Lecture 2

Overview of Electronic Commerce

Learning Objectives
1. Features of E- Commerce
1. 2. 3. 4. 5. 6. 7. 8. Ubiquity Global Reach Universal Standards Richness Interactivity Information Destiny Personalization & Customization Social Technology

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Features of Ecommerce

1-Ubiquity

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1-Ubiquity
Everywhere and at All times. Not Restricted to a Physical Space Marketplace extended beyond traditional boundaries.
Removed from a temporal and geographic location is called market space.

From a consumer point of view, ubiquity reduces: Transactions Cost: o Lowers the cognitive energy
o Cognitive energy refers to the mental effort required to complete a task.

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1-Ubiquity
Examples:

Cont..

o Accessing a bank account from your computer/laptop/mobile, transfer of money from one account to another. o Purchasing a Laptop from Hafeez Centre required more time and cognitive energy as compared to purchase from dell.com o Easypaisa o Paying Utility Bills from your Bank Account o Forex.com online money trading -> Buying and Selling in various types Dollar, Euro etc.
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Features of Ecommerce

2-Global Reach

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2-Global Reach
Reach: the number of user or customers an e-commerce business can obtain

oCommercial transactions cross cultural and national boundaries far more conveniently and cost-effectively. o Global audience

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2-Global Reach

Cont...

o Face book users are more than 35 million in just less than 10 years. o Alibaba.com, a China based web platform now have millions of customers and suppliers around the Globe.

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Features of Ecommerce

3-Universal Standards

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3-Universal Standards
Standards that are shared by all nations around the world
o Universal standards they are shared by all the nations around the world. (due to internet) The benefits of universal standards are:
o Reduced search costs for consumers o Becomes simpler, faster, with more accurate price discovery o Lower market entry costs for merchants o
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Features of Ecommerce

4-Information Richness

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4-Information Richness
o The Internet has the potential for offering considerably more information richness. o Chatting o The richness of the web allows retail and service merchants to market and sell complex goods and services.
o Complex goods have multiple attributes, are typically expensive, and cannot be compared easily, such as used cars and even diamond rings.

o face to face presentation by a sales force.

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Example: As on certain event(Eid) a shopkeeper do not brief much about product feature due to excess customers lead to less Richness but in E-commerce always remain rich.

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Features of Ecommerce

5-Interactivity

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5-Interactivity
E-commerce technologies allow two-way communication between the merchant and the consumer. o In contrast, all of these activities are possible on an ecommerce web site . interactivity allows an online merchants to engage a consumer in ways similar to a face-to-face experience, but on a much more massive, global scale. Examples: o Online chat between merchant and consumer o Feed back o Emails , Newsletter
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Features of Ecommerce

6- INFORMATION DENSITY

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6-INFORMATION DENSITY
o The total amount and quality of information available to consumers, and merchants. o Global market participants o Ecommerce technologies reduce information collection, storage, processing, and communication costs. o At the same time, these technologies increase greatly the accuracy and timeliness of information- making information more useful and important that ever. As a result, information becomes more rich, less expensive and of higher quality.

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6-INFORMATION DENSITY

Cont..

Growth in information density could result in:

o Greater price transparency: Consumers can easily find out the variety of prices in a market. o Greater cost transparency: Consumers can discover the actual costs merchants pay for products. o Greater opportunities for marketers to practice price discrimination.

Examples:
o Go to Amazon store you can find verity of products and prices.

Segmentation:
o Gold member, Silver member, Brown member on serversea.com o Office suite with some extra feature for premium customers
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Features of Ecommerce

7-PERSONALIZATION/CUSTOMIZATION

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7-PERSONALIZATION/CUSTOMIZATION

o E-commerce technologies enable merchants to target their marketing messages to a persons name, interests, and past purchases. (Personalization) o Personalization and customization allow firms to precisely identify market segments and adjust their messages accordingly.
o Personalization: The targeting of marketing messages to specific individuals by adjusting the message to a persons name, interest, and past purchases. o Customization: changing the delivered product or service based on a users preferences or prior behavior .
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Examples
Gmail Welcome Message (Personalization) Welcome: Name Change your Gmail background color scheme/ fonts (Customization) Customize a laptop on Dell.com (Customization)

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Features of Ecommerce

8-Social Technology

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8-Social Technology
User content generation and social networking technologies
users are able to create new social networks and strengthen existing ones.

The internet and ecommerce technologies have evolved to be much more social by allowing users to create and share content in the form of text, videos, music or photos with a worldwide community. The new internet and commerce technologies have give users the power to create and distribute content on a large scale.

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Examples
facebook, youtube, myspace, buzz(a new social network by google) etc. Blogs- Wordpress is most popular blogging tool to create a blog in minutes. http://www.wordpress.com

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Conclusion
Features of E- Commerce
1. 2. 3. 4. 5. 6. 7. 8. Ubiquity-All time Any Where Global Reach-By Internet, Chatting Universal Standards: are shared by all nations around the world Richness: the complexity and content of a message Interactivity: two-way communication between the merchant and the consumer Information Destiny: available to all market participants Personalization & Customization: allow firms to precisely identify market segments Social Technology: allowing users to create and share content
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