E-Commerce 2014: Kenneth C. Laudon Carol Guercio Traver

E-commerce 2014
business. technology. society.

tenth edition
Kenneth C. Laudon
Carol Guercio Traver
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 1
The Revolution Is Just Beginning
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

Birth of Technologies
■Birth of C’s (Computer’s)
1837 – (Charles Babbage - Father of Computer) Analytical Engine | mechanical
computer
1936- ( Konrad Zuse ) | Z1 – Computer (First Binary Computer) | mechanical computer
1942 - Atanasoff–Berry Computer (ABC) |first automatic electronic digital computer
1975 - (Ed Roberts)– Altair 8800 | First Micro or Personal Computer – price $750
1976 – Apple –I ( Steve Wozniak) | Micro or Personal Computer – price $666.
1976 to onward – PC’s , Laptop, Notebook, Netbook, Smart Phones, Handheld devices
(PDA), Wearable Devices (Such is Google Glass) .
Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1-3
Birth of Technologies Fact:
- Internetworking
■Birth of INTERNET to
- Internet
■ 1969 - Arpanet ( Advanced Research Projects Agency Network).
- A project which began in the Pentagon that year, called Arpanet.
ICANN? 1998
- that gave birth to the Internet protocols ISP’s?
■ In 1969 ARPANET began with some military computers in the pentagon - Purpose
is to survive nuclear attack. ( Wrong Theory)
■ Building a global Communication Network. (Wrong Theory)
■ Bob Taylor, the Pentagon official who was in charge of the Pentagon's Advanced
Research Projects Agency Network (or Arpanet) program, insists that the purpose
was not military, but scientific. (Correct Theory)
■ Arpanet was about time-sharing. Time sharing tried to make it possible for
research institutions to use the processing power of other institutions computers
when they had large calculations to do that required more power
Modern Example : “Intel’s Progress Thru Processors” (A Facebook App).
■ 1972, ARPANET Publically demonstrated this system (Network) for the first time in
International Computer Communication Conference. (Washington DC)
Birth of Technologies
■Birth of WWW (WEB)
■ A graduate of Oxford University, Tim Berners-Lee,
a British scientist at CERN (European Organization for Nuclear Research)
invented the World Wide Web (WWW) in 1989.
■ The web was originally conceived and developed to meet the demand for
automatic information-sharing between scientists in universities and institutes
around the world.
■ On 30 April 1993 CERN put the World Wide Web software in the public domain.
■ http://info.cern.ch/ | Browse the first website
■ http://line-mode.cern.ch/ | Line Wise First Browser
COMMERCE
Commerce refers to all the activities*“
the purchase and sales of goods or
”.services
■ *Marketing, payment, fulfillment, customer service
“E” Revolution in Commerce
■First (approx-23 years) years of
e-commerce
❖Just the beginning
❖Rapid growth and change
■Technologies continue to grow at
exponential rates
❖Disruptive business change
❖New opportunities
What Is E-commerce?
■Use of Internet and Web to transact
business
■Using of Computer’s, Internet and web
to transact business.
■More formally:
❖Digitally enabled commercial transactions
between and among organizations and
individuals
E-commerce vs. E-business
■E-business:
❖Digital enabling of transactions and processes
within a firm, involving information systems
under firm’s control.
Example: Banking System, customer relationship management

systems, web conferencing among business entities.
E-Commerce vs E-Business
In practice, e-business is more than just e-commerce. e-

commerce is a subset of an overall e-business strategy.
E-commerce seeks to add revenue streams using the World Wide

Web or the Internet to build and enhance relationships with
clients and partners and to improve efficiency.
Why Study E-commerce?
■E-commerce technology is different, more
powerful than previous technologies
■E-commerce brings fundamental changes to
commerce
■Traditional commerce:
❖ Consumer as passive (inactive) targets
❖ Sales-force driven
❖ Fixed prices
❖ Information asymmetry
© 2013 Hailey 12
Eight Unique Features of
E-commerce Technology
1. Ubiquity
2. Global reach
3. Universal standards
4. Information richness
5. Interactivity
6. Information density
7. Personalization/customization
8. Social technology
UBIQUITY
■It is available just about everywhere
and at all times.
� Market Place vs Market Space
� Reduce Cognitive Energy (Advantage)
Examples:-
❖ Accessing a bank account (24/7) | https://www.abl.com
❖ Purchasing from Internet. | http://www.shophive.com/
❖ Online Tracking | http://www.cargoserv.com/tracking.asp?Carrier=PK&Pfx=214
❖ Online Ticket Reservation | www.piac.com.pk
❖ Paying Utility Bills | https://epayment.ptcl.net.pk
GLOBAL REACH
■Reach: the number of user or customers
an e-commerce business can obtain.
� Traditional Commerce base on Television , Radio, Newspaper and
Sales force.
� Using Internet Commercial transactions to cross cultural and
national boundaries
Examples:-
❖ 100 million customers | http://www.amazon.com/
❖ 1,310,000,000 Active Users | http://www.facebook.com/
❖ Growing Mobile Social Network |smsall.pk (A messaging App) [National]
❖ The Designers Mall | http://www.fashionsouk.com/ [Global Presence]
UNIVERSAL STANDARDS
■Standards (i.e. INTERNET) shared by all
nations around the world
� Traditional commerce technologies differ from one nation to the
next ( Radio, Newspaper, TV ) etc.
� Using Internet Commercial transactions to cross cultural and
national boundaries
Benefits of Universal Standards
❖ Reduced search costs for consumers| http://www.google.com/
❖ simpler, faster, with more accurate price discovery | https://pricenoia.com/
❖ Lower market entry costs for merchants
❖ find many of the suppliers, prices, and delivery terms of a specific product
| https://www.mysupermarket.co.uk/
RICHNESS
■The complexity and content of a message
- Traditional commerce national sales forces, and small retail stores
have great richness face-to-face service using aural and visual cues
when making a sale.
- But there is Trade-off between richness and reach
Benefits of Richness
❖ more information richness than traditional media
❖ chatting with an online customer support person
❖ sell ‘complex’ goods and services
❖ Compare All (Prices, attributes, Services etc)
Examples:
▪ http://tcsconnect.com/nokia-lumia-1520.html | Product description, Vendor info, Compare Prices etc.
▪ http://www.daraz.pk/ | Product Detail, Size, Color etc. ; Online Chat
INTERACTIVITY
■Communication between the merchant
and the consumer.
- Traditional commerce national sales forces, and small retail
stores have great richness face-to-face service using aural and visual
cues when making a sale.
Interactivity in E-Commerce
❖ Customer Support | http://www.beliscity.com/support/index.php?a=add
❖ Customer Reviews| http://www.tcsconnect.com
❖ Feedback, FAQ’s, Newsletter Option | http://www.Dell.com/
❖ E-mail Support | http://www.amazon.com
❖ Live Help with customer representative | http://tcsconnect.com
INFORMATION DENSITY
■Total amount and quality of information
available to all market participants
▪ Internet and the web vastly increase information density.
▪ Ecommerce technologies reduce information collection, storage, processing,
and communication costs.
▪ Due to E-commerce Technologies information becomes more plentiful, less
expensive and of higher quality.
▪ Go to Amazon, Ebay or wallmart website you can find verity of products and
prices.
Growth in information density could result in
❖ Greater price transparency- for customers
❖ Greater Cost transparency- for customers
❖ Marketers to practice price discrimination (Segmentation)
http://www.statisticbrain.com/facebook-statistics/ | Data use for Segmentation
PERSONALIZATION & CUSTOMIZATION
■PERSONALIZATION: The targeting of marketing
messages to specific individuals.
▪ by adjusting the message to a person’s name, interest, and past
purchases.
Examples:- 1. Product search history on amazon.com
2. Welcome message by name on Gmail.
■CUSTOMZATION: Changing the delivered product or

service by Customer.
Examples:- 1. Add Text or Images not included in the original design
2. Customize a laptop on Dell.com.
3. http://www.customink.com | Add Text , Color to customize Shirts.
SOCIAL TECHNOLOGY
■User content generation and social
networking technologies.
- socializing traditional e-commerce sites by integrating social
elements into existing retail websites.
- Social technologies are increasingly being used to connect with
customers to build strong and lasting relationships, through ratings
and reviews, blogs, Wiki’s, micro-blogging, forums and communities
like Facebook.
Social Media Examples
❖ Facebook | plugins integration
❖ Twitter | plugins integration
❖ Pinterest | plugins integration
❖ Google+ | plugins integration
What is Web 2.0
■ Web 2.0 is the term given to describe a second generation of
theWorld Wide Web that is focused on the ability for people
to collaborate and share information online.
■ Social media technologies
■ User-generated content and communication
■ Highly interactive, social communities
Examples:
�Twitter, Instagram, Wikipedia, Tumblr
�Pinterest, Facebook, Blogs, Forums, RSS
Types of E-commerce
■May be classified by market relationship or
technology
■Business-to-Consumer (B2C)
■Business-to-Business (B2B)
■Consumer-to-Consumer (C2C)
■Social e-commerce
■Mobile e-commerce (M-commerce)
Business-to-Consumer (B2C)
⦿ It is the direct trade/selling via the Internet/web between
companies and end consumers.
Examples:
� Mc Donald's selling me a Big Mac
� Dell Selling me a Laptop
� An online pharmacy giving free medical consultation and
selling medicines to patients
� Overstock.com, Expedia.com and Orbitz.com
� Amazon.com, Gap.com
� Shophive.com
The Growth of B2C E-commerce
Figure 1.3, Page 20
SOURCE: Based on data from eMarketer, Inc., 2013a; authors’ estimates.
Business-to-Business (B2B)
⦿ in which businesses focus on selling to other businesses.
B2B is the largest form of e-commerce.
Examples:
� Manufacturer supplying goods to the retailer or wholesaler.
� Heinz selling ketchup to Mc Donald's
� Intel selling micro processors to Dell
� Firestone Selling tires to Ford Company.
� Dell sell products and services to small, medium, and large
enterprise businesses.
� www.quill.com | Best for Office Supplies
The Growth of B2B E-commerce
Figure 1.4, Page 21
SOURCE: Based on data from U.S. Census Bureau, 2013; authors’ estimates.
Consumer-to-Consumer (C2C)
■ C2C e-commerce provides a way for consumers to sell to
each other, with the help of an online market maker such as
the auction site eBay.
Examples:
� Mary buying an iPod from Tom on eBay.com
� Selling Laptop on Olx.com
� www.mudah.my
� www.pakwheels.com
� www.alibaba.com
� www.zameen.com
Social e-commerce
■ Social commerce is the use of social network(s) in the
context of e-commerce transactions.
■ Electronic commerce that involves using social media that
supports social interaction, and user contributions to assist
in the online buying and selling of products and services.
Examples:
� Facebook commerce or f-commerce refer to the buying and
selling of goods or services through Facebook
� Selling via Pinterest.com
� Social Selling with LinkedIn
Peer to Peer E-commerce
⦿ It is a technology in itself which helps people to directly
share computer files and computer resources without
having to go through a central web server.
⦿ To use this, both sides need to install the required software
so that they can communicate on the common platform.
⦿ The business models that support p2p commerce are
unusual, in many cases illegal.
Examples:
� FastTrack, Shareaza, uTorrent,
� Limewire, torrentz
Mobile e-commerce (M-commerce)
⦿ Mobile mean Mobility, Anywhere any time
⦿ M-Commerce refers to the use of mobile devices such as a
mobile phone, a Personal digital assistant PDA or a
smartphone for conducting the transactions.
⦿ M-commerce is becoming so popular that the web design
and development companies have to optimize the websites
to be viewed correctly on mobile devices.
Examples:
� Mary buying an iPod from Tom on eBay.com using Netbook
� Selling Laptop on Olx.com using Smartphone
� A person doing trade using Mobile devices.
Insight on Technology: Class Discussion
Will Apps Make the Web Irrelevant?
■What are the advantages and

disadvantages of apps, compared
with Web sites, for mobile users?
■What are the benefits of apps for
content owners and creators?
■Will apps eventually make the Web
irrelevant? Why or why not?
Understanding E-commerce:
Organizing Themes
■Technology:
❖ Development and mastery of digital computing and
communications technology
■Business:
❖ New technologies present businesses with new ways of
organizing production and transacting business
■Society:
❖ Intellectual property, individual privacy, public welfare
policy
Insight on Society: Class Discussion
Facebook and the Age of Privacy

■Why are social network sites interested in collecting
user information?
■Why Candy Crush users are more spending time
than any social website?
■Is e-commerce any different than traditional
markets with respect to privacy? Don’t merchants
always want to know their customer?
■How do you protect your privacy on the Web?
Academic Disciplines
Concerned with E-commerce
■Technical approach ■Behavioral approach
❖ Computer science ❖ Information systems
❖ Management science ❖ Economics
❖ Information systems ❖ Marketing
❖ Management
❖ Finance/accounting
❖ Sociology

E-Commerce 2014: Kenneth C. Laudon Carol Guercio Traver

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E-Commerce 2014: Kenneth C. Laudon Carol Guercio Traver

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Formats disponibles

E-commerce 2014

business. technology. society.

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall

Example: Banking System, customer relationship management

In practice, e-business is more than just e-commerce. e-

E-commerce seeks to add revenue streams using the World Wide

■CUSTOMZATION: Changing the delivered product or

SOURCE: Based on data from eMarketer, Inc., 2013a; authors’ estimates.

Will Apps Make the Web Irrelevant?

■What are the advantages and

Facebook and the Age of Privacy

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