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CHAPTER 18

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					           CHAPTER 18

E-commerce and the entrepreneur




  J. Nel       Van Schaik Publishers
  LEARNING OUTCOMES
• Identify the size of an e-commerce opportunity by
  analysing the Internet community in South Africa.
• Explain the link between product characteristics and
  the possibility to sell a product over the Internet.
• Explain the most common business models on the
  Internet.
• Explain which elements could be included in a Web
  site.
• Formulate an online promotional strategy
  for a business.

                                     Van Schaik Publishers
                        Chapter 18                           2
   HISTORY OF THE INTERNET

              Paul Baran      First
              proposes a      Email                                               Internet
ARPA is       pocket switch   program   First use of the   USENET is New T1 lines society is   Internet is
established   network         created   term “Internet”    established developed  chartered    still growing




   1957       1962              1972        1974              1979        1985      1992           1996




                                                               Van Schaik Publishers
                                                 Chapter 18                                              3
BENEFITS OF E-COMMERCE
 FOR A SMALL BUSINESS
 •   Expands the marketplace
 •   Decreases costs
 •   Inexpensive customisation of products
 •   EC supports business-process-reengineering
 •   Lowers telecommunications costs
 •   Improves customer service
 •   Increased access to information


                                      Van Schaik Publishers
                         Chapter 18                           4
             Van Schaik Publishers
Chapter 18                           5
 PRODUCTS THAT SELL VS
PRODUCTS THAT DON’T SELL
Important criteria to consider:
   – Is the product or service computer related?
   – Does the offering need to be physically seen, “tried on”, and/or
     touched?
   – Can the order process be automated?
   – What is the nature of the offering? Physical product/service, or
     virtual service?
   – Is it a commodity?
   – Are competitive offerings readily available from channel
     members?
   – Is it very expensive or inexpensive?
                                             Van Schaik Publishers
                                Chapter 18                              6
             Van Schaik Publishers
Chapter 18                           7
BUSINESS-TO-CONSUMER
        (B2C)
• Also called e-tailers
• Pure-play vs “clicks-and-mortar”
  business
• Classification according to revenue
  models:
  –   Subscription models
  –   Transaction fee models
  –   Advertising-supported models
  –   Sponsorship models
                                 Van Schaik Publishers
                        Chapter 18                       8
             Van Schaik Publishers
Chapter 18                           9
BUSINESS-TO-BUSINESS
       (B2B)
• Sales or services is between two businesses
• Can be conducted between a buyer and
  seller, or via an online intermediary
• Types of B2B business models:
  – Company-centric business model
  – Many-to-many marketplaces
  – Vertical or horizontal marketplaces

                                    Van Schaik Publishers
                       Chapter 18                           10
CONSUMER-TO-CONSUMER
       (C2C)
   • Online auction business model
   • Types of online auction business
     models:
     –   English auction
     –   Dutch auction
     –   First price sealed-bid auction
     –   Reverse first-price sealed-bid auction



                                Van Schaik Publishers
                   Chapter 18                           11
THE DESIGN OF A
   WEB SITE
•   Home page                   •     Help
•   Additional pages            •     Hypertext links
•   Banner with title           •     Text on screen
•   Subtitle                    •     Graphics
•   Main and submenus           •     Searchable
                                      database
•   Customer service



                                     Van Schaik Publishers
                        Chapter 18                           12
PROMOTING A WEB SITE

•   Banner ads
•   Search engine
•   Affiliate programs
•   Sponsorships
•   Chat rooms/Internet communities
•   Emails
•   Viral marketing
                                Van Schaik Publishers
                   Chapter 18                           13

				
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