ch02- e com fundamental

8/13/2019 Ch02- e Com Fundamental

1/30

CHAPTER 2

E-commerce Fundamentals


2/30

Figure 2.1 The environment in which e-business services are provided


3/30

Figure 2.2 B2B and B2C interactions between an organization, its suppliers and its

customers


4/30


5/30

Slide 2.5

Dave Chaffey, E-Business and E-Commerce Management, 3 rd Edition Marketing Insights Ltd 2007

Marketplace channel structure

Channel structure describe the way amanufacturer or selling organization deliversproducts and services to its customers

The distribution channel will consist of one ormore intermediaries such as wholesalers andretailersEg. Music company distributes CDs to retaileror wholesalerInternet offers a means of bypassing some ofthe channel partners this process is known as

disintermediation or cutting out the middleman


6/30

Figure 2.3 Disintermediation of a consumer distribution channel showing(a) the original situation, (b) disintermediation omitting the wholesaler, and

(c) disintermediation omitting both wholesaler and retailer


7/30

Figure 2.4 From original situation (a) to disintermediation (b) and reintermediation (c)


8/30

Slide 2.8


Reintermediation: purchase of product stillneeded assistance in the selection of productand this led to creation of new intermediaries

Simplify purchase and sale of goods.Countermediation: marketers create their ownonline intermediaries


9/30

Slide 2.9


Different types of online intermediary

directories: yahoo, exciteSearch engines: altavista,infoseekOnline shopping Malls

Virtual resellers (own inventory and sell direct): AmazonFinancial intermediaries (offering digital cashand cheque payment services): Digicash,paypalForums, fan clubs and user groups reffered asvirtual communities

Evaluators: sites that perform review or


10/30

Slide 2.10


Different types of onlineintermediary(cont.)

Directories are now less important and mergewith search engines since search is the mostpreferred form of access.

No consumer benefit in visiting a shoppingmall retailer. You could go direct to the retailersweb site

Sites in the evaluator category enable a choiceof many suppliers across many categoriesbased on price.


11/30

Figure 2.6 Yahoo! Shopping Australia, a price comparison site based on theKelkoo.com shopping comparison technology (http://shopping.yahoo.com.au)

l d


12/30

Slide 2.12


Weblogs or Blogs

Regularly publish web pages such as online journals, diaries or news or events listingsFrequency can be hourly, daily, weekly or lessfrequently, but daily updates are typicalE.g. www.davechaffey.com News items and articles structured according

to the chapters of the book
http://www.davechaffey.com/http://www.davechaffey.com/


13/30

Figure 2.5 Dave Chaffeys blog site ( www.davechaffey.com)


14/30

Figure 2.7 Example channel chain map for consumers selecting an estate agentto sell their property

Slide 2 15


15/30

Slide 2.15


Search engines

Directories

News aggregators

MR aggregators

Comparers

Exchanges

Meta services

Portal

A gateway toinformationresources and

services

Slide 2 16


16/30

Slide 2.16


Types of portalType of portal Characteristics Example

Access portal Associated with ISP Wanadoo ( www.wanadoo.com ) and now ( www.orange.co.uk )AOL ( www.aol.com )

Horizontal orfunctional portal

Range of services: search engines, directories, news recruitment, personal information management, shopping, etc.

Yahoo! ( www.yahoo.com )MSN ( www.msn.com )Google ( www.google.com ) for which a long period just focusedon search.

Vertical A vertical portal covers a particular market such as construction withnews and other services.

Construction Plus ( www.constructionplus.co.uk )Chem Industry(www.chemindustry.com )Barbour Index for B2B resources(www.barbour-index.com )E-consultancy(www.e-consultancy.com )Focuses on e-business resources

Media portal Main focus is on consumer or business news or entertainment. BBC ( www.bbc.co.uk )Guardian ( www.guardian.co.uk )ITWeek ( www.itweek.co.uk )

Geographical(Region, country,local)

May be:horizontalvertical

Google country versionsYahoo! country and city versionsCraigslist ( www.craigslist.com )Countyweb ( www.countyweb.com )

Marketplace

May be:HorizontalVerticalGeographical

EC21(www.ec21.com )eBay ( www.eBay.com )

Search portal Main focus is on Search Google ( www.google.com )Ask Jeeves ( www.ask.com )

Media type May be:VoiceVideo

Delivered by streaming media or downloads of files

BBC ( www.bbc.co.uk )Silicon ( www.silicon.com )

Slide 2 17
http://www.wanadoo.com/http://www.orange.co.uk/http://www.aol.com/http://www.yahoo.com/http://www.msn.com/http://www.google.com/http://www.constructionplus.co.uk/http://www.chemindustry.com/http://www.barbour-index.com/http://www.e-consultancy.com/http://www.bbc.co.uk/http://www.guardian.co.uk/http://www.itweek.co.uk/http://www.craigslist.com/http://www.countyweb.com/http://www.ec21.com/http://www.ebay.com/http://www.google.com/http://www.ask.com/http://www.bbc.co.uk/http://www.silicon.com/http://www.silicon.com/http://www.bbc.co.uk/http://www.ask.com/http://www.google.com/http://www.ebay.com/http://www.ec21.com/http://www.countyweb.com/http://www.craigslist.com/http://www.itweek.co.uk/http://www.guardian.co.uk/http://www.bbc.co.uk/http://www.e-consultancy.com/http://www.e-consultancy.com/http://www.e-consultancy.com/http://www.barbour-index.com/http://www.barbour-index.com/http://www.barbour-index.com/http://www.chemindustry.com/http://www.constructionplus.co.uk/http://www.google.com/http://www.msn.com/http://www.yahoo.com/http://www.aol.com/http://www.orange.co.uk/http://www.wanadoo.com/


17/30

Slide 2.17


Auctions

A buying model where traders make offers and bids tosell or buy under certain condition.Offer:

Commitment for a trader to sell a product under certainconditions such as minimum priceBid:Made by trader to buy a product under certain condition

such as commitment to purchase at a particular price

Slide 2 18


18/30

Slide 2.18


Auctions

Forward, upward or English auction(initiated by seller):Seller sets rule and timing, and then invites potentialbidders.

Increasing bids are placed within certain time limit andHighest bid will succeedCommon on B2C marketplaces

Reverse, downward or Dutch auction(initiated by buyer):

Buyer sets rule and timingBuyer places a request for tender or quotation andmany suppliers compete, decreasing the price.Common on B2B marketplaces

Slide 2.19


19/30

Slide 2.19


Roles for auction

Price discovery:antiques do not have standardize prices, but auction can helpestablish a realistic market price through bidding

Efficient allocation mechanism:

sale of item that are difficult to distributes through traditionalchannel falls into this category. E.g. damaged inventory, limitedshelf life product, available at a particular time such as flight ortheatre ticketswww.lastminute.com

Distribution mechanism:as a means of attracting particular audiences

Coordination mechanism:coordinate a sell of product to a number of interested parties

Slide 2.20
http://www.lastminute.com/http://www.lastminute.com/


20/30

Slide 2.20


Place of purchase

Examples of sites

A. Seller-controlled Vendor sites, i.e. home site of organization selling products, e.g.www.dell.com .

B. Seller-oriented Intermediaries controlled by third parties to the seller such asdistributors and agents, e.g. Opodo ( www.opodo.com )represents the main air carriers

C. Neutral Intermediaries not controlled by buyers industry, e.g. EC21(www.ec21.com ).

Product-specific search engines, e.g. CNET ( www.computer.com ) Comparison sites, e.g. Barclay Square/Shopsmart

(www.barclaysquare.com ) Auction space, e.g. eBay ( www.ebay.com )

D. Buyer-oriented Intermediaries controlled by buyers, e.g. Covisint used to representthe major motor manufacturers ( www.covisint.com ) althoughthey now dont use a single marketplace, but eachmanufacturer uses technology to access its suppliers direct.

Purchasing agents and aggregators

E. Buyer-controlled Web site procurement posting on companys own site, e.g. GETrading Process Network ( www.tpn.geis.com

Different places for Onlinerepresentation
http://www.dell.com/http://www.opodo.com/http://www.ec21.com/http://www.computer.com/http://www.barclaysquare.com/http://www.ebay.com/http://www.covisint.com/http://www.tpn.geis.com/http://www.tpn.geis.com/http://www.covisint.com/http://www.ebay.com/http://www.barclaysquare.com/http://www.computer.com/http://www.ec21.com/http://www.opodo.com/http://www.dell.com/


21/30

Figure 2.8 Variations in the location and scale of trading on e-commerce sites

Slide 2.22


22/30


Trading mechanismsCommercial (trading) mechanism Online transaction mechanism of Nunes et al . (2000)

1. Negotiated dealExample : can use similar mechanism to auction ason Commerce One ( www.commerceone.net )

Negotiation bargaining between single seller and buyer. Continuousreplenishment ongoing fulfilment of orders under pre-set terms

2. Brokered dealExample : intermediaries such as screentrade(www.screentrade.co.uk )

Achieved through online intermediaries offering auction and pure marketsonline

3. AuctionExample : C2C: E-bay ( www.ebay.com ) B2B:Industry to Industry ( http://business.ebay.co.uk/ )

Seller auction buyers bids determine final price of sellers offerings. Buyerauction buyers request prices from multiple sellers. Reverse buyers postdesired price for seller acceptance

4. Fixed-price saleExample : all e-tailers

Static call online catalogue with fixed prices. Dynamic call online cataloguewith continuously updated prices and features

5. Pure markets Example : electronic share dealing

Spot buyers and sellers bids clear instantly

6. Barter Example : www.intagio.com andwww.bartercard.co.uk

Barter buyers and sellers exchange goods. According to the InternationalReciprocal Trade Association ( www.irta.com ) barter trade was over $9 billionin 2002.

Slide 2.23
http://www.commerceone.net/http://www.screentrade.co.uk/http://www.ebay.com/http://business.ebay.co.uk/http://www.intagio.com/http://www.bartercard.co.uk/http://www.irta.com/http://www.irta.com/http://www.bartercard.co.uk/http://www.intagio.com/http://business.ebay.co.uk/http://www.ebay.com/http://www.screentrade.co.uk/http://www.commerceone.net/


23/30


Business modelTimmers (1999) defines a business model as:

An architecture for product, service and

information flows, including a description of thevarious business actors and their roles; and adescription of the potential benefits for thevarious business actors; and a description of thesources of revenue.

Slide 2.24


24/30


Business models

The method by which a company generatesrevenue to sustain itself in the market

Eg. In B2B one can sell from catalog or in

auctions.11 different types of business model: E-shop, e-procurement e-malls e-auctions virtual communities

Slide 2.25


25/30


Business models

collaboration platform third-party marketplaces value-chain integrators value-chain provider information brokerage trust and other services


26/30

Figure 2.10 Alternative perspectives on business models

Slide 2.27


27/30


Revenue models

Describe methods of generating income for anorganizationE.g. Publisher revenue modelMain types of revenue model for publisherinclude the following..

Slide 2.28


28/30


Revenue models publisher example

1. Subscription access to content: a range of documents canbe accessed for a period of a month or typically a year.E.g. I subscribe to www.ft.com foe access to the digitaltechnology section for around $80 per year

2. Pay-per-view access: payment occurs for single access toa document, video or music clip which can bedownloaded

3. CPM on site display advertising (e.g. banner ads ): costper thousand (mille ). The site owner charges advertisersa rate card price($50 CPM)according to the number oftimes its ads shown to site visiters

Slide 2.29
http://www.ft.com/http://www.ft.com/


29/30


Revenue models publisherexample

4. CPC advertising on site(pay-per-click textads): cost per click. Advertiser are chargedaccording to number of times they are viewed.

Cost per click can be high($0.10 to $4).

5. Sponsorship of site sections or content types

(typically fixed fee for a period): bank HSBCsponsor money section on thewww.wanadoo.com

Slide 2.30


30/30

d

Revenue models publisherexample6. Affiliate revenue (CPA or CPC): cost per

acquisition Affiliate revenue is a commissionbased. E.g. Dave chaffey display amazon

books on his website www.davechaffey.com and receive around 5% of the cover price as afee from amazon

7. Subscriber data access for e-mail marketing:can send different forms of e-mail tocustomers and can charge for it.
http://www.davechaffey.com/http://www.davechaffey.com/

ch02- e com fundamental

Documents