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ON
IMPACT OF E-COMMERCE ON
MARKETING
VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107
0
STUDENTS DECLARATION
I, VIKRANT TYAGI hereby declare that this project report on the topic IMPACT OF E-
Mr. Lalit Kumar Asst Professor Management Department, DIMS Meerut. This is
VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107
1
ACKNOWLEDGMENT
Life of human is full of interaction. No one is self sufficient by himself. Whenever anyone is
doing serious and important work. A lot of help from the people concerned is needed and one
feels specially obliged toward them. I cannot forget acknowledging them in few words.
Without the guidance & co-operation of them, this report was not possible.
I would like to thanks Mr. Lalit Kumar Asst Professor Management Department, DIMS
Meerut has played an instrumental role in the successful completion of this research report.
Apart from guiding me on how to go about things they have been a constant support
throughout.
During these period, I met many people at outlets, and I m indebted to all of them for their
VIKRANT TYAGI
MBA-III SEM
ROLL NO.1407470107
2
EXECUTIVE SUMMARY
Present world is the world of competition. There is huge competition in each and every
sector. Every one wants to be ahead of their competitors. The competitive landscape, rapidly
changing technologies, increased complexity of products and services and more aware and
demanding customers are all pushing the Organization to adopt the customer centric focus.
In the present dynamic business environment customer play a vital role and is of centric value
to the Organization. Hence satisfying a customer by providing excellent services is of prime
importance to the company.
First of all a proper outline of the entire survey work was decided like research objectives,
research approach. The main objective of the research was to find out the impact of e-
commerce on marketing..
The next step was decide upon other areas of research design. To meet the main objectives of
the research program me a proper sample size was decide upon, which represents the entire
population and help in getting results. Structured questionnaire was used as research
instrument and personal interview method was used for data collection in the whole survey.
Analysis and interpretation were drawn from the entire data so as to focus on the major
problems. Analysis and interpretation were further used to reach the results and findings of
the survey and were also helpful in making the suggestions.
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CONTENTS
Synopsis 5
Introduction 7
3. E-Commerce 31
Research Methodology 63
Research Design 68
Hypothesis 70
Limitation 97
Conclusion 100
Bibliography 103
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SYNOPSIS
5
SYNOPSIS
OBJECTIVE:
The main objective of this study project is to find out the IMPACT OF E-
COMMERCE ON MARKETING in the recent time period and what are its
goods and services between various trading parents for the increase in their utility.
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INTRODUCTION
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THE MARKETING CONCEPT AND AN OVERVIEW OF CORE CONCEPT
Marketing is exciting and full of powerful concepts ... but many people have
the image that marketing is only associated with business and is somehow
selling you something so they can make a profit. But that's not what
Throughout this course we are going to define all marketing concepts in terms that
are relevant to the National Park Service. Some will be easier than others. Some
may be a stretch. But there's no better time to start than right now. So let's take
the last sentence of the paragraph above and redefine needs, customers, and
objectives:
Customer needs in the business world: In the business world, the customer's
needs are for the generic product or service that the firm provides as well as any
intangibles associated with it. What do you need when you buy a car?
When most people hear the word marketing they immediately think of advertising,
selling, promotion, or public relations. In one study, 61% of the respondents said it
was a combination of these three components. Another 28% said it was one or
another of them. Only 11% got anywhere close to the correct response. Philip
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Kotler, a senior marketing professor at Northwestern University, states that
Needs assessment
Marketing research
Pricing
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MARKET SEGMENTATION
Market segmentation is of interest to marketers because not all customers are alike.
Treat them like they are alike and most will be less than well satisfied. That's the
theory popular today. Thirty years ago marketers were raving about mass marketing.
The rationale behind mass marketing included the economies of scale you achieve
the same product and message. Over time, however, marketers discovered that if
the mass market was divided into smaller, more homogeneous groups (segments)
If you put customers into groups based on the similarity of the benefits that meet
their needs, you will have relatively homogeneous groups. Each group will be unique
market segmentation: It is easier to satisfy a smaller group than a larger group. And,
you will recall, that we achieve our organization's objectives by satisfying people.
Anything we can do, then, to satisfy people better is of direct benefit to our
organization.
The smaller the group the easier it is to satisfy people in the group. That makes
intuitive sense because a group of ten is generally more homogeneous than a group
of 1,000. Enter the concept of viable segments. A viable segment is one that the
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organization to attempt to do so. Lets look at a couple of ridiculous examples (it's
First, assume no segmentation whatsoever. The result would be that we would have
one garment for everyone in the world without regard to size, gender, color, style,
etc. We know immediately that the price would be low because of economies of
scale in production and distribution. But we also know that satisfaction would be
horrible (it would be too big for most people, some wouldn't like the color or style,
etc.).
Now, assume the ultimate in segmentation: products designed for each individual.
You pick the style, color, size, fabric, etc. We know immediately that we would love it
- after all, it would be designed for each of us individually so why wouldn't we? But
we also know that it would be so expensive that we couldn't possibly afford it.
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TARGET MARKETING & MARKET POSITIONING
In performing market segmentation you identify the major groups you face in the
environment, defining them in terms of criteria that are pertinent to our organization
(see Chapter 3). You know now that segmentation is nothing more than identifying
homogeneous groups. But you also know that you accomplish your objectives by
doing something with some of these groups. Target marketing and market
positioning, then, are the two final parts of the market segmentation process.
customers whose needs the organization plans to satisfy. He suggests that the target
market may be the total focus of the organization or it may be viewed as only a
starting point for later expansion to other market segments. The point is, he
recognizes that there are many groups and you probably won't target them all.
After you've identified all of the groups you face, you evaluate each group in terms
of:
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2) how likely is it that you can satisfy the individuals in the group given
You need to select groups for your attention based on the extent to
which
group.
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MARKET POSITIONING
Logic: You need to design the benefits of your offering for groups
you have targeted so that the offerings will be properly positioned in their minds.
Market segmentation, target marketing, and positioning are a three part process.
First you segment, then you choose your target(s), then you design the totality of
your offering(s) with your target consumer in mind. This totality includes what we
commonly refer to in marketing as the marketing mix. The marketing mix is the
achieve its objectives with the target market. One of the most popular classifications
is commonly called the "four P's": product, price, place, and promotion.
The most current perspective in marketing today recognizes that each of these
communicates a message to the target market. While we will discuss this more
thoroughly in a later chapter, we need to recognize at this point that each element of
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The distribution channels you use communicate to your target market
publicity, etc.
The target customer is the focus of all of this communication and you have to be
aware of how the target market will perceive the messages. Your target consumers
must recognize that you are trying to meet their needs else all of your efforts will be
for naught. You want individuals in the target market to think of your organization and
the benefits you have to offer when they are concerned with the needs you are trying
to satisfy. When you have done this, you have properly positioned your offering.
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THE MARKETING MIX - PRICE
The price is what the customer pays. It includes direct and indirect costs as well as
opportunity costs.
Direct costs are cash outlays a customer makes in order to obtain something. An
example would be admission to a national park. Direct costs are, in many cases, a
Indirect costs are costs associated with obtaining something. An example would be
the cost of driving to a national park, food and entertainment along the way, etc. The
total of the indirect costs is often more, sometimes much more, than the direct cost.
The total cost is obtained by adding the direct and indirect costs.
Opportunity costs are what we give up when we do something. They can have
include other things you could be doing instead of going to a national park. Examples
might include mowing the lawn or going to a baseball game (which would be non-
The price the park visitor pays to go to a national park is the total of all costs,
national park have to be at least as great as the total of the costs if a potential park
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PRODUCT
to include services, programs, and attitudes and includes whatever you are offering
the target market in an effort to meet their needs. It involves all tangible and
intangible aspects of the good or service you offer your target market. These are
things which have value and are balanced against the value you expect to receive
from the target consumer. Product in the NPS world would probably be interpreted
product lines. Product lines contain product items. Each product item is a
service.
Package: In the product world this is the container. In the NPS world
Brand: The brand in our case is the National Park Service and all of the
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Product Item: A distinct unit within a product line that is distinguishable
Product Line: A group of products within a product mix that are closely
related, either because they meet the same need, function in a similar
Product Mix (assortment): the set of all product lines and items that an
Product Life Cycle: Products, services, programs, activities, etc., don't last forever!
They have a life ... and then, often, they die. Businesses have a clear signal ...
customers quit making a purchase. But government agencies do not receive such a
clear cut signal. Unfortunately, they can continue to offer these outdated programs,
services, etc., and operate outmoded facilities long after they should have been
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THE MARKETING MIX
A General Discussion
Marketing Mix: You may have heard of the "four Ps" of marketing: product, price,
place, and promotion. Collectively these are called the marketing mix. More
price - what the customer, client, or park visitor pays (direct costs are
financial, indirect or alternative costs are such things as time it takes and the
promotion or communication - this is how you inform the target market about
satisfy their target market(s) ... the only tools at their disposal. Remember: If
your marketing mix doesn't meet their needs they will not be satisfied - and if
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The marketing mix should be viewed as an integrated and coordinated package of
benefits that reflect the characteristics of customers and various targeted publics and
satisfy their needs, wants, and expectations. Note that the elements of the marketing
mix should be integrated because each element of the mix usually has some impact,
direct or indirect, on the other three. For example, if you improve the product or
service you probably have to change the price because it costs more to produce.
Although you may not have to change where the product is delivered to the
customer, you will almost certainly have to change the promotion or communication
with the customer because you need to tell the customer about the changes you
have made in the product and how the changes will make it more desirable and
satisfying.
One problem in many organizations is that different divisions may be responsible for
different elements of the marketing mix. This happens even in well managed
organizations. The result is that the offering is confusing to the target market. Lack of
communication among divisions makes this problem worse. And if they don't share
Product: The product, service, or program includes both tangible and intangible
elements. The tangible, of course, are those things that the customer can see, touch,
feel, taste, or smell. The intangible include such things as the image of the offering ...
which includes the image of the organization making the offering, the psychological
aspects of pricing (high price to many customers is equated with high quality - and
vice versa).
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Price: The price is what the customer pays. It includes direct and indirect costs as
well as opportunity costs. The benefits of the product have to be great enough to
warrant the price. Price includes all costs associated with the product, service, or
program.
Place: The place is where the customer receives the product, service, or program.
The place of delivery, including all of its resources, is part of what the consumer
buys. A place that meets his or her needs better may be worth more. The place may
be a park, a visitor center in the park, or an interpretive exhibit along a trail. In setting
its strategy, the organization must determine how much the target market is willing to
the benefits of your offering to the target market(s). The objective is to persuade the
customer in such a way that he or she recognizes that your offering is uniquely
qualified to meet his or her needs. The term promotion mix is commonly used to
refer to the types of communication that are available: advertising, public relations,
personal selling, publicity, and sales promotion. Some authors include direct
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Marketing Research: How do you know when a program has died? Paraphrasing
C. D. Moore, If you can't (or don't) measure it (user satisfaction), you can't improve it
(or know when to change or eliminate it). Collecting information for making good
decisions is the only purpose for marketing research. Data for data sake is an effort
in futility and a waste of time. Information is power, and good information is essential
to knowing when and how to make changes in what you are offering your customer.
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MARKETING PLANNING STAGE FOR ONLINE ACTIVITIES.
The Internet was not built with commerce in mind. It was built by scientists for
publishing and sharing information. These purpose were not afterthoughts; they
were built into the very architecture of the system. Precisely what constitutes
marketing in this new environment remains one of the least understood challenges
to what a business seeking to use the Internet as a channel for sales. While a
describe some general strategies that business can use to address the issue of how
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HOW THE INTERNET IS BEING APPLIED IN MARKETING STRATEGIES
CONSUMER ANALYSIS
actually shop online, a higher percentage than in other nations. Shoppers Worldwide
are much more apt to buy books and music/CD than any other products category.
Online purchases as a percentage of total category sales (both offline and online)
are growing rapidly in many categories. User activity is strongly influenced by age.
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PRODUCT PLANNING
Companies are taking a variety of product planning approaches to the Internet, such
involved with Internet-driven texts and print version of them. The online texts feature
high-tech graphics, animations, interactivity, and other dynamic attributes not found
for sale or for rent or lease. Some of the pioneers of online selling have taken a
traditional, probably less than dazzling, consumer product or service, repackaged for
single product with the tactic of narrow focus and keep selection as the Web
proposition). Offer a product that will last longer or feature a better warranty. Add
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Offer more expertise (remember narrow focus and deeper knowledge), and
prospects should be obvious. Answer e-mails within twenty-four hour and return
Display the awards, certifications, or industry affiliations the company has earned.
If the site is consumer-oriented, incorporate a guest book of site visitors names and
purchase experience.
After looking at the categories of interest, the marketer can compare the above
business attributes with the product or service concept. Consider these topics for
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DISTRIBUTION PLANNING
business exchanges that connect sellers with potential buyers. For a instance
goal of working on online with 90,000 global suppliers and saving 2000 dollar
or more per vehicle. With the distribution problems that a number of online
firms have faced, they are now more apt to out source delivery to such
Presence.
Promotion Planning
efforts, particularly T.V. Ads. These efforts proved too costly and to
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The promotional mix selections include advertising sales promotion, Public
and weakness.
Online media does offer a tremendous advantage of selectivity over the traditional
Price Planning
buying and 46% of Internet Shoppers visit 3 to 5 sits before making a purchase.
Some firms set their online prices similar to or slightly blow their offline prices and
count on customer loyalty to their brands and the convenience of web Shopping to
stimulate business. Other Company such as eBay and pricline.com focus their
appeal on people who like to price shop and get bargains. Stile other companies use
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Online shopping can produce less price sensitivity at a brand level and more
sensitivity to search attributes associated with quality them does traditional shopping.
opportunity to educate consumers about the benefits they offer, and consumer will
find it easier to access and compare the offerings of the firms competing on prices.
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E-COMMERCE
The cutting edge for business today is electronic commerce (e-commerce). Broadly
needs of the organizations, merchants, and consumers to cut costs while improving
the quality of goods and services and increasing the speed of service delivery. The
term also applies to the use of computer network to search and retrieve information
information, products, and services via computer networks today and in the future via
any one of the myriads of networks that make up the information superhighway (I-
way). Projections anticipate that the I-way will transform information transport
similar to what the interstate highway system did for productivity in the nations
manufacturing, travel, and distribution system. The I-way is not an U.S. phenomenon
but a global one, as reflected by its various labels worldwide. For instance, it is also
called the National Information Infrastructure (NII) in the United States, data-dori in
Factors fueling the avid interest in e-commerce run the gamut of the business
process. From the broad perspective, e-commerce is well suited to facilitate the
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current reengineering of business processes occurring at many firms. The broad
goals of reengineering and e-commerce are remarkably similar: reduced costs, lower
product cycle times, faster customer response, and improved service quality. One
computer.
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INFRASTRUCTURE
Once an account has been created on the network the other basic infrastructure
have to be established.
to the telephone network. Using modems, digital signals generated by computers are
transmitted over analog telephone lines (modulation) and converted back to digital
second). To deliver faster and more reliable data transmission, organizations can
For organizations operating from remote locations, where the quality of telephone
The emergence of the Integrated Services Digital Network (ISDN) has facilitated the
enhancement of services that an organization can provide. ISDN makes possible the
digitization of voice, data, graphics, text, music, video and other source material and
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the ISDN service can be provided to end users from a single end user terminal over
The major components for network access over the ISDN line are:
equipment are devices which connect to the serial port of the computer.
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SETTING UP A WEBSITE
When a business organization decides to set up its own website, it needs a unique
domain name so that it can be identified in the Internet word. Preferably, this domain
name should reflect the name of the organization. For example the company Super
Pencils may like to have their Web address as www.superpencils.com and all e-
domain used by commercial organizations. One of the most well known domain
name registration services for the top level domains .com , .net , .org , .edu is
offered by the Inter NIC ( registration and other information is available at their
website www.internic.net .
To register a domain name under .com (primarily used by commercial business) .net
(for network related organizations) .edu (for academic degree granting institutions),
and .org for non-profit groups, one first needs to ascertain whether the proposed
domain name is still available or has already been registered by some other
organization. This can be done by searching for example Inter NICs WHOIS
database, which contains the list of all registered domain names. Domain names can
be upto 26 character long, including the top level and cannot contain any characters
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other than letters, numbers and hyphens. A domain name can not have any space
For Indian organization who want to have the top level domain .in, domain name
Mumbai. Preferably the IP address of the machine on which the website is being
hosted should also then be obtained from the same organization NCST.
The top-level domains in the Domain Naming Scheme are edu, com ,gov,mil,org,int
and net and all the two letter country codes from the list of countries in iso-3166.
India has a top level domain in. The second level sub-domains registered under the
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org for organizations which dont get covered under any of the above sub-domains.
At the third level the sub Domain provides space for registering the organization
The domain name registration agreement of InterNIC requires that two domain name
servers (a primary and secondary) be listed for each domain name. These domain
name servers are used to determine IP numbers from domain names, so that the
registered domain name may be contacted over the Internet. Two servers ensure
that in the event of one of the name server machines becoming unavailable, the
domain name is still reachable. These name servers should not however listed
without the approval of the authority responsible for the maintenance of the host
machines.
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WEB SERVERS
Once the proposed domain name has been registered with the appropriate authority,
the organization has to ready itself for establishing its presence on the Internet. To
make information available on the Internet, the organization has to setup a Web
server. These Web servers have appropriate software, which allows production of
web pages and their subsequent round-the clock accessibility over the Internet. The
organizations Web server then becomes one of the millions of Web servers that are
available over the Internet for users to access through their web browsers.
Once a website has been setup and all the desired content created on it, the
organization wants people to come and look at it. It is desirable that right people
should be able to visit the website so that they may see what is being offered and
make ordering decisions, if any. In order to be able to do so, people have to know of
the existence of the website. There are different ways in which a website can be
2.Advertising
3.Newsgroup announcements
4.E-mail announcements
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One way to feed traffic to an organizations site to get other sites to link to its
website. Generally these other organizations will want a reciprocal link back.
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ELECTRONIC DATA INTERCHANGE
partners. EDI is quite different from sending electronic mail messages or sharing files
through a network, or a bulletin board. In EDI, the computer applications of both the
sender and the receiver referred to as TRADING PARTNERS (TPs) have to agree
upon the format of the business documents which is sent as a data file over an
Receivable application for raising an Invoice for payment could still be implemented
on a file system using COBOL while computers Accounts Payable may be based on
Once data is entered into the buyers computer system and transmitted
electronically, the same data gets entered into the sellers computer system, without
application EDI. EDI can be fully integrated with application programs. This allows
data to flow electronically between trading partners without the need foe reeking, and
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The repeated keying of identical information in the traditional paper-based business
1.increase time
2.low accuracy
4.increased uncertainty
documents such as Request for Question, Purchase Order, Purchase Order Change,
Bill of Landing, Receiving Advice, Invoice, and similar documents. These electronic
thus eliminates the human efforts required to read, sort, and physically transport
such documents. The documents for which standard EDI formats either in existence
To take full advantage of EDIs benefits, a company must computerized its basic
exchange EDI transactions. EDI cannot be undertaken unilaterally but requires the
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consist of an organizations principal suppliers and wholesale customers. Since large
retail stores transact business with a large number of suppliers, they were among the
early supporters of EDI. In the manufacturing sector, EDI has enabled the concept of
capital requirements.
data. EDI is one form of e-commerce that also includes e- mails and fax. EDI data
exchange among parties that know each other well and make arrangements for on
The Chennai based Satyam Infoway recently announced a pilot project for the
Indian automobile industry, Called AutoPilot, the project will network automobile
(EDI) application, thus speeding up transactions. The companies involved will use
the Web to purchase spares and supplies in order to collaborate on sales promotions
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E-MAIL: A MEDIA
Companies can use very simple tools such as the e-mail to carry out e-commerce.
This form is used mainly for business- to-business transactions. But with more and
more people connecting to the Internet, the companies are now also targeting the
consumers E-mails is used mostly for the purpose of sales promotion and
advertising. A number of business Web sites offer e-mail newsletters for subscribers.
The newsletters may carry product information, product updates or even news
documents with each other, ideally without human efforts. This reduces operating
costs, administrative errors, and delivery delays. The benefits accruing from EDI
benefits.
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DIRECT BENEFITS
paper documents.
5. There is improved job satisfaction among data entry operations, clerks etc.
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STRATEGIC BENEFITS
1.Customers relations are improved through better quality and speed of service.
E-commerce, E-business, E-retailing, Call it what you will, but 1998 will definitely be
commerce via the Internet in India totaled only $2.8 million in year in 2009.
E-commerce is not only the buying and selling of goods and services on the Internet,
exchange of data.
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E-mail used as a media to reach the prospective and
E-business is what happens when you combine the broad reach of the Internet with
before possible. They do business on the Web, and consequently they do more
business.
IBM was one of the first companies to have used this term in October 1997. It feels
employees, vendors, suppliers and business partners. They must all work together.
Companies are using the Web to buy parts and supplies from other companies, to
The $2.8 million pizza chain, Domino has used the expertise of IBM to setup an
Internet that connects all the franchises worldwide with its headquarters in Delhi,
Mumbai, and Chennai. The Internet gives 1000 employees access to more than 50
applications and over 2,000 Web pages. Applications allow employees to check
calendars, view policies, and download mission critical information. The system
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contains a detailed document library, which gives employees easy access to a broad
calendar. And the most popular application on the Dominos Interact is an online
discussion forum that covers topics from product distribution issues to human
resources management.
1. Purchase
Invoice
Buyer
Remittance
Advice
Seller
Buyers Sellers
Bank Bank
Fund transfer
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INTERNET BANKING: PICKING UP STEAM
keen interest among banks. Private and foreign banks have been prime movers in
the area while public sector banks are latching on to the bandwagon. The total
while the number of active users are around a million. This represents 15% of the
total Internet user population, a clear indication that the concept of Internet banking
is catching on. For example State Bank of IndiaIT Investment: Rs 800 Crore. IT
spend in 2009-10: Rs 100 Crore +SBI is in the process of networking 1500 branches
spread across 52 cities. The bank aims to take 80% of its business online by 2010.
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TRIGGERS
estimated to be nearly one eighth of that done through branch banking. Private and
importance. Banks such as ICICI, HDFC, IDBI, Bank of Punjab and MNCs like
HSBC, Citibank and ABN Amro are among those offering online banking services.
These include checking account details, ordering for cheques/drafts, mobile banking
and share trading. The real trigger that seems to be driving online banking is the
facility of making utility payments. However, the future of banking will be one in which
customers can address most of their needs through self-directed means and the key
differentiator will be how effective a bank is in getting customers online and deriving
The challenge for banks would lie in expanding their subscriber base of online
consumers and enhance their service portfolio. How the banks fare in designing,
improving, marketing and rolling out services will greatly impact the adoption trends.
While Internet banking in India is still in nascent stage, it can become a significant
channel for servicing customers. Countries like Singapore have nearly 10% of their
population banking online. Though India may have a very small online banking
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OUTLOOK
It is clear, then, that IT deployment in the banking, financial services and insurance
segment is all set to grow. Public sector banks and financial institutions have started
connecting their locations and are devising more means to bringing convenience to
connectivity and quality of services, the gamut of solutions range to this extent. So IT
will be used for repositioning the bank in an integrated financial services market.
Ultimately the key differentiator would be quality of services that companies offer,
VIRTUAL STORES
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If the retailer is to extend his distribution to a wider geography, the Internet may be a
wise move. The retailer, however should not give up the physical retail location if and
Generally, the benefits of operating a virtual storefront fall into several areas of
business strategy.
of a virtual storefront, which in turn can transfer more power to direct marketing,
which is the most targeted communications vehicle. This capability allows the
company to choose what is to be the purpose of the Web site: online sales, online
electronic storefront is much less than opening a tangible store (real estate and
There is much more flexibility in providing a base for operations to support the
virtual store. The flexibility is such that an entrepreneur could maintain sales and
To expand the firms credentials and qualifications the retail Web site can
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and with the proliferation of color printers, sales brochures retrieved from the Web
product pricing is of some relief to the marketer and allows the product to keep up
pricing system, competitors may not be able to match the computer-driven price
adjustments.
Producing a first-class Web site will enhance the virtual presence of the
are translated into the companys Web site (for instance. Pizza Huts use of a hot
button, or link, on its Web site to connect to its long-running Book. It campaign
marketing communications.
Rather than having customers wait for an answer from the order tracking
site. In many instances, the company will give the customer a tracking number so
The opportunity to test new products or services may be one of the biggest
Many marketers are eager to sell internationally with minimal electronic sales
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operational and financial issues in selling and delivering the product or service
abroad.
consumer foods like perishable or dated goods are not being sold on the Web as of
yet.
Everyone agrees that ads offering online shopping options are the most
effective. Though P&G [Procter & Gamble] and Unilever say they are gearing up
for direct Web site, they arent doing it yet. Distribution snags have so far limited
growth of online grocers like Peapod and Net Grocer. And traditional retailers like
Wal-Mart are only now moving onto the Net. Online sales of food and beverages
will total $168 million this year estimates Forrester Research, while sales of drugs
and health and beauty aide products will be a puny $16 million.
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The twenty-four-hour service pledge is a double-edged sword: the pitfalls can
connections.)
The consumer is not certain who the company is or what it stands for. Likewise, the
company is unsure who the buyer is and what the buyers intentions are.
being paid. Much as the cows on the diary farm must be milked daily to preserve
their health, the Web merchant also gets few days off if she is intent on filling and
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TRANSACTIONS
E-PAYMENT
With continuing growth in e-commerce, its worth learning what the major credit card
companies, banks, online merchants and their technology partners are doing to
From the early days of the Internet, credit and charge card companies recognized
the enormous opportunities presented to them. They also saw challenges ahead.
Credit cards are easily the best way to pay for products and services online and
approximately 90% of all online transactions are made by credit or debit cards
compared to only 28% of purchases made in person. These figures are based on
research by Data monitor who also forecast that the value of Internet transactions
However, online shopping also has the highest levels of fraud and proving that the
cardholder actually conducted the authorised transaction over the Internet cost Visa
member banks $250m to resolve disputed charges in 2000. The problem is that 'card
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not present' transactions only require the card number and expiry date, so there is no
It's not surprising then that the card companies have been focusing their minds on
the problem of online fraud. The challenge for them is to reduce the cost of fraud
while at the same time increasing consumer confidence and encouraging more of us
to buy online- whether that is through the Internet or other emerging channels
From the moment we decide to make a purchase using a credit card, there is a
complex sequence of processes and organizations that handle the transaction. But
in short, the key players are the card associations, the card issuers, merchants and
acquirers. The card associations, also known as 'the brands', are the likes of Visa,
MasterCard and Discover. The issuers are the banks who provide us with our credit
cards and the acquirers are the financial services companies that process
transactions on behalf of the merchants. Some large merchants will do this for
themselves but most outsource to an acquirer that may also provide merchant
hosting facilities.
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CARD HOLDER V/S CARD ISSUER
The question which of these parties bears the cost of online fraud is a complex
one. While in most cases the cardholder is liable for his or her cards being stolen
and used, the actual cost is capped and prevented from exceeding a modest limit.
The card issuer bears most of the costs associated with investigating the details of a
disputed charge, which may be considerably higher if the dispute is not resolved
quickly and always has the potential to damage customer relationships. However, it
is the merchant that is liable for the value of the items purchased if the cardholder
disputes the purchase ever happened or just refuses to pay the bill.
credit card number being used. Obviously the merchants and banks would benefit
directly, but so would be the cardholder. The process of proving identity provides a
greater feeling of security and should encourage more cardholders to shop online.
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QUESTION OF AUTHENTICATION
non-traditional networks such as the Internet, mobile and Interactive TV. The system
puts an extra step into the checkout process that requests that the bank that issued
the card verifies the online user and the legitimate cardholder. Once completed, the
merchant can process the transaction as normal but is now guaranteed payment,
even if the transaction is disputed. So in this case, liability shifts to the card issuer.
The consumer branding for this initiative is called Verified by Visa. Visa has stated
that by 2005, issuing banks must support 3D Secure for their cardholders in order to
in the US and was recently launched in Europe, where Visa, in agreement with BT
Ignite, now provides a hosted service for issuing banks. Barclaycard Merchant
Services and The Bank of Scotland - two of the largest issuing banks - have
announced that they will support Verified by Visa, while leading merchants that
already support it include Dell, Blockbuster Video, Petsmart.com and United Airlines.
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IMPORTANCE OF CRYPTOGRAPHY
To meet the new levels of security that customers, credit card associations and
financial institutions require, the new generation of online payment services need to
meet best practice security standards and address a wide range of threat scenarios.
One of the key tools for this is cryptography that dates back to Egyptian
The de-facto security standard used for Internet based transactions is SSL (Secure
browser, SSL is commonly used to encrypt Internet communications and prove that
youre connected to the right Web site and not a fake. Sites that support SSL are
clearly identified, usually by a padlock icon at the bottom right hand corner of the
browser screen.
However, although the use of SSL can keep credit card numbers secret as they
cross the Internet, this does not provide proof that the person typing in the card
number is actually the card holder. With Visa 3D Secure and MasterCards
legitimate card users by asking them to prove their identity. Assuming this process is
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transaction through the use of a secure message sent from the cardholders bank.
This message becomes the merchants primary piece of evidence if at some later
For consumers, the process is very simple. In the case of the Verified by Visa
initiative, existing cardholders can visit their banks Web site and enrol in the system,
online merchant that supports the Verified by Visa system they will be presented with
an extra screen in their browser to enter this information. Hidden from the merchant,
this is provided directly to the issuing bank that authenticates the cardholder and
Simple in practice, but the secure generation, storage and management of the
cryptographic keys that underpin the core encryption, digital signature and
market such as Arcot Systems and Cyota, are turning to specialists like n Cipher to
new pay Shield hardware security module (HSM) establishes a safe, tamper-
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performance problems associated with handling sensitive information or performing
Ensuring that the processing of encrypted customer data is performed within the
boundaries of the payShield (HSM) helps to ensure that sensitive data is never
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A SAFER FUTURE
Previous initiatives by the card industry to increase the security of online transactions
have failed to be widely adopted because they were too cumbersome for consumers
and expensive for the banks. SET (Secure Electronic Transactions) for example,
difference with Verified by Visa and MasterCard SPA is their simplicity. Consumers
only need to remember a password and PIN. The main pressure is on the issuing
banks that become liable for Verified by Visa transactions whether they have
implemented the system or not - so long as the merchants and acquirers have taken
In addition to these online systems, there are other industry initiatives to reduce
payment fraud in general and deliver a wider range of cardholder services. For
example, the card associations expect that next generation chip based credit cards,
or smart cards rather than traditional cards with magnetic strips will be used by
about two-thirds of all credit card users before the end of 2006.
The good news is that through industry collaboration and initiatives such as Verified
by Visa and others, there will be a high level of interoperability and standardization.
The end result should be a dramatic reduction in credit card fraud and should also
accelerate the use of the Internet and other online channels for e-commerce by
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RESEARCH
METHODOLOGY
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RESEARCH METHODOLOGY
Meaning Of Research
Research in common parlance refers to a search for knowledge. One can also define
The advance Learners Dictionary of Current English lays down the meaning of
research as a careful investigation or inquiry specially through search for new facts
efforts to gain new knowledge. Some people consider research as movement from
the known to the unknown. It is actually a voyage of discovery. We all possess the
vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and
our inquisitiveness makes up prove and attain full and fuller understanding of the
know. This inquisitiveness is the mother of all knowledge and the method, which man
employed for obtaining the knowledge or whatever the unknown, can be termed as
research.
Research is an academic activity and as such the term should be used in a technical
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making deductions and reaching conclusion; and at last carefully testing the
conclusion to determine whether they fit the formulating hypothesis. D Slesinger and
extend, correct or verify knowledge making for its advancement. It is the pursuit of
truth with the helps of study, observation comparison and experiment. In short, the
analyzing the facts and research certain conclusions either in the from of solution (s)
formulation.
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PREPARING THE RESEARCH DESIGN
The research problem having been formulated in clear cut terms, the researcher will
be required to prepare a research design, i.e. he will have to state the conceptual
In other words, the function of research design is to provide for the collection of
relevant evidence with minimal expenditure of effort, time and money. But how all
these can be achieved depends mainly on the research purpose. Research purpose
may be grouped into four categories, viz., (i) Exploration (ii) Description (iii)
opportunity for purpose of the research study is that to exploration. But when the
between variable, the suitable design will be one that minimize bias and maximize
before-ad after) without control, after only with control, before-and-after with control)
design, simple and complex factorial designs), our of which the researcher must
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1. The means of obtaining the information.
2. The availability and skills of research and his staff (if any).
5. The cost factor relating to research, i.e. the finance available for the purpose.
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RESEARCH
DESIGN
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RESEARCH DESIGN
A research design specifies the method and procedure for conducting a particular
products.
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HYPOTHESIS
HYPOTHESIS
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Hypothesis simply means a mere assumption or some supposition to be proved Or
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HYPOTHESIS OF THE PROJECT
DATA COLLECTION
TYPE OF DATA:
Primary Data: Primary data are those data which are gathered
research project.
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BENEFITS TO ORGANIZATIONS THAT USE E-COMMERCE
international.
2.Decreases costs.
4.Costs of distribution.
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A large part of business these days is dealing with other businesses that supply you
parts and components since rarely do companies manufacture things from beginning
to end most things are made from component parts which are created by totally
different companies.
This is true for service too, companies supplying services often have that service
1.Security service
2.access control
3.alarm response
4.Landscape service
7.Janitorial service
9.Electrician service
10.Plumbing service
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BENEFITS TO ORGANIZATION THAT USE E-COMMERCE WITH THEIR
Reduces inventory.
Build more collaborative and stronger relationships with suppliers. This includes
such as:
Direct marketing
Selling
Fulfillment
Procurement
Information management
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Benefits to consumers that use e-commerce
Can buy when you want, from more locations (internet connected terminals)
More choices
When you have more choices you can decide on a product with
Can receive more information about the product, make a more informed decision
decision
Quick delivery is important for people who want to use the product
immediately.
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BENEFIT TO SOCIETY (WHEN CONSUMERS AND BUSINESS USE E-
COMMERCE)
Less affluent people can buy more and increase standard of living.
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BOTTLENECKS
While the technology components are all available for conducting EC, the
infrastructure in the country and the lack of a suitable legal environment in which
Cyber laws are also being framed to take care of national, consumer and business
interest.
In the absence of the legal environment however, users can protect their business
implemented along with digital signatures. The use of these security products have
Some of the most popular security products that are available are:
2.PGP/Network Associates
3.RSA/Security Dynamics
4.Entrust Technologies
5.Net safe.
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Three particular pitfalls or mistakes that will undercut or delay the benefits of e-
1. BROAD EXPECTATION.
backslash when its promises are not fulfilled. E-commerce will not, in and of itself,
2. ROTE APPLICATIONS
requires us to ask more than whether we can apply e-commerce to a practice and
3. INCOMPLETE IMPLEMENTATION
The benefit of e-commerce will be restricted if we dont recognize its full system
implications, and instead implement it in limited ways that only partially meet its
requirements.
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Current Challenges of using Internet in Marketing
competencies
The proper roles for E-marketing may not be specified clearly enough
which to outsource.
Let us now review a number of specific challenges related to marketing and the
Internet.
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Consumer Service Web users often feel frustrated by what they
System breakdowns.
great, the costs will have to come down for more users to hop on board.
Legal issues Because the use of the Internet in business is so new, legal
Privacy issues Internet users are willing to provide companies with personal
Communicating without spam People respond well when they are asked if it
information they would like to receive. What a growing number of Web users
mail.
Clutter Given the huge number of companies that are now online, there is a
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Finding a workable business model Few Internet-based firms have earned a
profit because they have invested too much, expanded too fast, faced system
breakdowns, and overestimated how quickly people would buy on the Web.
countries can impact on a firm seeking a global Internet strategy. Since global
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THE FUTURE OF E-MARKETING:
The overall impact of the Internet on all parties will be enormous, but
the best of all, due to their name recognition, their customer following, and
The growth of new high-speed transmission modes such as cable and DSL
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E-Commerce Overconfidence:
easy way out, only an alternative strategy amid the hard work of
advantage.
that use digital tools to reinvent the way they work. To make
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4. Use Digital Tools to Create Virtual Teams
Immediately
Themselves
The Internet's value in marketing is best seen by reviewing the benefits that a
company may receive by going online. Several of these benefits are shown in figure
Communicability The Web makes it easy for a firm to communicate with every
target market and offer a marketing mix especially devised for that target market.
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Information A firm can amass information about almost any facet of its business
from free Web sites, as well as from fee-based ones. Both secondary data and
Timeliness With the Internet, a company can operate in real time, which means
contemporaneous manner. The time lags associated with other marketing tools are
Cost efficiencies There can be reduced costs from Internet usage. Postal costs
communication between companies and their suppliers. Sales personnel can follow-
up with clients in a more efficient manner. There are no shipping costs for items such
as software that are sold via the Web and downloaded by customers.
Dynamism / flexibility The Internet is a very dynamic and flexible medium, which
inexpensively communicate with its various constituencies around the world, thereby
connections. More company Web sites will soon be showing 3-D product pictures
that can be rotated 360 degrees, streaming audio and video, photo galleries of
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Interactivity Unlike traditional advertising, which is unidirectional (from company to
Sales For a clicks-only firm, the Internet represents the sole source of revenue.
For a bricks-and-clicks firm, the Internet offers the potential for growing the business.
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COMPANY BENEFITS OF USING THE
INTERNET IN MARKETING
Focus/
Tailored Multimedia
Approach Benefits Capabilities
of the
Internet
Information
Global
Possibilities
Cost Dynamism/
Timeliness Efficiencies Flexibility
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THE STAGE OF AN INTERNET MARKETING STRATEGY
Insourcing
or
Outsourcing Security
Scale of Channel
Web Relationship
Presence
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WHY CONSUMER PURCHASE ONLINE
24 Hours
Convenient Operations
Easier to Ship
More
Ease of Products
Comparison Informations
Shopping
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THE MULTIFACETED POTENTIAL MARKETING ROLES FOR THE INTERNET :
After reviewing the company benefits of the Internet in marketing, it should be clear
that the Web has the potential to serve multiple marketing roles. These are shown in
figure and discussed next. Each firm must determine which roles to pursue and how
Projecting an image A firm can project an image at its Web site through the sites
Channel relations The Internet can help channel members to better understand
one another, to coordinate their distribution strategies, to smooth over conflicts, and
so forth.
management can be greatly facilitated through the Web. As Fortune recently noted.
Businesses are finding out that E-marketplaces do something even more important
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Data-base development As a result of the online interaction between a company
and its suppliers and customers, extensive marketing data base can be developed.
Advertising and sales promotion Through the Internet, a company can promote
its goods and services, along with its image. It can use banner ads at portal sites, be
listed at search engines, and present multimedia messages and special sales
Selling Of course, generating sales is a key Internet marketing role for a number
of firms.
marketing, whereby they sell their products through more than one distribution
format, in this case, the Internet and at least one other format.
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HOW THE INTERNET MAY BE UTILIZED IN MARKETING
Projecting an
Image
Multi-Channel
Customer Marketing
Service
Channel Potential
Relations Selling
Marketing Roles
for the Internet
Purchasing and
Inventory
Management Advertising
and Sales
Promotion
Information
Gathering and Mass
Sharing Data-Base
Development
Customizatio
n
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Findings & Analysis
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ADVANTAGE OF E-COMMERCE
days every organization want to use the benefit of the e-commerce, they want to
1.Increased sales
2.Increased profits
7.Reduce costs
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13.The point here is that with a web site, you can have the prices listed, and
change them-you simply edit the web page where as in a printed catalogue
you are struck with the expense of printing a new version if you need to
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LIMITATION OF
E-COMMERCE
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LIMITATION OF E-COMMERCE
As there are some advantages of e-commerce but it also has the limitations such as
in the process of payment and privacy issue. Following are the limitations of e-
Privacy issue
Technical limitations
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Reliability for certain processes
majority
Costs
Lack of critical mass in certain market areas for sellers and buyers
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CONCLUSION
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CONCLUSION
The rapid development of information and communication technologies over the past
electronic means collectively electronic commerce have created new legal issues.
The shift from paper based to electronic transactions has raised questions
and signatures. The challenge for lawmakers has been to balance the sometime
technological development.
The electronic commerce act of 1998 aims to facilitate the development of a secure
The Acts are divided into parts that can be summarized as follows:
1. It provides definition for terminology used with in the act and defines the scope of
2. Part second of the act addressees electronic records and electronic signatures
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3. Part third of act address the integrity and authentication of secure electronic
4. Part fourth of the act address issues of electronic contracting. This part deals with
the form in which an offer and an acceptance may be expressed and legal
5. Part fifth, sixth, seventh, eighth, ninth address the legal issue related to the use
6. Part tenth of the act address the acceptance and use of electronic records and
7. Part eleventh of the act address deals with issues relating to the liability of
8. Part twelfth of the act provides criminal penalties for international damage or
networks.
Part thirteenth of the act contains general provisions relating to the use of
electronic commerce.
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BIBLIOGRAPHY
102
BIBLIOGRAPHY
SHERLEKAR)
KENNNETH ZIMMERMAN)
WHINSTON)
WWW.GOOGLE.COM
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