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B2B Marketing through Electronic Commerce

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Chapter Questions
Electronic Commerce Classification of e-Commerce B2B e-Commerce Key components of B2B e-Commerce E-Procurement Electronic Data Interchange (EDI) Electronic Fund Transfer (EFT) Electronic Exchange On-line Auctions Electronic Catalogues
Cont3

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Just-In-Time (JIT) delivery

E-Commerce support service

Intranet

Extranet
Domain name

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Electronic Commerce
Electronic Commerce is defined as buying, selling and exchange of products, services and information via computer network, particularly on the internet. Where as e-Business has a broader definition than ECommerce, not just buying and selling, but also providing services to the customers and partners or collaborators and performing electronic transaction within or outside the organization. .

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E-Commerce is generally classified into the following types;

Businessto-Business (B2B) Businessto-Consumers (B2C) Consumers-to-Consumers (C2C) Collaborative Commerce (c-Commerce) Intra-organizational commerce Mobile Commerce (M-Commerce) Location basedCommerce (L-Commerce) E-Government
Government-to-Citizens (G2C) Government-to-Government (G2G) Government-to-Business (G2B)

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The important features of e-Commerce:

Firms want to increase the efficiency of business communication; Expand market share Maintaining long term viability Digital relationship with their distributors, suppliers and other partners. Streamline delivery system

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Marketing mix model (four Ps) can be used by marketers as a tool to assist in implementing the marketing strategies.

Fig.1 The market space model

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B2B e-commerce
B2B , the Business alliance with different entities will offer enterprises to access the following information's. Product details Customers Suppliers Shipping mechanisms Inventory Services Sales and marketing Supply chain process and performance

14/9 Key components of B2B e-commerce Buyers company - with procurement mgmt.perspective or

orientation

Seller company with marketing mgmt.perspective (i.e.,

superior customer value)

Electronic intermediary also known as infomediaries, this

replaces traditional intermediaries, a 3rd party service provider

Deliverer who performs the JIT delivery Network platform Intranet, Internet, Extranet Protocols and communication these are rules & guidelines
used for data communication & message passing, such as EDI

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Models of B2B e-commerce

Supplier oriented market place Buyers oriented market place Intermediary oriented market place Virtual corporation Networking between headquarters and subsidiaries Online services to business

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E-Procurement
E-Procurement is a technology solution that facilitates corporate buying using the Internet. E-Procurement software make the on-going purchase and may qualify the customer for volume discount or special offers. E-Procurement software make it possible to automate some buying and selling E-procurement is expected to be integrated with the trend towards computerized Supply Chain Management in the organizations

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E-Procurements efficiency benefits includes lower procurement cost, faster cycle time, reduce maverick, or unauthorized buying will organized reporting information and tighter integration of the procurement functions with key back office systems. Shorter purchase cycle Improvement data accuracy Access to real time information Reduced paper work Reduction in off-contract buying

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E-procurements effectiveness includes increased control over the supply chain, proactive management of the key data, and higher-quality purchasing decision within organizations. Risk of e-Procurement Internal business risk External business risk Technology risk E-Procurement process risk

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Electronic Data Interchange (EDI)

The communication between the applications running in two or more number of computers. It communicates specially formatted standard business information like purchase order, bills invoices, approvals of credit, shipping notices and confirmation between the computer systems of companies, banks, government agencies and logistic companies. Its main purpose is to transfer the repetitive business transactions electronically.

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Electronic Fund Transfer (EFT)

is an application that electronically routes the funds, debits and credits and charges and payments between the banks and customers using telecommunication networks. The most common and acceptable methods of payments in E-Commerce are electronic cheque, electronic fund transfer (EFT), e-wallet, electronic credit cards, electronic cash, smart cards, person-toperson payments and purchasing cards.

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payment mechanisms are broadly classified into two types: Token based payment systems (or electronic token), which are of three types: Electronic cash (e-cash) Electronic Cheques Smart cards Credit card based payment systems are of the following types: Plain credit cards Encrypted credit cards Electronic wallet

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Disadvantages
Frauds and mistakes Shops should select an appropriate set of electronic payment systems. Until electronic payment methods become popular among customer it is necessary to offer traditional payment methods as well. Technical limitations like availability of telephone connections and desired internet Band width.

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Risks in electronic payment system

There are three major risks involved in the electronic payment systems: Fraud and mistakes Privacy issues Credit card risk

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Electronic Exchanges
It is a market place where many sellers and buyers gather to do the business. It is also referred as emarket place, e-hub or portal. There are four types of electronic exchanges; Vertical distributors Vertical exchange Horizontal distributors Functional Exchanges

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On-line Auctions
B2B auction is a mechanism which enables multiple buyers or sellers to make competitive bid on a contract. On-line auctioning becomes more popular

due to the following two reasons;

Low barrier to entry in the auction market

The opportunities to earn good commission on the

sales without maintaining any inventory.