E-Commerce2

E-Commerce

Electronic Commerce is an emerging concept that describes the process of buying and selling or exchanging of products, services and information over electronic system such as computer networks or Internet

Scope of Electronic Commerce

Electronic Market

EDI InternetCommerce

The mainstream of E-Commerce consists of these three areas, these are

Electronic Market

An electronic market is the use of Information and Communication Technology to present a range of offerings available in a market segment.

For Example : Air-line booking system.

Electronic Data Interchange (EDI)

EDI is used by organizations for transactions that occur on a regular basis according to a pre-determined format. It involves exchange of electronic business documents, i.e., purchase orders, invoices etc. EDI transactions are carried through special EDI software.

Key features of EDI include:

• No paper work

• No human intervention

• Exchange of information takes place in seconds

Internet Commerce :

Information and communication technologies can also be used to advertise goods and services.

The Internet can, for example, be used for purchasing of books that are then delivered by post.

E-Commerce and Trade Cycle

Trade Cycle

SearchPre-Sale

Negotiate

OrderExecution

Deliver

InvoiceSettlement

Payment

After sale After Sale

E-commerce classificationA common classification of EC is by the nature of transaction:

Business-to-Business (B2B): electronic market transactions that take place between organizations

Business-to-Consumer (B2C): retailing transactions with individual shoppers – typical shopper at

Amazon.com is a consumer

Consumer-to-Consumer (C2C): consumer sells directly to consumers, examples -individuals selling

in classified ads, auction sites allowing individuals to put up items for auction – e.g, e-bay

Consumer-to-Business (C2B): individuals who sell products or services to organizations and those

who seek sellers and conclude a transaction

E-Commerce and Trade Cycle

Trade cycle has to support :

1. Finding goods or services appropriate to the requirement and agreeing the terms of trade.

2. Placing the order, taking delivery and making payment.

3. After-sale activities such as Warranties, services etc.

Competitive Advantage

A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.

Three basic types for competitive advantage are

•Cost leadership

•Differentiation

•Focus

Cost Leadership

Cost leadership is simply to be able to sell the goods or services at a price that is lower than that of the competition.

Differentiation

Differentiation is where the goods or services provided have some quality that makes them more affective than competing products.

Focus

achieving focus means that a firm sets out to be best in a segment or group of segments.

Value - Chain

The web of trade relationships is referred to as the supply chain or the value chain.

Supplement

Supply

Sub-Assembly

Supply

Manufacture

Whole Sale

Retail

Value - Chain

In 1985 Michael Porter introduced a generic value chain model that comprises a sequence of activities found to be common to a wide range of firms

…Value - Chain

Inbound Logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.

Operations: the processes of transforming inputs into finished products and services.

Outbound Logistics: the warehousing and distribution of finished goods.

Marketing & Sales: finding out the requirements of potential customers and letting them know of the product and services that can be offered

Service: Any requirement for installation or advice before delivery and then after-sale service.

These primary activities are supported by:

The infrastructure of the firm: organizational structure, control systems, company culture,

Human resource management: employee recruiting, hiring, training, development, and compensation.

Technology development: technologies to support value-creating activities.

Procurement: purchasing inputs such as materials, supplies, and equipment

Strategic Implementation of E-Commerce

Strategic Implementation divides implementation into the Technical and the Business aspects

Technical Implimentation

In approach to technical implementation of e-commerce, system depends on the business objectives, business requirements and the technologies that have been selected.

Business ImplementationSystem builds e-shop, also organization needs to

• Put in place to business infrastructure to support the new- e-commerce facility.

•Market the new e-commerce facility to the intended users.

e-shop ?For e-commerce applications that are selling goods or services the internet application, held on the servers, is an e-shop. Features of e-shop:• Customer Registration.

•Dynamic web-pages.

•Shopping basket.

•Multiple payment options.

•Online Delivery.

•Encryption

•Online Help

Concept of Management

Management is process of reaching organization goals, by working with and through human & nonhuman resource to improve value added benefits.

We Manage 4Ms ( Money, Man, Machine, and Material)

1. Accomplishment of results, through the efforts of other people.

2. Getting things done.

3. Art of decision making and leadership.

4. Forecast , plan, organize, command , co-ordinate

5. Knowing what you want to do and can do in the best and cheapest way.

6. Function of an enterprise which concerns itself with the direction and control of various activities to attain the business objectives.

Functions of Management

• Planning

• Organizing

• Leading

• Staffing and Training

• Controlling.

Planning

Planning is deciding in advance what to do, how to do it, and who is to do it.

The goals and objectives are described.

Types of Planning

1. Organizational Planning:Done by Top-management. It creates framework for employees and services.

2. Divisional/ Departmental PlanningConcerned with determining the scope of activities and goals assigned to each division.

Time-Frame of Planning1. Long-Term Planning:

Broad technical and competitive aspects between 5 to 15 years are planned.Risk Factor due to technological changes or Govt: policies.

2. Medium-Term PlanningPurchase of Material, production, labour, expenses are planned for 2 to 5 years.

…Time-Frame of Planning

3. Short-Term PlanningInventory planning and control, employees training, work methods etc. are planned for less than a year period.

Organizing

It is performed to assemble and arrange the necessary resources, which can be man, money, and machinery and to assign work to be performed.

Organizing includes

1. Identifying the work

2. Division of work

3. Grouping of activities

4. Assigning the duties

5. Defining Relationship

Staffing

The recruitment of each organizational position, that of managers and operators with effective selection of the most competent personnel full of efficiency.

Objective : Right man on right place and on right time.

Leading

The Managerial functions Manager is directing which shows your sub-ordinate a path to success. A manager must have art of Leadership which gives directions and guidelines to workers to achieve the Goal.

Controlling

Controlling is basically checking current performance against predetermined standards to ensure the adequate progress and satisfactory performance.

Control over policies.

Control over Organization

Control over personnel.

Control over cost and expenses, salaries

Control over research and development

Duties OR RESPONSIBILITIES of a manager1. Moral Rules

2. Human Relationship

3. Promise Keeping

4. Non Malevolence (Not wishing evil for others)

5. Mutual Aids

6. Respect And Prosperity

7. Utilities

8. Year-End Financial Statements, Tax Returns, and Audits

9. Assistance to the Board of Directors

10. Emergencies:

11. Annual Association Meeting:

12. Establishments of Files

13. Bank Accounts

14. Annual Budget:

15. Insurance

Marketing

Marketing is "an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization".

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

…Marketing

LEVEL OF MARKETING

Two Levels of Marketing

Strategic Marketing

Strategic Marketing attempts to determine how an organization competed against its competition in a market place. In particular, it aims at generating a competitive advantage relative to its competition.

Operational Marketing

Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived from them. This includes the determination of the marketing mix, advertising execution etc.

The marketing concept

choosing and targeting appropriate customers

positioning your offering interacting with those customers controlling the marketing effort continuity of performance

Marketing Environment

The marketing environment surrounds and impacts upon the organization. There are three key perspectives on the marketing environment, namely

1. 'macro-environment,‘

2. 'micro-environment‘

3. 'internal environment'.

Marketing Environment

Macro-EnvironmentThis includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws (although it is accepted that they could lobby or be part of a trade organization). It is continuously changing, and the company needs to be flexible to adapt. There may be aggressive competition and rivalry in a market. Marketer needs to compensate for changes in culture, politics, economics and technology.

Micro-Environment

This environment influences the organization directly. It includes suppliers that deal directly or indirectly, consumers and customers, and other local stakeholders. In this context, micro describes the relationship between firms and the driving forces that control this relationship. It is a more local relationship.

Internal Environment

All factors that are internal to the organization are known as the 'internal environment'. They are generally audited by applying the 'Five Ms' which are Men, Money, Machinery, Materials and Markets. The internal environment is as important for managing change as the external. As marketers we call the process of managing internal change 'internal marketing.'

Kinds of MarketsThere are four main kinds of market:

Industrial markets: the market for manufactured products aimed at businesses, i.e. capital goods e.g. engineering, construction.’

Consumer markets: the market for goods and services that are sold to households e.g. clothing, shampoo, holidays.

Commodity markets – market for primary products or raw materials e.g. steel, coal, coffee.

Financial markets: the market for services that dealing with money e.g. banking, insurance, accounting.

Marketing Mix

A cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing mix. The offer you make to you customer can be altered by varying the mix elements.

Four P's of the marketing mix

Product The Product management and Product marketing aspects/part/feature of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.

Pricing: This refers to the process of setting a price for a product, including discounts.

Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company. Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc.