Welcome

to The World of

E Commerce
By: Dr. K. T. Subhas chandra.,
Govt. R. C. College of Commerce.

Module 1
Introduction to e-commerce and e-business. Types of E-Commerce Modes E-commerce business models, B2B,B2C, C2C,C2B, B2G, G2G, G2E, G2C. E-Marketing, Techniques and Tools, E-Commerce Providers and Vendors

Introduction
Information Age/Era is knowledge based Industrial Revolution. Information and Information Technology [IT] are new Drivers of this Era like other Drivers of the business viz., technology & Marketing, Research & Development, Entrepreneurship., etc., The changes in the Business Environment is accelerated by IT and Its Change. The challenge into the next century is not only to survive competition, and use new technologies, but also to mange change in technology and in markets.

 The key business characteristics of industrial age and Information age business have been compared by Tjaden as follows Industrial Age
1. Mass Production 2. Labour serves tools

Information Age
Mass Communication Tools serve Labour

3. Labour performs repetitive tasks

4. Command & control structure 5. Capital intensive 6. Capitalist own production means

Labour applies Knowledge

Common control structure Knowledge intensive Labour owns production means

7. Capital is primary driver

Knowledge is primary driver.

What is Information technology?

Information Technology (IT) in its narrow definition refers to the technological side of an information system. It includes Hardware, Software, Database, Networks and other devices. As such, it can be viewed as a sub-system of an information system. Some times, the term IT is also used interchangeably with information system or it may be used as a broader concept that describes a collection of several information systems, users, Internet, Intranet, Extranet and management of an entire organisation. The purpose of Information Technology For determining the applications of IT that will help to identify applications that have an impact upon the individual, the functional unit, and the organization as a whole the applications can be placed into three categories.
Those designed to improve efficiency. Those designed to improve effectiveness; and Those designed to facilitate transformation.

Efficiency: efficiency refers to doing things right. For example: an efficient office worker can update hundreds of documents per hour. An efficient information system can update thousands of employee records per minute. Etc., Effectiveness: It refers to doing the right things. This means doing the things that need to be done to achieve improvement in business result for example; A prospect database housed on a PC may enable a sales managers to identify sales prospects with high potential and direct his staffs attention to contacting those prospects. Transformation: Using IT to change the way we do business. This means changing the nature of the product or services being delivered or entirely transforming the way the business is done in functional unit or the whole organization.

 The information Age is characterized by the extensive use of global communication networks viz., internet, intranet, and extranet etc., have multiplied and the technology and tools of internet commerce have begun to transform industries in many fundamental ways. New ways to sell on the Internet, managing costs, Purchasing, production planning, supply chain management and organising work processes are the order of the day. The organisation of the 21st century is expected to be a learning organisation, networked organisation with completely decentralised methods of working and empowered work force with totally new reengineered work processes. Change, cost, competition and customer are the drivers of this information age.

Evolution of E Commerce
The explosive & unprecedented growth of the Internet during the late 1990s has created the vision of e commerce. E Commerce as a revolution started in the year 1997 and first used by Dell Computers and IBM in 1997. E Commerce is derived from such terms as email and e business. Thus, e business is a goose that lay golden eggs and it would be of benefit to allow the goose to reach the egg laying stage. E Business is comprehensive in essence, with the entire business being run using the internet, it includes buying, manufacturing, selling and managing both internal and external information required to run particular (potential) business. E Commerce is the sub-set of E Business.

Few Definitions of E - Business

E Business is the practice of performing and coordinating critical business processes such as designing products, obtaining supplies, manufacturing, selling, fulfilling orders, and providing services through the extensive use of computer and communication technologies and computerized data. Steven Alter. Electronic Business ., includes everything having to do with the application of information and communication technologies [ICT] to the conduct of business between organisations or from company to consumer Michael Wade and others.

 E Business includes e commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management, and human resources Bartels Andrew. IBM defines e business as a secure, flexible and integrated approach to delivering differentiated business value by combining the systems and processes that run core business operations with the simplicity and reach made possible by internet. E Business is about using internet technologies to transform the way business processes are performed. Its most visible form is online purchasing, both wholesale and retail. Shurety Samantha

 In its simplest sense, e business is the use of Internet technologies to improve and transform key business processes. Most companies understand this and have begun the evolution from traditional business practices to e business. www-3.ibm.com/e-business.
E Business: any Internet initiative - tactical or strategic that transforms business relationships, whether those relationships be businesstoconsumer, businessto-business, intrabusiness, or even consumer-to-consumer, E Business is really a way to drive efficiencies, speed, innovation and new value creation in an organisation. - Hartman, Amir, John Sifonis, & John Kador.

E BUSINESS & E - COMMERCE

E Business is comprehensive in essence, with the entire business being run using the Internet. It includes buying, manufacturing, selling and managing both internal and external information required to run a particular business.

While e commerce is only a subset and branch of e business, it is only a form of trading using electronic means to connect buyers and sellers who give a boost to any business category. The Internet provides the connectivity required for e-commerce. E-commerce is a generic name for a range of technologies that allow the exchange of information related to business transactions electronically. Internet commerce is the new terrain of e-business. The Internet is a global business platform for companies all over the world.
E-commerce has become more than a buzz word in the global economy it has become a lifestyle for most businesses and has created a global marketplace.

Definitions of E-Commerce
The World Trade Organisation (WTO) has Defined E-Commerce as the production, distribution, marketing, sale or delivery of goods and services by electronic means
IBM has defined E-Commerce to be the transformation of key business processes through the use of Internet technologies.
E-Commerce has been defined by the Organisation for Economic Cooperation and Development (OECD) to be commercial transations, involving both organisations and individuals, that are based upon the processing and transmission of digitized data, including text, sound and visual images and that are carried out over open networks (Internet) or closed networks that have a gateway onto an open network. these include electronically marketed products from business-to-consumer [B2C], which are intangibles such as travel and ticketing services, software, entertainment, banking, insurance and brokerage services, information services, legal services, real estate services, and increasingly health care, education and government services.

 Thus, E-commerce refers to using the Internet, intranet, & extranet to link-up with suppliers, dealers, vendors, banks, customers and even government bodies to do business. They exchange information, build up mutual confidence negotiate rates, exchange quotes/quotations, places orders, confirms deliveries, send bills and at the same time makes payment over telephone wire/cable plugged into a computer. It also includes buying and selling over the worldwide-web and the Internet, electronic funds transfer, smart cards, digital cash, Mobile phone sets, SMS-services and all other ways of doing business over digital networks. E-commerce is really much more than just purchasing products or services over the Internet. Therefore, e-commerce is An enabling technology that allows businesses to increase the accuracy and efficiency of business transaction processing: & A way for organisations to exchange information with customers and vendors for the benefit of everyone involved.

Limitation of traditional / conventional Business

a) Conventional Business is Paper-based system manually processed and transmitted There are many associated delays like processing delays, ordering delays etc., High volume data processing involves high cost of processing. Conventional Business process prone to many errors There is always uncertainty about the reach of information to the end user. Entire business process is time consuming and costly. Timely analysis of information and current position cannot be ascertained instantly.

b)
c)

d) e)
f) g)

h) i) j) k) l)

Just in time strategy cannot be adopted. Market potential cannot be obtained quickly. Cannot ensure immediate settlement of debts. There is no place for impulse buying. The absence of round the clock buying and level playing field are great drawbacks of conventional commerce. m) Business may loose modern consumers who prefer and appreciate on-line transations. n) It fails to generate substantial business by linking to remote merchants and customers. o) It is not cost-effective because transaction processing cost is high. p) Since it involves middlemen the cost of sale is more. q) On-line data/records/file updates are not possible.

Nature of E-commerce
The fast changing world of dot coms and Internet have become a strategic necessity for modern business. If a business men hesitant to board the internet to do e-commerce would find themselves outside the new growth matrix. The Internet has become open, newer, economically feasible and more customer friendly technology and emerged as the ultimate answer to survival in the new world order. In short, e-commerce is a new paradigm of business. It is the most easy to use and cost effective web hosting service on the net. The Internet is literally a whole new world for various businesses to explore to and capitalise.
Electronic business is no longer an alternative, it is an imperative for corporate houses. E-commerce is way for a business to use the power and tools of Internet.

E-commerce concentrates on Internet solutions of securing global business. Internet marketing is easier with information in e- commerce and offers an interactive sales medium. Being the potential business tool has made it possible for business firms to compete in global environment, it is a cutting edge technology. With the advent of technological infrastructure facilitates exponential growth in the usage of Internet for e-commerce in every nation. E-commerce adds unique value and reduce transaction costs when communicating with customers, suppliers and partners. E- commerce today is a synergy of physical and virtual business. In tune with the changing medium of business, a business firm chalks out strategies to do e-business, otherwise the firm may be out of business.

By using data that is collected, merchants can generate web pages, send e-mail, notifying, informing customers of sales and special and special promotions or evaluate the effectiveness of marketing programmes.

Features of E-commerce
E-commerce has been built on electronic technology, telecommunication, Electronic Data Interchange (EDI) E-commerce makes use of Internet, intranet and extranet for dealing with stake holders. Suppliers and customers exchange information electronically on-line, for negotiation to fix price, quantity, terms and mode of supply etc., Mutual trust and confidence are essential pre-requisite of e-commerce. Electronic Fund Transfer is essence of E-commerce by using smart cards, digital cash, Mobile phone sets, SMS-services etc., It allows businesses to increase the accuracy and efficiency of business transaction processing: It allows organisations to exchange information with customers and vendors for the benefit of everyone involved. In enables the organisation to do business at the speed of light. E-commerce can result in better transactions, wide market coverage by offering the benefits of speed, convenience, being cost effective, timeliness, high profit margins, instant customer relations. It improves responsiveness to market conditions and customer preferences.

E- commerce delivery and distribution of both internal & external information on-time. It enables to coordinates Sales efforts. It can increase the efficiency and effectiveness of public relation programmes, broadcast, press releases, financial updates and other corporate communications It improves customer satisfaction by attending all customers complaints on-time, in turn improves better customer relationship.

The mechanism of electronic operations in business facilitates planning and execution of meetings. Executive management meetings, seminars, workshops, symposia and conventions take a great deal of time and effort to manage. Arrangements must be coordinated among a variety of diverse groups in different locations example: hotels, speakers, exhibitors, attendees, the media etc., reports and surveys need to be distributed before and or after the event. In an electronic business environment, video-conferences, document conference, computer-based conference make the jobs easier and more effective in e-commerce environment.

Objective of E-commerce
Stimulating supply of new competitive information age products and services. Stimulating use and demand for information age products & services Developing a competitive market with an effective regulatory framework In information society, one stop shop for information, promotion and advice is desirable. Designing information security programmes Legal recognition of electronic signature. Voluntary licensing system for providers of cryptographic service.

Types of E-commerce
A. On-line Promotion: Hire site can take the user through the purchasing decision by allowing them to choose a colour and size of the product and then find out how much the total purchase with cost. However, the actual purchase needs to be made offline. Online Ordering: The client registers on the site and is given a secure user name and password. A website can now be used to initiate product delivery which is unique to that user. The most common use of this special information delivery is in giving price information over the Internet. Depending upon the address of the registered website user, a different price currency appears on site. Electronic Shopping: For some categories of retail products, Internet shopping is now very easy. It allows customers to browse a website, choose the product they would like to and enter a credit card to order the product information of minute. Customers choose the delivery service they would like and the deal is done. the latest shopping cart technology means the store can be opened for business 24 hours a day on all 365 days in a year. Naturally, payment security is of paramount importance for both the vender and the customer.

B.

C.

E-commerce can be divided into:

1. E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall" 2. The gathering and use of demographic data through Web contacts 3. Electronic Data Interchange (EDI), the business-tobusiness exchange of data 4. e-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters) 5. Business-to-business buying and selling 6. The security of business transactions

Essential Requirements for E-commerce:

An essential element to constitute e-commerce is that the customer should be able to perform an entire transaction having products and services delivered online, either on the web or e-mail. Therefore, for a genuine e-commerce, the customer should at least have an internet e-mail a/c, and a website or at least minimum single web page. The other requirements are:
Identification of business areas, Most suitable for completion of e-commerce such as supply chain, front end, back end, computing, B2B or B2C. Re-engineering the entire business process in order to make it applicable feasibly in terms of e-commerce. To asses the size or scale of e-commerce application and development. Post implementation, analysis and scrutiny. Concentration on developing system for the B2B segment as it has major business opportunities. Supply chain management optimization is one of strongest drivers of global e-commerce solution market, as it spurs potential B2B transactions.

E-commerce advantages and disadvantages

E-commerce provides many new ways for businesses and consumers to communicate and conduct business. There are a number of advantages and disadvantages of conducting business in this manner.

E-commerce advantages
Some advantages that can be achieved from e-commerce include: 1. Being able to conduct business 24 x 7 x 365 . E-commerce systems can operate all days in every minutes . 2. Access to the global marketplace . The Internet spans the world, and it is possible to do business with any business or person who is connected to the Internet. Simple local businesses such as specialist record stores are able to market and sell their offerings internationally using e-commerce. This global opportunity is assisted by the fact that, unlike traditional communications methods, users are not charged according to the distance over which they are communicating. 3. Speed. Electronic communications allow messages to traverse the world almost instantaneously. There is no need to wait weeks for a catalogue to arrive by post: that communications delay is not a part of the Internet / e-commerce world.

4. Marketplace. The market in which web-based businesses operate is the global market. It may not be evident to them, but many businesses are already facing international competition from web-enabled businesses. 5. Opportunity to reduce costs. The Internet makes it very easy to 'shop around' for products and services that may be cheaper or more effective than we might otherwise settle for. It is sometimes possible to, through some online research, identify original manufacturers for some goods - thereby bypassing wholesalers and achieving a cheaper price. 5. Computer platform-independent . 'Many, if not most, computers have the ability to communicate via the Internet independent of operating systems and hardware. Customers are not limited by existing hardware systems' (Gascoyne & Ozcubukcu, 1997:87). 6. Efficient applications development environment - 'In many respects, applications can be more efficiently developed and distributed because they can be built without regard to the customer's or the business partner's technology platform. Application updates do not have to be manually installed on computers. Rather, Internet-related technologies provide this capability inherently through automatic deployment of software updates' (Gascoyne & Ozcubukcu, 1997:87).

7. Allowing customer self service and 'customer outsourcing'. People can interact with businesses at any hour of the day that it is convenient to them, and because these interactions are initiated by customers, the customers also provide a lot of the data for the transaction that may otherwise need to be entered by business staff. This means that some of the work and costs are effectively shifted to customers; this is referred to as 'customer outsourcing'. 8. Stepping beyond borders to a global view. Using aspect of e-commerce technology can mean your business can source and use products and services provided by other businesses in other countries. This seems obvious enough to say, but people do not always consider the implications of e-commerce. For example, in many ways it can be easier and cheaper to host and operate some e-commerce activities outside India. Further, because many e-commerce transactions involve credit cards, many businesses in India need to make arrangements for accepting online payments. However a number of major Indian banks have tended to be unhelpful laggards on this front, charging a lot of money and making it difficult to establish these arrangements - particularly for smaller businesses and/or businesses that don't fit into a traditional-economy understanding of business. In some cases, therefore, it can be easier and cheaper to set up arrangements which bypass this aspect of the Indian banking system. Admittedly, this can create some grey areas for legal and taxation purposes, but these can be dealt with. And these circumstances do have implications for India's national competitiveness and the competitiveness of our industries and businesses.

As a further thought, many businesses find it easier to buy and sell in U.S. dollars: it is effectively the major currency of the Internet. In this context, global online customers can find the concept of peculiar and unfamiliar currencies disconcerting. Some businesses find they can achieve higher prices online and in US dollars than they would achieve selling locally or nationally. Given that banks often charge fees for converting currencies, this is another reason to investigate all of your (national and international) options for accepting and making online payments.

In brief, it is useful to take a global view with regard the potential and organisation of your e-commerce activities, especially if you are targeting global customers. A new marketing channel. The Internet provides an important new channel to sell to consumers. Peterson et al. (1999) suggest that, as a marketing channel, the Internet has the following characteristics:
1. the ability to inexpensively store vast amounts of information at different virtual locations 2. the availability of powerful and inexpensive means of searching, organising, and disseminating such information 3. interactivity and the ability to provide information on demand 4. the ability to provide perceptual experiences that are far superior to a printed catalogue, although not as rich as personal inspection 5. the capability to serve as a transaction medium 6. the ability to serve as a physical distribution medium for certain goods (e.g., software) 7. relatively low entry and establishment costs for sellers 8. no other existing marketing channel possesses all of these characteristics.

E-commerce disadvantages and constraints :

Some disadvantages and constraints of e-commerce include the following. a) Time for delivery of physical products . It is possible to visit a local music store and walk out with a compact disc, or a bookstore and leave with a book. E-commerce is often used to buy goods that are not available locally from businesses all over the world, meaning that physical goods need to be delivered, which takes time and costs money. In some cases there are ways around this, for example, with electronic files of the music or books being accessed across the Internet, but then these are not physical goods.

b) Physical product, supply & delivery uncertainty . When you walk out of a shop with an item, it's yours. You have it; you know what it is, where it is and how it looks. In some respects e-commerce purchases are made on trust. This is because, firstly, not having had physical access to the product, a purchase is made on an expectation of what that product is and its condition. Secondly, because supplying businesses can be conducted across the world, it can be uncertain whether or not they are legitimate businesses and are not just going to take your money. It's pretty hard to knock on their door to complain or seek legal recourse! Thirdly, even if the item is sent, it is easy to start wondering whether or not it will ever arrive.

c) Perishable goods . Forget about ordering a single gelato ice cream from a shop in
Rome! Though specialised or refrigerated transport can be used, goods bought and sold via the Internet tend to be durable and non-perishable: they need to survive the trip from the supplier to the purchasing business or consumer. This shifts the bias for perishable and/or non-durable goods back towards traditional supply chain arrangements, or towards relatively more local e-commerce-based purchases, sales and distribution. In contrast, durable goods can be traded from almost anyone to almost anyone else, sparking competition for lower prices. In some cases this leads to disintermediation in which intermediary people and businesses are bypassed by consumers and by other businesses that are seeking to purchase more directly from manufacturers. d) Limited and selected sensory information. The Internet is an effective conduit for visual and auditory information: seeing pictures, hearing sounds and reading text. However it does not allow full scope for our senses: we can see pictures of the flowers, but not smell their fragrance; we can see pictures of a hammer, but not feel its weight or balance. Further, when we pick up and inspect something, we choose what we look at and how we look at it. This is not the case on the Internet. If we were looking at buying a car on the Internet, we would see the pictures the seller had chosen for us to see but not the things we might look for if we were able to see it in person. And, taking into account our other senses, we can't test the car to hear the sound of the engine as it changes gears or sense the smell and feel of the leather seats. There are many ways in which the Internet does not convey the richness of experiences of the world. This lack of sensory information means that people are often much more comfortable buying via the Internet generic goods things that they have seen or experienced before and about which there is little ambiguity, rather than unique or complex things.

e) Returning goods. Returning goods online can be an area of difficulty. The uncertainties surrounding the initial payment and delivery of goods can be exacerbated in this process. Will the goods get back to their source? Who pays for the return postage? Will the refund be paid? Will I be left with nothing? How long will it take? Contrast this with the offline experience of returning goods to a shop. f) Privacy, security, payment, identity, contract. Many issues arise - privacy of information, security of that information and payment details, whether or not payment details (eg credit card details) will be misused, identity theft, contract, and, whether we have one or not, what laws and legal jurisdiction apply. g) Defined services & the unexpected . E-commerce is an effective means for managing the transaction of known and established services, that is, things that are everyday. It is not suitable for dealing with the new or unexpected. For example, a transport company used to dealing with simple packages being asked if it can transport a hippopotamus, or a customer asking for a book order to be wrapped in blue and white polka dot paper with a bow. Such requests need human intervention to investigate and resolve. h) Personal service . Although some human interaction can be facilitated via the web, ecommerce can not provide the richness of interaction provided by personal service. For most businesses, e-commerce methods provide the equivalent of an information-rich counter attendant rather than a salesperson. This also means that feedback about how people react to product and service offerings also tends to be more granular or perhaps lost using e-commerce approaches. If your only feedback is that people are (or are not) buying your products or services online, this is inadequate for evaluating how to change or improve your e-commerce strategies and/or product and service offerings. Successful business use of e-commerce typically involves strategies for gaining and applying customer feedback. This helps businesses to understand, anticipate and meet changing online customer needs and preferences, which is critical because of the comparatively rapid rate of ongoing Internet-based change.

i)

Size and number of transactions. E-commerce is most often conducted using credit card facilities for payments, and as a result very small and very large transactions tend not to be conducted online. The size of transactions is also impacted by the economics of transporting physical goods. For example, any benefits or conveniences of buying a box of pens online from a US-based business tend to be eclipsed by the cost of having to pay for them to be delivered to you in India. The delivery costs also mean that buying individual items from a range of different overseas businesses is significantly more expensive than buying all of the goods from one overseas business because the goods can be packaged and shipped together. Reflecting some of the comments above, the following chart (Figure 1.6) shows some of the complaints made by Indian e-consumers.

Figure 1. 6 Reasons for consumer complaints (India 2002) (EGEC, November 2003:11)

Factors to get on E-commerce;

Pricing: Pricing of Products / Services should be determined. Contacting: The fastest way to contact and be connected by the representative is through online. Getting website: The users should have website and it gives the company global presence. Selection of web developer: Best available local web developers may be selected to design and help business to develop and implement e-commerce solutions. Accounts: Business has to reach the website and establish a business a/c. Loss of credit card: In case of loss of credit card or stolen, alternative steps are to be taken. The measure is to change the payment option in electronic payment account to use a new credit card. Buying more than one item: the customers can buy large quantities of a particular product by changing quantity on the order form.

 Cancellation of purchase: The mechanism facilitates cancellation of any purchase order made. The credit card will not be charged until after the order form is processed. Summary statement: An abstract of all purchase made can be obtained, in the form of a summary statement. It provides access to the online receipts of all purchases made in each store of electronic commerce services.

Getting Started on E-commerce:

1) Launching a website is only the first step. But getting started with e-commerce is much more than establishing a website. 2) To carry on transactions under e-commerce technology, it requires a completely new business strategy. 3) To determine how to develop an infrastructure that works with the existing business system. 4) To build up e-commerce solutions that scales with future business needs.

5) 6) 7) 8) 9)

10) 11) 12) 13)

Every business has to necessarily re-engineer its strategy to exploit the benefits provided by e-commerce technology. Build up deeper ties with business partners on a global canvas. To design solutions that work with a broad range of customers. To start with, it is necessary to focus to automate order management system merchant accounts, credit card, cheque payment and security etc., E- commerce system is designed to work with existing constraints. It is necessary to have standard web technique while remaining compatible with the existing system and expertise resource applications. It is always desirable to adopt a strong 128 bit encryption for all transactions. To set up web-store front and e-commerce catalogue easily and affordably. To buy a special suitable software package along with services to use the e-commerce system. To have the most easy to use and cost effective web hosting services on the internet.

14) Shopping cart system for servicing e-commerce transactions to accept secure payments and secure transactions. 15) Providers of comprehensive open e-commerce solution environment comprising enterprise applications, internet applications and services technology to enable businesses to participate in the internet economy. 16) The mechanism needs a real time e-commerce transaction processing services for payment, tax calculation, risk management, fulfillment, management and distribution control. 17) Adopt and development of reliable secure, e-commerce solutions that rapidly deliver business value and competitive advantage to customers globally.

A Few Basic Elements to begin selling online.

Obtaining permissions: If a business man venturing into a e-commerce

must first fulfill all legal procedural requirements for doing business locally or internationally. It includes obtaining license, permission and demonstration etc. Domain name, website design, website hosting and merchant a/c etc should be obtained.

 A merchant a/c is essential to do business on the Internet. Secure certificates: Another important element is to have a secure certificate or secure socket layer [SSL] which makes online order secure. Verisign or Thawte are the popular secure certificate service providers. Server: After obtaining SSL certificate, take partner should set up an e-commerce server a/c. it is the server a/c where the website will be hosted. Online Credit Card Processor: In an e-commerce environment, the Credit Card is to be processed online. There are several merchant a/c providers who offer credit card processing solutions like cyber cash, authorise net payment. These organisations process credit card transactions online. Shopping Cart: A Business person has to set up online shopping carts. There are shopping cart solutions providers. They are shop sites and open markets which are powerful shopping cart software which offer, businesses to easily set up on line shopping.

Parties to E-commerce Transactions

A. The User: He is the card holder and party in the e-commerce transaction, who plans to purchase goods or services on line. The Merchant: the Merchant is the company or business house wishing to sell goods or services to enable customers to buy on-line. The Issuer: It is a credit card company that issues cards to the users to initiate online buying. The Acquirer: He is usually the banker of the Merchant to be specific, the merchants financial institution. The certificate Authority: It is an independent and neutral third party authority that issues certificates to the merchant, to the issuer and in some cases, the cardholder

B.

C. D.

E.

Electronic Commerce Activities

1. Direct Selling of goods and / or services over the Internet.
Provision of Packaged marketing or company information on a company home-page. Advertising banners on popular internet sites for publicity & marketing.

Involves providing product information, price details on the Internet to enable a customer to buy a product or services through off-line/on-line payment mechanisms.
Though not E-commerce, provides important information about the companys products and provokes direct or indirect enquires and subsequent purchase. Communicates packaged information regarding the company advertised and provides links to the companys homepage. The host company also earns some revenue by providing advertising space (not a true form of e-commerce, but adds for revenue generation). Firms may provide priced information regarding products or services or provide comparative information that may be of value to niche customers. The information in some cases, may be provided free to end-customers as the featured firms/ products pay for the service.

2.

3.

4.

Priced Information

5.

Agent Services

Firms may act as internet based agents and provide an internet site that helps in brining the buyer and seller together and thereby earn commission income
Firms may gather product preference and use information through popular general sites like double click. COM through information or through contents and use the information to provide targeted products.

6.

Research and Development

Niche, Board or Target Customer.

Nike: it involves targeting a niche single-customer or group of customers within a population of appropriate customers.

these are typically targeted through information on specialised sites

or through registration information gathered from general or specialised sites or through search engine keywords entered by the

prospective customer.
Board: it involves targeting the entire population of appropriate customers, typically through information presented on general or specialised sites depending on the product. The target customer for the firm could be either niche or broad.

Major E-commerce Modes.

Revenue generating modes
Firms can develop new revenue generation modes through the appropriate use of Internet capability. The revenue generating modes adopted are:
Profit from purchase/sale of goods. Through the reach of the Internet in the physical world, trading profits can enhance its quantum (i.e., amount) Agent Fees: Agents generates income by bringing the buyer & seller together. Income from priced packaged information: Revenue generation from the sale of information that is rendered more valuable to the consumer as it appropriately collected, classified, and in an easily searchable form. Through Internet capabilities, it can provide greater currency to the information. Revenues from the Advertisement: Revenue may be collected based on Page-Views ( number of people visiting the page when the advertisement is displayed) or click through ( number of people clicking the advertisement image to visit the sponsors web-site).

 Priced Information: The niche customers are benefited by providing priced information regarding products or services and this generates income. However, these differ form agent commissions though in some cases the information may be provided free to end customers are the featured firms/products pay the service. Income from sale of aggregated marketing information: Firms may like to sell this and customer data to marketing research firms as a revenue source.

Product delivery modes

There are two types: they are: Physical product delivery modes: Physical is the delivery through physical shops or through delivery service providers such as currier services. The transaction ends with safe delivery except in cases where the physical product requires: Maintenance, Repairs, Replacements, Other types of follow up activity. Virtual type of product delivery modes: Virtual type is used for information products like reports, music, software etc., After the payments have been made, the product is made available for viewing on the screen or for direct download or through e-mail delivery. Any follow up is required is usually through e-mail.

Payment collection modes The payment collection modes are similar to product delivery modes: viz.,
Physical Payment collection Mode: Physical payment collection is made through agents physical shops or against delivery through services providers such as courier service. Virtual is the payments collected through credit cards, charge cards, smart cards, gift cheques, e-cash or frequent filer points.

Operating modes. There are three major operating modes:

Completely outsourced operations Completely self-handled operations Hybrid operations

Completely outsourced operations

Completely self-handled operations Hybrid operations

Activities outsource to other specialised firms or consortia are : Web hosting, back-end processing and order fulfillment. The firm that builds the product chooses to concentrate on its physical world operations or on manufacturing alone. All activities like web hosting, back-end processing and order fulfillment activities are handled in-house in-parallel with its physical world operations and manufacturing. Part of the e-commerce activities like back-end processing and other fulfillment are handled by the firm in parallel with its physical world operations and manufacturing. The remaining like web hosting is outsourced to specialised firms or to consortia.

Business Models for E-Commerce

A companys business model is the way in which it conducts business in order to generate revenue. In the new economy, companies are creating new business models and reinventing old models. But, there is no single, comprehensive and cogent taxonomy of web business models one can point to. Although there are many different ways to categorise e-business models, they can be broadly categorised as follow:
E-Business model based on the relationship of transaction parties

E-Business model based on the relationship of transaction types.

A business model can be defined as an architecture for product, service, and information flow, including a description of business players, their roles and revenue sources. For example, some of the most popular revenue generating models adopted by companies are: (1).charge fees for advertising, (2). Sell goods & services, (3).sell digital contents, & (4). Charge for processing the transactions that occur between two parties on the web.

E-Commerce models can also be perceived in the form of relationship between two entities such as:
Direct marketing v/s indirect marketing Fully cyber marketing v/s partial cyber marketing Electronic distributor v/s electronic broker Electronic store v/s shopping mall Generalised e-malls v/s specialised e-malls Proactive v/s strategic cyber marketing Global v/s regional marketing Sales v/s customer service.

E-Business Model Based on Relationship of Transaction parties:

Electronic markets are emerging in various fields. Different industries have markets with different characteristics. For example, an information B2C market differs in many respects from the automotive B2B market. The former represents companies that sell digital information goods, such as news, articles, music, books, or digital videos. In the information B2C market, the electronic infrastructure not only helps match customers and sellers, but also acts as the distribution channel, delivering products to customers. In the automotive B2B market, the products traded, such as parts and components of cars, have a high degree of specificity. The market infrastructure used are to be mainly based on Electronic Data Interchange [EDI] over expensive VAN services. EDI involves the exchange of standardised, systems. Now, the automotive B2B market is using the Internet for many of its activities. At the heart of B2B applications is the strong integration of different applications. Servers, networks and software should provide the infrastructure to integrate web-based applications with mainframe and legacy systems. B2B is also a closed market. In the sense that the number of participants involved in trading is limited and known as priori.

The Relationship between B2B and B2C is shown as follow:

Raw Material Producer Manufacturer Distributor Retailer Consumer

B2B

B2C

E-commerce can be classified according to the transaction partners such as Business to Consumer (B2C), Business to Business (B2B), Business to Government (B2G), Consumer to Consumer (C2C), and Consumer to Business (C2). Within these broad categories, there are a number of variations in the way the models are implemented as shown in the table given in the next Slide.

Table showing the summary of E-Business transaction Model Model Description Sells products or services directly to consumers Example amazon.com, autobytel.com pets.com

B2C B2B B2G C2C C2B

Sells products or services to other businesses Chemdex.com or brings multiple buyers & sellers together in a MetalSite.com central market place. VerticalNet.com Businesses selling to local, state, and federal agencies. Consumers sell directly to other consumers iGov.com eBay. COM,
InfoRocket.com

Consumers fix price on their own, which businesses accept or decline.

Priceline.com

Business to Consumer (B2C)

Consumers are increasingly going online to shop for and purchase products, arrange financing, arrange shipment or take delivery of digital products such as software, and get service after the sale. B2C e-business includes retail sales, often called e-retail (e-tail), and other online purchases such as airline tickets, entertainment venue tickets, hotel rooms, and shares of stock. Many traditional brick and mortar retailers such as Barnes & Noble are now e-tailers with a web storefront. These combined brick and mortar/online businesses are also known as brick-and-click companies Some B2C e-businesses provide high-value content to consumers for a subscription fee example., the Wall Street journal (financial news and articles), Consumer Reports (product reviews and evaluations), and eDiets.com (nutritional counselling). B2C e-busniess models include virtual malls, which are web sites that host many online merchants. Virtual malls typically charge online merchants setups, listing, or transaction fees and may include transaction handling services and marketing options. Ex. Excite.com, choicemall, women.com, networkweb.com, amazon.com, Zshops.com, and yahoo.com

E-tailers that offer traditional or web-specific products or services only over the Internet are sometimes called virtual merchants., and provide another variation on the B2C model. Ex. Amazon.com (books, electronics, toys, and music), e-toys.com ( childrens books and toys), and ashford.com (personal accessories). Some businesses supplement a successful traditional mail-order business with an online shopping site, or move completely to web-based ordering. These businesses are sometimes called catalog merchants. Ex. Avon.com (cosmetics and fragrances), chefs.com (cookware and kitchen accessories), omaha steaks (premium steaks, meats and other gourmet food), and Harry and David (gourmet food gifts ). Reasons why one should opt for B2C are: 1. Inexpensive costs, big opportunities and companies can market their products to whole world without much additional cost. 2. Globalization. 3. Reduced operational costs 4. Consumer convenience: Searchable content, shopping carts, promotions and interactivity and user-friendly interfaces gives customer convenience, generating more business. A customer can also see order status, delivery status, and get their receipts online. 5. Knowledge Management. Through database systems and information management , one can say who visit your site, and how to create, better value for them.

How does B2C Work?

The following process are involved in B2C e-commerce: 1. Visiting the virtual Mall: The customer visits the mall by browsing the online catalogue. Virtual mall may include a basic to an advanced search engine, product rating system, content management, customer support systems, bulletin boards, newsletters and other components which make shopping convenient for shoppers. 2. Customer registers: The customer should have to register to become part of sites shopper registry. This will allow him or her to avail of the shops complete services. The customer will be a part of the companys growing database which it can use for knowledge management and data mining. 3. Customer buys products: Through a shopping cart system, order details, shipping charges, taxes, additional charges and price totals are presented in an organised manner. The customer can even change the quantity of a certain product. Virtual malls have very comprehensive shopping system, complete with check out forms. 4. Merchant processes the order: The merchant then processes the order that is received from the previous stage and processes it, filling up necessary forms.

1.

2.

3.

4.

5.

Credit card is processed: The credit card of the customer is authenticated through a payment gateway or a bank. Other payment methods can be used as well, such as debit cards, prepaid cards, or bank to bank transfers. Operations Management: When the order is passed on the logistics people, the traditional business operations will still be used. Things like inventory management, total quality management, warehousing, optimization and project management should still be incorporated even though it is an e-business. Getting the product to the customer is still the most important aspect of e-business. Shipment and delivery: The product is then shipped to the customer. The customer should be able to track his order/delivery through the web site. Virtual malls have a delivery tracking module on the web site which allows a customer to change the status of a particular order. Customer receives: The product is received by the customer, and is verified. The system should then tell the firm that order has been fulfilled. After sales services: After the sale has been made, the firm has to make sure that it maintains a good relationship with its customers. This is done through customer relationship management or CRM.

Business to Business (B2B) Model

B2B means commercial activity between companies through the Internet as a medium. This is a huge opportunity area on the web. Fully computerised companies need to go into next stage by linking their customers and vendors. This is done by supply chain software, which is an integral part of business ERP application. B2B sites are company and industry specific, catering to a community of users or a combination of forward and backward integration. B2B is the portion of the Internet market that effects transactions between business operations and their partners in marketing, sales, development, manufacturing and support. Any transactions or information associated with development, manufacturing, delivery, sales and support of products or services are components of B2B system. B2B transactions are marketing transactions includes:
Use of EDI and Electronic mail for purchasing goods & services Buying information & consulting services Submitting requests for proposals Receiving proposals

Advantages of B2B
1. 2.
3.

4.

5.

Direct interaction with customers Focused sales promotion is possible by giving authentic data about the clients addressing their likes, dislikes and preferences Building customer loyalty. it has been observed that online customers can be more loyal than other customers if they are made to feel special and their distinct identity is recognised and their concerns about privacy are respected. Scalability. This means the web is open and offers round-the clock access. This provides an access never known before, to the customer. This access is across locations and time zones. Thus a company is able to handle much more customers on a much wider geographical spread if it uses an e-business model. The company can set up a generic parent site for all locations and make regional domains to suit such requirements. Savings if distribution costs. A company can make huge savings in distribution, logistical and after sales support costs by using e-business models.

Tools & Techniques at the Disposal of B2B Enterprises:

1. Use of pricing as a tool. There is a wealth of research on pricing used as a tool to generate sales on the net. The biggest e-tailer of them all, amazon.com made it big by giving substantial discounts. Part of these discounts is attributed to the distributor level commissions, which are being passed on to the customer. Apart from this companies have started giving things free on the net in order to get a critical mass of subscribers, which helps, in getting advertising revenues. The best example is the Apple IMac computer machine being given free if the buyer agrees to make a certain amount of purchase using Apples e-commerce web site. Use of Application Service Provider Model: Software companies are offering their packages not in CDs and boxes but through the web. The customer can log in over the net and access the software from the web server of the company and need not download it into his PC. A hard disk and all critical application data is kept on the web and can be accessed anywhere in the world. These services are being offered at, say $5 an hour.

2.

3. Use of generic models which are known for efficiency as well as personalised attention to various business customers. 4. Use of comparison shopping. The Internet has brought in a whole new concept of price matching and comparisonshopping. Today there are sites, which will take you to hundreds of sites to find the cheapest product to suit your specifications. This would never have been possible without the Internet. Business activities between companies can be transacted over an extranet. An Extranet consists of two or more intranets connected via the Internet, where participating companies can view each other's data and complete business transactions such as purchasing.

B2B Transactions and Models

B2B interactions involve much more complexity than B2C. For instance, typical B2B transactions include, the following steps:

1. 2. 3.

Review of catalogs, Identify specifications, Define requirements

4.
5. 6. 7.

Post request for proposals

Review vendor reputation Select vendor Fill out purchase orders

8.
9.

Send purchase order to vendor

Prepare invoice

10. Make payment 11. Arrange shipment, &

12. Product inspection and reception.

Due to the large number of transactions involved, B2B operations may be too risky if e-business sites cannot guarantee adequate quality of service in terms of performance, availability and security. The B2B electronic marketplace is illustrated in the model given on the next slide.

Electronic Marketplace
Aggregators Hubs

Buyers

Auctions Community Contents

Sellers

1. Aggregators. In the aggregation model, one company aggregates buyers to form a virtual buying entity and/or aggregates suppliers to constitute a virtual distributor. For example. In the science marketplace, one company became the central buying location for thousands of buyers to implement their own purchasing rules and obtain volume discounts. The aggregator takes the responsibility for selection and fulfillment, pricing, and marketing segmentation.

2. Hubs or process integration. Hubs or process integration focuses on producing a highly integrated value proposition through a managed process. Hubs have been defined as impartial internet-based intermediaries that focus on a specific industry or a specific business process. Hubs host electronic markets and create value by reducing the costs of transactions between sellers and buyers. For Ex. the hubs serve a vertical market or a specific industry, such as energy, steel, telecommunications, and plastic. On the contrary , functional hubs specialise in horizontal markets across different industries. Functional Hubs focus on business processes such as project management and MRO [i.e., Maintenance, Repair and Operation processes]. An electronic business company that provides office supplies to many industries is a good example of a functional hub in B2B commerce.

3.

4.

5.

Community or alliance. In the community model, alliances are used to achieve high value integration without hierarchical control. Members and end users play key roles as contributors and customers. Basically, community produce knowledge with economic value, such as Linux, MP3 & Open Source. Content. Content is the end product of this model or B2B commerce. It has the purpose of facilitating trading. Revenue can be generated from subscription, membership, or advertising. For Example, there are e-companies that sell information about contracts to bid market intelligence and analysis, and jobs by industry. Auctions or dynamic pricing markets, handle complex exchanges between buyers and sellers in B2B commerce. Actions are dynamic and efficient mechanisms for mediating and brokering in complex marketplaces, like supply-chain and procurement systems. Bundle auctions allow agents to bid for bundles of items and are useful for B2B applications such as automatic supply-chain or procurement.

A Summary of B2B Models.

B2B storefronts
Provide business with purchase, order fulfillment, and other value-added services. Provide a trading community for a specific industry. Provide a single markets place for business purchasing from multiple suppliers. Provide a markets place for multiple vertical markets. Provide a markets place where participants post buy and sell opportunities. Provide a markets place for buyers and sellers to enter competitive bids on contracts. Provide a markets place for the automatic matching of standardized buy and sell contracts Staples.com OfficeDepot.com. HotelResource.com Chemdex.com. MetalSite.com VerticalNet.com CATEX.com CreditTrade.com TechEx.com e-STEEL.com HoustonStreet.com Altra.com

B2B Vertical Mkts.

B2B aggregators

B2B trading hubs

B2B post & browse mkts.

B2B auction mkts. B2B fully automated exchanges.

PaperExchange.com

A List of Major B2B Portals in India.

[Browse: http://WWW.GIIC.ORG/EVENTS/EC990615india.html]. 1) agriwatch.com. It is a B2B portal set up by Indian agricultural systms. This is one of the largest agro based B2B portal in India. 2) appnatransport.com. It provides a tracking system, a fleet management system & a transaction processing system. 3) auctionindia.com. It is the largest B2B auction portal in India. It works with corporates including Lucas TVS, HLL, Ashok Leyland, BHEL, HMT 4) bimaonline.com.. It is insurance B2B portal, link agents and insurance co. 5) bijleeindia.com. It is Indias premier electrical engineering portal which services power producers utilities and equipment manufacturers, consultants, students, project managers, covering in depth technical knowledge on equipments used for generation, transmition, distribution, ctc 6) balcuttasarees.com. It is a major portal links major sarees dealers. 7) castingsworld.com. Brings together dealers in the casting industry. 8) chemround.com. Brings together players in the chemical industries. 9) commodityindia.com. It is the first portal on research based statistics on commodities provide information on price trends, export & import, watch, analysis on price information. 10) e2commerce.net. This portal assists Indian exporters in exporting their goods to North America and Europe using e-commerce capability such as auction, sale and reverse auction.

Consumer-to-Consumer (C2C).
In this model, consumers sell directly to other consumers via online classified ads and auctions, or by selling personal services or expertise online. Ex. ebay.com (auction), and TraderOnline.com (classified ads). There are also a number of new C2C expert information exchange it was estimated that nearly $6 billion revenue was generatedby the end of 2006. Some of these exchanges, such as AskMe.com and abuzz, are free, and some allow their experts to negotiate fees with clients. InforRocket.com, one of the first question and answer marketplaces, is driven by a person-to-person auctionformat. The InfoRoket.com bidding system allows a person who submits a question to review the profiles of the experts who offer to answer the question. When the person asking the question action accepts an expert offer, InfoRocket.com bills the persons credit card, delivers the answer, and takes a 20 percent commission.

Consumer-to-Business (C2B).
The C2B model, also called a reverse auction or

demand collection model, enables buyers to name their

own price, often binding, for a specific good or service generating demand. The web site collects the demand

bids and then offers the bids to participating sellers.

ReverseAction.com (travel, autos, consumer electronics) and Priceline.com ((travel, telephone, mortgages) are

examples of C2B e-business models.

E Commerce Model Based on the Relationship of Transaction Types

this model is essentially ruled by the following two parameters:

Control: At the higher end of the model there is a hierarchical control and at the lower end there is no control so that it is self-organising.
Value Integration: value integration takes into consideration the addition of value to a product or service because of the web business opportunities.

Based on these, five types of transaction can be identified :

1. Brokerage 2. Aggregator 3. Info-mediary 4. Community 5. Value Chan.

Brokerage Model and its Characteristics.

The price-discovery mechanism is its key-principle. It is a meeting point for sellers and buyers Auctions and exchanges are the modes of transactions. It is a free-Market. It consists of Global Network of Buyers & Sellers. It is a Virtual Markets place enabled by the Internet. It encompasses all types of organisation now. Advantages of Brokerage Model C2C trading, which : 1.Allows buyers and sellers to trade directly bypassing intermediaries, & 2. reduces cost for both parties. Global reach Trading convenience, which (a). Allows trading at all hours & (b) provides continually updated information. Sense of community through direct buyer & seller communication. Efficient access to information. Alleviation of the risks of anonymous trading.

Price Discovery Mechanisms of Brokerage Model

There are 3 kinds of price discovery mechanisms viz., 1. Auction. 2. Reverse Auction 3. Market Exchange. Auction Broker. There are open and sealed-bid auctions. There are auctions where the auction price ascends as the auction proceeds and auctions where the price descends instead at regular intervals. There are single auctions and double auctions. Ex. English auction is openoutcry auction or the ascending-price auctions. Dutch auction developed in the Netherlands to auction flowers and other products with a limited lifetime. It is known as the descending-price auction. First-price sealed-bid auction. It has the main characteristic of not being an open-cry auction, i.e., individual bids are hidden from other bidder. Vickrey auction. William Vickrey, winner of the 1996 Noble prize in Economic, Developed the Vickrey Auction. It is also called uniformed Second-price auction. The bidder bids from his own intuitive knowledge ignorant of all the other bids. The winning bidder will pay the price of the second highest bid, which is the same as the highest unsuccessful bid. Thus, the winner pays less than what he has bidden.

Impact of the Web on Electronic Auctions. Online Auction

The Auctioneer brings together the suppliers (sellers) and the customers (buyers or bidders) within the auction process. During the process of transaction, trade objects and a rule are needed. The entire auction process can be executed with information technology on the world wide web.
Online Auction Model

Buyer & Seller Registration

Bidding

Setting up a Particular Auction

Bid evaluation And Auction

Scheduling & Advertising

Trade Settlement

The electronic auction will benefit from the following web-related features:
Common infrastructure with millions of potential users, which will increase the possibility of an auction to occur between potential suppliers and customers. Standardised hypertext protocol for displaying the trade objects ( i.e. items to be auctioned), which will increase the economic feasibility of the electronic auctions. Development of standardised search functions, which will facilitate for suppliers and customers to find each other.

Standards for secure payments ( e.g. SSL and SET), which will encourage suppliers and customers to actually use the web medium for trading.

Critical Factors.
There are 4 main factors that characterize electronic auctions. at least one of these will be present for an electronic auctions
1. Perishability. This is a valid factor, if the value of the product to be sold at a given point in time is zero. Ex. A perishable product is Airplane ticket. When airplane leaves the airport, the unsold tickets will make zero in revenue. 2. Scarcity. This occurs when there is an excess demand. 3. Goods that may be moved electronically, 4. Goods that are geographically constrained. This is due to the fact that if the transportation cost will exceed the customers local search cost, the customer will not engage in an electronic auction. Therefore, a global market for physically constrained goods makes little sense. It has to be kept in mind that goods that can be moved electronically are on the other hand excellent for electronic auctions

eBay
It is the worlds largest personal online trading community and created a new market , an efficient one-to-one trading in an auction format on the web. Individuals (not big businesses) use eBay to buy and sell items in more than 4,320 categories. It provides over 4 million new auctions and 4,50,000 new items every day. It also helps the user to use this site for chatting at the eBay Caf. From the point of view of security, we can instantly check the reputation or business practices of anyone at eBay. It is possible because of the Feedback Forum is a place where users leave comments about each others buying and selling experiences at eBay. A bidder, checks his sellers Feedback Profile before he places a bid to learn about the other persons reputation with previous buyers. If a person is seller he does the same with the bidders. An escrow service can give the users an added security whether a user is a buyer or a seller, in transactions involving expensive items. eBays escrow partner i-Escrow, will hold the payment and send it to the seller only after the merchandise has been inspected and given approval. The seller again, has the opportunity to inspect and approve a returned item before the buyer gets refunded.

Process of Auction under eBay model.

1. User needs to register as an eBay member 2. User can enter the auction field using his user ID & password. 3. User should carefully look for what he is bidding on. 4. Suppose user feels the maximum bid price of an item may be Rs.250/- he has to enter in the bid box at the bottom of the page. 5. Then click the Review Bid button. 6. eBay will now bid on behalf of the person, up to his maximum affordability. 7. The credit card should be placed on file with eBay. 8. Whereas the seller for his part, can sit back (after entering his ID & password) & watch the auction.

eBay Model
Items Payment for items B U Y E R S

Reputation ratings

Listing and Transaction fees

Price Discovery Mechanisms Community Delivery

eBay
Reputation ratings

Product info

Community

S E L L E R S

Delivery

Payment for Delivery

Courier & Postal Service

Reverse Auction
Business model is described on the Priceline.com web site. It is a pioneered a unique type of e-commerce known as a demand collection system that enables consumers to use Internet to save money on a wide range of products and services while enabling sellers to generate incremental revenue. Using a simple and compelling consumer proposition name your price they collect consumer demand ( in the form of individual customer offers guaranteed by a credit card) for a particular product or service at a price set by the customer and communicate that demand directly to participating sellers or to their private databases. The Pricelines competitive advantage is its name your price business model. It is the worlds first buyer driven commerce system, and benefits both consumers and sellers by providing a unique platform where demand and supply meet. . Priceline.coms major sources of revenue are derived from the following sources: Airline tickeet reservation services, Hotel ticket reservations services, New auto purchasing, Home financing including mortgages, refinancing, and equity loans, Adaptive marketing programs, and Licensing patents.

Aggregator Model.
The Aggregator are connectors between the buyers and sellers. They are involved in the overall process of selection, organization, matching the buyers requirements with that of the available goods, fulfillments of the orders and enable the customers to create a value about the sellers. Types of aggregators Content aggregators. They are large publishing companies like :athfinder.com. Their basic challenge is that, content has to be attractive enough to make the site viable. They provide ectensive statistics, analysis, pool information. Mainstream aggregators. Like Yahoo they provide a web directory and a search engine, along with a bunch of attractive tools like e-mail addresses, homepages, reminders and many other. Event aggregators. These are sites that provide in-depth content and tools tailored to the needs of a particular group. Shopping aggregators. They let consumers roam through hundreds of sites and catalogues and find the best price in seconds.

Info-Mediary Model.
An organiser of virtual community is called an information intermediary or info-mediary, who helps customers to collect, mange, and maximize the value of information about consumers. They sell information about consumer to other businesses.

Community Model.
Community refers to the people with common interests living in a particular area. E-communities are formed when groups of people meet online to fulfill certain needs, which include personal interest, relationships, entertainment and transactions. The viability of the community model is based on user loyalty (as opposed to high traffic volume). Customer loyalty can be achieved by building e-communities. First, visitors come and look for information. Then, they start to contribute to the website for instance, suggesting ways to improve the site or its services. Finally, they work inside the web site, for instance, volunteering as editors for a message board or by serving on a customer advisory board.

Community Structures
Newsletters. They are one way communication. They generally use list server software that sends the same message to an entire list of people and handles new subscribers and those who wish to unsubscribe. Listserver software is the backbone for e-mail discussion lists. Discussion Lists. One of the best way to build a sense of community is by e-mail discussion lists. In a typical discussion list, the listserver software allows a member to send a message to the list address, and then sends that message to all the list members, all within a few minutes. Bulletin Boards. One of the struggles of e-mail based communities is keeping treads (different topics of conversation) separate. Sure, the subject line usually includes the topic, but if we reading 15 messages a day that are not sorted by topic, things will look disjointed. One solution to this is a web-based bulletin board system. Their great strengths are; (1). Keeping threads separate: and (2). Allowing posts to be read, searched, and researched later by individuals who may not have been part of the original conversation.

Chat Rooms.
Another significant type of community building tool is the chat room. This is a useful source of knowledge and information for any user. As for business people, it has a great utility. Sometime even people from Public relations schedule chats and interviews with famous personalities. Such chats may have overwhelming responses and may also gear up business.

Value Chain Model.

Value Chain Moves businesses away from discrete streams of data about the product being made to one unified pool of information one that even extends outside the company to suppliers and customers. The goal is to develop full and seamless interaction among all members of the chain, resulting in lower inventories, higher customer satisfaction and shorter time to market.

Portals - On the Internet, a portal is a site that consists of links to other

websites Collins Dictionary. - Portals can link to information sources beyond the corporate firewall, including Internet new feeds, real time events (like stock quotes), calendars, news announcements and online discussion groups. - A portal is a destination site for users of a particular class. A portal is any site with a large number of visitors on which the primary focus was not to sell products. Many large portals are becoming full service, e-commerce sites and many e-commerce sites are attempting to position themselves as portals. - A large portals started life as search engines ex. Altavista, America Online (AOL), Compuserve, Excite, Infoseek, lycos, Northern Light, Netscape, Magellan and Yahoo.

Definition of Portal. 1. Portal is a major visiting centre for Internet users.

2. Portal is a single, web based interface to content data; aggregated and customised, based on the users profile, (user can be internal and external to the corporation like employees, customers, partners & suppliers) subscription and access.

Functions of Portal
(Entertainment Media

Content Presentation
(Categorization, integration, search business taxonomy)

User Profiling
(user can be internal and external to the corporation like employees, customers, partners & suppliers)

Major Portal Functions

Collaboration

Personalization

Portal Technologies
Content Management Servers. Search Tools

Directories

Portal

Automated Classification engines

Extensible Markup Language tools

Content catalogues

Features of Portal
Major visiting centre for Internet users. Create search capability by buying a high-end search server and building a corporate wide search site. Organise content by building a corporate topic hierarchy. Create a single length by buying a light-weight. That is by Directory access protocol compatible directory server and creating an intranet portal security model. Organise for easy publishing by creating publishing standards and developing document templates. Facilitate document consent procedure by identifying common approval processes and hosting online where possible. Create personal views for users by discerning user preferences and logging them into the directory. Deliver dynamic content by buying software and building dynamic personal pages.

Internal Assessment Test on E-Commerce , March 2009.

Max. marks.-25

SECTION A. (10 marks)

1. Answer any 5 of the following each question carries 2 marks. a) Define E-Commerce. b) Expand EDI, EFT, B2G, HTTP. c) What do you mean by Shopping Cart. d) Distinguish between NICHE & BOARD customers e) Write the Meaning of Bulletin Board & Cookies. f) Define Portal.

SECTION B. (5 marks)
Answer any 1of the following

2. 3.

Give Brief note on the parties involved in E-Commerce transaction. What are e-commerce activities. SECTION C. (10marks)
Answer any 1of the following

4. 5.

Explain major modes found in e-commerce. What are the matrix of e-commerce model? What is B2C commerce? How is retailing done on the www?