MIS 111 Computers and the Inter -networked Society

MIS 111: Computers and the Inter -networked Society Class 4: E-Commerce July 14 th, 2011 1

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Today’s Learning Objectives l l l l 3 List one or two current events in technology news Define e-commerce List at least 4 different ways e-commerce can make money Explain the difference between Business-to-Customer and Business-to-Business e-commerce List the components of an online store Discuss how the “long tail” is implemented in e-commerce and why it makes e-commerce successful Discuss a few ways you can make money online

Survey 4 When was the last time you used a physical store to buy… Music Book Software DVD

E-Commerce: An Example 5

E-Commerce: A Definition “The process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet. ” 6

Pure vs. Partial E-Commerce l l Virtual (pure e-commerce) l 7 Bricks and mortar (not e-commerce) Clicks and mortar (partial e-commerce)

A Word on Nomenclature l l 8 Business and technology people are fairly simple people. Hence, the names they choose mean exactly what they say (for example, management information systems? The world wide web? )

Types of E-Commerce l l l 9 Business-to-Consumer Business-to-Business Consumer-to-Consumer Business-to-Employee E-Government Mobile Commerce

Business-to-Consumer and Business-to-Business More details 10

Business-to-Consumer EC (B 2 C) l Means of Access (E-Tailing) – Direct sale through Electronic Storefronts l – Direct sale through Electronic Malls l l May include thousands of vendors Benefits of E-Tailing: – – 11 Like www. officedepot. com Can buy from home 24/7 Wider variety of products at lower prices (text books? )

Business-to-Consumer Services l Online Service Industries (in addition to goods) – – 12 Cyberbanking (paying bills, applying for loans) Online Securities Trading (E*Trade) Online Job Market (www. monster. com) Travel Services (www. hotels. com)

Business-to-Consumer Ads l Online Advertising Methods – – – Banners (electronic billboards) Pop-ups/Pop-unders (annoying!!) Spamming vs. Permission Marketing l – Viral Marketing l l 13 (Will you please sign up for our newsletter? ) “Word of Mouth” marketing Addwords (not as good as search engine optimization)

Business-to-Business (B 2 B) l Sell-Side Marketplaces – l Buy-Side Marketplaces – l Organizations buy products from others Electronic Exchanges – 14 Organizations sell products to others One buyer, many sellers

Some E-Commerce Business Models l Online direct marketing – l Deep discounters – l 15 Receivers send info about product to friends Group purchasing – l Appeals to customers who consider only price Viral marketing – l Manufacturers/Retailers sell directly to customers Small buyers aggregate demand to get low price Online auctions – Like regular auction, but online

How do they make money? 16

Amazon. com 17

Pandora. com 18

Ebay. com 19

i. Tunes 20

http: //www. barnesandnoble. com/ 21

Google 22

Facebook 23

CNN 24

ESPN 25

NCN. com 26

go. disney. com 27

www. arizona. edu 28

Woot. com 29

Where to start? l Q 1. how are you going to make money l l l l l 30 Adverting Selling a product Selling a service Selling digital media Affiliate program Selling sort of you own program Subscriptions Hybrid DO YOUR RESEARCH!

Example, I’m going to be selling a digital product l l 31 Tomorrow, we will do an affiliate program so today we are going to be selling videos and music Q 2. how much work am I willing to put into Web development?

Option 1 l Online solutions – – 32 http: //shopping-cart-review. toptenreviews. com/ https: //www. bigcommerce. com/ecommercesolution-features. php

Online Stores: Components & Processes Customer a Catalogue b Shopping Cart 1 Catalogue • List of Products • Descriptions • Prices • Options, size, etc. • Pictures 2 Shopping Cart • A temporary list of item to be purchased 3 Checkout • Billing Info • Shipping Address • Shipping Cost • Record Order • Process Payment c Payment Collection d e-commerce - Michael Mc. Donnell Checkout

Electronic Payments l l 34 Electronic Checks Electronic Credit Cards Purchasing Cards Do you know what that little lock means in the upper right hand corner of the browser?

Electronic Payments (cont’d) l Electronic Cash – – 35 Stored-Value Money Cards (calling cards) Smart Cards (like the Cat. Card) Person-to-Person Payments (Pay. Pal) Digital Wallets (stores financial info of buyer so no reentry is needed)

Option 2 l Content Management System – – – l Plugins – 36 Blog Google sites Word press Joomla Drupal http: //extensions. joomla. org/

Option 3 l l Completely program it Why? – – Complete flexibility Your platform doesn’t support content management systems l l – 37 http: //govollow. appspot. com/ Free and lots of traffic (great for facebook, iphone integration) You’re a geek

With option 2 and 3 l You usually need to find you own place to host the Web site (they are just software) – – 38 Install software Create a database

The Long Tail 39

“The Long Tail” l l 40 What happened to Touching the Void? What does it mean that we have a “market of hits? ” (anyone listen to the Top 40 station? ) Why aren’t obscure products in the market? What is the 20/80 principle and why doesn’t it apply to the market for music and videos?

The Long Tail: Power Law Distribution 41

The Rules of The Long Tail l Rule 1: Make Everything Available – l Rule 2: Cut the Price in Half; Now Lower it. – l Is any price too low? Rule 3: Help Me Find it. – 42 Why can sellers sell everything online? How do recommendations work?

You: A Money Maker l l Affiliate Programs (http: //www. amazon. com/) Advertising (www. google. com/adsense/) Create Products (http: //www. spreadshirt. com/) I want to sell my own product … – – 43 Don’t want to handle order fulfillment http: //www. amazonservices. com/content/fulfillmentby-amazon. htm? id=hm 2

Tomorrow l l l 44 No reading Meet in Mc. Clelland Hall 214 We’re going to make a business!!!

Quiz 45