Understanding Commerce, E-commerce, and Business Ethics

• Commerce encompasses all activities involved in the exchange of goods or services from producers to consumers.
• Commerce includes distribution, transportation, warehousing, and other supporting activities.
• E-commerce refers to the buying and selling of goods or services over the internet.
• Online shopping, online banking, and electronic payments are all included in E-commerce.
• E-commerce reduces transaction costs, expands market reach, and improves customer service.
• International trade involves the exchange of goods or services across national borders.
• Countries can specialize in the production of goods and services in which they have a comparative advantage due to international trade.
• International trade is influenced by factors such as exchange rates, tariffs, and trade agreements.
• Business ethics refers to the moral principles and standards that guide the conduct of businesses and their employees.
• Making decisions that are not only legal but also ethical and socially responsible is part of business ethics.
• Ethical behavior can enhance a company's reputation, build trust with stakeholders, and improve its financial performance.
• Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.
• Consumer behavior takes into account psychological, social, and cultural factors.
• Understanding consumer behavior is critical for developing effective marketing strategies.
• Marketing strategies are the plans and actions organizations undertake to reach and influence consumers to buy their products or services.
• These strategies involve decisions related to the 4Ps of marketing: product, price, place, and promotion.
• Effective marketing strategies are based on a thorough understanding of the target market and the competitive landscape.

Types of Commerce

• Domestic commerce occurs within the boundaries of a single country.
• Foreign commerce involves trade between two or more countries.
• Retail commerce involves selling goods directly to consumers for personal use.
• Wholesale commerce involves selling goods to retailers or other businesses for resale.

E-commerce Models

• Business-to-Consumer (B2C) involves businesses selling goods or services directly to individual consumers.
• Business-to-Business (B2B) involves businesses selling goods or services to other businesses.
• Consumer-to-Consumer (C2C) involves consumers selling goods or services to other consumers.
• Consumer-to-Business (C2B) involves consumers selling goods or services to businesses.

Benefits of E-commerce

• Increased market reach allows businesses to access customers globally.
• Reduced costs are achieved through lower transaction costs and overhead expenses.
• Improved customer service is achieved through 24/7 availability and personalized recommendations.
• Greater convenience allows consumers to shop from anywhere at any time.

Challenges of E-commerce

• Security concerns exist regarding online fraud and data breaches.
• Logistical challenges are related to shipping and delivery.
• Increased competition is due to the ease of entry into the online market.
• Lack of personal interaction can hinder relationship building with customers.
• Differences in regulations and consumer preferences across countries can create complexity.

International Trade Theories

• Mercantilism advocates for countries to export more than they import to accumulate wealth.
• Absolute advantage theory suggests countries should specialize in producing goods they can produce more efficiently than others.
• Comparative advantage theory suggests countries should specialize in producing goods with the lowest opportunity cost.
• Heckscher-Ohlin theory suggests countries should specialize in producing goods that use their abundant factors of production.

Barriers to International Trade

• Tariffs are taxes imposed on imported goods.
• Quotas are limits on the quantity of goods that can be imported.
• Non-tariff barriers include regulations, standards, and other requirements that make it difficult or costly to import goods.
• Cultural differences can affect consumer preferences and marketing strategies.
• Political risks such as instability, corruption, and trade wars can also affect international trade .

Ethical Frameworks in Business

• Utilitarianism focuses on maximizing overall happiness or well-being.
• Deontology emphasizes moral duties and obligations.
• Virtue ethics focuses on developing good character traits.
• Justice theory emphasizes fairness and equity in decision-making.

Areas of Business Ethics

• Corporate social responsibility (CSR) refers to a company's commitment to operating in an ethical and sustainable manner.
• Environmental ethics involves protecting the environment and minimizing negative impacts on ecosystems.
• Fair trade aims to promote equitable trading relationships between developed and developing countries.
• Intellectual property rights involve protecting patents, trademarks, and copyrights.

Factors Influencing Consumer Behavior

• Psychological factors include motivation, perception, learning, beliefs, and attitudes.
• Social factors include culture, social class, reference groups, and family.
• Cultural factors include values, customs, and traditions.
• Economic factors include income, prices, savings, and credit.
• Personal factors include age, occupation, lifestyle, and personality.

Consumer Decision-Making Process

• Need recognition is the first step where consumers recognize a need or want.
• Information search involves gathering information about potential solutions.
• Evaluation of alternatives involves comparing and contrasting different options.
• Purchase decision involves selecting a product or service to buy.
• Post-purchase behavior involves evaluating the satisfaction with the purchase.

Marketing Mix (4Ps)

• Product involves decisions related to the features, design, quality, and branding of a product or service.
• Price involves decisions related to the pricing strategy, discounts, and payment terms.
• Place involves decisions related to the distribution channels, logistics, and inventory management.
• Promotion involves decisions related to advertising, public relations, sales promotion, and personal selling.

Marketing Segmentation

• Dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics.
• Demographic segmentation divides the market based on age, gender, income, education, etc.
• Geographic segmentation divides the market based on location.
• Psychographic segmentation divides the market based on lifestyle, values, and personality.
• Behavioral segmentation divides the market based on purchasing behavior, usage patterns, and loyalty.

Marketing Research

• Systematic gathering, recording, and analysis of data related to marketing products and services.
• Surveys involve collecting data from a sample of individuals through questionnaires.
• Experiments involve manipulating variables to determine cause-and-effect relationships.
• Focus groups involve gathering data from a small group of individuals through guided discussions.
• Observational studies involve observing consumer behavior in natural settings.

Digital Marketing Strategies

• Search engine optimization (SEO) involves optimizing websites to rank higher in search engine results pages.
• Social media marketing involves using social media platforms to connect with customers and promote products or services.
• Email marketing involves sending targeted email messages to customers and prospects.
• Content marketing involves creating and distributing valuable content to attract and engage customers.
• Pay-per-click (PPC) advertising involves paying for ads that appear on search engine results pages or other websites.