A

SUMMER TRAINING PROJECT REPORT

ON

IMPACT OF E-COMMERCE ON
MARKETING

TO BE SUBMITTED TO SUBMITTED TO DR. APJ ABDUL

KALAM TECHNICAL UNIVERSITY, LUCKNOW
IN THE PARTIAL FULFILLMENT OF THE
FOR THE DEGREE
OF

REQUIREMENT

MASTER OF BUSINESS ADMINISTRATION

Batch 2014-16

External Supervision of :
Mr. AJAY SINGH
(Branch Manager)

Internal Supervision of :
Mr. Lalit Kumar
(Faculty, MBA Deptt.)

VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107

DEWAN INSTITUTE OF MANAGEMENT STUDIES

Meerut By-Pass Road, Partapur, Meerut.(U.P.) INDIA Pin-250 103
Ph.:91-121-2440315, 2440375, Fax: 91-121-2440337
Email:info@dewninstitutes.org,Web Site: www.dewaninstitutes.org

STUDENTS DECLARATION
I, VIKRANT TYAGI hereby declare that this project report on the topic IMPACT OF ECOMMERCE ON MARKETING. Is an original work done by me under the guidance of
Mr. Lalit Kumar Asst Professor Management Department, DIMS Meerut. This is
submitted in partial fulfillment of MASTER OF BUSINESS ADMINISTRATION.

VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107

ACKNOWLEDGMENT
Life of human is full of interaction. No one is self sufficient by himself. Whenever anyone is
doing serious and important work. A lot of help from the people concerned is needed and one
feels specially obliged toward them. I cannot forget acknowledging them in few words.
Without the guidance & co-operation of them, this report was not possible.

I would like to thanks Mr. Lalit Kumar Asst Professor Management Department, DIMS
Meerut has played an instrumental role in the successful completion of this research report.
Apart from guiding me on how to go about things they have been a constant support
throughout.

During these period, I met many people at outlets, and I m indebted to all of them for their
help and co-operation.

VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107

EXECUTIVE SUMMARY
Present world is the world of competition. There is huge competition in each and every
sector. Every one wants to be ahead of their competitors. The competitive landscape, rapidly
changing technologies, increased complexity of products and services and more aware and
demanding customers are all pushing the Organization to adopt the customer centric focus.
In the present dynamic business environment customer play a vital role and is of centric value
to the Organization. Hence satisfying a customer by providing excellent services is of prime
importance to the company.
First of all a proper outline of the entire survey work was decided like research objectives,
research approach. The main objective of the research was to find out the impact of ecommerce on marketing..
The next step was decide upon other areas of research design. To meet the main objectives of
the research program me a proper sample size was decide upon, which represents the entire
population and help in getting results. Structured questionnaire was used as research
instrument and personal interview method was used for data collection in the whole survey.
Analysis and interpretation were drawn from the entire data so as to focus on the major
problems. Analysis and interpretation were further used to reach the results and findings of
the survey and were also helpful in making the suggestions.

CONTENTS

Synopsis

Introduction

1. The marketing concept

2. Marketing planning stage for online activities.

24

3. E-Commerce

31

Research Methodology

63

Research Design

68

Hypothesis

70

Findings & Analysis

94

Limitation

97

Conclusion

100

Bibliography

103

SYNOPSIS

SYNOPSIS
OBJECTIVE:
The main objective of this study project is to find out the IMPACT OF ECOMMERCE ON MARKETING in the recent time period and what are its
implication towards the marketing mix.
Hypothesis: E-commerce has changed total face of marketing.
Definition: E-Commerce is the paperless exchange of information, products, i.e.
goods and services between various trading parents for the increase in their utility.

Research Methodology

Exploratory Research.

Data Collected

Secondary type.

Source of Information

Books, Magazines, Websites.

INTRODUCTION

THE MARKETING CONCEPT AND AN OVERVIEW OF CORE CONCEPT

Marketing is exciting and full of powerful concepts ... but many people have
the image that marketing is only associated with business and is somehow
tainted and manipulative. Thoughts gravitate immediately to someone
selling you something so they can make a profit. But that's not what
marketing really is ... at least when practiced as it should be! Done
properly, marketing focuses on meeting the needs of customers in order to
achieve organizational objectives.
Throughout this course we are going to define all marketing concepts in terms that
are relevant to the National Park Service. Some will be easier than others. Some
may be a stretch. But there's no better time to start than right now. So let's take
the last sentence of the paragraph above and redefine needs, customers, and
objectives:

Customer needs in the business world: In the business world, the customer's
needs are for the generic product or service that the firm provides as well as any
intangibles associated with it. What do you need when you buy a car?
Transportation. Why do you want a Mercedes? Because of the performance
image Mercedes has established through promotion.
When most people hear the word marketing they immediately think of advertising,
selling, promotion, or public relations. In one study, 61% of the respondents said it
was a combination of these three components. Another 28% said it was one or
another of them. Only 11% got anywhere close to the correct response. Philip

Kotler, a senior marketing professor at Northwestern University, states that

marketing involves the following:

Needs assessment

Marketing research

Product, service, and program development

Pricing

Distribution or delivery of the product, service, or program.

MARKET SEGMENTATION
Logic:

Smaller,

more

homogeneous

groups

are

easier

to

satisfy

than larger, less homogeneous groups.

Market segmentation is of interest to marketers because not all customers are alike.
Treat them like they are alike and most will be less than well satisfied. That's the
theory popular today. Thirty years ago marketers were raving about mass marketing.
The rationale behind mass marketing included the economies of scale you achieve
in both manufacturing and communication by reaching a large group of people with
the same product and message. Over time, however, marketers discovered that if
the mass market was divided into smaller, more homogeneous groups (segments)
these smaller segments could be better satisfied.
If you put customers into groups based on the similarity of the benefits that meet
their needs, you will have relatively homogeneous groups. Each group will be unique
in some important benefit-related way. So finally we get back to the rationale of
market segmentation: It is easier to satisfy a smaller group than a larger group. And,
you will recall, that we achieve our organization's objectives by satisfying people.
Anything we can do, then, to satisfy people better is of direct benefit to our
organization.
The smaller the group the easier it is to satisfy people in the group. That makes
intuitive sense because a group of ten is generally more homogeneous than a group
of 1,000. Enter the concept of viable segments. A viable segment is one that the
organization is capable of satisfying and is large enough to be worthwhile for the

10

organization to attempt to do so. Lets look at a couple of ridiculous examples (it's

easier to see the point!). Think of a garment, a piece of clothing.
First, assume no segmentation whatsoever. The result would be that we would have
one garment for everyone in the world without regard to size, gender, color, style,
etc. We know immediately that the price would be low because of economies of
scale in production and distribution. But we also know that satisfaction would be
horrible (it would be too big for most people, some wouldn't like the color or style,
etc.).
Now, assume the ultimate in segmentation: products designed for each individual.
You pick the style, color, size, fabric, etc. We know immediately that we would love it
- after all, it would be designed for each of us individually so why wouldn't we? But
we also know that it would be so expensive that we couldn't possibly afford it.

11

TARGET MARKETING & MARKET POSITIONING

First you segment a market.

Then you target one or more segments.
In performing market segmentation you identify the major groups you face in the
environment, defining them in terms of criteria that are pertinent to our organization
(see Chapter 3). You know now that segmentation is nothing more than identifying
homogeneous groups. But you also know that you accomplish your objectives by
doing something with some of these groups. Target marketing and market
positioning, then, are the two final parts of the market segmentation process.

Philip Kotler, a marketing guru, defines a target market as a well-defined set of

customers whose needs the organization plans to satisfy. He suggests that the target
market may be the total focus of the organization or it may be viewed as only a
starting point for later expansion to other market segments. The point is, he
recognizes that there are many groups and you probably won't target them all.

After you've identified all of the groups you face, you evaluate each group in terms
of:

1) how important the group is to accomplishment of your

organizations objective(s); and

12

2) how likely is it that you can satisfy the individuals in the group given
the resources you have available (program, human, financial, etc.).

You need to select groups for your attention based on the extent to
which

Each group has the ability to contribute to accomplishment of

the organizations objective(s), and

The organization has the resources to meet the needs of the

group.

Here's the logic:

It doesn't do any good to waste "time, talent, and treasure" on

any group that can't contribute to accomplishment of the
objective you are focusing on.

It doesn't do any good to focus on any group that you can't

possibly satisfy with the resources you have available.

13

MARKET POSITIONING
First you segment a market.
Then you target one or more segments.
Then you position your total offering so that it
communicates effectively with the targeted market(s).
Logic:

You

need

to

design

the

benefits

of

your

offering

for

groups

you have targeted so that the offerings will be properly positioned in their minds.
Market segmentation, target marketing, and positioning are a three part process.
First you segment, then you choose your target(s), then you design the totality of
your offering(s) with your target consumer in mind. This totality includes what we
commonly refer to in marketing as the marketing mix. The marketing mix is the
particular blend of controllable marketing variables that the organization uses to
achieve its objectives with the target market. One of the most popular classifications
is commonly called the "four P's": product, price, place, and promotion.
The most current perspective in marketing today recognizes that each of these
communicates a message to the target market. While we will discuss this more
thoroughly in a later chapter, we need to recognize at this point that each element of
the marketing mix has communication characteristics:

The product or service communicates with the target market through

the image it projects.

The price communicates through the psychological factors of pricing

(ex: we commonly associate high price with high quality)

14

The distribution channels you use communicate to your target market

through the image they project.

Finally, and communicating most directly, is promotion, which

communicates with your target market through public relations,
advertising, personal selling, sales promotion, direct marketing,
publicity, etc.

The target customer is the focus of all of this communication and you have to be
aware of how the target market will perceive the messages. Your target consumers
must recognize that you are trying to meet their needs else all of your efforts will be
for naught. You want individuals in the target market to think of your organization and
the benefits you have to offer when they are concerned with the needs you are trying
to satisfy. When you have done this, you have properly positioned your offering.

15

THE MARKETING MIX - PRICE

Price: A Part of the Marketing Mix
The price is what the customer pays. It includes direct and indirect costs as well as
opportunity costs.
Direct costs are cash outlays a customer makes in order to obtain something. An
example would be admission to a national park. Direct costs are, in many cases, a
relatively small part of the total cost.
Indirect costs are costs associated with obtaining something. An example would be
the cost of driving to a national park, food and entertainment along the way, etc. The
total of the indirect costs is often more, sometimes much more, than the direct cost.
The total cost is obtained by adding the direct and indirect costs.
Opportunity costs are what we give up when we do something. They can have
various types of value, sometimes monetary, sometimes not. Opportunity costs
include other things you could be doing instead of going to a national park. Examples
might include mowing the lawn or going to a baseball game (which would be nonmonetary) and not working overtime on Saturday in order to go to a national park
(which would be monetary),
The price the park visitor pays to go to a national park is the total of all costs,
including direct, indirect, and opportunity. The perceived benefits of going to a
national park have to be at least as great as the total of the costs if a potential park
visitor is going to make a decision to go to a park.

16

PRODUCT
Product: A Part of the Marketing Mix
Product is actually a complex, multidimensional concept. It is defined broadly enough
to include services, programs, and attitudes and includes whatever you are offering
the target market in an effort to meet their needs. It involves all tangible and
intangible aspects of the good or service you offer your target market. These are
things which have value and are balanced against the value you expect to receive
from the target consumer. Product in the NPS world would probably be interpreted
as programs, activities, interpretation, as well as services.
Product Mix: Every organization has a product mix that is made up of
product lines. Product lines contain product items. Each product item is a
product or service as well as the brand, package, and services associated
with it. There are six components as follows:

Services: Interpreters in visitor centers are providing an information

service.

Package: In the product world this is the container. In the NPS world
this could be the surroundings in which a program is delivered. The
atmosphere of a visitor center might be considered the package in
which the visitor center experience is delivered.

Brand: The brand in our case is the National Park Service and all of the
image attributes that are associated with the NPS.

17

Product Item: A distinct unit within a product line that is distinguishable

by size, price, appearance, function, or some other attribute. A guided
hike along a particular trail might be a product item.

Product Line: A group of products within a product mix that are closely
related, either because they meet the same need, function in a similar
manner, or share some other characteristic. Interpretation might be
considered a product line.

Product Mix (assortment): the set of all product lines and items that an
organization offers its target market(s). Everything the NPS offers
target market(s) constitutes its product mix.

Product Life Cycle: Products, services, programs, activities, etc., don't last forever!
They have a life ... and then, often, they die. Businesses have a clear signal ...
customers quit making a purchase. But government agencies do not receive such a
clear cut signal. Unfortunately, they can continue to offer these outdated programs,
services, etc., and operate outmoded facilities long after they should have been
retired ... and would have in the business sector.

18

THE MARKETING MIX

A General Discussion
Logic:

Marketers

have

four

tools

to

use

to

develop

an

offering

to

meet the needs of their targeted customers.

Collectively they are called the marketing mix.
Marketing Mix: You may have heard of the "four Ps" of marketing: product, price,
place, and promotion. Collectively these are called the marketing mix. More
comprehensively they are viewed as:

product, service, or program - something of value you are offering the

customer, client, or park visitor

price - what the customer, client, or park visitor pays (direct costs are
financial, indirect or alternative costs are such things as time it takes and the
things people give up if they choose your offering)

place, distribution, location, or accessibility - where the transaction takes

place, perhaps in a park

promotion or communication - this is how you inform the target market about
the benefits in your marketing mix
Collectively these are the tools organizations uses to develop offerings to
satisfy their target market(s) ... the only tools at their disposal. Remember: If
your marketing mix doesn't meet their needs they will not be satisfied - and if
they aren't satisfied you are unlikely to meet your objectives.

19

The marketing mix should be viewed as an integrated and coordinated package of

benefits that reflect the characteristics of customers and various targeted publics and
satisfy their needs, wants, and expectations. Note that the elements of the marketing
mix should be integrated because each element of the mix usually has some impact,
direct or indirect, on the other three. For example, if you improve the product or
service you probably have to change the price because it costs more to produce.
Although you may not have to change where the product is delivered to the
customer, you will almost certainly have to change the promotion or communication
with the customer because you need to tell the customer about the changes you
have made in the product and how the changes will make it more desirable and
satisfying.
One problem in many organizations is that different divisions may be responsible for
different elements of the marketing mix. This happens even in well managed
organizations. The result is that the offering is confusing to the target market. Lack of
communication among divisions makes this problem worse. And if they don't share
the same view of organizational objectives, the problem is worse still.
Product: The product, service, or program includes both tangible and intangible
elements. The tangible, of course, are those things that the customer can see, touch,
feel, taste, or smell. The intangible include such things as the image of the offering ...
which includes the image of the organization making the offering, the psychological
aspects of pricing (high price to many customers is equated with high quality - and
vice versa).

20

Price: The price is what the customer pays. It includes direct and indirect costs as
well as opportunity costs. The benefits of the product have to be great enough to
warrant the price. Price includes all costs associated with the product, service, or
program.
Place: The place is where the customer receives the product, service, or program.
The place of delivery, including all of its resources, is part of what the consumer
buys. A place that meets his or her needs better may be worth more. The place may
be a park, a visitor center in the park, or an interpretive exhibit along a trail. In setting
its strategy, the organization must determine how much the target market is willing to
pay for atmosphere and physical resources of place.
Promotion: Promotion includes all forms of communication you use to communicate
the benefits of your offering to the target market(s). The objective is to persuade the
customer in such a way that he or she recognizes that your offering is uniquely
qualified to meet his or her needs. The term promotion mix is commonly used to
refer to the types of communication that are available: advertising, public relations,
personal selling, publicity, and sales promotion. Some authors include direct
marketing. Word of mouth, though seldom discussed, is powerful promotion.

21

Marketing Research: How do you know when a program has died? Paraphrasing
C. D. Moore, If you can't (or don't) measure it (user satisfaction), you can't improve it
(or know when to change or eliminate it). Collecting information for making good
decisions is the only purpose for marketing research. Data for data sake is an effort
in futility and a waste of time. Information is power, and good information is essential
to knowing when and how to make changes in what you are offering your customer.
Ideally, the organizational culture will encourage looking at program performance
data as an opportunity (remember SWOT) rather than a threat.

22

MARKETING PLANNING STAGE FOR ONLINE ACTIVITIES.

The Internet was not built with commerce in mind. It was built by scientists for
publishing and sharing information. These purpose were not afterthoughts; they
were built into the very architecture of the system. Precisely what constitutes
marketing in this new environment remains one of the least understood challenges
to what a business seeking to use the Internet as a channel for sales. While a
definitive answer to this question is unlikely to emerge for sometime, it is possible to
describe some general strategies that business can use to address the issue of how
to market on the Internet.

23

HOW THE INTERNET IS BEING APPLIED IN MARKETING STRATEGIES

CONSUMER ANALYSIS
As highlighted in Table research shows that 27 percent of U.S. Internet users
actually shop online, a higher percentage than in other nations. Shoppers Worldwide
are much more apt to buy books and music/CD than any other products category.
Online purchases as a percentage of total category sales (both offline and online)
are growing rapidly in many categories. User activity is strongly influenced by age.

24

PRODUCT PLANNING

Companies are taking a variety of product planning approaches to the Internet, such
as these two. Atomic Dog (www.atomicdog.com) , the publisher of this text, is
involved with Internet-driven texts and print version of them. The online texts feature
high-tech graphics, animations, interactivity, and other dynamic attributes not found
in traditional paper-based books.

DEFINING THE PRODUCT OR SERVICE

On application for electronic commerce could be to launch a new product or service

for sale or for rent or lease. Some of the pioneers of online selling have taken a
traditional, probably less than dazzling, consumer product or service, repackaged for
convenience, and then produced a strong promotional program to expose (or
perhaps overexpose) it to online audiences.
The marketer achieve these processes ad promises offer an outstanding variety of a
single product with the tactic of narrow focus and keep selection as the Web
proposition). Offer a product that will last longer or feature a better warranty. Add
convenience to the companys distribution channels.

25

Offer more expertise (remember narrow focus and deeper knowledge), and
demonstrate this commitment on the Web page.) Faster service to costumers or
prospects should be obvious. Answer e-mails within twenty-four hour and return
telephone calls the same day.
Display the awards, certifications, or industry affiliations the company has earned.
If the site is consumer-oriented, incorporate a guest book of site visitors names and
telephone numbers, or publish letters of praise on various aspects of the consumer
purchase experience.
After looking at the categories of interest, the marketer can compare the above
business attributes with the product or service concept. Consider these topics for
commerce; remember, the more specialized or unique, the better.

26

DISTRIBUTION PLANNING

One of the most complex aspects of E-distribution involves business to

business exchanges that connect sellers with potential buyers. For a instance
in nov.2011 several major automakers established covisint, with a ultimate
goal of working on online with 90,000 global suppliers and saving 2000 dollar
or more per vehicle. With the distribution problems that a number of online
firms have faced, they are now more apt to out source delivery to such
industries power houses as UPS, which has a significant Internet Logistical
Presence.

Promotion Planning

Internet drawn firms have dramatically scaled back on their advertising

efforts, particularly T.V. Ads. These efforts proved too costly and to
ineffective. Print and online ads. remain popular .

27

The promotional mix selections include advertising sales promotion, Public

relations, direct marketing , personal selling, each of which have strengths
and weakness.
Online media does offer a tremendous advantage of selectivity over the traditional
mass vehicles of advertising and web is powerful both in delivering massages to
large audience via browser and banner advertising.
Electronic Exposure contribution is include web presence, Email, List serves,
Electronic Bulletin boards, use nets, sigfiles and faqs.

Price Planning

According to Jupiter research, 80% of Internet Shoppers compare shop before

buying and 46% of Internet Shoppers visit 3 to 5 sits before making a purchase.
Some firms set their online prices similar to or slightly blow their offline prices and
count on customer loyalty to their brands and the convenience of web Shopping to
stimulate business. Other Company such as eBay and pricline.com focus their
appeal on people who like to price shop and get bargains. Stile other companies use
the Internet to sell closed out merchandise at deep discounts.

28

Online shopping can produce less price sensitivity at a brand level and more
sensitivity to search attributes associated with quality them does traditional shopping.
Buy providing more information to costumers with minimal search cost,
manufacturers and retailers with differentiated

offerings will have a greater

opportunity to educate consumers about the benefits they offer, and consumer will
find it easier to access and compare the offerings of the firms competing on prices.

29

E-COMMERCE

The cutting edge for business today is electronic commerce (e-commerce). Broadly
defined, electronic commerce is a modern business methodology that addresses the
needs of the organizations, merchants, and consumers to cut costs while improving
the quality of goods and services and increasing the speed of service delivery. The
term also applies to the use of computer network to search and retrieve information
in support of human and corporate decision making.

More commonly, e-commerce is associated with the buying and selling of

information, products, and services via computer networks today and in the future via
any one of the myriads of networks that make up the information superhighway (Iway). Projections anticipate that the I-way will transform information transport
technology for electronic commerce applications and provide an economic windfall
similar to what the interstate highway system did for productivity in the nations
manufacturing, travel, and distribution system. The I-way is not an U.S. phenomenon
but a global one, as reflected by its various labels worldwide. For instance, it is also
called the National Information Infrastructure (NII) in the United States, data-dori in
Japan, and jarring.

Factors fueling the avid interest in e-commerce run the gamut of the business
process. From the broad perspective, e-commerce is well suited to facilitate the

30

current reengineering of business processes occurring at many firms. The broad

goals of reengineering and e-commerce are remarkably similar: reduced costs, lower
product cycle times, faster customer response, and improved service quality. One
major goal of the reengineering effort is to use electronic messaging technologiesa
key building block of e-commerceto streamline business processes by reducing
paperwork and increasing automation. For example, electronic data interchange
(EDI)a fast and dependable way to deliver electronic transactions by computer to
computer.

31

INFRASTRUCTURE
Once an account has been created on the network the other basic infrastructure
components such as a computer, a modem and connection to the telephone network
have to be established.

A modem----short form for Modulator-Demodulator----is used to connect a computer

to the telephone network. Using modems, digital signals generated by computers are
transmitted over analog telephone lines (modulation) and converted back to digital
form on receipt at the destination computer (demodulation). Modems can be either
internal or external. Fast modems available operate at speeds of 56kbps(kilobits per
second). To deliver faster and more reliable data transmission, organizations can
obtain leased telephone lines to provide permanent connection. Leased lines
operate at speed upto 2mbps.

For organizations operating from remote locations, where the quality of telephone
lines is not as high as desired the use of VSATs as a reliable means of
communication can be explored. In any case approvals and communication
infrastructure have to be obtained from the telephone/telecommunication authorities.
The emergence of the Integrated Services Digital Network (ISDN) has facilitated the
enhancement of services that an organization can provide. ISDN makes possible the
digitization of voice, data, graphics, text, music, video and other source material and

32

the ISDN service can be provided to end users from a single end user terminal over
existing telephone wiring.
The major components for network access over the ISDN line are:
1.ISDN BRI line and a network terminal (NT).
2.ISDN customer premises equipment.
An

ISDN

BRI

line

can

be

obtained

from

the

department

of

Telecommunication/Mahanagar Telephone Nigam Ltd. ISDN customer premises

equipment are devices which connect to the serial port of the computer.

33

SETTING UP A WEBSITE

DOMAIN NAME REGISTRATION

When a business organization decides to set up its own website, it needs a unique
domain name so that it can be identified in the Internet word. Preferably, this domain
name should reflect the name of the organization. For example the company Super
Pencils may like to have their Web address as www.superpencils.com and all email address of company employees could be userid@superpencil.com is the
domain used by commercial organizations. One of the most well known domain
name registration services for the top level domains .com , .net , .org , .edu is
offered by the Inter NIC ( registration and other information is available at their
website www.internic.net .

To register a domain name under .com (primarily used by commercial business) .net
(for network related organizations) .edu (for academic degree granting institutions),
and .org for non-profit groups, one first needs to ascertain whether the proposed
domain name is still available or has already been registered by some other
organization. This can be done by searching for example Inter NICs WHOIS
database, which contains the list of all registered domain names. Domain names can
be upto 26 character long, including the top level and cannot contain any characters

34

other than letters, numbers and hyphens. A domain name can not have any space
and can not begin or end with a hyphen.
For Indian organization who want to have the top level domain .in, domain name
have to be registered with a National Center for Software Technology (NCST),
Mumbai. Preferably the IP address of the machine on which the website is being
hosted should also then be obtained from the same organization NCST.
The top-level domains in the Domain Naming Scheme are edu, com ,gov,mil,org,int
and net and all the two letter country codes from the list of countries in iso-3166.
India has a top level domain in. The second level sub-domains registered under the
in domain are the following:

nic for the governments network,

ernet for the academics and research network,
net for Internet Service Providers,
ac for the academic community,
co for the commercial organisations,
mil for military organizations,
gov for government offices and

35

org for organizations which dont get covered under any of the above sub-domains.
At the third level the sub Domain provides space for registering the organization
names or acronyms such as hub.nic.in and vsnl.net.in. In this manner domain
names can be registered by Indian organization.
The domain name registration agreement of InterNIC requires that two domain name
servers (a primary and secondary) be listed for each domain name. These domain
name servers are used to determine IP numbers from domain names, so that the
registered domain name may be contacted over the Internet. Two servers ensure
that in the event of one of the name server machines becoming unavailable, the
domain name is still reachable. These name servers should not however listed
without the approval of the authority responsible for the maintenance of the host
machines.

36

WEB SERVERS
Once the proposed domain name has been registered with the appropriate authority,
the organization has to ready itself for establishing its presence on the Internet. To
make information available on the Internet, the organization has to setup a Web
server. These Web servers have appropriate software, which allows production of
web pages and their subsequent round-the clock accessibility over the Internet. The
organizations Web server then becomes one of the millions of Web servers that are
available over the Internet for users to access through their web browsers.

Once a website has been setup and all the desired content created on it, the
organization wants people to come and look at it. It is desirable that right people
should be able to visit the website so that they may see what is being offered and
make ordering decisions, if any. In order to be able to do so, people have to know of
the existence of the website. There are different ways in which a website can be
promoted. These include:
1. Registering on the search engines
2.Advertising
3.Newsgroup announcements
4.E-mail announcements

37

One way to feed traffic to an organizations site to get other sites to link to its
website. Generally these other organizations will want a reciprocal link back.

38

ELECTRONIC DATA INTERCHANGE

Electronic Data Interchange (EDI) is the electronic exchange of business documents
ina standard, computerprocessable, universally accepted format between trading
partners. EDI is quite different from sending electronic mail messages or sharing files
through a network, or a bulletin board. In EDI, the computer applications of both the
sender and the receiver referred to as TRADING PARTNERS (TPs) have to agree
upon the format of the business documents which is sent as a data file over an
electronic messaging service.
Since data is exchanged in standard predefined formats, it becomes possible to
exchange

business

documents

irrespective

of

the

computerized

business

applications at either end of communication. For example, the suppliers Accounts

Receivable application for raising an Invoice for payment could still be implemented
on a file system using COBOL while computers Accounts Payable may be based on
an RDBMS such as ORACLE.

Once data is entered into the buyers computer system and transmitted
electronically, the same data gets entered into the sellers computer system, without
the need for reeking or re-entry. This is normally referred to as application-toapplication EDI. EDI can be fully integrated with application programs. This allows
data to flow electronically between trading partners without the need foe reeking, and
between internal applications of each of the trading partners.

39

The repeated keying of identical information in the traditional paper-based business

communication creates number of problems that can be significantly reduced
through the usage of EDI. These problems include:
1.increase time
2.low accuracy
3.high labor charges
4.increased uncertainty
EDI consists of standardized electronic messages formats for common business
documents such as Request for Question, Purchase Order, Purchase Order Change,
Bill of Landing, Receiving Advice, Invoice, and similar documents. These electronic
transaction sets enable the computer in an organization to communicate with a
computer in another organization without actually producing paper documents. It
thus eliminates the human efforts required to read, sort, and physically transport
such documents. The documents for which standard EDI formats either in existence
or under development, constitute about 85% of the official communications
associated with commercial transactions among business, government, educational
institutions, and nonprofit establishments in most of the industrialized world. It is
estimated that in the developing countries also, the preponderance of these
documents is in similar proportion.
To take full advantage of EDIs benefits, a company must computerized its basic
business applications. Trading partners are individual organizations that agree to
exchange EDI transactions. EDI cannot be undertaken unilaterally but requires the
cooperation and active participation of trading partners. Trading partners normally
40

consist of an organizations principal suppliers and wholesale customers. Since large

retail stores transact business with a large number of suppliers, they were among the
early supporters of EDI. In the manufacturing sector, EDI has enabled the concept of
Just-In-Time (JIT) inventory to be implemented. JIT reduces inventory and operating
capital requirements.
EDI (Electronic Data Interchange) is a standard format for exchanging business
data. EDI is one form of e-commerce that also includes e- mails and fax. EDI data
exchange among parties that know each other well and make arrangements for on
to one connection, usually dial-up.
The Chennai based

Satyam Infoway recently announced a pilot project for the

Indian automobile industry, Called AutoPilot, the project will network automobile
manufacturers, components suppliers and dealers via an electronic data interchange
(EDI) application, thus speeding up transactions. The companies involved will use
the Web to purchase spares and supplies in order to collaborate on sales promotions
and joint research.

41

E-MAIL: A MEDIA

Companies can use very simple tools such as the e-mail to carry out e-commerce.
This form is used mainly for business- to-business transactions. But with more and
more people connecting to the Internet, the companies are now also targeting the
consumers E-mails is used mostly for the purpose of sales promotion and
advertising. A number of business Web sites offer e-mail newsletters for subscribers.
The newsletters may carry product information, product updates or even news
pertaining to the product range.

COSTS AND BENEFITS

Where EDI has been implemented, computers electronically exchange business

documents with each other, ideally without human efforts. This reduces operating
costs, administrative errors, and delivery delays. The benefits accruing from EDI
implementations can be classified into direct benefits and long-term strategic
benefits.
42

DIRECT BENEFITS

1. Since the transfer of information from computer to computer is automatic, there

is no need to rekey information. Data id only entered at the source.
2. Cost of processing EDI documents is much smaller that that of processing
paper documents.
3. Customer service is improved. The quick transfer of business documents and
marked decrease in errors allow orders to be fulfilled faster.
4. Information is managed is more effectively.
5. There is improved job satisfaction among data entry operations, clerks etc.
when redeployed in more creative activities.

43

STRATEGIC BENEFITS
1.Customers relations are improved through better quality and speed of service.
2.Competitive edge is maintained and enhanced.
3.Reduction in product costs can be achieved.
4.Business relations with trading partners are improved.
5.More accurate sales forecasting and business planning is possible due to
information availability at the right place at the right time.

E-commerce, E-business, E-retailing, Call it what you will, but 1998 will definitely be
remembered as the year in which electronic commerce took off. Electronic
commerce via the Internet in India totaled only $2.8 million in year in 2009.

E-commerce is not only the buying and selling of goods and services on the Internet,
especially the World Wide Web but can be divided into:

E-business: Business to Business buying and selling.

Electronic Data Interchange (EDI), the business to business
exchange of data.

44

E-mail used as a media to reach the prospective and

established buyers (foe example, with newsletters).

E-business: Business to Business buy and sell

E-business is what happens when you combine the broad reach of the Internet with
vast

resources of traditional information technology system. It uses the Web

connect together customers, vendors, suppliers and employees in a way never

before possible. They do business on the Web, and consequently they do more
business.

IBM was one of the first companies to have used this term in October 1997. It feels
that business is a series of collaborative processes. It requires interaction between
employees, vendors, suppliers and business partners. They must all work together.
Companies are using the Web to buy parts and supplies from other companies, to
collaborate on sales promotion, and to do joint research.

The $2.8 million pizza chain, Domino has used the expertise of IBM to setup an
Internet that connects all the franchises worldwide with its headquarters in Delhi,
Mumbai, and Chennai. The Internet gives 1000 employees access to more than 50
applications and over 2,000 Web pages. Applications allow employees to check
calendars, view policies, and download mission critical information. The system
45

contains a detailed document library, which gives employees easy access to a broad
range of company information, such as corporate accounting procedures and
calendar. And the most popular application on the Dominos Interact is an online
discussion forum that covers topics from product distribution issues to human
resources management.

Purchase

1.

Invoice
Buyer
Remittance
Advice
Seller
Payment
order

Buyers
Bank

Payment Advice

Fund transfer

Sellers
Bank

Part of document interchange between buyer and seller

46

INTERNET BANKING: PICKING UP STEAM

Internet banking in the retail segment is a recent phenomenon that is generating

keen interest among banks. Private and foreign banks have been prime movers in
the area while public sector banks are latching on to the bandwagon. The total
number of Internet banking registrations in India crossed 2 million, an IDC estimate,
while the number of active users are around a million. This represents 15% of the
total Internet user population, a clear indication that the concept of Internet banking
is catching on. For example State Bank of IndiaIT Investment: Rs 800 Crore. IT
spend in 2009-10: Rs 100 Crore +SBI is in the process of networking 1500 branches
spread across 52 cities. The bank aims to take 80% of its business online by 2010.

47

TRIGGERS

24 x 7 availability, increase in customer convenience, retention and cost reduction

triggered the concept of online banking. The cost of an online transaction is
estimated to be nearly one eighth of that done through branch banking. Private and
multinational banks are taking a lead on in Internet channel, which is gaining in
importance. Banks such as ICICI, HDFC, IDBI, Bank of Punjab and MNCs like
HSBC, Citibank and ABN Amro are among those offering online banking services.
These include checking account details, ordering for cheques/drafts, mobile banking
and share trading. The real trigger that seems to be driving online banking is the
facility of making utility payments. However, the future of banking will be one in which
customers can address most of their needs through self-directed means and the key
differentiator will be how effective a bank is in getting customers online and deriving
measurable value from this presence.

The challenge for banks would lie in expanding their subscriber base of online
consumers and enhance their service portfolio. How the banks fare in designing,
improving, marketing and rolling out services will greatly impact the adoption trends.

While Internet banking in India is still in nascent stage, it can become a significant
channel for servicing customers. Countries like Singapore have nearly 10% of their
population banking online. Though India may have a very small online banking
population, the untapped market represents a huge potential.

48

OUTLOOK

It is clear, then, that IT deployment in the banking, financial services and insurance
segment is all set to grow. Public sector banks and financial institutions have started
connecting their locations and are devising more means to bringing convenience to
customers. From implementing customer relationship management applications to
managing and integrating of back-end processes including ensuring network
connectivity and quality of services, the gamut of solutions range to this extent. So IT
will be used for repositioning the bank in an integrated financial services market.
Ultimately the key differentiator would be quality of services that companies offer,
which would all be enabled by IT.

VIRTUAL STORES
49

If the retailer is to extend his distribution to a wider geography, the Internet may be a
wise move. The retailer, however should not give up the physical retail location if and
when the web site supports sufficient E-Commerce.
Generally, the benefits of operating a virtual storefront fall into several areas of
business strategy.

A companys distribution channels can become expanded with the presence

of a virtual storefront, which in turn can transfer more power to direct marketing,
which is the most targeted communications vehicle. This capability allows the
company to choose what is to be the purpose of the Web site: online sales, online
advertising, online customers service, or other sales or communications activities.

With a virtual presence, capital expenditure is much less in starting consumer

or business-to- directed marketing problems. The capital expenditure to open an

electronic storefront is much less than opening a tangible store (real estate and
structures); this factor should reduce the amount to borrow.

There is much more flexibility in providing a base for operations to support the

virtual store. The flexibility is such that an entrepreneur could maintain sales and
service from any location.

To expand the firms credentials and qualifications the retail Web site can

dispense marketing or sales materials automatically on request. Sales brouchers

can be obtained by prospects (as well as competitors) through a Web presence,

50

and with the proliferation of color printers, sales brochures retrieved from the Web
are as attractive as the printed sales piece.

Whether the company operates in a highly competitive business or faces

rampant

hyperinflation,

there

are

electronic

systems

to

update

prices,

specifications, or other product or service data hourly if necessary. This control of

product pricing is of some relief to the marketer and allows the product to keep up
with the market as it might swing up or down. Because of the computer-based
pricing system, competitors may not be able to match the computer-driven price
adjustments.

Producing a first-class Web site will enhance the virtual presence of the

company using the promotional mix elements. Company-sponsord promotions that

are translated into the companys Web site (for instance. Pizza Huts use of a hot
button, or link, on its Web site to connect to its long-running Book. It campaign
encouraging childerns interests in a reading) follows the paradigm of integrated
marketing communications.

Rather than having customers wait for an answer from the order tracking

department, inquiries can be investigated more quickly on an organizations Web

site. In many instances, the company will give the customer a tracking number so
that he may follow the package through its delivery.

The opportunity to test new products or services may be one of the biggest

advantages of the Web.

Many marketers are eager to sell internationally with minimal electronic sales

support. There are many marketing issues to be considered in addition to the

51

operational and financial issues in selling and delivering the product or service
abroad.

The Disadvantages of a Virtual Store

Not every product or service is appropriate to Web sales exposure. Many

consumer foods like perishable or dated goods are not being sold on the Web as of
yet.

Everyone agrees that ads offering online shopping options are the most

effective. Though P&G [Procter & Gamble] and Unilever say they are gearing up
for direct Web site, they arent doing it yet. Distribution snags have so far limited
growth of online grocers like Peapod and Net Grocer. And traditional retailers like
Wal-Mart are only now moving onto the Net. Online sales of food and beverages
will total $168 million this year estimates Forrester Research, while sales of drugs
and health and beauty aide products will be a puny $16 million.

While capital expenses may be reduced, site offerings, communications, and

maintenance require many hours, day or weeks of a Web masters attention. It

might even require the work of multiple WebMaster .

52

The twenty-four-hour service pledge is a double-edged sword: the pitfalls can

produce severe repercussions if the service activities falter.

Besides the people portion of a twenty-four-hour work day, the marketers

organization is dependent on its equipment, communications software, and its ISP

connections.)

Another double-edged sword is the anonymity of identify inherent to the Web.

The consumer is not certain who the company is or what it stands for. Likewise, the
company is unsure who the buyer is and what the buyers intentions are.

The another double-edged sword, the virtual storefront continues to present

merchandise or services as long as the server is running or the Internet provider is

being paid. Much as the cows on the diary farm must be milked daily to preserve
their health, the Web merchant also gets few days off if she is intent on filling and
shipping merchandise orders or communicating daily to customer inquiries.

53

TRANSACTIONS
E-PAYMENT

SECURING ONLINE PAYMENTS

With continuing growth in e-commerce, its worth learning what the major credit card
companies, banks, online merchants and their technology partners are doing to
increase the security of e-payments.

From the early days of the Internet, credit and charge card companies recognized
the enormous opportunities presented to them. They also saw challenges ahead.
Credit cards are easily the best way to pay for products and services online and
approximately 90% of all online transactions are made by credit or debit cards
compared to only 28% of purchases made in person. These figures are based on
research by Data monitor who also forecast that the value of Internet transactions
will reach $3.9 billion by 2005 in the US and Europe alone.

However, online shopping also has the highest levels of fraud and proving that the
cardholder actually conducted the authorised transaction over the Internet cost Visa
member banks $250m to resolve disputed charges in 2000. The problem is that 'card

54

not present' transactions only require the card number and expiry date, so there is no
way to be sure that it is the actual cardholder providing the details.

It's not surprising then that the card companies have been focusing their minds on
the problem of online fraud. The challenge for them is to reduce the cost of fraud
while at the same time increasing consumer confidence and encouraging more of us
to buy online- whether that is through the Internet or other emerging channels
including mobile phones and interactive digital TV.

From the moment we decide to make a purchase using a credit card, there is a
complex sequence of processes and organizations that handle the transaction. But
in short, the key players are the card associations, the card issuers, merchants and
acquirers. The card associations, also known as 'the brands', are the likes of Visa,
MasterCard and Discover. The issuers are the banks who provide us with our credit
cards and the acquirers are the financial services companies that process
transactions on behalf of the merchants. Some large merchants will do this for
themselves but most outsource to an acquirer that may also provide merchant
hosting facilities.

55

CARD HOLDER V/S CARD ISSUER

The question which of these parties bears the cost of online fraud is a complex
one. While in most cases the cardholder is liable for his or her cards being stolen
and used, the actual cost is capped and prevented from exceeding a modest limit.
The card issuer bears most of the costs associated with investigating the details of a
disputed charge, which may be considerably higher if the dispute is not resolved
quickly and always has the potential to damage customer relationships. However, it
is the merchant that is liable for the value of the items purchased if the cardholder
disputes the purchase ever happened or just refuses to pay the bill.
If it were possible for the cardholder to be authenticated before a purchase, to a
reasonable level of certainty, it should be possible to reduce the likelihood of a stolen
credit card number being used. Obviously the merchants and banks would benefit
directly, but so would be the cardholder. The process of proving identity provides a
greater feeling of security and should encourage more cardholders to shop online.

56

QUESTION OF AUTHENTICATION
3D Secure is a payment authentication mechanism defined by Visa for use on all
non-traditional networks such as the Internet, mobile and Interactive TV. The system
puts an extra step into the checkout process that requests that the bank that issued
the card verifies the online user and the legitimate cardholder. Once completed, the
merchant can process the transaction as normal but is now guaranteed payment,
even if the transaction is disputed. So in this case, liability shifts to the card issuer.
The consumer branding for this initiative is called Verified by Visa. Visa has stated
that by 2005, issuing banks must support 3D Secure for their cardholders in order to
conduct authenticated online transactions. Verified by Visa is already up and running
in the US and was recently launched in Europe, where Visa, in agreement with BT
Ignite, now provides a hosted service for issuing banks. Barclaycard Merchant
Services and The Bank of Scotland - two of the largest issuing banks - have
announced that they will support Verified by Visa, while leading merchants that
already support it include Dell, Blockbuster Video, Petsmart.com and United Airlines.

57

IMPORTANCE OF CRYPTOGRAPHY
To meet the new levels of security that customers, credit card associations and
financial institutions require, the new generation of online payment services need to
meet best practice security standards and address a wide range of threat scenarios.
One of the key tools for this is cryptography that dates back to Egyptian
hieroglyphics circa 1900 BC.
Today, cryptography is widely used in a variety of applications such as securing
electronic documents and discouraging the copying of valuable material such as
digital movies. But increasingly, cryptography is used to verify the identity of
someone or something and to prove that an event actually happened.
The de-facto security standard used for Internet based transactions is SSL (Secure
Sockets Layer). Originally developed in 1994 by the creators of the Netscape
browser, SSL is commonly used to encrypt Internet communications and prove that
youre connected to the right Web site and not a fake. Sites that support SSL are
clearly identified, usually by a padlock icon at the bottom right hand corner of the
browser screen.
However, although the use of SSL can keep credit card numbers secret as they
cross the Internet, this does not provide proof that the person typing in the card
number is actually the card holder. With Visa 3D Secure and MasterCards
equivalent solution called MasterCard SPA, cryptography is used to validate
legitimate card users by asking them to prove their identity. Assuming this process is
completed successfully the merchant in question is given approval to complete the

58

transaction through the use of a secure message sent from the cardholders bank.
This message becomes the merchants primary piece of evidence if at some later
stage the transaction is disputed.
For consumers, the process is very simple. In the case of the Verified by Visa
initiative, existing cardholders can visit their banks Web site and enrol in the system,
by providing some basic personal information such as a password or PIN (Personal
Identification Number) which is stored by the bank. To make a purchase from an
online merchant that supports the Verified by Visa system they will be presented with
an extra screen in their browser to enter this information. Hidden from the merchant,
this is provided directly to the issuing bank that authenticates the cardholder and
authorizes the transaction with the merchant.
Simple in practice, but the secure generation, storage and management of the
cryptographic keys that underpin the core encryption, digital signature and
cardholder validation processes, relies on sophisticated technology. Because of the
severe security and branding implications of a successful attack, the card
associations have defined stringent measures. To meet these challenges, software
companies developing cardholder authentication solutions for the online payments
market such as Arcot Systems and Cyota, are turning to specialists like n Cipher to
provide this additional level of security and functionality.
For example, Arcot's TransFort system uses cryptography in a variety of ways to
protect sensitive information and to create digital signatures to provide a record of
authenticity for transactions and payment authorization. The integration of n Cipher's
new pay Shield hardware security module (HSM) establishes a safe, tamperresistant hardware environment that overcomes the inherent security and

59

performance problems associated with handling sensitive information or performing

complex secure processes on unprotected server platforms.
Ensuring that the processing of encrypted customer data is performed within the
boundaries of the payShield (HSM) helps to ensure that sensitive data is never
exposed to potential attackers where it could be stolen or manipulated to create
fraudulent authorization of illegitimate transactions.

60

A SAFER FUTURE
Previous initiatives by the card industry to increase the security of online transactions
have failed to be widely adopted because they were too cumbersome for consumers
and expensive for the banks. SET (Secure Electronic Transactions) for example,
required consumers to download a 5Mbyte 'wallet' and digital certificates. The
difference with Verified by Visa and MasterCard SPA is their simplicity. Consumers
only need to remember a password and PIN. The main pressure is on the issuing
banks that become liable for Verified by Visa transactions whether they have
implemented the system or not - so long as the merchants and acquirers have taken
the necessary measures.
In addition to these online systems, there are other industry initiatives to reduce
payment fraud in general and deliver a wider range of cardholder services. For
example, the card associations expect that next generation chip based credit cards,
or smart cards rather than traditional cards with magnetic strips will be used by
about two-thirds of all credit card users before the end of 2006.
The good news is that through industry collaboration and initiatives such as Verified
by Visa and others, there will be a high level of interoperability and standardization.
The end result should be a dramatic reduction in credit card fraud and should also
accelerate the use of the Internet and other online channels for e-commerce by
increasing consumer confidence.

61

RESEARCH
METHODOLOGY

62

RESEARCH METHODOLOGY

Meaning Of Research

Research in common parlance refers to a search for knowledge. One can also define
research as scientific and systematic search for pertinent information on a specific
topic. In fact, research in an art of scientific investigation.

The advance Learners Dictionary of Current English lays down the meaning of
research as a careful investigation or inquiry specially through search for new facts
in any branch of knowledge. Remain and Mory define research as a systematized
efforts to gain new knowledge. Some people consider research as movement from
the known to the unknown. It is actually a voyage of discovery. We all possess the
vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and
our inquisitiveness makes up prove and attain full and fuller understanding of the
know. This inquisitiveness is the mother of all knowledge and the method, which man
employed for obtaining the knowledge or whatever the unknown, can be termed as
research.

Research is an academic activity and as such the term should be used in a technical
sense. According to Cliforrd Woody research comprises defining and redefining
problems, formulating hypothesis of suggested solutions, collecting, organizing date;

63

making deductions and reaching conclusion; and at last carefully testing the
conclusion to determine whether they fit the formulating hypothesis. D Slesinger and
M. Stephenson in the Encyclopedia of Social Sciences defined research as the
manipulation of things, concepts or symbols for the purpose of generalizing to
extend, correct or verify knowledge making for its advancement. It is the pursuit of
truth with the helps of study, observation comparison and experiment. In short, the
solution to a problem is research. The systematic approach concerning
generalization and the formulation of a theory is also research.
As such the term research refers to the systematic method consisting of
enunciating the problem, formulating a hypothesis, collecting the facts of data,
analyzing the facts and research certain conclusions either in the from of solution (s)
towards the concerned problem or in certain generalization for some theoretical
formulation.

64

PREPARING THE RESEARCH DESIGN

The research problem having been formulated in clear cut terms, the researcher will
be required to prepare a research design, i.e. he will have to state the conceptual
structure within which research would be conducted. The preparation of such a
design facilities research to be as efficient as possible yielding maximal information.
In other words, the function of research design is to provide for the collection of
relevant evidence with minimal expenditure of effort, time and money. But how all
these can be achieved depends mainly on the research purpose. Research purpose
may be grouped into four categories, viz., (i) Exploration (ii) Description (iii)
Diagnosis, and (iv) Experimentation. A fixable research design which provides
opportunity for purpose of the research study is that to exploration. But when the
purpose happens to be an accurate description of a situation or of an association
between variable, the suitable design will be one that minimize bias and maximize
the reliability of the date collected and analyzed.

There are several research designs, such as experiment and non-experimental

hypothesis testing. Experimental designs can be either information design (such as
before-ad after) without control, after only with control, before-and-after with control)
or formal designs (such as completely randomized block design, Latin square
design, simple and complex factorial designs), our of which the researcher must
select on for his won project.
The preparation of research design, appropriate for a particular research problem,
involves usually the consideration of the following:

65

1. The means of obtaining the information.

2. The availability and skills of research and his staff (if any).
3. Explanation of the way in which selected means of obtaining information will
be organized and the reasoning leading to the selection.
4. The time available for research, and
5. The cost factor relating to research, i.e. the finance available for the purpose.

66

RESEARCH
DESIGN

67

RESEARCH DESIGN

A research design specifies the method and procedure for conducting a particular
study. Research designs can be grouped into:

Exploratory Research:

Focuses on the discovery of the ideas. An

exploratory research is generally based on the
secondary data. It does not have a rigid design as
the researcher does nit himself have sufficient
knowledge and therefore unable to form questions.

Descriptive Research :

It is undertaken when the Researcher wants to

know

the

characteristics

of

certain

different

products.
Causal Research:

it is undertaken when the Researcher is interested

knowing the cause and effect relationship between
two or more variables.

Researcher has used the exploratory research design.

68

HYPOTHESIS

HYPOTHESIS
69

Hypothesis simply means a mere assumption or some supposition to be proved Or

disproved. It may be defined as a predictive statement, capable of being tested by
scientific methods, that relates an independent variable to some dependent variable,
e.g. refrigerator X is performing as well as refrigerator Y.

70

HYPOTHESIS OF THE PROJECT

E-COMMERCE HAS CHANGED TOTAL FACE OF MARKETING.

DATA COLLECTION
TYPE OF DATA:
Data can be well defined of two types. These are as follow:

Primary Data:

Primary data are those data which are gathered

for

some

specific

purpose

of

for

specific

research project.

Secondary Data:

Secondary data are that data which are

gathered for some other purpose and already
exist some where.

In this project Researcher has taken many secondary data. Researcher

has collected Secondary data from books, Magazines and Websites.

71

BENEFITS TO ORGANIZATIONS THAT USE E-COMMERCE

1.Expand the size of the market from regional to national or national to

international.
2.Decreases costs.
3.Costs of creating the product.
4.Costs of distribution.
5.Cost of processing ( orders from customers )
6.Cost of storing information.
7.Pull type processing
8.Enables customization of products.
9.Allows for innovative business models.
10. Allows for a high degree of specialization.
11.Reduces the time exposure.
12. Increase productivity.
13.Owers telecommunication costs.
14. Improve customer service.(in some cases)

72

A large part of business these days is dealing with other businesses that supply you
parts and components since rarely do companies manufacture things from beginning
to end most things are made from component parts which are created by totally
different companies.

This is true for service too, companies supplying services often have that service
broken down into sub-contracting services. Example: A building maintenance
contract can be subdivided into the following service.
1.Security service
2.access control
3.alarm response
4.Landscape service
5.Summer- grass cutting
6.Winter- snow removal
7.Janitorial service
8. Heating , ventilation and air-conditioning service.
9.Electrician service
10.Plumbing service
11.Window washing service.

73

BENEFITS TO ORGANIZATION THAT USE E-COMMERCE WITH THEIR

BUSINESS PARTNERS, MANUFACTURERS AND SERVICE COMPANIES.

Minimizes Supply Chain inefficiencies

Reduces inventory.
Reduces delivery delays
Enable efficient e-procurement
Build more collaborative and stronger relationships with suppliers. This includes
streamlining and automating the underlying business processes, enabling areas
such as:
Direct marketing
Selling
Customer services ( call centers)
Fulfillment
Procurement
Information management

74

Benefits to consumers that use e-commerce

Can buy when you want, from more locations (internet connected terminals)
More choices
When you have more choices you can decide on a product with
better features at a more competitive price.
Some time product are less expensive online
Can receive more information about the product, make a more informed decision
Greater information leads to more confidence to make a purchase
decision
More info also leads to enhanced customer satisfaction because the
customers has a better idea how to use the product.
Quicker delivery(for online products)
Quick delivery is important for people who want to use the product
immediately.

75

BENEFIT TO SOCIETY (WHEN CONSUMERS AND BUSINESS USE ECOMMERCE)

Cocooning -more individuals can work offsite
This decreases HR costs for companies because they can have
smaller offices , buildings, less parking spaces, fewer it services etc.
Less affluent people can buy more and increase standard of living.
Facilitates delivery of public services ( Toronto water bills online now)

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BOTTLENECKS
While the technology components are all available for conducting EC, the
constraining factors are the inadequacy of the existing communication
infrastructure in the country and the lack of a suitable legal environment in which
business transactions can be electronically conductedsafely and securely.
Cyber laws are also being framed to take care of national, consumer and business
interest.
In the absence of the legal environment however, users can protect their business
interests by suitably securing their intellectual property and their business
transactions. While access controls can be implemented through routine methods of
password verification and the installation of firewalls, cryptographic products help in
maintaining confidentially, integrity and authenticity of data being transmitted. In
addition, non-reputability of message submission and message delivery can be
implemented along with digital signatures. The use of these security products have
to be negotiated between the end-users and a sufficiently high degree of security
can be achieved without the involvement of the network service provider.
Some of the most popular security products that are available are:
2.PGP/Network Associates
3.RSA/Security Dynamics
4.Entrust Technologies
5.Net safe.

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Three particular pitfalls or mistakes that will undercut or delay the benefits of ecommerce. They are:
1. BROAD EXPECTATION.
We must avoid over expecting- or over promising e-commerce lest we create a
backslash when its promises are not fulfilled. E-commerce will not, in and of itself,
correct all the industrys problems.
2. ROTE APPLICATIONS
Little or no improvements will come from the rote imposition of e-commerce
techniques on bad practices. Ensuring the appropriate application of e-commerce
requires us to ask more than whether we can apply e-commerce to a practice and
to consider whether we should.
3. INCOMPLETE IMPLEMENTATION
The benefit of e-commerce will be restricted if we dont recognize its full system
implications, and instead implement it in limited ways that only partially meet its
requirements.

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Current Challenges of using Internet in Marketing

Some general reasons why E-marketing can be so daunting.

The Companys corporate culture may be resistant to change

Internet marketing

may not capitalize

on

a companys core

competencies

The proper roles for E-marketing may not be specified clearly enough
or may be realistic in nature

Web user may be very demanding.

The Personal touch may be important to many customers.

Channel partners may be alienated.

On line and off line systems may be hard to integrate,

It may be difficult to determine what Internet functions to in source and

which to

outsource.

Investment costs and ongoing expenses may be underestimated.

Let us now review a number of specific challenges related to marketing and the
Internet.

Consumer resistance to online shopping.

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Consumer Service Web users often feel frustrated by what they

perceive as inadequate customer service.

System breakdowns.
Speed of site performance Slow Internet connections are irritating to both
users

and companies that have Web sites.

Internet connection costs Although the promise of high-speed connections is

great, the costs will have to come down for more users to hop on board.

Legal issues Because the use of the Internet in business is so new, legal
precedents often do not yet exist.

Privacy issues Internet users are willing to provide companies with personal
information. However, they are concerned about what information is being
requested to company Web sites and how that information is to be used.

Communicating without spam People respond well when they are asked if it
is okay for a company to communicate with them and what kinds of
information they would like to receive. What a growing number of Web users
object to is the extensive use of spam, which is unsolicited and unwanted Email.

Clutter Given the huge number of companies that are now online, there is a
lot of clutter on the Web.

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Finding a workable business model Few Internet-based firms have earned a

profit because they have invested too much, expanded too fast, faced system
breakdowns, and overestimated how quickly people would buy on the Web.

Expectations of free services A particularly vexing challenge for companies

that offer online services is how to generate revenues from them.

Integrating bricks-and-clicks operations It is not simple for firms to integrate

offline and online strategies.

Global issues Even though the Internet is a worldwide communications

vehicle, cultural, language, currency, legal, and other differences among
countries can impact on a firm seeking a global Internet strategy. Since global
distribution tends to be complicated, there often is a need to outsource tasks.

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THE FUTURE OF E-MARKETING:

Here are some projections about the future of E-marketing :

Integrating bricks-and-clicks operations It is not simple for firms to integrate

offline and online strategies.

The overall impact of the Internet on all parties will be enormous, but
somewhat different than originally anticipated. The emphasis will be more on
E-marketing (using the Internet to enhance marketing strategies) rather than
on E-commerce (revenues from Internet transactions).

Bricks-and-clicks firms will outperform bricks-and-mortar firms and clicks-only

firms. Bricks-and-clicks firms that have a bricks-and-mortar background will do
the best of all, due to their name recognition, their customer following, and
their established physical presence.

The growth of new high-speed transmission modes such as cable and DSL
connection services will allow more multimedia capabilities to be incorporated
into company. Websites, creating an exciting environment for browsing,
entertainment, and shopping by users.

Business-to-business E-commerce will far outstrip business-to-consumer

E-commerce. According to E-marketer, by 2004, annual worldwide businessto-business online revenues will approach $2.8 trillion, while business-toconsumer revenues will be about $428 billion.

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E-Commerce Overconfidence:

For all the studies and discussions of electronic marketing and

electronic commerce, you should remember that e-marketing is not the
easy way out, only an alternative strategy amid the hard work of
marketing. E-marketings efforts must be integrated among traditional
promotional and sales programs to enhance the synergy gained by
attentive and sensitive marketing activities.
Bill Gates Twelve New Rules :
In the Microsoft chairmans second book, Business @the Speed of
Thought, a logical premise is supported throughout the book that only
managers who master the digital universe will gain competitive
advantage.
The successful companies of the next decade will be the ones
that use digital tools to reinvent the way they work. To make
digital information flow an intrinsic part of your company, here
are twelve key steps.

1.

Insist That Communication Flow through E-mail.

2.

Study Sales Data Online to Share Insigths Easily

3.

Shift Knowledge Works into High-Level Thinking

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4.

Use Digital Tools to Create Virtual Teams

5.

Convert Every Paper Process into a Digital Process

6.

Use Digital Tolls to Eliminate Single-Task Jobs

7.

Create a Digital Feedback Loop

8.

Use Digital System to Route Customer Companies Complaints

Immediately

9.

Use Digital Communications to Redefine the Boundaries

10.

Transform Every Business Process into Just-in-Time Delivery

11.

Use Digital Delivery to Eliminate the Middle Man

12.

Use Digital Tools to Help Customers Solve Problems for

Themselves

THE BENEFITS OF A COMPANYS USING THE INTERNET IN MARKETING:

The Internet's value in marketing is best seen by reviewing the benefits that a
company may receive by going online. Several of these benefits are shown in figure
and described next.
Communicability The Web makes it easy for a firm to communicate with every
one of its constituencies: consumers, suppliers, resellers, employees, the media,
government bodies and others.
Focus/tailored approach The Web enables a company to focus on a specific
target market and offer a marketing mix especially devised for that target market.

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Information A firm can amass information about almost any facet of its business
from free Web sites, as well as from fee-based ones. Both secondary data and
primary data can be garnered via the Internet.
Timeliness With the Internet, a company can operate in real time, which means
the ability to communicate, gather information, and so forth in a very
contemporaneous manner. The time lags associated with other marketing tools are
much shorter on the Web.
Cost efficiencies There can be reduced costs from Internet usage. Postal costs
decrease. Inventory costs can be lowered because there is more efficient
communication between companies and their suppliers. Sales personnel can followup with clients in a more efficient manner. There are no shipping costs for items such
as software that are sold via the Web and downloaded by customers.

Dynamism / flexibility The Internet is a very dynamic and flexible medium, which
lets a company rapidly adjust its marketing mix
Global possibilities With the Internet, a company can effectively and
inexpensively communicate with its various constituencies around the world, thereby
increasing the reach of the firms marketing strategy.
Multimedia capabilities The Internet has large multimedia possibilities for
marketers, especially as additional users convert to cable, DSL, or other fast
connections. More company Web sites will soon be showing 3-D product pictures
that can be rotated 360 degrees, streaming audio and video, photo galleries of
product offerings and so forth.
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Interactivity Unlike traditional advertising, which is unidirectional (from company to

audience), the Internet can be deployed in an interactive manner (from company to
audience and from audience to company) much like personal selling.
Sales For a clicks-only firm, the Internet represents the sole source of revenue.
For a bricks-and-clicks firm, the Internet offers the potential for growing the business.

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COMPANY BENEFITS OF USING THE

INTERNET IN MARKETING

Communicability

Focus/
Tailored
Approach

Information

Timeliness

Sales

Interactivity

Multimedia
Capabilities

Benefits
of the
Internet

Global
Possibilities

Cost
Efficiencies

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Dynamism/
Flexibility

THE STAGE OF AN INTERNET MARKETING STRATEGY

Insourcing
or
Outsourcing

(1) Goals

(2) Target
audience

(3) Web site

attributes

Scale of
Web
Presence

Security

(4)
Marketingmix
decisions

(5) Implementation

Channel
Relationship

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(6)
Assessmen
t

WHY CONSUMER PURCHASE ONLINE

Convenient

24 Hours
Operations

Easier to Ship

Good Gift Ideas

Time
Saving
Benefits
of the
Internet

Speed

No
Crowds
More
Products
Informations

Ease of
Comparison
Shopping

Low
Prices

No
Salespeople

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Wide Product
Variety

THE MULTIFACETED POTENTIAL MARKETING ROLES FOR THE INTERNET :

After reviewing the company benefits of the Internet in marketing, it should be clear
that the Web has the potential to serve multiple marketing roles. These are shown in
figure and discussed next. Each firm must determine which roles to pursue and how
to prioritize their importance.
Projecting an image A firm can project an image at its Web site through the sites
design (colors, graphics, etc) and the content presented.
Customer Service According to various surveys, many companies use the
Internet to supplement their traditional customer service.
Channel relations The Internet can help channel members to better understand
one another, to coordinate their distribution strategies, to smooth over conflicts, and
so forth.
Purchasing and inventory management Company purchases and inventory
management can be greatly facilitated through the Web. As Fortune recently noted.
Businesses are finding out that E-marketplaces do something even more important
than locating a better price on materials. They save time.
Information gathering and sharing As previously noted, the Internet has
considerable possibilities for providing marketing information.

90

Data-base development As a result of the online interaction between a company

and its suppliers and customers, extensive marketing data base can be developed.
Mass customization An attractive feature of the Internet involves companies
ability to engage in mass customization, a process by which mass-market goods and
services are individualized to satisfy a specific customer need, at a reasonable price.
Advertising and sales promotion Through the Internet, a company can promote
its goods and services, along with its image. It can use banner ads at portal sites, be
listed at search engines, and present multimedia messages and special sales
promotions at its own Web site.
Selling Of course, generating sales is a key Internet marketing role for a number
of firms.
Multichannel marketing Bricks-and-clicks firms engage in multichannel
marketing, whereby they sell their products through more than one distribution
format, in this case, the Internet and at least one other format.

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HOW THE INTERNET MAY BE UTILIZED IN MARKETING

Projecting an

Image
Multi-Channel
Marketing

Customer
Service
Channel
Relations

Potential
Marketing Roles
for the Internet

Purchasing and
Inventory
Management

Selling

Advertising
and Sales
Promotion
Information
Gathering and

Sharing

Data-Base
Development

92

Mass
Customizatio
n

Findings & Analysis

Findings & Analysis

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ADVANTAGE OF E-COMMERCE
E-Commerce is going to be an essential part of the business organizations. Now a
days every organization want to use the benefit of the e-commerce, they want to
increase the sales and reduced the cost of their products.
Following are the advantages of e-commerce.

1.Increased sales
2.Increased profits
3.Understanding that profits is not the same as sales
4.Reach a narrow market
5.Target market segmentation allows you to focus on a more select group of
customers and therefore have competitive advantages in satisfying them.
6.Create a virtual community
7.Reduce costs
8.Of handling sales inquires
9.Repeat activities and information processing
10.Of promotional material
11.Of handling customer phone calls.
12.Provide price quotes

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13.The point here is that with a web site, you can have the prices listed, and
change them-you simply edit the web page where as in a printed catalogue
you are struck with the expense of printing a new version if you need to
change many of the prices.
14.Determine product availability (inventory management)

95

LIMITATION OF
E-COMMERCE

96

LIMITATION OF E-COMMERCE

As there are some advantages of e-commerce but it also has the limitations such as
in the process of payment and privacy issue. Following are the limitations of ecommerce are as follows:

Customer fear of personal information being used wrongly

Privacy issue
Fear of payment information being unsecured
Cost of a technological solution
Higher employee training required to be click and mortar
Integrating digital and non-digital sales and production information
Vulnerability to fraud and other crimes
Customer expectations unmeet
Technical limitations
Some protocols are not standardized around the world

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Reliability for certain processes

Insufficient telecommunication bandwidth
Software tools are not fixed but constantly evolving
Access limitation of dial-up, cable, ISDN, wireless
Some vendors require certain software to show features on their
pages, which is not common in the standard browser used by the
majority
Non technical limitations
Costs
Security and privacy
Lack of trust and user resistance
Legal issue outstanding
Limitations of support services
Lack of critical mass in certain market areas for sellers and buyers
Accessablity outside of urban/suburban and areas effects universality

98

CONCLUSION

99

CONCLUSION
The rapid development of information and communication technologies over the past
decade has revolutionized business practices. Transactions accomplished through
electronic means collectively electronic commerce have created new legal issues.
The shift from paper based to electronic transactions has raised questions
concerning the recognition, authenticity and enforceability of electronic document
and signatures. The challenge for lawmakers has been to balance the sometime
conflicting

goals

of

safeguarding

electronic

commerce

and

encouraging

technological development.
The electronic commerce act of 1998 aims to facilitate the development of a secure
regulatory environment for e-com by providing a legal infrastructure governing
electronic contracting, security and integrity of electronic transactions, the use of
digital signatures and other issues related to e-com.
The Acts are divided into parts that can be summarized as follows:
1. It provides definition for terminology used with in the act and defines the scope of
the application of the act.
2.

Part second of the act addressees electronic records and electronic signatures
generally. It provides that, with limited exception, electronic records and
signatures should be accorded the same treatment as paper records and
signatures for purpose of complying with statuary writing, signature, and
evidentiary and record keeping requirements.

100

3.

Part third of act address the integrity and authentication of secure electronic
records and secure electronic signatures.

4. Part fourth of the act address issues of electronic contracting. This part deals with
the form in which an offer and an acceptance may be expressed and legal
recognition of contracts formed in an electronic medium. This parts aim to provide
increased legal certainty as to the conclusion of contracts by electronic means.
5.

Part fifth, sixth, seventh, eighth, ninth address the legal issue related to the use
of digital signatures. Digital signature technology, which utilizes asymmetric
cryptography technology, has been developed to facilitate secure transactions
over the internet and other computer networks.

6. Part tenth of the act address the acceptance and use of electronic records and
electronic signatures by government entities.
7.

Part eleventh of the act address deals with issues relating to the liability of
network service providers.

8. Part twelfth of the act provides criminal penalties for international damage or
destruction of information system or data, international trespass into a system
and international theft of computer services, tempering with data, interrupting
network service and intentionally introducing viruses into computers or computer
networks.

Part thirteenth of the act contains general provisions relating to the use of
electronic commerce.

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BIBLIOGRAPHY

102

BIBLIOGRAPHY

MARKETING MANAGEMENT (PHILIP KOTLER)

GLOBAL MARKETING MANAGEMENT (S.A SHERLEKAR & V.S
SHERLEKAR)
MARKETING, 8E(JOEL R.EVANS & BARRY BERMAN)
ELECTRONIC MARKETING (JOEL REEDY, SHAUNA SCHULLO &
KENNNETH ZIMMERMAN)
FRONTIERS OF ELECTRONICS COMMERCE (KALAKOTA &
WHINSTON)
MARKETING RESEARCH (C.R KOTHARI)
MARKETING RESEARCH (D.D SHARMA)
MAGAZINES: BUSINESS WORLD & BUSINESS TODAY
THE ECONOMIC TIMES
WWW.GOOGLE.COM

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