

The Economic Impact of E-Commerce
Typically, commerce takes place when the exchange of money for goods or services happens
within a store or as a transaction between two or more people. For centuries, this was done either
in an actual store, through businesses making in-person deals, or via other means where the
transaction was "hands on." In the mid-1990s however, electronic commerce, or e-commerce as
it is widely known, suddenly became much more commonplace. The ability to make a purchase
solely online without having to leave the home was a new, novel idea that has since changed the
face of business. Websites such as Amazon.com and Ebay.com were pioneers in this field.
Today, there are thousands of e-commerce websites that people can purchase items from.
Everything from books and clothing to furniture and groceries can now be bought through a
website, and it all has an effect on our economy. Even servicing a car or making a doctor's
appointment can be done through the Internet. It seems that electronic commerce is growing
more rapidly every day. And it's not just limited to the United States; the potential for ecommerce to grow worldwide is staggering.
Not only does electronic commerce affect the economy, but it also has a large effect on the job
market as well. It creates new positions in data entry, website creation and maintenance, credit
card processing, Internet security, and inventory management, just to name a few. The fact that a
new niche has become so popular is good news for people from all kinds of backgrounds.
E-commerce has made a profound impact on society. People can now shop online in the privacy
of their own homes without ever having to leave. This can force larger brick and mortar retailers
to open an online division. In some cases, it can also force smaller businesses to shut their doors,
or change to being completely online. It also changes the way people look at making purchases
and spending money.

Electronic Commerce has changed the face of retail, services, and other things that make our
economy work. Undoubtedly, it will continue to influence how companies sell and market their
products, as well as how people choose to make purchases for many years to come.
Future directions of E-commerce
Virtual companies and the internet are changing traditionally accepted economic practices and
making competition even fiercer than it has ever been in the past. As the internet opens up larger
markets to take advantage of, more and more flexible competitors are entering in market, all
offering better priced value propositions in order to steal market share.
Moving into 2014, big ecommerce trends like social, mobile, and local optimization are
continuously on the upswing. But certain aspects of these digital revolution criteria are
positioned to become even more influential than anticipated. Without further ado, here are some
e-commerce predictions for 2014:
1.

Ecommerce, as a whole, keeps on booming

Overall, ecommerce continues to boom. Over the past few years, moving online has become
a quickly rising trend. With companies optimizing their online shops, sales, and layouts, the
customer experience has become greatly simplified, which reinforces and encourages further
interaction. Numbers were up in the US last year, with the holiday season bringing in a 24%
increase in e-commerce sales than the previous year. And this trend doesnt just apply to the
United States. In fact, ecommerce is making an impact all over the globe, with Asia being the
anticipated leader for 2014. E-Marketer predicts that Asia will become the biggest
contributor to B2C ecommerce and will account for nearly a third of ecommerce spending for
the entire year, over $502 billion. All in all, online business is and will continue to thrive in
2014 read on to learn what we think is driving the growth.

2.

Integrating on-the-go shopping through mobile

Mobile shopping is on the rise and it is here to stay. As businesses optimize their mobile sites
and apps, consumers are incentivized to dive in and complete quick transactions on-the-go.
Websites are increasingly simple, which serves to coincide with mobile preferences and users

are reacting favorably. In the UK last year, mobile purchases made up approximately a
quarter of all sales, a pattern that is just gaining momentum.
Mobile also has the advantage of integrating quietly into the lives of consumers, making it an
ever-present element of a persons day. Because of this, multi-tasking and interacting on
mobile and tablet devices while watching TV, sitting in the lobby, waiting at the Laundromat,
riding the train, and all other passing periods is a norm, and in the world of ecommerce, an
opportunity to capture a buyers attention to make a sale.
3.

Mass-customization and individuality

Long gone are the days of the industrial era, where assembly lines mass produced identical
items and Henry Fords Model T car came in every color, as long as it was black. Postindustrial society has shifted to valuing individuality, mass-customization, and unique
products designed for personal expression. From Facebook ads targeting individual users
based on previous preferences, to custom designed retail options, to try-before-you-buy
business models like Trunk Club and Warby Parker, to sites like True & Co. that collect user
data through surveys in order to offer products curated to specific users, consumers are being
courted with products that seem like they were made just for them (and sometimes they are).

4.

Tighter delivery demands

Consumers are accustomed to the speed and efficiency that is possible with digital advances.
And why shouldnt they be? Next day delivery service is on its way to becoming an
expectation, rather than a luxury. Google Shopping Express, which was rolled out in Silicon
Valley and San Francisco earlier in 2013, is positioned to expand and make more of an
impact on the digital shipping scene. The availability of these conveniences will undoubtedly
be followed by an even higher demand for speed and shorter tolerance for wait periods.

5.

A grander holiday season

Every year, the holiday season sparks new conversation about ecommerce. In 2013, total
ecommerce sales were up 10% from the previous year. The conception of Cyber Monday in
the holiday season of 2005 changed the game, joining Black Friday as a second speciallynamed holiday sale. In 2013, Thanksgiving Day, Black Friday, and Cyber Monday alone

brought in a total of $940 million in the US, up 63% from 2012. And for four years running,
the Monday after Thanksgiving has been ranked the #1 spending day of the year.
We can predict that 2014 will follow suit, and its likely that consumers will begin emerging
for holiday shopping earlier. Recently, stores have begun their sales on Thanksgiving
Thursday, rather than waiting until Black Friday. Its only a matter of time before the sale
dates move up on the calendar, and perhaps 2014 will be the year to coin a new date.

6.

Wearable tech on the rise

Wearables: the most stylish technology of the future. Introduced to the masses by Google
Glass and Samsungs line of smart watches, the media is buzzing about the possible
implications and the future of wearable gadget technology. What does this mean for
ecommerce? Hands-free buying, voice activated purchasing, and price searching at the blink
of an eye are all within the scope of possibilities. So far, these are just hypothesized uses for
new technologies, but its certain that these savvy gizmos will make an impact on
ecommerce. And if they dont touch ecommerce directly, wearables will certainly open a new
door for interaction through external apps, indirectly driving users to engage in ecommerce
through yet another portal.

7.

Connecting on a social level

As companies are pressured to focus more and more on community and customer relation,
social interactions between the producer and the consumer have increased dramatically.
Special sales available on Facebook pages and other social media platforms not only increase
web traffic and customer engagement, but also create a relationship with the brand. Weve
also seen really smart marketing campaigns run on Instagram, which is a great avenue for
brand building in the creative community and among teens. And speaking of teens, social
shopping site, Wanelo, released share buttons in 2013 and we expect to see more of them pop
up on ecommerce sites this year. The site is an obsession for many young buyers and shows
no sign of stopping. The power of social is evident, and, we anticipate seeing businesses try
new and creative ways to reach customers this way in 2014.

Near Future of e-commerce

Last Cyber Monday, Amazon was logging sales at the dizzying rate of 426 transactions per
second a 39 percent increase over the same day a year earlier. Also in 2013, global ecommerce became a 1.2 trillion dollar business, growing at a staggering pace of almost 20
percent year on year. And recently, India surpassed the 1 million mark in its number of
online retailers!
Clearly, the worlds love affair with online retail is alive and well.
It may seem a little odd therefore, to suggest that Amazon and other e-commerce titans may
soon have to radically evolve in order to remain relevant but a new range of technologies
seem poised to disrupt the online shopping experience as weve known it.
Immersive
The ecommerce experience is due to become decidedly more physical, sensory and
immersive and many would argue its a shift thats long overdue. After all, despite even
Amazons tremendous success, its e-commerce interface remains not much more than a
sophisticated digital catalogue of goods, offering little in the way of a shopping experience.
Virtual reality technologies akin to Oculus Rift (recently acquired by Facebook) and Sonys
Morpheus both virtual reality displays, worn like goggles, are indicative of how we, as
consumers, may soon quite literally step into more life-like shopping and service experiences
online. During this years London Fashion Week, for example, retailer Topshop allowed
select fans to experience a virtual front-row seat for a live, 15-minute fashion show! The
fans, as shown in this video, were equipped with the Oculus Rift headsets and headphones
and were able to experience both the action on the catwalk, as well as see the celebrities they
were seated next to all while sitting in a Topshop store!
What this suggests, in theory, is that by simply donning a relatively inexpensive virtual
reality headset, shoppers could soon be able to transport themselves to any store in the world,
browsing and buying in a very natural, intuitive and highly experiential way. The ChampsElysee, New Yorks Fifth Avenue or Turkeys Grand Bazaar all accessible from the comfort
of ones own living room.
This video from U.K. retailer Tesco provides a sense of just how lifelike these virtual
shopping trips may seem.

Tactile
One of the inherent drawbacks of online shopping is the inability to touch and feel items that
youre considering buying. Thats likely to change. Through the work of University of
Pennsylvania mechanical engineering professor Katherine Kuchenbecker, touch is something
we may soon widely replicate with technology. Professor Kuchenbecker and her research
team have been successfully mapping patterns of vibration in order to accurately simulate the
feel of various materials, allowing users to sense, through a glide pad and stylus, the unique
tactility of different surfaces and textures. Soon, feeling something online before you buy it
will likely be commonplace.
Contextual
Wearable, smart technologies like Google Glass in combination with location-based
augmented reality applications like this one from Layer will enable us to see and interact
with digital information overlaid on the world around us, making entire cities and the things
in them clickable. By simply saying, O.K. Glass, scan this. the Layer program
immediately detects any digital data present in the field of vision. Once detected, it initiates
that content and allows the user to interact with it.
For example, by instructing Google Glass to scan a street lined with shops, hotels and
restaurants, the user may then be able to interact with data attached to those various physical
places. It may be possible to browse hotel reviews, make reservations at a restaurant or
download coupons or offers from stores.

Question No. 2(a)

Describe the structure of the Internet and indicate the speed of its development in context of Ebusiness.
Structure of the Internet

The Structure of the Internet is a collection of many computer networks and individual computer
units interconnected via routers. Each fragment of a computer network is able to act
independently.
The structure of the Internet allows substituting dead connection with another, which does not
disable the network from the Internet. If, one of our routers is damaged or turned off, his duties
will assume immediately another.
The entire network will work without a router that has failed (figure below). This rule has been
adopted since the beginning of the history of the Internet.
Among the network of computers, there are two known types: servers and clients. A server is a

computer that provides its resources with other computers on the network. The client is a
computer that uses the resources located on servers.

The Structure of the Internet is based on a set of protocols that allows a hit in its original form
data from one network to another. Internet protocol, depending on its structure is responsible for
such activities as:
- validation of sending data,
- traffic control information.
The Internet Protocol Suite, TCP/IP, is a suite of protocols used for communication over the
internet. The TCP/IP model was created after the OSI 7 layer model for two major reasons. First,
the foundation of the Internet was built using the TCP/IP suite and through the spread of the
World Wide Web and Internet, TCP/IP has been preferred. Second, a project researched by the
Department of Defense (DOD) consisted of creating the TCP/IP protocols. The DODs goal was
to bring international standards which could not be met by the OSI model. Since the DOD was
the largest software consumer and they preferred the TCP/IP suite, most vendors used this model
rather than the OSI.

The TCP/IP model, similar to the OSI model, is comprised of layers. The OSI has seven layers
and the TCP/IP model has four or five layers depending on different preferences. Some people
use the Application, Transport, Internet and Network Access layers. Others split the Network
Access layer into the Physical and Data Link components.
Application layer is comparable to the application, presentation, and session layers of the OSI
model all combined into one. It provides a way for applications to have access to networked
services. This layer also contains the high level protocols. The main issue with this layer is the
ability to use both TCP1 and UDP2 protocols. For example TFTP3 uses UDP because usually on
a LAN4 the physical links are short enough to ensure quick and reliable packet delivery without
many errors. SMTP5 instead uses TCP because of the error checking capabilities. Since we
consider our email important information we would like to ensure a safe delivery.
Transport layer acts as the delivery service used by the application layer. Again the two
protocols used are TCP and UDP. The choice is made based on the applications transmission
reliability requirements. The transport layer also handles all error detection and recovery. It uses
checksums, acknowledgements, and timeouts to control transmissions and end to end
verification. Unlike the OSI model, TCP/IP treats reliability as an end-to-end problem.
Internet layer is responsible for routing and delivery of data and is the key component of this
architecture. It allows communication across networks of the same and different types and
carries out translations to deal with dissimilar data addressing schemes. It inject packets into any
network and deliver them to the destination independently to one another. Because the path
through the network is not predetermined, the packets may be received out of order. The upper
layers are responsible for the reordering of the data. This layer can be compared to the network
layer of the OSI model. IP and ARP6 are the major protocols used at this layer.
Network access layer is a combination of the Data Link and Physical layers of the OSI model
which consists of the actual hardware. This includes wires, network interface cards, etc. Other
related details within this layer are connectors, signal strength, and wavelength along with
various others. It will use the required LAN operating algorithms, such as Carrier Sense Multiple

Access with Collision Detect (CMSA/CD)7 or IBM Token Passing8 etc. and is responsible for
placing the data within a frame. The frame format is dependent on the system being used, for
example Ethernet LAN, Frame relay9, etc. The frame is the package that holds the data, in the
same way as an envelope holds a letter. The frame holds the hardware address of the host and
checking algorithms for data integrity. This layer has actually not been specified in details
because it depends on which technology is being used such as Ethernet. So freedom is given to
this layer as far as implementation is concerned.

IP (Internet Protocol) is a network protocol for transmitting data corresponding to different

networks of computers. The IP number is presented as the number of units individuals assigned
to a single computer or individuals to a network of computers, used to identify the unit. IP
address is not assigned to a physical computer, and can be changed at every entrance to the
Internet.

The current standard IPV4 is usually separated into 4 tuples or bytes, such as 171.154.188.76,
as a dotted decimal. What this means is that if we are to navigate the Internet to this IP address
for some reason, then our network will send out packets with that number in them, and a
process called routing will send those packets to that Internet address.
IPv6 is the second version of the Internet Protocol to be used generally across the virtual world.
One of the main upgrades in IPv6 is in the number of addresses available for networked devices.
For example, each mobile phone or other kind of electronic device can have its own address.
IPv6 allows 3.41038 addresses. This is mainly due to the number of bits in each protocol. IPv4

addresses have 32 bits in them and so allow a maximum of four billion addresses. Version 6
addresses have 128 bits.
However, IPv4 is still the protocol of choice for most of the Internet. The transition will be a
steady one, and IPv6 is the future of Internet addressing, mainly because industry experts believe
that they are close to running out of available addresses altogether.

More about IP addresses

The most important part of the Internet is routing. The device which is responsible for routing is
a router. We can also use a desktop equipped with the appropriate software for the routing.
If we accept a model, that the Internet is collection of smaller networks linked together in many
different places, then the process of routing, or sending Internet packets around the Internet is
quite simple.
A host/device can only send messages within its own network. The Internet and the networks
grow in same time, but we must remember that in the past we were using only modems to
communication and they acted as gateways. Even today if you are on, for example, the Telus
network, then you must go through one of the Telus Internet gateways to see the rest of the
Internet. Even to get out of your home network, you must go through your router to get out of
your house. This process of Internet datagram movement is called routing.

Each datagram has a source IP address and a destination IP address in the IP header information.
As a datagram is passed to the gateway (each host knows who its gateway is), it follows rules as
to where it should go. Simply put, the router, or gateway looks at the packet and says is these
destinations IP address in my network, or should I send it off to my gateway? Obviously there is
much more to it, but at the simplest level, that is really what happens in a static routing table.
There are, of course extremely complex rules automatically set by protocols such as border gate
protocol (BDP) by higher level upstream providers (Telus, Sprint, etc.) since your destination IP
address may not just be upstream, but may also be downstream somewhere too.

All this talk about numbers is great for computers, but for us humans not really. It is much
easier for us to remember a name like mallowcollege .i.e. than 81.17.250.47.
Names are also useful in case we do something like change all the numbers on the Internet and
make them really hard to remember as will be the as IPV6 is slowly introduced. IP addresses
change, but names are supposed to be more static changing only when there is a human reason
for it.
When it all began, in 1970, all of the computers on the network aware of its existence, and so on,
through a text file named HOSTS.TXT. This was maintained by one Network Information
Centre (NIC). Changes were emailed to NIC when a new host was added, or one was deleted,

and clients fetch the file to their own host to get the latest version. When ARPAnet moved
to TCP/IP, the population of the Internet exploded, and this scheme no longer worked.
Development of Internet in context of E-business
With the advent of the World Wide Web (WWW), or the "web," traditional business
organizations that had relied on catalog sales had a new sales vector. Other businesses
found that the web was a good place to put customer service information, such as manuals
and drivers, as well as a place to help create a consistent corporate image. As the web
developed, a number of Internet-based businesses developed, including companies like
eBay and Amazon, and web-based information repositories like eHow.
Early Use of the Web for Business
Business began using websites for marketing shortly after graphical-based web design became
available in the early 1990s. Most of these websites served to provide visitors basic information
about a company's products and services, and included contact information, such as phone
numbers and email addresses, to assist consumers in contacting a company for services. The
move from providing simple business information to soliciting business via the web occurred
almost as soon as marketing departments realized that company websites were available to
millions of people. Online sales began in 1994 with the ability to encrypt credit card data.

Early Online Sales

With the advent of the Secured Socket Layer (SSL), developed by Netscape in 1994, websites
developed the ability to encrypt sessions, thus making credit card transactions over the Internet
more safe. With an encrypted connection between a company's server and a client computer,
credit numbers could be masked so they could not be intercepted by a third party, thus making
theft of card information less likely. This security led to an increased number of businesses
offering products for sale via the web.

Birth of Modern Web Sales

Developments in server technology, including the ability to build websites from product
databases, resulted in creation of large Internet-only businesses like eBay and Amazon. In
previous product-sales websites, each product had to be manually posted on a web page. With
database-driven sites, companies could use web-page templates to display tens of thousands of
products on-the-fly. As the number of available products increased, so did traffic and sales on
these websites.

Payment System Advances

Early SSL implementations were good, but many people still did not trust them to secure credit
card payment information. In addition, it was too expensive to process micropayments -payments of less than a dollar -- through traditional credit card systems. As a result, a number of
micropayment sites came and went. One has remained and has done very well because of its
ability to transfer money from a variety of funding sources, including credit cards and bank
accounts, without revealing the payer's credit card information to the merchant. That company is
PayPal. PayPal has enabled credit card processing by many small businesses that would
otherwise not be eligible for a traditional credit card merchant account.

Dot-Com Bubble of 2001

Problems with customer confidence began in the late 1990s. Notable denial of service (DOS)
attacks on prominent websites made customers worry that their credit card data might not be
safe. Throughout this period, online businesses received large capital investments via Initial
Public Offerings (IPOs), and saw their stock selling at prices far above the actual value of their
companies. Many companies had good ideas but poor business plans, and speculators bid up the
prices of stocks in Internet companies. The initial blows came as some on-line companies began
reporting large losses and investors began examining the viability of online business plans.
Fearful investors started to sell their stocks, causing the overinflated stock prices to plummet
below their actual value. A number of well-known companies closed, such as eToys. Many other
companies that lacked solid business plans failed between 2001 and 2002.

The Current State of E-Business

Currently, e-business ranges from simple sites providing corporate information to sites offering
goods and services for sale online. Innovative uses for new voice and video communication
technologies include online language tutoring. Large commercial information repositories are
growing and use of the Internet for research is now common. Online sales from web-based
storefronts continue to grow. Sales of digital information, in the form of eBooks and digital
music files, are more recent offerings by e-businesses like Apple, Amazon, and Barnes & Noble.

Question No. 2(b)

Explain how your business can use e-mail to effect positive results.
The use of email is essential when communicating in today's business culture. Businesses of all
sizes, locations and types can effectively use email for multiple purposes. It is the most
efficient way to communicate with management, colleagues, clients and vendors.

Communicate Companywide
Email is used when management, human resources and other departments send memos and
notifications to the company as a whole. For instance, certain software programs might be shut
down for maintenance between specific hours of the evening or night. Emails will be sent
notifying all employees to process data, fill out time sheets or log out of that system during the
maintenance period.
Correspondence
Email is used when colleagues of the same or different departments need to send and receive
information about projects, spreadsheets, reports and research. Emailing is an extremely useful
tool because it only takes a few moments to receive the answers to an inquiry.
PDF
Scanned documentation, such as signed contracts and time sheets, can be sent in a PDF form.
This enables recipients the ability to review information without making changes to the
document. They can also print, save and forward the documentation to others.
Administrative Needs
Employees can use email to communicate needs to the administrative assistant. They can inform
the administrative assistant about a lack of office supplies. Upon receipt she will make note to
order more supplies.
Employee-Vendor Relations

Clients and vendors use email to order products and services. This is the best way to ensure the
proper amount of products will be delivered. Senders and receivers should save emails, in case
there is an issue with quantity and pricing.
Company Information
Businesses send out company newsletters through email. This gives employees the opportunity
to quickly open and read information on company advancement, stocks, featured employees,
charitable donations and food drives.
Scheduled Meetings
Employees can receive dates and times of meetings, conferences, and mandatory training
sessions via email. Confirmations and reservations can be made the same way.
Why Use Email Marketing
Todays email marketing is perfectly suited to the way small businesses have always operated. It
is personal, immediate and easily tailored to what makes you unique. Above all, its practical.
Here are six reasons why email marketing can work for your business:
1. Effective
According to the Direct Marketing Association, $1 spent on email advertising was shown to
return between $45 and $51 and despite what you might think, email gets read. Open rates for
email often approach 40 percent.
2. Affordable
Industry estimates say online campaigns are 20 times more cost-effective than other marketing
channels, with individual email messages often costing just fractions of a penny. As a result,
email makes it practical to communicate more often with customers.

3. Easy
Sending out professional-quality email campaigns is now a do-it-yourself project.
4. Quick and Effective
Need to boost revenue right away? Email marketing allows you to broadcast to everyone at
Internet speed. Initial campaign response generally occurs within 48 hours of launch
5. Grows Relationships
Emailing personalized deals or your inside scoop is an efficient way to make customers feel
important. If a customer feels appreciated and finds value in your message, you gain their loyalty
while offering the perfect word-of-mouth opportunity.
6. Measurable
A great advantage of email is that everything can be tracked. From the moment you send an
email, you can see how many people opened it, clicked on certain links, and forwarded it to
others and much more!
Five Ways to Use Email Marketing
Email marketing offers a variety of specialized uses that can be tailored to both your business
and your customers. Take a look at this handy checklist for ideas that can energize your own
online marketing!
1. Increase sales conversions
Prospects may require up to nine touches before making a buying decision. When youre
communicating with new prospects, repetition isnt optional. Its mandatory.

2. Generate repeat sales

Getting new customers is expensive anywhere from six to 12 times more expensive than
selling to an existing one. Keeping in touch on a regular basis can generate repeat sales and
improve customer loyalty.
3. Up-sell and cross-sell your products
Email provides a great opportunity for you to help customers order one more product while
theyre in the mood to buy. It is easy to create a series of email messages that are timed to follow
up with offers of related interest.
4. Gain feedback from your visitors
Email in particular provides your customers with a unique opportunity to give honest feedback.
Now youre ready to adapt to what your market wants.
5. Drive Web users to offline purchases
Email marketing is often a catalyst for Web users to purchase offline. More than half of users in
one survey had made a purchase offline after receiving an email promotion. Make it easy for
customers to find you and see your business hours and other essentials.
How to Improve Your Email Marketing Campaigns
A basic email marketing campaign can produce significant results quickly. For many
entrepreneurs, that's enough to comfortably grow sales and attract new customers. Others,
however, see the potential in taking email marketing to the next level.

Once you've mastered the basics of targeted email campaigns, try incorporating a few advanced
techniques to improve email marketing. As you work to raise the bar of your email efforts, focus
on what produces the best results. In testing advanced techniques, you may find that your

subscribers prefer a more basic approach. Bottom line: Keep an open mind, and put your
customers first.
Refine your email campaign based on results
Analyze the reporting from your email campaigns. What does the data say about your customers
and their preferences?
You might notice that certain content tips lists or case studies, for example continuously
receive the most clicks. Tweak your content strategy to include more of those communication
elements. Do charts and bar graphs receive a significant amount of clicks? If so, then incorporate
more visual, research-based items in your emails.

The popularity of content isn't the only type of data you can learn from. Look for patterns in the
times and days you send your emails. You might learn that your messages get the most results
when sent on Tuesday mornings, for example.
Provide your customers exactly what they want
List segmentation can improve your email marketing campaign. It allows you to fine-tune your
campaign based on customer preferences. Here's how list segmentation works:
1. Split up your email list into groups based on a common factor. For example, you could
segment your list based on age, education level, gender or past buying behavior.
2. Test out subtle tweaks on your groups to see what produces the best results. For example, send
your groups different subject lines to determine which is more popular, or try different color
schemes in your messages to see which is preferred.
3. Analyze and incorporate your findings in your messaging going forward.

Improve Your Email Marketing Campaign By Taking Content To The Next Level
Once you've started using email marketing, take a few measures to improve your email
marketing content by making it more exciting, innovative and diverse. Try a few of these ideas:

Conduct a customer survey to find out the type of content customers would like to see.
Include questions such as: Do you prefer information that's visual or text-based? and
What's most useful: tip lists, news articles or case studies? Revise your content going
forward based on what you learn.

For each email newsletter, poll your customers by asking them a question. The question
could be more thought-provoking and based on a current news event, or just for fun.
Provide poll results in your next newsletter. You could even highlight the results in a bar
chart or graph to add some visual interest.

Interview a few of your customers, and turn those conversations into case studies. It's a
great way to add a human element to your newsletter, and it will keep your content fresh
and unique.

Plan ahead by creating a content calendar. Map out the article topics you want to cover
over the next few months, and incorporate relevant promotions, sales and events. This
way, you won't be scurrying at the last minute to come up with a concept. Plus, you will
improve the quality of your newsletter content.

Gain even more ideas to improve email marketing campaigns by checking out a few email
marketing resources and books.
Sending Effective Emails When It Matters
In this era of ever-changing buying habits and newly regulated telemarketing and email
solicitation, it has become increasingly difficult to deliver the right message to the right customer
at the right time. Gone are the days of marketing to the masses through one marketing channel,
when customers were forever loyal and retention was virtually guaranteed. Today, the task of

engaging customers is far more arduous, often requiring nontraditional email tools that enable
you to market precisely when it matters most.
Transactional and operational messaging, also called triggered or event-based messaging, is as
powerful a tool as it is underappreciated. Simply put, every one of the following elements
becomes a marketing vehicle to personalize, brand, promote, cross-sell and up-sell other
products and services to an attentive and already-engaged customer:

Order confirmation

Shipping notice

Receipt

Cancellation

Order change

Warranty reminder

Registration confirmation

Abandoned shopping cart

Subscription expiration

Profile change

Transaction-related emails, triggered by customers buying behavior, can provide marketers with
great opportunity for:

Improving customer service

Gaining repeat sales

Deepening customer engagement

If you are contacting your customers with operational or customer service messages, consider
how you can incorporate marketing and promotional messaging within the email to build an
ongoing and positive dialog with the customer. As you develop the marketing message, make
sure to consider the context of the original message and look for ways to make the message
relevant, engaging, informative and important to your customer.
Tips on How to Generate Effective Emails
Remember To Say "Thank You"
Giving thanks matters. All messages related to the purchase life cycle should include some type
of messaging thanking customers for their business. Shipping confirmations that did not say
Thank you had 35 percent lower click and transaction rates than those that included it.
Maximize Branding Opportunities
Use HTML to optimize the look and feel of transactional emails. Including both static and
dynamic content pertaining to cross-sell products and services will increase transactions and
broaden awareness of your products. When possible, use dynamic recommendation engines,
next-most-likely-to-buy models or business rules such as seasonality.
Enhance the Customer Experience
Include links for site navigation, order status, customer service, email subscription and social
media. The goal is to make it as easy and inviting as possible for your customers to stay engaged
with you. When mailing to first-time purchasers, inclusion of a rewards program sign-up link
will serve to stimulate subsequent purchase behavior.
Comply With the CAN-SPAM Act
Do not include an offer as the subject line or as the main message. Also, include a message
assuring the customer of the security of the transaction, and offer a link to your privacy policy.

Question No. 3(a)

Explain the following models for a commercial face:
i.

Poster model

ii.

Yellow pages model

iii.

Brochure model

iv.

Shop front model

v.

Subscription model

vi.

Advertising model

The detail of each is given below:(i)

POSTER MODEL

Advocated as a low-cost entry model, this entails having an e-mail address and promoting it at
every opportunity. The e-mail address should be included in each and every advertisement,
publication and activity. Responses to the email service should not stop at simple freeform
messaging. This is simply substituting email for the telephone to cuts cost and improve flexibility
only, so it should include the use of a list server set up by the organization to respond to requests
for standard literature, requests to be put on mailing lists, and so on.
(ii)

YELLOW PAGES MODEL

Moving on from simple e-mail messaging, Lawrence suggests that an advertisement be placed on
the Web in the same way as one would be taken out in the classified advertisement pages of the
telephone directory. This costs more, as it necessitates setting up one or more Web pages with
information content. This serves as a faster way of making modified information available,
reducing communication costs and allowing users to browse material in their own fashion and at
their own pace. Additional information such as special offers, announcement of events, and
interactive communication with forms extends the usefulness of simple unchanging web pages.
This model is intended primarily as a promotional tool to capture those looking for a company or
service.

(iii)

BROCHURE MODEL

The cyber brochure model proposed is merely a more sophisticated Yellow Pages model. It relies
on moving away from promotional and advertising material to the provision almost entirely of
information like a sophisticated set of leaflets, brochures, fact sheets and so on. The advantage is
that real-time updates are possible with instant dissemination of information to users and
customers. This is intended to service the customer base, not merely to trawl for extensions to it.
Information Sites
Information sites (also called brochure or billboard sites) are designed to derive economic benefit
through indirect means from either referred sales, reduced cost, or both. Revenue comes from
creating awareness of its products or services via the web with the actual purchase transaction
occurring offline.
Just like a billboard on a highway, success is measured on viewership as 'net citizens "surf" by
and are influenced to purchase product. Most corporate sites today put up these electronic
brochures to provide information about their products, employment opportunities, investor
relations, or customer service. Economic benefit is created through the indirect purchase of the
goods or services from existing physical outlets and cost savings through the elimination of
infrastructure or inefficiency.
Some businesses feel this is the best way to avoid channel conflict -- a potential pricing disparity
between different supply chains.

(iv)

SHOP FRONT MODEL

This model suggests that just as a retail outlet operates in real space, a virtual shop front can be
established in cyberspace, on the web. This model extends beyond the advertising for customers
(Poster) and the active soliciting for customers(Yellow Pages) models, as it includes the full
provision of information(brochure model) with the ability to effect sales on line. In cyberspace,
two-way encrypted traffic is becoming gradually accepted for the sale and purchase of many
items. Initially, information goods, such as software and music, which could be downloaded over

the Internet, were found to be viable commodities for Internet sales. Increasingly companies like
Dell and Cisco Systems are using the Internet as their prime sales channel.
Storefront Sites
To some people, a products-offered site is narrowly defined as a "true" e-commerce site. A web
site that offers products for sale is the electronic version of a catalog. These virtual storefronts
are built to describe the offering with pictures and words, offer promotions, provide a "shopping
cart," and complete the purchase transaction.
Once the product is purchased, the cyber enterprise arranges for product fulfillment including
shipping and handling. The fulfillment is sometimes completed by the web site enterprise or
directly from the manufacturer in a drop shipping arrangement. Some manufacturers are now
passing up the intermediary wholesalers and retailers by offering their products directly to
consumers. This collapsing of the supply chain is called disintermediation.
Although the vast majority of these sites offer tangible products, they can work for service
products, too. The primary characteristic of these types of sites is the ability to make a one-time
purchase with no future obligations.

(v)

SUBSCRIPTION MODEL

The subscription model has long been used in the world of physical publishing. On the Internet,
just as a customer may subscribe to have a newspaper delivered daily, so access to a Website may
be restricted to those who have paid subscriptions. This is an attractive model for sellers on
continually updated or modified products, whose enhancements can be delivered online, and is
used by several software companies.
Subscription Sites
In other media, the subscription models are well established -- accepted by subscribers and
nurtured by publishers. On the web, subscriptions are not yet widely accepted by consumers. Of
those that are accepted, the subscription model caters to sites targeted to particular niches of

individuals who have specific needs. These sites are often specialized with expert content and
timely information. The subscription revenues fund the development and maintenance of the site.
Subscriptions can be paid on a weekly, monthly, or annual basis. Payment through a credit card
account is a common payment scheme for subscription sites because of the ability to periodically
process the purchase transaction electronically.

(vi)

ADVERTISING MODEL

The advertising model resembles a free community newspaper: there is no subscription elicited
and there is no pretense that the cost of providing the content is entirely borne by advertising
revenue. The use of targeted advertising, i.e. drawing relevant advertisements from a database to
match search strings, allows for better targeting of prospects by advertisers, and reduces the
annoyance factor that browsers experience when they are in receipt of irrelevant advertising.
This use of channeled advertisements is likely to increase with technical advances and may even
threaten the value of traditional broadcasting methods.
Advertising Sites
Network television, radio, and many periodicals follow the advertising model. All programming
and content is funded by advertising dollars with consumer viewership being the measurement of
value. Agencies conduct sophisticated surveys to measure the value and establish the pricing. For
e-commerce, advertising can be in the form of banners, sponsorships, ads, and other promotion
methods.
This is a much ballyhooed but still largely unproven model on the web. While there are a few
sites that are entirely supported by advertising dollars, lack of web-savvy viewership statistics
hinders mass adoption by advertisers. As the knowledge of consumer behavior is further
understood, experts will prepare purchase pattern analyses providing advertisers with empirical
data to support their promotion campaigns.
While it is impossible to predict the future in this fast-moving media, it is obvious that all five
business models will remain viable for the near-term. Each model will continue to mature both in
its acceptance and sophistication. Consumers will increasingly look to the web for physical

commerce alternatives because of the limitlessness of the media both in terms of geography and
shopping hours.
For 'net entrepreneurs, each model should be examined carefully to understand which model
provides the maximum benefit. With the understanding of the business models, financial
projections can be easily created, and business plans finalized. With the business plan in hand,
you will realize even in cyberspace, there is no such thing as a free lunch.

Question No. 3(b)

Using your experience of working for, or observing organizations, identify a strategic
opportunity for the development of a new e-business venture, using one of the six models
mentioned above in part (a).

We will use Shop front model for a new e-business venture as it provides opportunity for
business transactions apart from advertising. In the below section, we will first briefly explain
shop front model of e- business.
Shop front Model
The shop front or storefront model is what many people think of when they hear the word ebusiness. The storefront combines the transaction processing, security, online payment and
information storage to enable merchants to sell their products on the Web. This is a basic form of
e-commerce where the buyer and the seller interact directly.
To conduct storefront e-commerce, merchants need to organize an online catalog of products;
take orders through their Web sites, accept payments in a secure environment, send merchandise
to customers and manage customer data (such as customer profile). They must also market their
sites to potential customers.
Some of the most successful e-businesses are using the storefront model. Many of the leading
storefront model companies are B2C (business-to-consumer) companies. For example, more.com
is a health and beauty e-commerce site that uses a shopping cart to allow customers to shop, buy
and arrange shipment. Two important technologies associated with Storefront Model are:

1. Shopping Cart Technology

One of the most commonly used e-commerce enablers is the shopping cart. This order processing
technology allows customers to accumulate items they wish to buy as they continue to hop.
Supporting the shopping cart is a product catalog, which is hosted on the merchant server in the
form of a database. The merchant server is the data storage and management system employed

by the merchant. A database is a part of the merchant server designed to store and reports a large
amount of information.

2. Online Shopping Malls

Online shopping malls present consumers with a wide selection of products and services. They
are often considered to be more convenient than searching and shopping at independent online
storefronts for several reasons. Consumers can search and hop for a variety of products, and
rather than making several separate purchases, they can use the malls shopping cart technology
to purchase items from many stores in a single transaction. Often these sites act as shopping
portals, directing traffic to the leading shopping retailers for a specific product.
http://www.mall.com/ is the example of an online shopping mall.

We will quote here the example of TCS Pakistan. TCS stands of Tranzum Courier Services. Now
in its 30th celebratory year of successful operations, the TCS brand has evolved into a symbol of
trust and reliability. TCS provides domestic and international express services to consumers,
corporate, SMEs and households alike with pickups and deliveries crossing over 100 million
shipments annually. This it does, through a nationwide network of 250+ offices, making TCS the
biggest such network in Pakistan. TCS operates with over 8,000 professionals, 24/7 state-of-the
art call center, 650 plus conveniently located Express Centers, dedicated chartered Boeing 737
aircraft, 2000+ on-line and offline locations, 375 plus satellite tracked delivery vehicles and a
proficient team of 4000 couriers dedicated to providing you the best of service and reliability in
the industry. With a view to enlarging its presence in the global village, TCS operates in
international territories through its business partners in Dubai and London, providing access to
its customers in over 3,500+ destinations worldwide. TCS Visatronix, a division of Intiana
Private Limited, extends booking facilities for visa applicants in the non-immigrant (work, visit,
study) categories for applicants all over Pakistan for Canada, India, Spain, Malaysia, Egypt,
Tunisia, Italy, Malta and South Africa, and UAE. Applications are booked on a "Return Service
Basis" at selected TCS Express Centers in all major cities.

TCS has achieved many milestones by investing into its business model that continues to grow
stronger. Realizing the customer needs and expectations have always been the driving principles
in the milestones that TCS has achieved over the years. This has resulted in setting benchmarks
to improve the overall quality and standards of the express courier industry. TCS achievements
have led to a case study, undertaken by Harvard Business School in 2003 for 'International
Entrepreneurship' course of MBA. TCS has been mentioned in the textbooks used by Harvard
Business School as a model of highly effective company from the developing world. A case
study on TCS has also been included in Philip Kotlers latest South Asian edition of Principles
of Marketing which is being taught at the best and the biggest Business Schools across South
Asia.

Now TCS using its traditional network utilized the advent of new technology and entered into ecommerce. It launched its separate website named as TCS Connect for online shopping and
delivery of products at the doorstep of customers. It is an example of shop front model of ecommerce. The introduction of TCS Connect is given in the below section.

TCS Connect is Pakistan's premier e-marketplace, and its opening the world of online shopping
to customers.
Here you'll find:

Pakistan's premier brands

Authentic products

Extensive variety of product options

Fast, multiple and convenient payment options - online and offline

Excellent after-sales and logistical support

Doorstep delivery and pick-up services

Extensive accessibility options via Web, Mobile, Retail Outlets, Catalogue

A network of over 550 TCS Express Centers nationwide

All of this backed by the trust and reliability of TCS ensures customers have a euphoric and
unique social online shopping experience. In this way, TCS has extended its business by using ecommerce as a tool.

Question No. 4(a)

What are the major challenges faced by most organizations when deploying CRM?

The potential upside that CRMs promise to provide to sales organizations is fantastic. At this
point, you wont find a credible, successful sales organization on the planet that hasnt invested
in or considered implementing a CRM. The problem is, you will also find most of them
scratching their heads, mystified over the fact that the systems arent delivering nearly the bang
for the buck they had hoped for, mostly because the level of adoption and functionality on the
part of their sales teams is distressingly low. Why, in spite of all of the hype and hope, are CRMs
missing the mark for most organizations?

Over the years we have built a deep repository of expertise in helping companies significantly
boost their level of salesforce.com CRM adoption, and we can trace the difficulty to a handful of
issues:

Failure to gain executive leadership and sponsorship.

Extracting the true value from a CRM starts at the very top of any organization. CRMs are
intended to streamline workflow and increase sales throughput. As such the executive leadership
team is responsible for helping the organization transition to a new way of business, one that
eliminates as many friction points as possible in the customer pre-sales and support cycle. If
executive leadership continues to require old reports, support non-optimized workflows, and
resist new technology, then CRM efforts will sure fail.

Failure to focus on Sales Management.

Just as important as executive leadership, Sales Managers are the key change agents or change
resistors. Sales reps will only follow what the managers will ask them to do. If Sales Managers
dont utilize the CRM as the communication platform for coaching, best practices, and team

communications then the sales reps will resist any CRM.

Failure to focus on generating Revenue.

The purpose of implementing a CRM is not to have a sales accounting system; it is to have a
sales enablement system that helps eliminate choke points and bottlenecks that prevent revenue
from occurring, ultimately increasing sales throughput. Most CRM implementations focus on
pipeline visibility, which helps management but does little to help the Sales Representative retire
quota.

Failure to include users in the design or deployment of the system.

Too often, CRM systems are thrust upon sales teams, with lots of fancy menus and buttons that
look cool but which have no immediate perceived relevance to what they do every day. If the
users are the last to know about a change like this, they will not be enthusiastic about using it.

Failure to align CRM processes with sales team processes.

Deploying a CRM represents a massive change in workflow. Sales teams already have a process
they are comfortable with including order management, pricing and approval systems and
document management. The CRM may interrupt or hinder those processes and tools, if it is not
aligned with what the team is already doing. Either the CRM must track with the present process
and support other tools, or the sales team must be re-tasked to follow a different process that
incorporates existing tools into the CRM, in order for true and lasting benefit to be realized.
Sadly, they are often allowed to exist in conflict with each other.

Failure to build trust with the sales team.

A high percentage of the sales team may perceive a CRM to be another tool of "Big Sales
Manager" watching over them, using the data entered by the reps against them during
performance reviews or force reductions.

Failure to get buy-in from the users.

This is really a by-product of all the above. If users feel the system has been thrust upon them
without taking their needs into consideration, or that it is only creating more work for them in the
form of entering copious amounts of useless data, and especially if the data is going to be used
against them, users will only do the minimum, if that much. Usually they will claim they are just
too busy with real work to spend time with the CRM.

Failure to include non-sales facing functions.

Finance, HR, Support, Operations and other functions all impact customer experience. Not
connecting other functions into a CRM decreases the opportunity to eliminate redundant work
processes and ultimately the customers experience. If an organization is leveraging a CRM for a
subset of its customer interactions but asking non-sales groups to use different tools that contain
redundant or potentially conflicting information, then a disconnect on where, when and how to
leverage a CRM to drive improved customer experiences will persist.

Failure to integrate sales and marketing work streams.

Sales and Marketing are often at odds with each other. Even though both Sales and Marketing
are ultimately responsible for driving revenue, they often report to different executives with
conflicting measurement objectives. As a result, 75% of leads generated by marketing for Sales
never receive a phone call, wasting time and energy of both groups. Both Sales and Marketing
processes should come to life inside integrated work streams enabled by the CRM.

Failure to deliver effective training.

CRMs can be highly complex and intricate. The training and tutorials provided by most
organizations during the deployment of the system focus on what the buttons do, but provide
very little reinforcement regarding why reps should really care, or what is in it for them if they
start using those buttons. It is all very overwhelming; for those reason reps often end up using
CRMs as nothing more than hugely expensive address books to manage their customer contacts

and record their sales. This leads to the ultimate reason sales teams CRM adoption rates are so
low.

Failure to help reps see how the CRM will drive revenue and benefit them.
If the CRM doesnt drive more revenue for the rep, the team and the company, it is truly a
colossal waste of time and money. Because communication from upper management is often
poor and training is generally insufficient or irrelevant, sales team members never get the vision
or the skills to leverage the CRM for its ultimate purpose: driving more sales and improving
productivity! Truly, with the right strategic alignment that includes process, skill and tools for the
entire sales team (including sales managers and senior executives), CRMs really do drive
revenue. Once sales reps discover the power at their fingertips and learn how to use it, sales
numbers will begin to climb, enthusiasm for the process builds, adoption increases, and the CRM
finally becomes the valuable tool it was always intended to be.

Question No. 4(b)

What are the key factors leading to the successful implementation of CRM?

The Critical success factors for the CRM of any firm may vary from firm to firm. The general
considerations for the effective implementation are:

CRM customer centric approach: The approach for the implementation of CRM
using Data mining should be customer centric. The customer centric approach revolves
around the customer. In this approach the customer is the core element and whole firm
move around that.

Top management commitment: The top management of the firm should be

committed toward the successful implementation of the project. This involve the
management should be aware about the pros and cons of the implementation.

Skilful personnel: The implementation requires the skillful trained staff to work on
the software so that the necessary information which comes through the hidden pattern
could be used for the effective customer relations.

Project schedule and plan: As the implementation process may take time , it is
required that the schedule and plan of the whole work is made in advance so that the
actual picture regarding the time when will the project be complete is clearly known to all
concerned personnels.

Monitoring and feedback: As the plan is a long term implementation so it require that
each time some phase is complete , the official take the feedback of the system. It is also
required even after the completion so that the personnel will be aware about the result we
are getting and what was accepted.

Communication: The communication of the revealed pattern through the software

should be circulated through the whole system as per the importance to the various
departments. This requires that the communication should be considered in advance to
check whether the setup has proper communication facility through the LAN and WAN

setup. Even some information is required to send through some other mean like manual
method.

Privacy and security: This issue is very important as the data mining reveals some
secret and personal information also. This has what affect to the firm and its relationship
with the customer and how risk of privacy hindrance can be minimized should be taken
care in advance.

Creating a link between the existing information systems and the new CRM
system: The new setup always is beneficial if it create a link between the existing setup
and the new one. This is very well needed in our system which needs an effective
relationship between the data warehouse and database already in the system. Also the
check need to be made regarding the existing hardware and software and what is actually
needed for the new setup.

An understanding that the process has a long-term effect on the organization: The
effect of the implementation of the CRM using Data mining has some mixed affect as far
as output is concerned. To get the output in the form of improved relationship with
customer, this may require some time which should be planned at very beginning. The
implementation cannot provide the immediate result.

Cost involved in the project: Every project has got some implementation cost. Same
is true with this also. But the Top management should be analysis and calculate the cost
involved and the output they accept from the implementation of CRM using Data Mining.

12 Rules for a Successful CRM Implementation

CRM success requires adherence to the following 12 rules:
Rule #1. Do your research.
Companies sometimes buy a particular CRM system because they heard it was good or because
the vendor had slick advertising. However, not every CRM system is right for every company

and when the system isnt right, an expensive failure is inevitable. Before you buy, confirm with
thorough research that the system truly fits your needs.
Rule #2. Rent dont buy.
There are still a few poor misguided souls out there who believe its more economical in the long
run to set up servers, buy perpetual software licenses, host the system and hire IT consultants to
customize it. Thats dumb because owning rather than renting means youre stuck with what
youve got even if it doesnt do what you want.
Rule #3. Keep it simple.
A CRM implementation thats chockablock with obscure features and functions can make the
system seem cumbersome and user-unfriendly. The biggest challenge is usually to get the sales
teams to embrace the new system, which is harder if theres a steep learning curve. Why pay
more for features that make your system less useable?
Rule #4. Entice dont force.
Sales reps embrace CRM when they can see how it saves them time and helps them make more
sales. By contrast, trying to force a system down the throats of salespeople creates resistance and
resentment. This is one business situation where the proverbial carrot works far better than the
proverbial stick.
Rule #5. Take a gradual approach.
Successful CRM implementations begin with a pilot project thats rolled out to a small group.
The pilot both serves as an in-house evaluation period and also allows time to tailor the system
to better match your sales process. More importantly, a pilot team singing the praises of the new
system virtually guarantees corporate-wide acceptance.
Rule #6. Dont confuse big with good.
As a concept, CRM is constantly redefining itself, so its a myth that the large CRM vendors can
provide better service than the smaller, less-established vendors. The big vendors cater to their

equally huge corporate customers, whose already-installed systems provide a reverse incentive
for the big vendor to be innovative and flexible.
Rule #7. Articulate the benefits.
If you expect salespeople to use a CRM system, you must first carefully and believably explain
the benefits of the system, how the requirements evolved, how the system helps create
opportunities, how it will be measured, and (most importantly) how it will help the sales reps to
sell more.
Rule #8. Limit the busywork.
While the data preserved in your CRM system is valuable, its not so valuable that entering the
data should be more important than the selling that creates the data. As far as possible, offload
data entry tasks onto automated programs or paid clerical help. Dont turn your top salespeople
into key strokers.
Rule #9. Hide the complexity.
When you turn the key in your new car, you do not care that there are silicon chips controlling
every aspect of your cars handling and performance. You just care that it starts and gets you
where youre going. Look for a CRM system thats intuitive and doesnt require your people to
understand the internals.
Rule #10. Make the executives use it.
A huge benefit of CRM is that it helps a company hone sales strategy. Thats only possible,
though, if everyone involved including top executivesuses the same system and therefore
talks the same language. If not using CRM becomes seen as the mark of executive privilege,
you might as well not bother.
Rule #11. Use managers as trainers.
When sales managers are responsible for training the reps, it not only guarantees that the
managers learn the system, but it also makes the managers into the sales teams first line of

support. A train the trainers approach thus helps everyone work to more closely to ensure that
the system becomes integral to the sales effort.
Rule #12. Dont support multiple systems.
Some reps and managers want to continue to use spreadsheets, e-mails, and handwritten notes,
because thats the way weve always done things. To prevent this, top management should
refuse any report not generated with the official system. The reluctant will quickly figure out
that its less work to use the system than to rekey the data.

Question No. 5(a)

Explain the Virtual Face in detail.

Virtual Face
Virtual Face is a complete, hosted solution for face-to-face and e-commerce transactions. Easy to
use and economical, Virtual Face efficiently and cost-effectively processes payments through
Internet-connected PC. All information is hosted and stored, minimizing data security and
association compliance concerns. It also integrates with multiple shopping cart applications for
e-commerce environments.

Virtual faces are the cyberspace incarnations of an existing non-virtual organization.

Contemporary information and communication technologies (ICTs) may shift the focus of
activity, as these new services need not copy the activities of the parent organization, but extend
them. The scope of activities is being extending by the use of facilities such as electronic
procurement, contract tendering, electronic mall, with or without added enrichment such as a
common payment mechanism. There is obviously an extremely tight link between the virtual
face and parent organization, as what is happening is that a new way of reaching the customer
has emerged. Many companies offering web pages with varying degrees of interactivity to add
to, rather than replace, other market cannels, are readily using this model. In some cases
organizations find that the different communication challenges require them to establish an
entirely new management model independent from the parent group, this has been proposed in a
number of electronic retailing situations where the traditional forms of management cannot be
successfully maintained in an electronic market. This virtual face model commends itself as a
starting point.

The Co-alliance
Co-alliance models are shared partnerships where each partner brings approximately equal
amounts of commitment to the virtual organisation to form a group. The membership of the
group may change in response to shifting opportunities, or to reflect changing competencies of
each member. Focus can be on specific functions such as collaborative design or engineering, or,
in providing virtual support with a virtual team of consultants. Links within the co-alliance are
normally contractual for long-lasting alliances or by mutual convenience on a project-by-project
basis. Within the lifecycle of a project, there is not usually much room for membership
substitution. This organisational form is not new, but its attractiveness as a virtual model are a
consequence of the benefits flowing from cheapness and speed of real-time communication and
the ease with which such groupings can be made and unmade.

This form of cooperation is not new: what is new is the speed and efficiency with which such
alliances can form, do their jobs, and reform as a result of ICT. This means that it is easy for
other businesses or groupings to deal with the partners as a virtual (single) entity existing for a
specified time.

The Star Alliance

Star alliance models are networks made up of a core, and surrounded by satellite organisations.
At the core are the dominant players in the market who supply competency or expertise to
members. These alliances are commonly based around similar industries or company types.
While this form is a true network, typically the star or leader is identified with the virtual face
(perhaps by brand ownership). As a result, the core is very difficult to replace, whereas the
satellites may have a far greater level of substitutability. Communication channels are controlled
by the core and this may lead to quite hierarchical communication structures.

The Value Alliance

Value alliance models bring together a range of products, services and facilities in one package
and are based on the value or supply chain model. Participants may come together on a projectby-project basis but generally the contractor is project manager, and also provides coordination.
Where longer-term relationships have developed, the value alliance often adopts the form of
value constellations where firms supply each of the companies in the value chain, and a complex
and enduring communications structure is embedded within the alliance. Substitutability has
traditionally been a function of efficiency and transaction costs: searching for, evaluating, and
commencing operations with potential partners has been a costly and slow business procedure,
relying as it does on information transfer, the establishment of trust and business rules across
time zones, culture, currency and legal frameworks. These have determined the relative
positioning of partners on the chain, and the reciprocity of the relationship. This model is
particularly suited to taking advantage of communications efficiencies not previously available,
and therefore changing components extremely rapidly in response to evanescent market forces
and opportunities.

The Market Alliance

Market alliances are organisations that exist primarily in cyberspace, depend on their member
organisations for the provision of actual products and services, and operate in an electronic
market. Normally, they bring together a range of products, services and facilities in one package,
each of which may be offered separately by individual organisations. In some cases the market is
open and in others serves as an intermediary. These can also be described as virtual communities,
however a virtual community can be an add-on, such as exists in an e-mall rather than a
cyberspace organisation perceived as a virtual organisation. Fast and responsive communication
channels are essential to preserving such alliances which could only have formed occasionally,
and relied on duration to be cost-effective from here on.

The Virtual Broker

Virtual brokers are designers of dynamic networks. These prescribe additional strategic
opportunities either as third party value-added suppliers (such as in the case of common web
marketing events or as information brokers providing a virtual structure around specific business
information services). This model has the highest level of flexibility with purpose-built virtual
organisations created to fill a window of opportunity, and dissolved when that window is closed.
New intermediaries using the Internet (such as e-Bay and the many auction enterprises)
epitomize the growing trend to take fast and inexpensive communications across time and space
for granted, and to configure themselves for advantage accordingly.

The Virtual Space

The virtual space is characterized by being wholly dependent upon virtual contact with the client.
This business has no other channel to market, nor need be dependent upon any particular existing
intermediaries between it and the makers/suppliers of goods and services it sells. Unlike
alliances, which may act as the virtual face for chains of retail shops with walk-in retail outlets
and existing brand image, the supply chain of these companies is hidden from, and of no
importance to the customer. They may elect to choose goods and services from companies with a
retail face, but they may equally elect to operate (or subcontract) warehousing and delivery
services specifically designed for this channel to market. Different forms are currently emerging
using this basic model, although there is evidence that the temptation to focus on 'core
competencies' and form market alliances with others still operates.

The value of the various models outlined above is that they enable a company to select a model,
or type of business to implement. It will be instructive to visit commercial sites and, using the
above types of models provided, see how they fit into proposed frameworks bearing in mind
the fact that the B2C sites you will normally have access to visit, are just the tip of the iceberg of
electronic business.

Question No. 5(b)

The implementation of virtual face model in retailing industry can be beneficial for the
organization profitability, discuss the real world case in detail.

VIRTUAL FACE MODEL IN RETAILING INDUSTRY

The retail industry is confronted with unprecedented change. Economic turmoil and
technological advances are combining to reshape the retail landscape faster than some retailers
are able to react.
Todays consumer has vastly different and more sophisticated expectations of product, service,
value and environment than five or even three years ago. In the new multichannel reality, the
boundaries between virtual and physical space are becoming blurred and retailers are being
forced to question the role and function of stores in an environment where their relevance to the
connected consumer is increasingly subject to challenge.
While the role of the store is under question, even the most pessimistic commentators do not
seem to be predicting the complete demise of the store. There will remain a role for physical
space albeit in a different format and potentially radically smaller scale. The process of resetting
the physical retail estate is likely to be an uncomfortable one for many concerned and will
require structural and operational changes that will take time and innovation to address.
The changing retail environment
Changes in todays retail environment are leading to questions about the long term viability of
the traditional retail model. We are observing five key pressures on retailers in the marketplace:
1. Consumer spending levels will remain weak especially for discretionary goods.
2. Business costs continue to rise, increasing not only variable costs but also fixed central costs.
3. Evolving technology and an ever increasing number of interactive devices is profoundly
changing consumer shopping behaviour.
4. Intensifying competition through a shrinking market and an increasing number of players
converging from other sectors or other countries.

5. Retailers sustainability agenda and policies will significantly contribute to commercial

performance.
The convergence of these challenges requires that retailers re-evaluate and adapt their store
propositions to face the future with a commercially sustainable proposition. To do this, retailers
need to truly understand changing consumer requirements and assess how these can best be
addressed within the four walls of the store.
The rise of the connected consumer
Retailers need to develop an understanding of how consumer behaviours are evolving and the
impact of these changes on consumer expectations both in and outside of the physical retail
location.
The customer experience is changing as consumers adapt and become more connected: they are
constantly connected to the internet through smart, portable, and highly usable devices; they are
in control of the technology they use and also expect the latest technology from retailers. As
consumers become savvier, they are increasingly taking charge of their own shopping
experience, identifying and leveraging many different sources of information and channels to
optimise the different elements of their shopping journey.
The role of the store needs to evolve to become one part of a much more complex relationship
between the retailer and consumer, it needs to find a new balance between providing inspiration
and emotional engagement while offering new ways of experiencing the breadth and depth of the
range; and do this in a consistent and relevant way across all channels.
The evolving role of the store
The role of the store will evolve to become one part of a much more complex and challenging
relationship between the retailer and consumer. In a truly multichannel world, the purpose of the
store changes from driving sales of the product in store to being a brand and product
showroom that drives revenues across all channels.
1. Store as a destination to augment the brand experience

2. Limitless range
3. Empowered store assistants and more
4. Technology as an enabler of the store experience
5. Connected stores for connected consumers
1. Stores as destinations to augment the brand experience
Despite currently accounting for a small share of sales, digital sales are predicted to continue to
grow and retailers will need to re-evaluate the use of retail floor space, with space being focussed
less on driving the sale of product in-store and more on engaging the customer. Retailers have
redoubled efforts to create dramatic customer experiences through in-store atmospherics that
distinguish the store experience from other channels. The type of customer experiences and store
theatre will vary by the category and the needs of the customer.
2. Stores as showrooms for the limitless range
Even as customers become more comfortable with placing orders digitally, the retail store will
continue to play an important role. This reflects customers need to touch and feel products as
well as the fact that shopping is considered by many as an entertaining and sociable pastime.
That said, a question remains as to the breadth of product carried by an individual store and the
inventory needed to satisfy customers.
3. Empowered store associates and more
Retailers need to empower their store associates to connect with customers and provide a
personalized experience. As customers are increasingly well informed they expect more from the
service they receive in store. They enter the store armed with a wealth of information and store
associates need to be able to not only match this high level of knowledge but also add to it and
provide additional value. Increasing technology adoption in-store allows retailers to provide store
staff with detailed product information, remote access to product experts, as well as customer
information. This effectively puts CRM into the hands of the store associate to create a unique
and personalized experience for the customer

4. Technology as an enabler of the store experience

Increasing adoption of technology by consumers has meant that retailers have had to evaluate the
use of technology in stores to support the new connected consumer. Leverage payment
technology to create a quick and easy transaction in store. Retailers are increasingly trialling
mobile POS, mobile payments and considering biometric technologies, for queue busting and to
make the buying process as simple as one-click online. Leverage technology to improve the
efficiency of in-store processes such as digital price displays, RFID recognition of product stock
levels, etc.
5. Connected stores for connected consumers
Many customers will expect retailers to offer free Wi-Fi as a matter of course. There are a whole
host of benefits that Wi-Fi access in store could enable:
Track customers online behaviour, including which competitors they are visiting and
delivering communications in response to their browsing behaviour.
Develop a pool of customer data so the retailer can provide personalised targeting on future
visits this depends on privacy agreements.
Allow shoppers to conduct personal activities which means more time in store and potential to
impulse buy.
Facilitate push applications such as localized targeting of information, discounts and up-selling
to customers mobile devices.
Access to stock availability, freeing up employers time to spend on more valuable activities
such as customer service.
Deployment of Wi-Fi tablets as interactive catalogues and order systems.
In order to capitalise fully on this opportunity, retailers will need to develop better applications to
enhance the in-store experience and invest in their network connectivity. The greatest challenge
around this opportunity is customer privacy for online tracking this is a publically sensitive
issue and therefore if retailers are to pursue Wi-Fi connectivity, they should ensure they maintain
the trust and loyalty of their customers.