E-Commerce Definition and Features

Definition and Features of E-Commerce

• E-commerce refers to the use of electronic means and technology for conducting business.
• Features of e-commerce:
  • Virtual existence: easy to set up an online store
  • Availability: open 24/7, accessible from anywhere
  • Time-saving approach: reduces travel time and distance
  • Economical process: reduces costs for sellers and buyers
  • Comfort for buyers: convenient shopping experience
  • Comfort for suppliers/sellers: easier to promote and sell products

History and Development of E-Commerce

• Four generations of e-commerce:
  1. First generation (1995-1997): business-to-consumer e-commerce
  2. Second generation (1997-2001): consumer-to-consumer and business-to-business e-commerce
  3. Third generation (2001-2009): online malls and web stores
  4. Fourth generation (2009 onwards): business-to-business-to-consumer-to-consumer (B2B2C2C) e-commerce

Types of E-Commerce

• Six types of e-commerce:
  1. Business-to-Business (B2B): electronic transactions between companies
  2. Business-to-Consumer (B2C): electronic transactions between businesses and final consumers
  3. Consumer-to-Consumer (C2C): electronic transactions between consumers
  4. Consumer-to-Business (C2B): electronic transactions where consumers offer services or products to businesses
  5. Business-to-Administration (B2A): electronic transactions between companies and public administration
  6. Consumer-to-Administration (C2A): electronic transactions between individuals and public administration

Advantages of E-Commerce

• Advantages of e-commerce:
  • Global reach without large financial investment
  • Direct interaction with final consumers, shortening the product distribution chain
  • Increased productivity and competitiveness for companies
  • Cost reduction and improved customer service
  • 24/7 availability of virtual stores

Disadvantages of E-Commerce

• Disadvantages of e-commerce:
  • Dependence on information and communication technologies (ICT)
  • Lack of adequate legislation and regulation
  • Cultural and economic identity concerns
  • Insecurity in online business transactions

Models of E-Commerce based on Functionality

• Two factors lead to the development of Models of E-Commerce based on Functionality: value addition to products available online and control of websites.
• There are seven models of E-Commerce based on functionality:
  • Brokerage Model: brings buyers and sellers together on a common platform, mediates between them, and earns profit from fees and commissions.
  • Info-mediary Model: helps sellers gather and manage customer information for targeted marketing.
  • Affiliate Model: earns commissions by selling other e-retailers' products or services on their websites.
  • Subscription Model: charges customers for content services, person-to-person networking, trust services, and internet services.
  • Advertising Model: generates revenue from advertising on websites.
  • Community Model: thrives through chat rooms, social networks, bulletin boards, open content, and public broadcasting.
  • Manufacturer Model: classified into purchase, lease, license, and brand-integrated content.

Marketing Strategies

• Two types of marketing strategies:
  • Product-centric: focuses on developing new products, expanding product portfolios, innovating products, advertising, and offering promotional discounts.
  • Customer-centric: focuses on fulfilling customer needs, segmenting markets, providing solutions, and conducting customer surveys.

Market Segmentation

• Four types of market segmentation:
  • Demographic Segmentation: based on age, gender, income, family size, family life cycle, occupation, education, religion, and social class.
  • Geographic Segmentation: based on international, national, regional, city, town, or neighborhood locations.
  • Psychographic Segmentation: based on beliefs, values, lifestyles, social status, activities, interests, and opinions.
  • Behavioral Segmentation: based on attitudes towards products, response to products, and behavior patterns.

Guidelines for Market Segmentation on the Web

• Four guidelines:
  • Identify market segments on the web using search visitors, referrer visitors, campaign visitors, and direct visitors.
  • Measure responsiveness of visitors to the website.
  • Measure the stability of a segment's behavior.
  • Measure the profitability of each segment.

Search Engine Optimization (SEO) and Search Engine Marketing (SEM)

• SEO: designing, writing, and coding a website to maximize chances of appearing at the top of search engine results for selected keywords and phrases.
• SEM: placing an organization's website at the top of search results to attract potential customers.

E-Publication and E-Banking

• E-Publication: digitally produced materials like bulletin boards, newsgroups, mailing lists, CD-ROM-based media, and websites.
• E-Banking: integrating technology into financial services, allowing customers to use banking services through the internet or mobile apps.