MI0030

E-Commerce
Assignment Set- 1
Q1 What are the developments that have contributed to the emergence of the internet
as an electronic commerce infrastructure?

Answer: The role of the Internet in the evolution of e-commerce has been so crucial that
the history of e-commerce will remain incomplete without the inclusion of the history of
the Internet.

Using the Internet, you can communicate with other people throughout the world by
means of e-mail, read online versions of newspapers, magazines, academic journals, and
books, join discussion groups on almost any conceivable topic, participate in games and
simulations, and obtain free computer software. In recent years, the Internet has allowed
commercial enterprises to connect with one another and with customers. Today, all kinds
of businesses provide information about their products and services on the Internet. Many
of Business use internet to market or sell their product or services. The part of internet is
known as WWW or world wide web or simply web, which is a subset of computers on
the internet which are connected to each other in a specific way that makes those
computers and their contents easily accessible to each other. The most important thing
about the Web is that it includes an easy-to-use standard interface. This interface makes it
possible for people who are not computer experts to use the World Wide Web to access a
variety of Internet resources.

In the early 1960s, the US Department of Defense became very much concerned about
the possible effects of a nuclear attack on its computing facilities. The Defense
Department realized the need for powerful computers for coordination and control. The
powerful computers of that time were all large mainframe computers. So the Defense
Department began examining ways to connect these computers to each other and also to
weapon installations that were distributed all over the world. The Defense Department
agency, charged with this task, hired many of the best communications technology
researchers and funded research at leading universities and institutes to explore the task
of creating a worldwide network that could remain operational even if parts of the
network were destroyed by enemy military action or sabotage. These researchers worked
to devise ways to build networks that could operate independently-that is, networks that
would not require a central computer to control network operations.

The world’s telephone companies were the early models for networked computers,
because early networks of computers used leased telephone company lines for their
connections. Telephone company systems of that time established a single connection
between sender and receiver for each telephone call, and that connection carried all the
data along a single path. When a company wanted to connect computers it owned at two
different locations, it placed a telephone call to establish the connection and then
connected one computer to each end of that single connection.

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The Defence Department was concerned about the inherent risk of this single-channel
method for connecting computers. So its researchers developed a different method of
sending information through multiple channels. In this method, files and messages are
broken into packets and labelled electronically with codes about their origin and
destination. The packets travel from computer to computer along the network until they
reach their destination. The destination computer collects the packets and reassembles the
original data from the pieces in each packet. Each computer that an individual packet
encounters on its trip through the network, determines the best way to move the packet
forward to its destination.

In 1969, these Defense Department researchers used this network model to connect four
computers-one each at the University of California at Los Angeles, SRI International, the
University of California at Santa Barbara, and the University of Utah. During the
subsequent years, many researchers in the academic community connected to this
network and contributed to technological developments that increased the speed and
efficiency with which the network operated. At the same time, researchers at other
universities were creating their own networks using similar technologies.

The upshot was the Internet Protocol (IP), which enabled any number of computer
networks to link up and act as one-and eventually it was given the name, the Internet.
This meant that the communication network among the computers was not dependent on
any single computer to operate, and so could not be shut down by destroying one or even
several of the computers.

Although the goals of the Defense Department network were still to control weapons
systems and transfer research files, other uses of this vast network began to appear in the
early 1970s. In 1972, a researcher wrote a program that could send and receive messages
over the network. Thus was born the e-mail which came to be widely used very quickly.
The number of network users in the military and education research communities
continued to grow. Many of these new participants used the networking technology to
transfer files and access remote computers. The network software included two tools for
performing these tasks. File Transfer Protocol (FTP) enabled users to transfer files
between computers, and Telnet let users log on to their computer accounts from remote
sites. Both FTP and Telnet are still widely used on the Internet for file transfers and
remote logins, even though more advanced techniques are now available that allow
multimedia transmissions such as real-time audio and

video clips.

The first e-mail mailing lists also appeared on these networks. In 1979, a group of
students and programmers at the Duke University and the University of North Carolina
started Usenet, an abbreviation for Users News Network. Usenet allows anyone who
connects to the network to read and post articles on a variety of subjects. The Defense
Department’s networking software became more widely used as academic and research
institutes realized the benefits of having a common communications network. The
explosion of personal computer use during that time also helped more people become

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comfortable with computing. In the late 1980s, these independent academic and research
networks merged into one infra-structure-the Internet that links today hundreds and
thousands of networks to one another.

Q 2 Explain the various E-commerce applications in industry.

Answer: E-Commerce applications

1.3.4.1 Information Delivery Transport and E-Commerce Applications

Transport providers are principally telecommunications, cable, and wireless industries;

computer networks including commercial networks such as CompuServe or America
Online; and public networks such as the Internet. As noted earlier, the transport system
does not function as a monolithic system, in the sense that there is no single Interstate 80
that connects the digital equivalent of New York’s George Washington Bridge to San
Francisco’s Bay Bridge. Instead, the architecture is a mix of many forms of high-speed
network transport whether it is land-based telephone, air-based wireless, modem-based
PCs, or satellite transmissions (see Table 1.2).

Table 1.2 Transport Routes

Information Transport Providers Information Delivery Methods
Long-distance telephone lines;
Telecommunication companies
local telephone lines
Cable TV coaxial, fiber optic,
Cable television companies
and satellite lines
Internet; commercial on-line
Computer-based on-line servers
service providers
Cellular and radio networks;
Wireless communications
paging systems

Literally, the transport routes for e-commerce applications are boundless. The distribution
of information has become a competitive market with a combination of offense and
defense. Playing on the defense are telephone companies and cable television companies,
providers that have enjoyed monopoly positions for decades. Now, however, their
enormous investments in wiring and equipment have become vulnerable to new
competition.

Playing offense are computer companies that offer new hardware capabilities and
software programs with the potential to define new markets. The computer companies are
banking on public networks such as the Internet, which is expanding at an astounding
pace. Another emerging threat will be wireless communications known as personal
communications services, a form of walk around telephony that bypasses the traditional
telecommunications companies and uses wireless communications.

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Each highway route provider faces a different but no less daunting set of challenges:

· Telecom-based. These providers, the most visible (and vocal) of all competitors, include
long-distance and local telephone service providers. For the phone companies, the
breakthrough for e-commerce applications delivery came in 1991 when scientists found a
way to do what everybody had assumed was impossible: squeeze a video signal through a
telephone wire. The technology, known as asymmetric digital subscriber line (ADSL),
has some unresolved drawbacks: It cannot handle live transmissions, and the picture it
produces is not as clear as that provided by a well-tuned cable hookup. Researchers have
recently improved the quality of the picture and with further compression expect to
accommodate several channels of live video over a single telephone wire.

· Cable-based. These providers depend on coaxial cable as transport roads and will. Help
determine which broadband applications and services the viewing public prefers. All
leading cable providers are conducting trials with a variety of hardware and software; and
most are expected to use fiber optic cable and coaxial wire as the delivery medium. The
strategy among cable companies is to develop a "network neutral" content that uses
digital compression and is adaptable to alternative delivery systems, such as wireless and
satellites

· Computer network-based. These providers are often dial-up linkages of lower

bandwidth when compared to telecom and cable highways. Bandwidth is analogous to
the number of lanes on a highway. Examples of on-line transport architectures are
CompuServe, Prodigy, and America Online, which often tend to serve as both a transport
road and content providers.

· Wireless. These operators are typically radio-based-cellular, satellite and light-based-

infra red. In fact, some of the most exciting transport architectures are invisible. New
wireless-based systems require new ways of thinking about information delivery.

Q 3. Describe the rules of thumb for designing good websites? [

Answer: Rules of thumb for designing good websites

These guidelines are offered as a starting point for developing good web design skill, not
as a formula that should be followed point by point.

Page Loading Efficiency

The temptation to overload a page with graphics should be resisted. A few well-chosen
graphics are fine, but too much on a page and the visitor may become frustrated with the
required time to load a page, and "click, click" they are off to another site. Frames also
increase the loading time, and if the site sells or exchanges advertising space in which
banners will appear, these items will also slow down the load time. Web site designers
should review the load time periodically from an off-site connection with a connection

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speed that is comparable to a reasonably low connection speed. Users with lower speed
modems than this will probably browse the Internet with their graphics options turned
off. For these users, the web site should be designed with a text-only option, which
displays text in lieu of graphics and contains the same hypertext links.

Simplicity

Avoid clutter on web pages. If the business has a lot of information to convey, organize it
well and spread it out over multiple pages. Unlike printed advertisements, web site
hosting costs are so low and competitive that the number of pages is typically not a
significant cost factor. Do not go overboard, however, and place so little information on
each page that the user must click to advance to the next page after reading only three or
four sentences. A guideline is to use about 60 characters per line. Also, avoid long pages
that require a lot of scrolling. Again, organizing the material well can preclude excessive
scrolling from being necessary.

Use the Space Wisely

Do not ramble on; make each statement count. Just because web space is relatively cheap
does not mean that visitors want to weed through hoards of verbose commentaries and
other non value-added information to find the items desired.

Create a Reason to Return

Once a visitor comes to the site, give them a reason to return. Suggest they bookmark the
site – it works! Some suggestions for items that may cause the visitor to return:

· daily or weekly specials;

· daily or weekly updates to the site that are clearly labeled, such as editorials,current
events, projects, recipes, etc.;

· frequent buyer programs;

· contests; and

· events, such as hosting a chat session with a guest celebrity or public figure.

Framing

A frame is a section of the viewer’s computer screen. A screen can be split into multiple
sections that can load different web pages, even those from other sites. The use of frame
has it benefits and its drawbacks. Framing is useful, for example, for providing a
directory of options in one frame and the contents of each option in another frame. It
helps the visitor to know where they are and where they have been, through the use of
highlighted hypertext links. The drawbacks are that they slow the load time, not all

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browsers support frames, and most search engines cannot read the hypertext links in the
frames. Over time, these drawbacks will most likely be non-issues.

Tables and Fonts

Tables are useful for providing structure to text that will not be lost due to the size of the
visitor’s screen and the size of the viewing window, which is affected by the viewer’s
web browser. Whenever possible, avoid using all uppercase letters as they are more
difficult for the eye to follow. Further, the use of fancy fonts may look good on the web
designer’s screen, but the fonts displayed to visitors are limited to those that are available
on their own computer. The Times and Helvetica fonts are good fonts for readability on
web sites. As mentioned earlier, try to keep line lengths less than 60 characters per line.

Graphics

Graphics can enhance a web site when used properly. Attempt to use images that are no
larger than 70k or the load time may annoy visitors. Fortunately, many image software
packages allow the user to view the image in different storage sizes and indicate the
approximate load time for each size. The larger the image, the better the image, but a
slightly less vivid image that loads faster may payoff in terms of retaining visitors. If
picture clarity is important, for example for inventory items, allow the user to choose to
view a bigger, clearer picture by clicking on the smaller picture.

Interlaced Graphics

Images that gradually appear sharper are called interlaced graphics. Not everyone
appreciates these pictures, and some people find them annoying. Designers that use
interlace graphics contend that the visitor is able to see the picture faster, albeit fuzzy,
and has something to view while the remainder of the picture is loading and sharpening.

GIF vs. JPEG files

Either format can be used. The primary difference between the two file types is the
compression techniques used. GIF files are typically more efficient for solid color
images, such as logos, or images with large regions of solid color. JPEG formats will
typically yield better results for multi-colored images or photographs in terms of best
quality for the size.

Colors and Contrast

Most web site designers agree that dark text on light backgrounds works best. The key is
to have enough contrast between the text and the background. Some colors work together
and some do not; a traditional color wheel is useful for choosing contrasting colors.

Purchasing Information

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Sites that sell their products/services on-line should clearly post policies in an easily
found place regarding these items: Tax rates, Shipping rates, Shipping schedules, Return
policy, Privacy of transaction and Security of data that is transmitted. Further, items
selected for purchase (placed in a shopping cart) should be easily reviewed at any point.
The total bill, including taxes and shipment cost, should be displayed to the user before
asking for payment information, such as credit card data.

Tracking Data

In order to analyze the success or contribution of a site, certain data need to be tracked.
Some useful information includes:

· number of different visitors (not repeat visitors)

· number and frequency of repeat visitors;

· location of site prior to visit, including the search engine used to locate the site, if
applicable;

· length of time of visit;

· pages visited;

· items examined by visitors;

· domain names of visitors;

· country codes of visitors; and

· purchases made, if applicable.

Cookies may be necessary in order to avoid double counting. The examination of

correlations between some of the above items can provide useful information, such as the
correlation between the location of prior site and length of time visited or purchases
made. For example, a site selling infant clothing may notice a strong correlation between
prior site and length of visit if a significant portion of its visitors are arriving via an
advertising banner placed on a site similar to Parenthood.com. Obviously, much analysis
of such data is necessary before any conclusions should be drawn and used to make
future decisions, however, such data contains a wealth of information if collected and
analyzed properly.

Using Navigation elements

Navigation elements are important because a viewer may not always enter a website from
its home page. He or she may enter through any page of the site or search engine or a
hyperlink from a different site. In this situation it is important to have a way to get to

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site’s home page or other major pages. A navigation bar is a series of icon or text
hyperlinks to major pages of a website. The position of navigation bars should be
consistent in all the pages of the website. Navigation bars using icons are often positioned
at the top of the page. Another important navigational technique is the inclusion of top of
page hyperlinks at the bottom of each web page, which would enable a viewer to quickly
return to top of the same page after having scrolled down.

Maintain consistency

Web pages design emphasize consistency in its presentation. The

e-business name and contact information is important as customer may print a copy of
individual pages from the website and may want the name and the contact information
available on the printout.

Designing a website for a variety of displays

Majority of the audience the display is the function of monitor and the size and colour
capabilities. It is important to keep in mind that the diversity goes end here, because users
may use Television to watch webpage. Other may view using Personal Digital Assistant
(PDA), also referred to as a palmtop or a cell phone, sight impaired users may be
listening to your page and not viewing it.

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 MI0030
E-Commerce
Assignment Set- 2

Q1. What are the advantages and disadvantages of E-commerce?

Answer: Advantage of E-Commerce

Some of the key strengths of using the Internet for businesses include the following:

1. 24 x 7 operation. Round-the-clock operation is an expensive proposition in the ‘brick-

and-mortar’ world, while it is natural in the ‘click-and-conquer’ world.

2. Global reach. The net being inherently global, reaching global customers is relatively
easy on the net compared to the world of bricks.

3. Cost of acquiring, serving and retaining customers. It is relatively cheaper to acquire

new customers over the net; thanks to 24 x 7 operation and its global reach. Through
innovative tools of ‘push’ technology, it is also possible to retain customers’ loyalty with
minimal investments.

4. An extended enterprise is easy to build. In today’s world every enterprise is part of the
‘connected economy’; as such, you need to extend your enterprise all the way to your
suppliers and business partners like distributors, retailers and ultimately your end-
customers. The Internet provides an effective (often less expensive) way to extend your
enterprise beyond the narrow confines of your own organization. Tools like ERP, SCM
and CRM easily deployed over internet, permitting amazing efficiency in time needed to
market, customer loyalty, on-time delivery and eventually profitability.

5. Disintermediation. Using the Internet, one can directly approach the customers and
suppliers, cutting down on the number of levels and in the process, cutting down the
costs.

6. Improved customer service to your clients. It results in higher satisfaction and more
sales.

7. Power to provide the ‘best of both the worlds’. It benefits the traditional business side-
by-side with the Internet tools.

8. A technology-based customer interface. In a brick- and-mortar business, customers

conduct transactions either face-to-face or over the phone with store clerks, account
managers, or other individuals. In
contrast, the customer interface in the electronic environment is a ’screen-to-face’

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interaction. This includes PC based monitors, ATM machines, PDAs, or other electronic
devices such as the DoCopMo iMode in Japan and the Nokia 7100 in Europe.
Operationally, these types of interfaces place an enormous responsibility on the
organization to capture and represent the customer experience because there is often no
opportunity for direct human intervention during the encounter. If the interface is
designed correctly, the customer will have no need for a simultaneous or follow-up phone
conversation. Thus, the ’screen-to- customer’ interface has the potential to both increase
sales and decrease costs. When the interface does not work, not only is the revenue lost
but the organization also incurs the technology costs. Thus, a poorly designed customer
interface has both negative revenue and cost implications.

9. The customer controls the interaction. At most websites, the customer is in control
during screen-to-face interaction, in that the Web largely employs a ’self service’ model
for managing commerce or community-based interaction. The customer controls the
search process, the time spent on various sites, the degree of price/product comparison,
the people with whom he or she comes in contact, and the decision to buy. In a face-to-
face interchange, the control can rest with either the buyer/seller or the community
member. At a minimum, the seller attempts to influence the buying process by directing
the potential buyer to different products or locations in the store, overcoming price
objections and reacting in real item to competitive offering. The virtual store can attempt
to shape the customer experience with uniquely targeted promotions, reconfiguration of
storefronts to reflect past search behaviour, recommendations based on previous
behaviour of other similar users, and access to proprietary information.

10. Knowledge of customer behaviour. While the customer controls the interaction, the
firm has unprecedented access to observe and track individual consumer behaviour.
Companies, through a third-party measurement firm such as Vividence and Accrue, can
track a host of behaviors on web sites visited, length of stays on a site, page views on a
site, contents of wish lists and shopping carts, purchases, dollar amounts of purchases,
repeat purchases behaviour, conversion rates of visitors who have completed transactions
and other metrics. This level of customer behaviour tracking, in contrast with tracking
consumer attitudes, knowledge or behavioral intentions, is not possible in the brick-and-
mortar world. Armed with this information, companies can provide one-to-one
customization of their offerings. In addition, companies can dynamically publish their
storefronts on the Web to configure offerings to individual customers. In a tactical
embellishment, electronic retailers can welcome a user back by name. In more strategic
terms, an online business can actually position offers and merchandise in ways that
uniquely appeal to specific customers.

11. Network economics. In information intensive industries, a key competitive

battleground centres on the emergence of industry-
standard products, services, components, and or architecture. Network effects, as
described by Metcalfe’s law, can best be expressed as the situation where the value of a
product or service rises as a function of the number of other users who are using the
product. A classic
example is the fax machine of other people who adopt the technology.

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A key characteristic of network’s economic is positive feedback, that is, as the installed
base grows, more and more users are likely to adopt
the technology because of the installed base. Many commercial wares in the digital
economy revolve around setting a standard, growing the installed base and attempting to
‘lock-in’ customers to the standard because of rising switching costs. This applies to both
hardware (e.g. cable modems versus DSL lines) and software (e.g. MP3 versus streaming
audio). A key result of network effects and positive feedback is ‘increasing return’
economies as compared to the traditional decreasing-returns model often associated with
the brick-and-mortar world. It also means that the traditional realities of marketing such
as the importance of word-of-mouth (WOM) among potential customers, become greatly
magnified in this new environment. It is this turbo charged WOM phenomenon that
makes viral marketing a reality for consumer-oriented e-commerce business such as ICQ
in instant messaging system.

Disadvantages of E-commerce

Some business processes may never lend themselves to electronic commerce. For
example, perishable foods, and high-cost items (such as jewellery, antiques, and the like),
may be difficult to inspect from a remote location. Most of disadvantages are from the
newness and rapid pace of underlying technologies, which would disappear as e-
commerce matures and becomes more and more available to and gets accepted by the
general population. Many products and services require a critical mass of potential

buyers who are well-equipped and willing to buy through the Internet.

Businesses often calculate the return-on-investment before committing to any new

technology. This has been difficult to do with e-commerce, since the costs and benefits
have been hard to quantify. Costs, which are a function of technology, can change
dramatically even during short-lived e-commerce implementation projects, because the
underlying technologies are changing rapidly. Many firms have had trouble in recruiting
and retaining employees with technological, design, and business process skills needed to
create an effective e-commerce atmosphere. Another problem facing firms that want to
do business on the Internet is the difficulty of integrating existing databases and
transaction-processing software designed for traditional commerce into a software that
enables e-commerce.

In addition to technology and software issues, many businesses face cultural and legal
obstacles in conducting e-commerce. Some consumers are still somewhat fearful of
sending their credit card numbers over the Internet. Other consumers are simply resistant
to change and are uncomfortable viewing merchandise on a computer screen rather than
in person. The legal environment in which e-commerce is conducted is full of unclear and
conflicting laws. In many cases, government regulators have not kept up with the trends
in technologies.

Q 2. What do you understand by solicited targeted mail and unsolicited targeted mail?

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Answer: Solicited, Targeted E-mail

E-mail marketing has become a popular medium because of its relatively low-cost and
the ability to send HTML messages containing full-color pictures of products, as well as
links to order form pages. The transmittal of an e-mail message to a solicited, targeted list
is a method used to attract visitors to a web site that requires acts by both the web site and
the visitor. This mechanism allows a business to maintain regular contact with customers
and drive traffic to web sites or other products. These types of arrangements are mutually
beneficial and can be a great information source for customers/users and a wonderful
advertising mechanism to help businesses unload unwanted inventory or notify interested
parties of requested information. These types of relationships are typically initiated by the
business offering an information service to its visitor. If the visitor is interested, he/she
can sign-up for the service. The amount of information required to register can vary by
site. Typically, the more information required, the fewer interested parties a site can
expect to receive. Because the user requests the information, this type of Internet
marketing technique is considered to be "pulled" by the consumer with the help of the
web site. From the web sites perspective, it can also be considered to be a "soft-push,"
since the site encourages the distribution of information and provides it. Examples of
these types of activities can be e-mail reminding the user of a family member’s birthday,
an alert from an on-line stock broker of a specific stock position, and notification that a
specific merchandise item has gone on sale from your spouse’s registered wish list.

Unsolicited, Targeted E-mail

Another method of on-line advertising that entails the web site business taking initiative
is unsolicited, targeted e-mail advertising to past visitors or customers. This type of
advertising is somewhat aggressive in that the visitor or customer does not specifically
request additional sales or promotion items. When conducted properly, these methods can
be effective; for example, sending only a few advertisements to past customers and
discontinuing the e-mails if the former customer does not return to the site during that
period. The use of cookies enables the tracking of customers’ responses to such e-mail
advertisements. When abused, these methods can result in an irritation factor. For
example, if a previous customer is continuously bombarded with e-mail sales promotions,
he/she may find it annoying and even begin to block such incoming messages. The
challenge is to send e-mail that will get attention and not to send too much of it.

Q 3. Compare and contrast the website of P&G and HUL.

Answer: t may have been a rough ride for Hindustan Unilever (HUL) these past few
years, but detergents are adding that extra sheen to the company's portfolio.

HUL's wheel of fortune is turning. And, the company's detergent business is growing at
13.6% this year versus the industry average of 8.4%. And all that is happening by
increasing its focus on semi urban and tier-II cities and by giving its brands Wheel, Surf
Excel and Rin that extra push. Sudhanshu Vats, Category Head - Home Care, HUL said

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that 55% of the consumption is coming out of urban India. "Urban India is growing at
7%, rural demand is growing at 10%, which is much faster. But if you look at specific
clusters, it is the small town urban that is growing rapidly," he added.

That small town urban growth has made HLL not only retain but also grow its leadership
position in the detergent market in the past quarter.

Its value market share is up at 37.8% vs 35.3% in the same period last year. HUL is
followed by P&G, which has also grown from 7.1% to 7.6%. But the detergent price
warrior Nirma seems to have had some tough luck. Its market share has fallen by 1.7%, a
fall that is significant with the changing times.

Experts say that with income levels rising, consumers are willing to spend a few extra
bucks on upgrading their detergent brands.
And that is what HUL and P&G are cashing in on.

Both HUL and P&G have steadily hiked prices by 2-4% over the past two years. Vats
said, "Cost pressures continue to be significant, but we are managing them both in terms
of innovation and ability to pass on some of the cost pressures to consumers.

And so, HUL is now tailor-making products for modern trade formats, which curently
account for less than 3% of the company's detergent sales. It has recently launched
washing powders for washing machines, a liquid variant of Surf Excel, a fabric
conditioner - and is now all set to storm the market with more liquid detergents and pre-
wash and post-wash products.

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