Our Services

Get 15% Discount on your First Order

[rank_math_breadcrumb]

Saudi Electronic University Homework Help

project E-commerce101 part 1,2 and presentation

Description

noo coping plea

College of Administrative and Financial Sciences
ECOM101 – E-commerce

E-commerce Project
Second Semester/ 2024-2025

Restricted – ‫مقيد‬

Guidelines for the assignment (part A & B):
The answer sheet must include the following:
•

Cover page

•

Questions

•

Answers

Make sure to include the cover page with all information required.
TWO marks will be deducted if there is no cover page
This is a group project (4-5 students), which is part of your course score. It requires
effort, research, and critical thinking.
You are required to choose one current business from the list.
Each website can be chosen by one group only.
Use font Times New Roman, 12 font size
Use 1.5 line spacing with adjust to all paragraphs (alignment).
Use the footer function to insert page number.
Ensure that you follow the APA style in your project and references.
The minimum number of required references is 5 references using APA style.
Your whole project report length should be between 1250 to 1600 words.
You must check the spelling and grammar mistakes before submitting the assignment.
Up to 20% of the total grade will be deducted for providing a poor structure of
assignment. Structure includes these elements paper style, free of spelling and grammar
mistakes, referencing and word count.
Your file should be saved as Word Doc. Follow this pattern to name the file:
Your name_CRN_ECOM101_ Project A or B.docx

Guidelines for the Presentation (part C):
•

There must be 10 slides in the presentation.

•

The slides should have a clear background design, readable font size and style with
appropriate color.

Restricted – ‫مقيد‬

•

The power-point presentation must answer all the above parts.

•

Make sure to include the cover page in the first slide.

•

Work with the same group members

•

Ensure that you follow the APA style in your references.

•

The minimum number of required references is 5 references using APA style.

•

Up to 20% of the total grade will be deducted for providing a poor structure of presentation.
Structure includes these elements presentation style, free of spelling and grammar mistakes
and referencing.

•

Your file should be saved as a PowerPoint file and follow this pattern to name the file:
Business Name_CRN_ECOM101_ Project_presentation_docx

(Part A)
Requirements:
In this project, you are required to evaluate one of the websites below based on what you learn
from this course and your perspective. The evaluation will cover the different aspects of Ecommerce such as business idea, website design, marketing, security … etc.
You will need to analyze the business and provide suggestions to improve the current business
situation.
Current e-commerce businesses: (choose one)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Restricted – ‫مقيد‬

12.
13.
14.
15.

The following questions require critical thinking to be answered successfully. The answers to
these questions will drive the ways of improvement of the current e-commerce business.

1. Know the business (7 marks) Each point worth 0.7 mark
1. What is the business?
(Introduce the e-commerce business you have chosen).
2. What is the idea?
(Provide an overview of the business idea & The visioning process).
3. What are the type of products and/or services provided?
(Explain the products and services does the online store provide such as customer service,
exchange and return, delivery, and payment options).
4. Explain the business statement, business vision and business objective.
5. Where is the money?
(Explain the company’s business model and the revenue model. Give a general idea of how
the business generates revenues)
6. Who and where is the target audience?
(Explain demographics, lifestyle, consumption patterns, etc.).
7. Characterize the marketplace
(Research the market and give an idea about the size, growth, demographics, structure,
competition).
8. Describe the content of the business website
9. Conduct a SWOT analysis for the business
(Provide 3 points each)
10. Develop an e-commerce presence map.

Restricted – ‫مقيد‬

(For example: website, email … etc. What activities does the company use these platforms
for? (E.g., marketing, customer service, news…etc.).

2. Explain the design of the system (4 marks)
Explain in detail the design of the system (business objectives, system functionality, information
provided)

Business Objective

System Functionality

Information provided

Ex: Display goods

Digital Catalog

Dynamic text and graphics catalog

• What can be improved or added into the system design?

Restricted – ‫مقيد‬

3. Explain the current business e-commerce features (2 mark)
What are the current website features? And what types of these features can be annoying to
customers? Provide pictures.
(What can you do to improve the current features on the website?)

4. Explain the business e-commerce process (2 marks)
Explain in detail all the steps from the time user enters the website until the final user buys a
product.
(What can be improved in the process?)

Restricted – ‫مقيد‬

College of Administrative and Financial Sciences
ECOM101 – E-commerce

E-commerce Project
(Part B)
Second Semester/ 2024-2025

Restricted – ‫مقيد‬

Requirement:
This is a continuous activity for part A, keep working on the same website you have chosen in
part A. In this part you are required to evaluate one of the websites below based on what you learn
from this course and your perspective. The evaluation will cover the different aspects of
ECommerce such as business idea, website design, marketing, security … etc. You will need to
analyze the business and provide suggestions to improve the current business situation. The
following questions require critical thinking to be answered successfully. The answers to these
questions will drive the ways of improvement of the current e-commerce business.

5. Site Design (3 marks)
Evaluate the website design focusing on the eight most important factors in successful ecommerce
site design (ease of use, ease of purchase, simple graphics … etc.). You are required to evaluate
each factor.
(Discuss possible suggestions to improve the site design).

6. Business software (2 marks)
The development of an e-commerce website requires more interactive functionalities, such as the
ability to respond to user input (name and address forms), capturing customer orders for goods
and services, clearing credit card transactions on the fly, consolidating price and product
databases, and even adjusting advertising on the screen based on user characteristics.
(Explain the different types of software used on the website to perform the current functionalities).
What can be done to improve the software?

7. Payment and Security (3 marks) each point worths 1 mark
1 What are the methods of payment available in the online store?
(What other methods can be added? Explain why?)

Restricted – ‫مقيد‬

2 What are the technologies used on the website to secure the online transactions?
(What other technologies can be added? Explain why?)
3 What is the current privacy policy of the online store? Outline how the information is
collected and used? (What can be added to the privacy policy? Explain why?)

8. Categorize marketing and advertising strategy and method (2 marks)

Explain the current online, offline, and social media marketing strategies of the e-commerce
business? (Provide photos or screenshots of your business marketing activities, What can be
done to improve the marketing aspects of the business?)

9. Know your competitors (3 marks)
Choose a website of one competitor in the same industry (locally or globally) and compare it with
your chosen company’s site. Indicate why the competitor’s website is better or worse than the
chosen company’s website. (What can be done by learning from your competitor’s experience?)

10.Conclude your report (2 marks)
Summarize the above points and include your recommendation to improve the e-commerce
business.

Restricted – ‫مقيد‬

College of Administrative and Financial Sciences
ECOM101 – E-commerce

E-commerce Project
(Presentation)
Second Semester/ 2024-2025

Restricted – ‫مقيد‬

Requirement:
Upon completing your Group Assignment – Parts A and B; in a group, you will be asked to create
a powerpoint presentation of your chosen e-commerce business. Your presentation should cover
all the elemnts that were discussed in the assignment as listed below:

Presentation must have the following format:
1. First slide: Cover Page
2. Business profile: Name of the business and what is your business, target market,
marketplace, products and services provided.
3. Explain the business system design. (Business objectives, system functionality,
information provided).
4. Explain the current business e-commerce features.
5. Explain the business e-commerce process.
6. Explain the business software
7. Explain the payment and security of the chosen website
8. What is the marketing and advertising strategy?
9. Competitor’s analysis
10. Conclusion
11. References

The End
==============

Restricted – ‫مقيد‬

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 1
Introduction to
E-commerce

Note:Slide 2 is list of
textbook LO numbers and
statements

Learning Objectives

1.1 Understand why it is important to study e-commerce.
1.2 Define e-commerce, understand how e-commerce differs from ebusiness, identify the primary technological building blocks underlying
e-commerce, and recognize major current themes in e-commerce.
1.3 Identify and describe the unique features of e-commerce
technology and discuss their business significance.
1.4 Describe the major types of e-commerce.
1.5 Understand the evolution of e-commerce from its early years to
today.
1.6 Describe the major themes underlying the study of e-commerce.
1.7 Identify the major academic disciplines contributing to e-commerce.
Copyright © 2019 Pearson Education, Ltd.

Everything On Demand: The
“Uberization” of E-commerce
• Class Discussion
– Have you used Uber or any other on-demand service
companies?
– What is the appeal of these companies for users and
providers?
– Are there any negative consequences to the
increased use of on-demand services like Uber and
Airbnb?

The First Thirty Seconds
• First 20 years of e-commerce
– Just the beginning
– Rapid growth and change
• Technologies evolve at exponential rates
– Disruptive business change
– New opportunities
• Why study e-commerce
– Understand opportunities and risks
– Analyze e-commerce ideas, models, issues
Copyright © 2019 Pearson Education, Ltd.

Introduction to E-commerce
• Use of Internet to transact business
– Includes Web, mobile browsers and apps
• More formally:
– Digitally enabled commercial transactions between
and among organizations and individuals

The Difference between E-Commerce and
E-Business
• E-business:
– Digital enabling of transactions and processes within
a firm, involving information systems under firm’s
control
– Does not include commercial transactions involving
an exchange of value across organizational
boundaries

Technological Building Blocks Underlying
E -Commerce
• Internet
• World Wide Web
– HTML
– Deep Web v s. “surface” Web
ersu

• Mobile platform
– Mobile apps

Insight on Technology: Will Apps Make the
Web Irrelevant?
• Class Discussion
– What are the advantages and disadvantages of apps,
compared with websites, 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?

Major Trends in E-Commerce
• Business trends include:
– All forms of e-commerce show very strong growth
• Technology trends include:
– Mobile platform has made mobile e-commerce reality
• Societal trends include:
– Increased online social interaction and sharing

Unique Features of E-Commerce
Technology (1 of 2)
1. Ubiquity
2. Global reach
3. Universal standards

4. Information richness
Note :Additional concepts and

terminology include: Information
asymmetry, menu costs,
marketplaces and marketspaces,
transaction costs, cognitive
energy, market entry costs,
search costs, price discovery,
network externalities.
Copyright © 2019 Pearson Education, Ltd.

Unique Features of E-Commerce
Technology (2 of 2)
5. Interactivity
6. Information density
7. Personalization/customization

8. Social technology

Note: Additional concepts and

terminology include price
transparency, cost transparency,
and price discrimination.
Copyright © 2019 Pearson Education, Ltd.

Types of E-Commerce
• Business-to-Consumer (B2C)
• Business-to-Business (B2B)
• Consumer-to-Consumer (C2C)

• Mobile e-commerce (M-commerce)
• Social e-commerce
• Local e-commerce

Figure 1.5 The Growth of B2C E-Commerce
in the United States

Figure 1.7 The Growth of B2B E-Commerce
in the United States

Figure 1.8 The Growth of M-Commerce in the
United States

Notes:
Figure 1.5, Page 22.
In the early years, B2C ecommerce was doubling or
tripling each year. Although
B2C e-commerce growth in
the United States slowed in
2008–2009 due to the
economic recession, it
resumed growing at about
13% in 2010 and since then,
has continued to grow at
double-digit rates.
SOURCES: Based on data
from eMarketer, Inc., 2017d,
2017e; authors’ estimates.

Figure 1.7 Page 24.
B2B e-commerce in the
United States is about 10
times the size of B2C ecommerce. In 2021, B2B
e-commerce is projected
to reach about $7.6
trillion. (Note: Does not
include EDI transactions.)
SOURCES: Based on
data from U.S. Census
Bureau, 2017; authors’
estimates.

Figure 1.8, page 25.
In the last five years, mcommerce has increased
astronomically, from just
$32.8 billion in 2012 to
almost $230 billion in
2017, and it is anticipated
that it will continue to grow
by over 20% over the next
five years as consumers
become more and more
accustomed to using
mobile devices to
purchase products and
services.
SOURCE: Based on data
from eMarketer, Inc.,
2017f, 2017g, 2015a,
2015b, 2014.

E-Commerce: A Brief History (1 of 4)
• Precursors
– Baxter Healthcare modem-based system
– Order entry systems
– Electronic Data Interchange (EDI) standards
– French Minitel

E-Commerce: A Brief History (2 of 4)
• 1995–2000: Invention
– Sale of simple retail goods
– Limited bandwidth and media
– Euphoric visions of
▪ Friction-free commerce
▪ First-mover advantages
– Dot-com crash of 2000
Note: Additional concepts include

disintermediation, monopoly profits,
switching costs, network effects,
disrupting traditional channels.
Copyright © 2019 Pearson Education, Ltd.

E-Commerce: A Brief History (3 of 4)
• 2001–2006: Consolidation
– Emphasis on business-driven approach
– Traditional large firms expand presence
– Start-up financing shrinks
– More complex products and services sold
– Growth of search engine advertising
– Business web presences expand

E-Commerce: A Brief History (4 of 4)
• 2007–Present: Reinvention
– Rapid growth of:
▪ Web 2.0, including online social networks
▪ Mobile platform
▪ Local commerce
▪ On-demand service economy
– Entertainment content develops as source of
revenues
– Transformation of marketing

Figure 1.10 Periods in the Development of
E-Commerce

Note: Figure 1.10, page 28.
Copyright © 2019 Pearson Education, Ltd.

Insight on Business: Rocket Internet
• Class Discussion
– What are the benefits of investing in a company that
Rocket Internet has launched?
– Is an incubator the best solution for start-ups to find
funding? Why or why not?
– Why is Rocket Internet controversial?

Assessing E-Commerce (1 of 2)
• Stunning technological success
• Early years a mixed business success
– Few early dot-coms have survived
– Online sales growing rapidly
• Many early visions not fulfilled
– Price dispersion
– Information asymmetry
– New intermediaries

Assessing E-Commerce (2 of 2)
• Other surprises
– Fast-follower advantages
– Start-up costs
– Impact of mobile platform
– Emergence of on-demand e-commerce

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

Figure 1.11 The Internet and the Evolution
of Corporate Computing

Note: Figure 1.11,

page 38.
The Internet and
Web, and the
emergence of a
mobile platform
held together by
the Internet cloud,
are the latest in a
chain of evolving
technologies and
related business
applications, each
of which builds on
its predecessors.
Copyright © 2019 Pearson Education, Ltd.

Insight on Society: Facebook and the Age
of Privacy
• Class discussion:
– Why are social networks interested in collecting user
information?
– What types of privacy invasion are described in the
case? Which is the most privacy-invading, and why?
– 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
Technology
• Technical
– Computer science, management science, information
systems
• Behavioral
– Information systems research, economics, marketing,
management, finance/accounting, sociology

Careers in E-Commerce
• Position: Category specialist in E-commerce Retail
Program
• Qualification/Skills
• Preparing for the Interview
• Possible Interview Questions

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 2
E-Commerce Infrastructure

Slides in this presentation contain
hyperlinks. JAWS users should be
able to get a list of links by using
INSERT+F7

Learning Objectives
2.1 Discuss the origins of, and the key technology concepts
behind, the Internet.
2.2 Explain the current structure of the Internet.
2.3 Understand the limitations of today’s Internet and the
potential capabilities of the Internet of the future.
2.4 Understand how the Web works.
2.5 Describe how Internet and web features and services
support e-commerce.
2.6 Understand the impact of mobile applications.
Copyright © 2019 Pearson Education, Ltd.

Tech Titans Target a Prize: Bringing Internet
Access to Rural India
• Class Discussion
– How can the business opportunities of rural India be
assessed?
– What is rural India’s biggest potential?
– Which of the various methods described for bringing
the Internet to rural India do you feel might be most
successful?

The Internet: Technology Background
• Internet
– Interconnected network of thousands of networks and
millions of computers
– Links businesses, educational institutions,
government agencies, and individuals
• World Wide Web (Web)
– One of the Internet’s most popular services
– Provides access to billions, possibly trillions, of web
pages

The Evolution of the Internet 1961–Present
• Innovation Phase, 1961–1974
– Creation of fundamental building blocks
• Institutionalization Phase, 1975–1995
– Large institutions provide funding and legitimization
• Commercialization Phase, 1995–present
– Private corporations take over, expand Internet
backbone and local service

The Internet: Key Technology Concepts
• Internet defined as network that:
– Uses IP addressing
– Supports TCP/IP
– Provides services to users, in manner similar to
telephone system
• Three important concepts:
– Packet switching
– TCP/IP communications protocol
– Client/server computing

Packet Switching
• Slices digital messages into packets
• Sends packets along different communication paths as
they become available
• Reassembles packets once they arrive at destination
• Uses routers
• Less expensive, wasteful than circuit-switching

Figure 2.3 Packet Switching

Note: Figure 3.3, Page 121.

In packet switching, digital messages are divided into
fixed-length packets of bits (generally about 1,500
bytes). Header information indicates both the origin
and the ultimate destination address of the packet,
the size of the message, and the number of packets
the receiving node should expect. Because the
receipt of each packet is acknowledged by the
receiving computer, for a considerable amount of
time, the network is not passing information, only
acknowledgments, producing a delay called latency.
Copyright © 2019 Pearson Education, Ltd.

TCP/IP
• Transmission Control Protocol (TCP)
– Establishes connections among sending and receiving
Web computers
– Handles assembly of packets at point of transmission, and
reassembly at receiving end
• Internet Protocol (IP)
• Four TCP/IP layers
– Network interface layer
– Internet layer
– Transport layer
– Application layer
Copyright © 2019 Pearson Education, Ltd.

Figure 2.4 The TCP/IP Architecture and
Protocol Suite

Note: Figure 3.4,

Page 123.
TCP/IP is an
industry-standard
suite of protocols for
large internetworks.
The purpose of
TCP/IP is to provide
high-speed
communication
network links.
Copyright © 2019 Pearson Education, Ltd.

Internet (IP) Addresses
• IPv4
– 32-bit number
– Four sets of numbers marked off by periods:
201.61.186.227
▪ Class C address: Network identified by first three
sets, computer identified by last set
• IPv6
– 128-bit addresses, able to handle up to 1 quadrillion
addresses (IPv4 can handle only 4 billion)

Figure 2.5 Routing Internet Messages:
TCP/IP and Packet Switching

Note: Figure 3.5, Page 124.
The Internet uses packet-switched networks and the TCP/IP
communications protocol to send, route, and assemble
messages. Messages are broken into packets, and packets from
the same message can travel along different routes.
Copyright © 2019 Pearson Education, Ltd.

Domain Names, DNS, and URLs
• Domain name
– IP address expressed in natural language
• Domain name system (DNS)
– Allows numeric IP addresses to be expressed in
natural language
• Uniform resource locator (URL)
– Address used by Web browser to identify location of
content on the Web
– For example:

Client/Server Computing
• Powerful personal computers (clients) connected in
network with one or more servers
• Servers perform common functions for the clients
– Storing files
– Software applications
– Access to printers, and so on

The Mobile Platform
• Primary Internet access is now through tablets and
smartphones
• Tablets supplement PCs for mobile situations
– Over 160 million people in U.S. use Internet with
tablets
• Smartphones are a disruptive technology
– New processors and operating systems
– Over 220 million in U.S. access Internet with
smartphones

The Internet “Cloud Computing”
Model (1 of 2)
• Firms and individuals obtain computing power and
software over Internet
• Three types of services
– Infrastructure as a service (IaaS)
– Software as a service (SaaS)
– Platform as a service (PaaS)
• Public, private, and hybrid clouds

The Internet “Cloud Computing”
Model (2 of 2)
• Drawbacks
– Security risks
– Shifts responsibility for storage and control to
providers

• Radically reduces costs of:
– Building and operating websites
– Infrastructure, IT support
– Hardware, software

Other Internet Protocols and Utility
Programs
• Internet protocols
– HTTP
– E-mail: SMTP, POP3, IMAP
– FTP, Telnet, SSL/TLS

• Utility programs
– Ping
– Tracert

The Internet Today
• Internet growth has boomed without disruption because of:
– Client/server computing model
– Hourglass, layered architecture
▪ Network Technology Substrate
▪ Transport Services and Representation Standards
▪ Middleware Services
▪ Applications

Figure 2.10 The Hourglass Model of the
Internet

Note: Figure 3.10 Page 135.
The Internet can be characterized as
an hourglass modular structure with a
lower layer containing the bit-carrying
infrastructure (including cables and
switches) and an upper layer
containing user applications such as
e-mail and the Web. In the narrow
waist are transportation protocols
such as TCP/IP.
Copyright © 2019 Pearson Education, Ltd.

Figure 2.11 Internet Network Architecture
Note: Figure 3.11, Page 136.
Today’s Internet has a multi-tiered open
network architecture featuring multiple
backbones, regional hubs,
campus/corporate area networks, and local
client computers.

The Internet Backbone
• Tier 1 Internet Service Providers (Tier 1 ISPs) or transit
ISPs
• Numerous private networks physically connected to
each other

• Undersea fiber optics, satellite links

Internet Exchange Points (IXPs)
• Regional hubs where Tier 1 ISPs physically connect with
one another and with regional Tier 2 ISPs.
• Tier 2 ISPs provide Tier 3 ISPs with Internet access.
• Originally called Network Access Points (NAPs) or
Metropolitan Area Exchanges (MAEs).

Tier 3 Internet Service Providers
• Retail providers
– Lease Internet access to home owners, small businesses
– Large providers: Comcast, Verizon, Time Warner Cable
– Smaller local providers

• Services
– Narrowband
– Broadband
– Digital subscriber line (DSL)
– Cable Internet
– Satellite Internet
Copyright © 2019 Pearson Education, Ltd.

Campus/Corporate Area Networks
• Local area networks operating within single organization
• E.g. NYU, Microsoft Corporation
• Lease Internet access directly from regional and national
carriers

Intranets
• Intranet
– TCP/IP network located within a single organization
for communications and processing
– Used by private and government organizations for
internal networks
– All Internet applications can be used in private
intranets

Who Governs the Internet?
• Organizations that influence the Internet and monitor its operations
include:
– Internet Corporation for Assigned Names and Numbers (ICANN)
– Internet Engineering Task Force (IETF)
– Internet Research Task Force (IRTF)
– Internet Engineering Steering Group (IESG)
– Internet Architecture Board (IAB)
– Internet Society (ISOC)
– Internet Governance Forum (IGF)
– World Wide Web Consortium (W3C)
– Internet Network Operators Groups (NOGs)

Insight on Society: Government Regulation
and Surveillance of the Internet
• Class discussion:
– How is it possible for any government to “control” or
censor the Web?
– Does the Chinese government, or the U.S.
government, have the right to censor content on the
Web?
– How should U.S. companies deal with governments
that want to censor content?
– What would happen to e-commerce if the existing
Web split into a different Web for each country?

Limitations of the Current Internet
• Bandwidth limitations
– Slow peak-hour service
• Quality of service limitations
– Latency
• Network architecture limitations
– Identical requests are processed individually
• Wired Internet
– Copper and expensive fiber-optic cables

The Internet2 Project
• Consortium of 450+ institutions collaborating to facilitate
revolutionary Internet technologies
• Primary goals:
– Provides leading-edge very-high-speed network for
national research community
– Environment for developing and testing new
technologies
– Distributed and collaborative computing environments
for sciences, health, arts, and humanities initiatives

The First Mile and the Last Mile
• Most significant private initiatives
– Fiber optic trunk-line bandwidth (first mile)
– Wireless internet services (last mile)

Fiber Optics and the Bandwidth Explosion
in the First Mile
• “First mile”: Backbone Internet services that carry bulk
traffic over long distances
• Fiber-optic cable: hundreds of glass strands that use light
to transmit data
– Faster speeds and greater bandwidth
– Thinner, lighter cables
– Less interference
– Better data security
• Substantial investments in fiber optic by
telecommunications firms in last decade
Copyright © 2019 Pearson Education, Ltd.

The Last Mile: Mobile Internet Access
• “Last mile”: From Internet backbone to user’s computer,
smartphone, and so on
• Two basic types of wireless Internet access:
– Telephone-based (mobile phones, smartphones)
– Computer network–based (wireless local area
network–based)

Wireless Local Area Network (WLAN) –
Based Internet Access
• Wi-Fi
– High-speed, fixed broadband wireless LAN (WLAN)
– Wireless access point (“hot spots”)
– Limited range but inexpensive

• WiMax
• Bluetooth

Other Innovative Internet Access Technologies:
Drones, Balloons, and White Space
• Google: Project Loon
• Facebook: Facebook Connectivity Lab/Acquila drone
• Microsoft: White spaces project

Figure 2.13 Wi-Fi Networks

Note: Figure 3.13, page 151.
In a Wi-Fi network, wireless
access points connect to the
Internet using a land-based
broadband connection. Clients,
which could be desktops,
laptops, tablet computers, or
smartphones, connect to the
access point using radio signals.
Copyright © 2019 Pearson Education, Ltd.

The Future Internet
• Latency solutions
– diffserv (differentiated quality of service)
• Guaranteed service levels and lower error rates
• Declining costs
• The Internet of Things (IoT)
– Objects connected via sensors/RFID to the Internet
– “Smart things”
– Interoperability issues and standards
– Security and privacy concerns
Copyright © 2019 Pearson Education, Ltd.

Insight on Business: The Apple Watch:
Bringing the Internet of Things to Your Wrist
• Class Discussion
– Are you or anyone you know using the Apple Watch?
If not, why not? If so, what apps do you use most?
– What are the potential benefits of wearable
technology? Are there any disadvantages?
– What effects will features like the Apple Pay button
and Taptic Engine have?
– Are there any privacy issues raised by wearable
technology?

The Web
• 1989–1991: Web invented
– Tim Berners-Lee at CERN
– HTML, HTTP, web server, web browser
• 1993: Mosaic web browser w/GUI
– Andreessen and others at NCSA
– Runs on Windows, Macintosh, or Unix
• 1994: Netscape Navigator, first commercial web browser

• 1995: Microsoft Internet Explorer

Hypertext
• Text formatted with embedded links
– Links connect documents to one another, and to other
objects such as sound, video, or animation files
• Uses Hypertext Transfer Protocol (HTTP) and URLs to
locate resources on the Web
– Example URL:

Markup Languages
• Hypertext Markup Language (HTML)
– Fixed set of pre-defined markup “tags” used to format
text
– Controls look and feel of web pages
– HTML5 the newest version
• eXtensible Markup Language (XML)
– Designed to describe data and information
– Tags used are defined by user

Insight on Technology: the Rise of HTML5
• Class Discussion
– What features of HTML5 are changing the way
websites are built?
– Is HTML5 a disruptive technology, and if so, for
whom?
– Are there any disadvantages in websites and mobile
apps moving to an HTML5 platform?

Web Servers and Web Clients
• Web server software
– Enables a computer to deliver web pages to clients on a network
that request this service by sending an HTTP request
– Basic capabilities: Security services, FTP, search engine, data
capture

• Web server
– May refer to either web server software or physical server
– Specialized servers: Database servers, ad servers, and so on
• Web client
– Any computing device attached to the Internet that is capable of
making HTTP requests and displaying HTML pages

Web Browsers
• Primary purpose is to display web page, but may include
added features
– Google’s Chrome: 60% of desktop market, 56%
mobile market
▪ Open source
– Internet Explorer: 17% of desktop, >1% mobile
– Mozilla Firefox: 12% desktop, >1% mobile
▪ Open source
– Apple’s Safari: 4% desktop, 33% mobile

The Internet and Web: Features
• Features on which the foundations of e-commerce are
built:
– Communication tools
– Search engines
– Downloadable and streaming media
– Web 2.0 applications and services
– Virtual reality and augmented reality
– Intelligent digital assistants

Communication Tools
• E-mail
– Most used application of the Internet
• Messaging Applications
– Instant messaging
• Online message boards
• Internet telephony
– VOIP
• Video conferencing, video chatting, telepresence

Search Engines
• Identify web pages that match queries based on one or
more techniques
– Keyword indexes
– Page ranking

• Also serve as:
– Shopping tools
– Advertising vehicles (search engine marketing)
– Tool within e-commerce sites
• Top three providers: Google, Bing, Yahoo
Copyright © 2019 Pearson Education, Ltd.

Figure 3.17 How Google Works

Note: Figure 3.18, page 172.
Copyright © 2019 Pearson Education, Ltd.

Downloadable and Streaming Media
• Downloads:
– Growth in broadband connections enables large
media file downloads
• Streaming technologies
– Enables music, video, and other large files to be sent
to users in chunks so that the file can play
uninterrupted
• Podcasting
• Explosion in online video viewing

Web 2.0 Features and Services
• Online Social Networks
– Services that support communication among networks of
friends, peers
• Blogs
– Personal web page of chronological entries
– Enables web page publishing with no knowledge of HTML
• Wikis
– Enables documents to be written collectively and
collaboratively
– E.g. Wikipedia
Copyright © 2019 Pearson Education, Ltd.

Virtual Reality and Augmented Reality
• Virtual reality
– Immersing users within virtual world
– Typically uses head-mounted display (HMD)
– Oculus Rift, Vive, PlayStation VR

• Augmented reality
– Overlaying virtual objects over the real world, via
mobile devices or HMDs
– Pokémon GO

Intelligent Digital Assistants
• Computer search engine using:
– Natural language
– Conversational interface, verbal commands
– Situational awareness

• Can handle requests for appointments, flights, routes,
event scheduling, and more.
– Examples:
▪ Apple’s Siri
▪ Google Now
▪ Google Assistant
Copyright © 2019 Pearson Education, Ltd.

Mobile Apps
• Use of mobile apps has exploded
– Most popular entertainment media, over TV
– Always present shopping tool
– Almost all top 100 brands have an app

• Platforms
– iPhone/iPad (iOS), Android, Blackberry
• App marketplaces
– Google Play, Apple’s App Store, RIM’s App World,
Windows Phone Marketplace
Copyright © 2019 Pearson Education, Ltd.

Careers in E-Commerce
• Position: E-commerce Specialist
• Qualification/Skills
• Preparing for the Interview

• Possible Interview Questions

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 3
Building an E-Commerce
Presence

Learning Objectives
3.1 Understand the questions you must ask and answer, and the steps
you should take, in developing an e-commerce presence.
3.2 Explain the process that should be followed in building an ecommerce presence.
3.3 Identify and understand the major considerations involved in
choosing web server and e-commerce merchant server software.
3.4 Understand the issues involved in choosing the most appropriate
hardware for an e-commerce site.
3.5 Identify additional tools that can improve website performance.
3.6 Understand the important considerations involved in developing a
mobile website and building mobile applications.
Copyright © 2019 Pearson Education, Ltd.

The Financial Times: A Remodel for 21st
Century Publishing Profitability
• Class Discussion
– What were the Financial Times’ objectives in
redesigning its e-commerce presence?
– What considerations, if any, unique to the newspaper
business were involved?
– What did the Financial Times do to meet the needs of
mobile device users?

Imagine Your E-Commerce Presence (1 of 3)
• What’s the idea? The vision includes:
– Mission statement
– Target audience
– Intended market space
– Strategic analysis
– Marketing matrix
– Development timeline
– Preliminary budget

Imagine Your E-Commerce Presence (2 of 3)
• Where’s the money?
– Business model(s)
– Revenue model(s)
• Who and where is the target audience?
– Demographics, lifestyle, consumption patterns, etc.
• What is the ballpark? Characterize the marketplace
– Size, growth, demographics, structure

Imagine Your E-Commerce Presence (3 of 3)
• Where’s the content coming from?
• Know yourself—SWOT analysis
• Develop an e-commerce presence map

• Develop a timeline: Milestones
• How much will this cost?
– Simple website: up to $5000
– Small startup: $25,000 to $50,000
– Large corporate website: $100,000+ to millions

Figure 3.1 SWOT Analysis

Note: Figure 4.1, Page 197.
A SWOT analysis describes
your firm’s strengths,
weaknesses, opportunities,
and threats.
Copyright © 2019 Pearson Education, Ltd.

Figure 3.2 E-Commerce Presence Map

Note: Figure 4.2,
Page 198.
An e-commerce
presence requires
firms to consider the
four different kinds
of presence, and
the platforms and
activities associated
with each type of
presence.
Copyright © 2019 Pearson Education, Ltd.

Building an E-Commerce Site: A Systematic
Approach
• Most important management challenges:

1. Developing a clear understanding of business objectives
2. Knowing how to choose the right technology to achieve those
objectives
• Main factors to consider
– Management
– Hardware architecture
– Software
– Design
– Telecommunications
– Human resources
Copyright © 2019 Pearson Education, Ltd.

Planning: The Systems Development Life
Cycle
• Methodology for understanding business objectives of a
system and designing an appropriate solution
• Five major steps:
– Systems analysis/planning
– Systems design
– Building the system
– Testing
– Implementation

Figure 3.5 Website Systems Development
Life Cycle

Note: Figure 4.5, Page 202.
Copyright © 2019 Pearson Education, Ltd.

System Analysis/Planning
• Business objectives:
– List of capabilities you want your site to have
• System functionalities:
– List of information system capabilities needed to
achieve business objectives
• Information requirements:
– Information elements that system must produce in
order to achieve business objectives

Table 3.2 System Analysis, Business Objectives,
System Functionalities, and Information
Requirements for a Typical E-Commerce Site (1 of 2)
Business Objective

System Functionality

Information Requirements

Display goods

Digital Catalog

Dynamic text and graphics catalog

Provide product
information

Product database

Product description, stocking numbers,
inventory levels

Personalize/customize
product

Customer on-site tracking

Site log for every customer visit; data mining
capability to identify common customer paths
and appropriate responses

Engage customers in
conversations

On-site blog; user forums

Software with blogging and community forum
functionality

Execute a transaction

Shopping cart/payment
system

Secure credit card clearing; multiple payment
options

Accumulate customer
information

Customer database

Name, address, phone, and e-mail for all
customers; online customer registration

Table 3.2 System Analysis, Business Objectives,
System Functionalities, and Information
Requirements for a Typical E-Commerce Site (2 of 2)
Business Objective

System Functionality

Information Requirements

Provide after-sale
customer support

Sales database

Customer ID, product, date, payment, shipment
date

Coordinate
marketing/advertising

Ad server, e-mail server,
e-mail, campaign
manager, ad banner
manager

Site behavior log of prospects and customers
linked to e-mail and banner ad campaigns

Understand marketing
effectiveness

Site tracking and reporting
system

Number of unique visitors, pages visited,
products purchased, identified by marketing
campaign

Provide production
and supplier links

Inventory management
system

Product and inventory levels, supplier ID and
contact, order quantity data by product

Systems Design: Hardware and Software
Platforms
• System design specification:
– Description of main components of a system and their
relationship to one another
• Two components of system design:
– Logical design
▪ Data flow diagrams, processing functions,
databases
– Physical design
▪ Specifies actual physical, software components,
models, and so on
Copyright © 2019 Pearson Education, Ltd.

Figure 3.6(a) Logical Design for a Simple
Website
Note: Figure
4.6(a), Page 205.
This data flow
diagram
describes the
flow of
information
requests and
responses for a
simple website

(a) Simple Data Flow Diagram
This data flow diagram describes the flow of information requests and
responses for a sample Web site
Copyright © 2019 Pearson Education, Ltd.

Figure 3.6(b) Physical Design for a Simple
Website

Note: Figure 4.6(b), Page 205.
A physical design describes the hardware and
software needed to realize the logical design.
Copyright © 2019 Pearson Education, Ltd.

Building the System: In-House Versus
Outsourcing
• Outsourcing: Hiring vendors to provide services involved in
building site
• Build own v s. outsourcing:
– Build your own requires team with diverse skill set; choice
of software tools; both risks and possible benefits
ersu

• Host own v s. outsourcing
– Hosting: Hosting company responsible for ensuring site is
accessible 24/7, for monthly fee
– Co-location: Firm purchases or leases Web server (with
control over its operation), but server is located at vendor’s
facility
ersu

Figure 4.7 Choices in Building and Hosting

Note: Figure 4.7, Page 206.
You have a number of alternatives to consider when
building and hosting an e-commerce site.
Copyright © 2019 Pearson Education, Ltd.

Insight on Business: Weebly Makes
Creating Websites Easy
• Class Discussion
– What value does Weebly offer to small businesses?
– Are there any drawbacks to using Weebly to create
an e-commerce presence?
– How are service providers like Weebly changing the
nature of e-commerce?

Testing the System
• Testing
– Unit testing
– System testing
– Acceptance testing
– A/B testing (split testing)
– Multivariate testing

Implementation and Maintenance
• Systems break down unpredictably
• Maintenance is ongoing
• Maintenance costs: Similar to development costs
– A $40K e-commerce site may require $40K annually
to upkeep
• Benchmarking

Figure 3.10 Factors in Website Optimization
Note: Figure 4.10, Page 213.
Website optimization requires
that you consider three factors:
page content, page generation,
and page delivery.

Simple v s. Multi-Tiered Website
Architecture
ersu

• System architecture
– Arrangement of software, machinery, and tasks in an
information system needed to achieve a specific
functionality

• Two-tier
– Web server and database server
• Multi-tier
– Web application servers
– Backend, legacy databases

Figure 3.11(a) Two-Tier E-Commerce
Architecture

Note: Figure 4.11(a), Page 215.
In a two-tier architecture, a web server responds to requests for web
pages and a database server provides backend data storage.
Copyright © 2019 Pearson Education, Ltd.

Figure 3.11(b) Multi-Tier E-Commerce
Architecture

Note: Figure 4.11(b), Page 215.
In a multi-tier architecture, a web server is linked to a middle-tier layer that typically includes a
series of application servers that perform specific tasks, as well as to a backend layer of existing
corporate systems.
Copyright © 2019 Pearson Education, Ltd.

Web Server Software
• Apache
– Leading web server software
– Works with UNIX, Linux operating systems
– Reliable, stable, part of open software community

• Microsoft’s Internet Information Server (IIS)
– Second major web server software
– Windows-based
– Integrated, easy-to-use

Table 3.4 Basic Functionality Provided by
Web Servers
Functionality

Description

Processing of HTTP requests

Receive and respond to client requests for HTML
pages

Security services (Secure
Sockets Layer)/ Transport Layer
Security

Verify username and password; process certificates
and private/public key information required for credit
card processing and other secure information

File Transfer Protocol

Permits transfer of very large files from server to
server

Search engine

Indexing of site content; keyword search capability

Data capture

Log file of all visits, time, duration, and referral
source

E-mail

Ability to send, receive, and store e-mail messages

Site management tools

Calculate and display key site statistics, such as
unique visitors, page requests, and origin of
requests; check links on pages

Site Management Tools
• Basic tools included in all web servers
– Verify that links on pages are still valid
– Identify orphan files
• Third-party software for advanced management
– Monitor customer purchases
– Marketing campaign effectiveness
– Keep track of hit counts and other statistics
– E.g. Webtrends Analytics 10

Dynamic Page Generation Tools
• Dynamic page generation:
– Contents stored in database and fetched when
needed
• Common tools:
– CGI, ASP, JSP, ODBC, JDBC
• Advantages
– Lowers menu costs
– Permits easy online market segmentation
– Enables cost-free price discrimination
– Enables content management system (CMS)
Copyright © 2019 Pearson Education, Ltd.

Application Servers
• Web application servers:
– Provide specific business functionality required for a
website
– Type of middleware
▪ Isolate business applications from Web servers
and databases
– Single-function applications being replaced by
integrated software tools that combine all functionality
needed for e-commerce site

E-Commerce Merchant Server Software
• Provides basic functionality for sales
– Online catalog
▪ List of products available on website
– Shopping cart
▪ Allows shoppers to set aside, review, edit
selections, and then make purchase
– Credit card processing
▪ Typically works in conjunction with shopping cart
▪ Verifies card and puts through credit to company’s
account at checkout
Copyright © 2019 Pearson Education, Ltd.

Merchant Server Software Packages (1 of 2)
• Integrated environment that includes most of functionality
needed
– Shopping cart
– Merchandise display
– Order management
• Two main options
– E-commerce merchant service sites (e.g. Yahoo
Aabaco Small Business)
– Open-source merchant server software

Merchant Server Software Packages (2 of 2)
• Key factors in selecting a package
– Functionality
– Support for different business models, including (mcommerce)
– Business process modeling tools
– Visual site management and reporting
– Performance and scalability
– Connectivity to existing business systems
– Compliance with standards
– Global and multicultural capability
– Local sales tax and shipping rules
Copyright © 2019 Pearson Education, Ltd.

Choosing Hardware
• Hardware platform:
– Underlying computing equipment needed for ecommerce functionality
• Objective:
– Enough platform capacity to meet peak demand
without wasting money
• Important to understand the factors that affect speed,
capacity, and scalability of a site

Right-Sizing Your Hardware Platform: the
Demand Side
• Customer demand:
– Most important factor affecting speed of site
• Factors in overall demand:
– Number of simultaneous users in peak periods
– Nature of customer requests (user profile)
– Type of content (dynamic v s. static Web pages)
– Required security
– Number of items in inventory
– Number of page requests
– Speed of legacy applications
ersu

Right-Sizing Your Hardware Platform: the
Supply Side
• Scalability:
– Ability of site to increase in size as demand warrants
• Ways to scale hardware:
– Vertically
▪ Increase processing power of individual
components
– Horizontally
▪ Employ multiple computers to share workload
– Improve processing architecture
– Outsource to cloud service, CDN
Copyright © 2019 Pearson Education, Ltd.

Table 3.8 Vertical and Horizontal Scaling
Techniques
Technique

Application

Use a faster computer

Deploy edge servers, presentation servers, data
servers, etc.

Create a cluster of computers

Use computers in parallel to balance loads.

Use appliance servers

Use special-purpose computers optimized for their
task.

Segment workload

Segment incoming work to specialized computers.

Batch requests

Combine related requests for data into groups,
process as group.

Manage connections

Reduce connections between processes and
computers to a minimum.

Aggregate user data

Aggregate user data from legacy applications in
single data pools.

Cache

Store frequently used data in cache rather than on
the disk.
Copyright © 2019 Pearson Education, Ltd.

Table 3.9 Improving the Processing
Architecture of Your Site
Architecture Improvement

Description

Separate static content from
dynamic content

Use specialized servers for each type of workload.

Cache static content

Increase RAM to the gigabyte range and store
static content in RAM.

Cache database lookup tables

Use cache tables used to look up database
records.

Consolidate business logic on
dedicated servers

Put shopping cart, credit card processing, and
other CPU-intensive activity on dedicated servers.

Optimize ASP code

Examine your code to ensure it is operating
efficiently.

Optimize the database schema

Examine your database search times and take
steps to reduce access times.

Other E-Commerce Site Tools
• Website design: Basic business considerations
– Enabling customers to find and buy what they need
• Tools for search engine optimization
– Search engine placement
▪ Metatags, titles, content
▪ Identify market niches
▪ Offer expertise
▪ Links
▪ Buy ads
▪ Local e-commerce
Copyright © 2019 Pearson Education, Ltd.

Table 3.10 E-Commerce Website Features
That Annoy Customers (1 of 2)
Feature
• Requiring user to view ad or intro page before going to website
content
• Pop-up and pop-under ads and windows

• Too many clicks to get to the content
• Links that don’t work
• Confusing navigation; no search function

• Requirement to register and log in before viewing content or ordering
• Slow loading pages
• Content that is out of date
Copyright © 2019 Pearson Education, Ltd.

Table 3.10 E-Commerce Website Features
That Annoy Customers (2 of 2)
• Inability to use browser’s Back button
• No contact information available (web form only)
• Unnecessary splash/flash screens, animation, etc.
• Music or other audio that plays automatically

• Unprofessional design elements
• Text not easily legible due to size, color, format
• Typographical errors

• No or unclear returns policy

Table 3.11 The Eight Most Important Factors
in Successful E-Commerce Site Design
Factor

Description

Functionality

Pages that work, load quickly, and point the customer toward
your product offerings

Informational

Links that customers can easily find to discover more about
you and your products

Ease of use

Simple foolproof navigation

Redundant navigation

Alternative navigation to the same content

Ease of purchase

One or two clicks to purchase

Multi-browser
functionality

Site works with the most popular browsers

Simple graphics

Avoids distracting, obnoxious graphics and sounds that the
user cannot control

Legible text

Avoids backgrounds that distort text or make it illegible

Tools for Interactivity and Active Content
• CGI (Common Gateway Interface)
• ASP (Active Server Pages)/ASP.NET
• Java, JSP, and JavaScript

• ActiveX and VB Script
• ColdFusion
• PHP, Ruby on Rails, Django

• Other design elements:
– Widgets, mashups
Copyright © 2019 Pearson Education, Ltd.

Personalization Tools
• Personalization
– Ability to treat people based on personal qualities and
prior history with site
• Customization
– Ability to change the product to better fit the needs of
the customer
• Cookies
– Primary method to achieve personalization

The Information Policy Set
• Privacy policy
– Set of public statements declaring how site will treat
customers’ personal information that is gathered by
site

• Accessibility rules
– Set of design objectives that ensure disabled users
can effectively access site

Insight on Society: Designing for
Accessibility
• Class discussion:
– Why might some merchants be reluctant to make their
websites accessible to disabled users?
– How can websites be made more accessible?
– Should all websites be required by law to provide
“equivalent alternatives” for visual and sound
content?
– What additional accessibility problems do mobile
devices pose?

Developing a Mobile Website and Building
Mobile Applications
• Types of m-commerce software
– Mobile website
▪ Responsive Web design
– Mobile Web app
– Native app
– Hybrid app
▪ Runs inside native container
▪ App distribution
▪ Based on HTML5, CSS, JavaScript

Planning and Building a Mobile Presence
• Identify business objectives, system functionality, and
information requirements
• Choice:
– Mobile website or mobile Web app
▪ Less expensive
– Native app
▪ Can use device hardware, available offline

Table 3.13 Unique Features That Must be Taken
into Account When Designing a Mobile Presence
Feature

Implications For Mobile Platform

Hardware

Mobile hardware is smaller, and there are more resource
constraints in data storage and processing power.

Connectivity

The mobile platform is constrained by slower connection
speeds than desktop websites.

Displays

Mobile displays are much smaller and require simplification. Some
screens are not good in sunlight.

Interface

Touch-screen technology introduces new interaction
routines different from the traditional mouse and keyboard.
The mobile platform is not a good data entry tool but can
be a good navigational tool.

Mobile Presence Design Considerations
• Platform constraints
– Graphics, file sizes
• Mobile first design
– Desktop website design after mobile design

• Responsive web design (RWD)
– CSS site adjusts layout of site according to device screen
resolutions
• Adaptive web design (AWD)
– Server delivers different templates or versions of site
optimized for device
Copyright © 2019 Pearson Education, Ltd.

Cross-Platform Mobile App Development
Tools
• Objective C, Java
• Low cost, open-source alternatives
– Appery.io
– Codiqa
– PhoneGap
– MoSync
– Appcelerator

Mobile Presence: Performance and Cost
Considerations
• Mobile first design: Most efficient
• Mobile website:
– Resizing existing website for mobile access is least
expensive

• Mobile web app:
– Can utilize browser API
• Native app:
– Most expensive; requires more programming

Insight on Technology: Carnival Cruise
Ships Go Mobile
• Class Discussion
– What influenced Carnival in deciding to create a
mobile app?
– Are there any disadvantages in making a mobile app
a central part of the Carnival Cruise experience?
– How will the Ocean Medallion system add value to
the cruising experience?

Careers in E-Commerce
• Position: UX Designer
• Qualification/Skills
• Preparing for the Interview

• Possible Interview Questions

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 4
E-Commerce Security and
Payment Systems

Learning Objectives
4.1 Understand the scope of e-commerce crime and security problems,
the key dimensions of e-commerce security, and the tension between
security and other values.
4.2 Identify the key security threats in the e-commerce environment.
4.3 Describe how technology helps secure Internet communications
channels and protect networks, servers, and clients.
4.4 Appreciate the importance of policies, procedures, and laws in
creating security.
4.5 Identify the major e-commerce payment systems in use today.
4.6 Describe the features and functionality of electronic billing
presentment and payment systems.
Copyright © 2019 Pearson Education, Ltd.

The Rise of the Global Cyberattack:
WannaCry and NotPetya
Class Discussion
– Have you or anyone you know been the subject of a
cybercrime? If so, what happened?
– Do you think an agreement among countries akin to
the Geneva Convention will be an effective deterrent
for cybercrime? Why or why not?
– What steps have you taken to protect yourself online?

The E-Commerce Security Environment
• Overall size and losses of cybercrime unclear
– Reporting issues
• 2017 survey: Average total cost of data breach to U.S.
corporations was $21 million

• Low-cost web attack kits
• Online credit card fraud
• Underground economy marketplace

What is Good E-Commerce Security?
• To achieve highest degree of security
– New technologies
– Organizational policies and procedures
– Industry standards and government laws

• Other factors
– Time value of money
– Cost of security v s. potential loss
– Security often breaks at weakest link
ersu

Figure 4.1 The E-Commerce Security
Environment

Note;Figure 5.1, Page 262.
E-commerce security is multilayered, and must take into account
new technology, policies and
procedures, and laws and industry
standards.
Copyright © 2019 Pearson Education, Ltd.

Table 4.3 Customer and Merchant Perspectives on
the Different Dimensions of E-Commerce Security
Dimension

Customer’s Perspective

Merchant’s Perspective

Integrity

Has information I transmitted or
received been altered?

Has data on the site been altered without
authorization? Is data being received
from customers valid?

Nonrepudiation

Can a party to an action with me
later deny taking the action?

Can a customer deny ordering products?

Authenticity

Who am I dealing with? How can I
be assured that the person or
entity is who they claim to be?

What is the real identity of the customer?

Confidentiality

Can someone other than the
intended recipient read my
messages?

Are messages or confidential data
accessible to anyone other than those
authorized to view them?

Privacy

Can I control the use of
information about myself
transmitted to an
e-commerce merchant?

What use, if any, can be made of
personal data collected as part of an ecommerce transaction? Is the personal
information of customers being used in
an unauthorized manner?

Availability

Can I get access to the site?

The Tension between Security and Other
Values
• Ease of use
– The more security measures added, the more difficult
a site is to use, and the slower it becomes
• Public safety and criminal uses of the Internet
– Use of technology by criminals to plan crimes or
threaten nation-state

Security Threats in the E-Commerce
Environment
• Three key points of vulnerability in e-commerce
environment:
– Client
– Server
– Communications pipeline (Internet communications
channels)

Figure 4.2 A Typical E-Commerce
Transaction

Figure 4.3 Vulnerable Points in an ECommerce Transaction

Malicious Code
• Exploits and exploit kits
• Malvertising
• Drive-by downloads
• Viruses
• Worms
• Ransomware
• Trojan horses

Potentially Unwanted Programs
• Browser parasites
– Monitor and change user’s browser
• Adware
– Used to call pop-up ads
• Spyware
– Track’s users keystrokes, e-mails, IMs, etc.

Phishing
• Any deceptive, online attempt by a third party to obtain
confidential information for financial gain
• Tactics
– Social engineering
– E-mail scams and BEC phishing
– Spear phishing
• Used for identity fraud and theft

Hacking, Cybervandalism, and Hacktivism
• Hacking
– Hackers v s. crackers
– White hats, black hats, grey hats
– Tiger teams
– Goals: cybervandalism, data breaches
ersu

• Cybervandalism:
– Disrupting, defacing, destroying Web site

• Hacktivism

Data Breaches
• When organizations lose control over corporate
information to outsiders
• 15 major breaches in 2016, 1.1 billion identities exposed
• Yahoo and Equifax two of the most notorious
• Leading causes
– Hacking
– Employee error/negligence
– Accidental e-mail/Internet exposure
– Insider theft
Copyright © 2019 Pearson Education, Ltd.

Insight on Society: Equifax: Really Big
Data Hacked
• Class Discussion
– What organizational and technological failures led to
the data breach at Equifax?
– What technical solutions are available to combat data
breaches?
– Have you or anyone you know experienced a data
breach?

Credit Card Fraud/Theft
• Stolen credit card incidences about 0.9% on the Web and
about 0.8% of mobile transactions
• Hacking and looting of corporate servers is primary cause
• Central security issue: establishing customer identity
– E-signatures
– Multi-factor authentication
– Fingerprint identification

Identity Fraud/Theft
• Unauthorized use of another person’s personal data for
illegal financial benefit
– Social security number
– Driver’s license
– Credit card numbers
– Usernames/passwords
• 2016: Over 15 million U.S. consumers suffered identity
fraud

Spoofing, Pharming, and Spam (Junk)
Websites
• Spoofing
– Attempting to hide true identity by using someone
else’s e-mail or IP address
• Pharming
– Automatically redirecting a web link to an different
address, to benefit the hacker
• Spam (junk) websites
– Offer collection of advertisements for other sites,
which may contain malicious code

Sniffing and Man-In-The-Middle Attacks
• Sniffer
– Eavesdropping program monitoring networks
– Can identify network trouble spots
– Can be used by criminals to steal proprietary information

• E-mail wiretaps
– Recording e-mails at the mail server level
• Man-in-the-middle attack
– Attacker intercepts and changes communication between
two parties who believe they are communicating directly

Denial of Service (DoS) and Distributed
Denial of Service (DDoS) Attacks
• Denial of service (DoS) attack
– Flooding website with pings and page request
– Overwhelm and can shut down site’s web servers
– Often accompanied by blackmail attempts
– Botnets
• Distributed Denial of Service (DDoS) attack
– Uses hundreds or thousands of computers to attack target
network
– Can use devices from Internet of Things, mobile devices
• DDoS smokescreening
Copyright © 2019 Pearson Education, Ltd.

Insider Attacks
• Largest threat to business institutions come from insider
embezzlement
• Employee access to privileged information
• Poor security procedures
• Insiders more likely to be source of cyberattacks than
outsiders

Poorly Designed Software
• Increase in complexity of and demand for software has
led to increase in flaws and vulnerabilities
• SQL injection attacks
• Zero-day vulnerability
• Heartbleed bug; Shellshock (BashBug); FREAK

Social Network Security Issues
• Social networks an environment for:
– Viruses, site takeovers, identity fraud, malwareloaded apps, click hijacking, phishing, spam
• Manual sharing scams
– Sharing of files that link to malicious sites
• Fake offerings, fake Like buttons, and fake apps

Mobile Platform Security Issues
• Little public awareness of mobile device vulnerabilities
• 2016: 18 million mobile malware infections
• Vishing

• Smishing
• SMS spoofing
• Madware

Insight on Technology: Think Your
Smartphone is Secure?
• Class Discussion
– What types of threats do smartphones face?
– Are there any particular vulnerabilities to mobile
devices
– What qualities of apps make them a vulnerable
security point in smartphone use
– Are apps more or less likely to be subject to threats
than traditional PC software programs?

Cloud Security Issues
• DDoS attacks
• Infrastructure scanning
• Lower-tech phishing attacks yield passwords and access

• Use of cloud storage to connect linked accounts
• Lack of encryption and strong security procedures

Internet of Things Security Issues
• Challenging environment to protect
• Vast quantity of interconnected links
• Near identical devices with long service lives

• Many devices have no upgrade features
• Little visibility into workings, data, or security

Technology Solutions
• Protecting Internet communications
– Encryption
• Securing channels of communication
– SSL, TLS, VPNs, Wi-Fi
• Protecting networks
– Firewalls, proxy servers, IDS, IPS
• Protecting servers and clients
– OS security, anti-virus software

Figure 4.5 Tools Available to Achieve Site
Security

Encryption
• Encryption
– Transforms data into cipher text readable only by
sender and receiver
– Secures stored information and information
transmission
– Provides 4 of 6 key dimensions of e-commerce
security:
▪ Message integrity
▪ Nonrepudiation
▪ Authentication
▪ Confidentiality
Copyright © 2019 Pearson Education, Ltd.

Symmetric Key Cryptography
• Sender and receiver use same digital key to encrypt and
decrypt message
• Requires different set of keys for each transaction
• Strength of encryption: Length of binary key
• Data Encryption Standard (DES)
• Advanced Encryption Standard (AES)
• Other standards use keys with up to 2,048 bits

Public Key Cryptography
• Uses two mathematically related digital keys
– Public key (widely disseminated)
– Private key (kept secret by owner)
• Both keys used to encrypt and decrypt message
• Once key used to encrypt message, same key cannot be
used to decrypt message
• Sender uses recipient’s public key to encrypt message;
recipient uses private key to decrypt it

Figure 4.6 Public Key Cryptography: A
Simple Case

Note: Figure 5.6, Page 293.
In the simplest use of public key cryptography, the sender encrypts a message using the recipient’s
public key, and then sends it over the Internet. The only person who can decrypt this message is
the recipient, using his or her private key. However, this simple case does not ensure integrity or an
authentic message.
Copyright © 2019 Pearson Education, Ltd.

Public Key Cryptography Using Digital
Signatures and Hash Digests
• Sender applies a mathematical algorithm (hash function)
to a message and then encrypts the message and hash
result with recipient’s public key
• Sender then encrypts the message and hash result with
sender’s private key—creating digital signature—for
authenticity, nonrepudiation
• Recipient first uses sender’s public key to authenticate
message and then the recipient’s private key to decrypt
the hash result and message

Figure 4.7 Public Key Cryptography with
Digital Signatures
Note:Figure 5.7, Page 295.
A more realistic use of public
key cryptography uses hash
functions and digital
signatures to both ensure
the confidentiality of the
message and authenticate
the sender. The only person
who could have sent the
above message is the owner
or the sender using his/her
private key. This
authenticates the message.
The hash function ensures
the message was not altered
in transit. As before, the only
person who can decipher the
message is the recipient,
using his/her private key.

Digital Envelopes
• Address weaknesses of:
– Public key cryptography
▪ Computationally slow, decreased transmission
speed, increased processing time
– Symmetric key cryptography
▪ Insecure transmission lines
• Uses symmetric key cryptography to encrypt document

• Uses public key cryptography to encrypt and send
symmetric key

Figure 4.8 Creating a Digital Envelope

Note:Figure 5.8, Page 296.
A digital envelope can be
created to transmit a
symmetric key that will
permit the recipient to
decrypt the message and be
assured the message was
not intercepted in transit.
Copyright © 2019 Pearson Education, Ltd.

Digital Certificates and Public Key
Infrastructure (PKI)
• Digital certificate includes:
– Name of subject/company
– Subject’s public key
– Digital certificate serial number
– Expiration date, issuance date
– Digital signature of CA
• Public Key Infrastructure (PKI):
– CAs and digital certificate procedures
– PGP

Figure 4.9 Digital Certificates and
Certification Authorities

Note: Figure 5.9,
Page 297.
The PKI includes
certification authorities
that issue, verify, and
guarantee digital
certificates that are
used in e-commerce
to assure the identity
of transaction
partners.

Limitations of PKI
• Doesn’t protect storage of private key
– PKI not effective against insiders, employees
– Protection of private keys by individuals may be
haphazard

• No guarantee that verifying computer of merchant is
secure
• CAs are unregulated, self-selecting organizations

Securing Channels of Communication
• Secure Sockets Layer (SSL)/Transport Layer Security
(TLS)
– Establishes secure, negotiated client–server
session

• Virtual Private Network (VPN)
– Allows remote users to securely access internal
network via the Internet
• Wireless (Wi-Fi) networks
– WPA2

Figure 4.10 Secure Negotiated Sessions
Using SSL/TLS

Note: Figure 5.10, Page 300.
Certificates play a key role in using SSL/TLS to
establish a secure communications channel.

Protecting Networks
• Firewall
– Hardware or software that uses security policy to filter packets
▪ Packet filters
▪ Application gateways
– Next-generation firewalls
• Proxy servers (proxies)
– Software servers that handle all communications from or sent to
the Internet
• Intrusion detection systems
• Intrusion prevention systems

Figure 4.11 Firewalls and Proxy Servers

Note: Figure 5.11, Page 303.
The primary function of a firewall is to deny access by remote client computers to local
computers. The primary purpose of a proxy server is to provide controlled access from local
computers to remote computers.
Copyright © 2019 Pearson Education, Ltd.

Protecting Servers and Clients
• Operating system security enhancements
– Upgrades, patches
• Anti-virus software
– Easiest and least expensive way to prevent threats to
system integrity
– Requires daily updates

Management Policies, Business Procedures,
and Public Laws
• Worldwide, companies spend more than $86 billion on
security hardware, software, services
• Managing risk includes:
– Technology
– Effective management policies
– Public laws and active enforcement

A Security Plan: Management Policies
• Risk assessment
• Security policy
• Implementation plan
– Security organization
– Access controls
– Authentication procedures, including biometrics
– Authorization policies, authorization management
systems
• Security audit
Copyright © 2019 Pearson Education, Ltd.

Figure 4.12 Developing an E-Commerce
Security Plan

The Role of Laws and Public Policy
• Laws that give authorities tools for identifying, tracing,
prosecuting cybercriminals:
– USA Patriot Act
– Homeland Security Act

• Private and private-public cooperation
– US-CERT
– CERT Coordination Center
• Government policies and controls on encryption software
– OECD, G7/G8, Council of Europe, Wassener Arrangement

E-Commerce Payment Systems
• In U.S., credit and debit cards are primary online
payment methods
– Other countries have different systems
• Online credit card purchasing cycle

Figure 4.14 How an Online Credit
Transaction Works

Note :Figure 5.14, Page 313.

Alternative Online Payment Systems
• Online stored value systems:
– Based on value stored in a consumer’s bank,
checking, or credit card account
– Example: PayPal

• Other alternatives:
– Pay with Amazon
– Visa Checkout, Mastercard’s MasterPass
– Bill Me Later
– WUPay, Dwolla, Stripe

Mobile Payment Systems
• Use of mobile phones as payment devices
– Established in Europe and Asia
– Expanding in United States
▪ Apple Pay, Android Pay, Samsung Pay, PayPal,
Square
• Near field communication (NFC)
• Social/Mobile Peer-to-Peer Payment Systems

Digital Cash and Virtual Currencies
• Digital cash
– Based on algorithm that generates unique tokens that
can be used in “real” world
– Example: Bitcoin

• Virtual currencies
– Circulate within internal virtual world
– Example: Linden Dollars in Second Life
– Typically used for purchasing virtual goods

Insight on Business: Bitcoin
• Class Discussion
– What are some of the benefits of using a digital
currency?
– What are the risks involved to the user?
– What are the political and economic repercussions of
a digital currency?
– Have you or anyone you know ever used Bitcoin?

Electronic Billing Presentment and
Payment (EBPP)
• Online payment systems for monthly bills
• Over 55% of all bill payments
• Four EBPP business models:
– Online banking model (most widely used)
– Biller-direct
– Mobile
– Consolidator

Careers in E-Commerce
• Position: Cybersecurity Threat Management Team
Trainee
• Qualification/Skills
• Preparing for the Interview
• Possible Interview Questions

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 5
E-Commerce Business
Strategies

Learning Objectives
2.1 Identify the key components of e-commerce business
models.

2.2 Describe the major B2C business models.
2.3 Describe the major B2B business models.
2.4 Understand key business concepts and strategies
applicable to e-commerce.

Ace & Tate: Disrupting the European
Eyewear Industry
• Class Discussion
– How do companies like Ace & Tate disrupt traditional
supply chains?
– What kind of infrastructure does a company that sells
online exclusively require?
– How does Ace & Tate engage with its demographic?
– Should Ace & Tate expand its physical retail
presence?

E-Commerce Business Models
• Business model
– Set of planned activities designed to result in a profit
in a marketplace
• Business plan
– Describes a firm’s business model
• E-commerce business model
– Uses/leverages unique qualities of Internet and Web

Eight Key Elements of a Business Model
1. Value proposition
2. Revenue model
3. Market opportunity

1. Value Proposition
• “Why should the customer buy from you?”
• Successful e-commerce value propositions:
– Personalization/customization
– Reduction of product search, price discovery costs
– Facilitation of transactions by managing product
delivery

2. Revenue Model
• “How will you earn money?”
• Major types of revenue models:
– Advertising revenue model
– Subscription revenue model
▪ Freemium strategy
– Transaction fee revenue model
– Sales revenue model
– Affiliate revenue model

Insight on Society: Foursquare: Check
Your Privacy at the Door
• Class discussion:
– What revenue model does Foursquare use? What
other revenue models might be appropriate?
– Are privacy concerns the only shortcoming of
location-based mobile services?
– Should business firms be allowed to text or call
mobile devices with advertising messages based on
location?

3. Market Opportunity
• “What marketspace do you intend to serve and what is its
size?”
– Marketspace: Area of actual or potential commercial
value in which company intends to operate
– Realistic market opportunity: Defined by revenue
potential in each market niche in which company
hopes to compete

• Market opportunity typically divided into smaller niches

4. Competitive Environment
• “Who else occupies your intended marketspace?”
– Other companies selling similar products in the same
marketspace
– Includes both direct and indirect competitors
• Influenced by:
– Number and size of active competitors
– Each competitor’s market share
– Competitors’ profitability
– Competitors’ pricing

5. Competitive Advantage
• “What special advantages does your firm bring to the
marketspace?”
– Is your product superior to or cheaper to produce than
your competitors’?
• Important concepts:
– Asymmetries
– First-mover advantage, complementary resources
– Unfair competitive advantage
– Leverage
– Perfect markets
Copyright © 2019 Pearson Education, Ltd.

6. Market Strategy
• “How do you plan to promote your products or services to
attract your target audience?”
– Details how a company intends to enter market and
attract customers
– Best business concepts will fail if not properly
marketed to potential customers

7. Organizational Development
• “What types of organizational structures within the firm
are necessary to carry out the business plan?”

• Describes how firm will organize work
– Typically, divided into functional departments
– As company grows, hiring moves from generalists to
specialists

8. Management Team
• “What kind of backgrounds should the company’s leaders
have?”

• A strong management team:
– Can make the business model work
– Can give credibility to outside investors
– Has market-specific knowledge
– Has experience in implementing business plans

Raising Capital
• Seed capital
• Elevator pitch
• Traditional sources
– Incubators, angel investors
– Commercial banks, venture capital firms
– Strategic partners

• Crowdfunding
– JOBS Act

Insight on Business: Crowdfunding Takes off
• Class Discussion
– What types of projects and companies might be able
to most successfully use crowdfunding?
– Are there any negative aspects to crowdfunding?
– What obstacles are presented in the use of
crowdfunding as a method to fund startups?

Categorizing E-Commerce Business Models
• No one correct way
• Text categorizes according to:
– E-commerce sector (e.g., B2B)
– E-commerce technology (e.g., m-commerce)
• Similar models appear in different sectors
• Companies may use multiple business models (e.g.,
eBay)

• E-commerce enablers

B2C Business Models
• E-tailer
• Community provider (social network)
• Content provider

• Portal
• Transaction broker
• Market creator
• Service provider

B2C Models: E-Tailer
• Online version of traditional retailer
• Revenue model: Sales
• Variations:
– Virtual merchant
– Bricks-and-clicks
– Catalog merchant
– Manufacturer-direct

• Low barriers to entry

B2C Models: Community Provider
• Provide online environment (social network) where
people with similar interests can transact, share content,
and communicate
– Examples: Facebook, LinkedIn, Twitter, Pinterest
• Revenue models:
– Typically hybrid, combining advertising, subscriptions,
sales, transaction fees, and so on

B2C Models: Content Provider
• Digital content on the Web:
– News, music, video, text, artwork

• Revenue models:
– Use variety of models, including advertising,
subscription; sales of digital goods
– Key to success is typically owning the content
• Variations:
– Syndication
– Aggregators
Copyright © 2019 Pearson Education, Ltd.

Insight on Technology: Crowdfunding Takes
Off
• Class Discussion
– What types of projects and companies might be able
to most successfully use crowdfunding?
– Are there any negative aspects to crowdfunding?
– What obstacles are presented in the use of
crowdfunding as a method to fund startups?

B2C Business Models: Portal
• Search plus an integrated package of content and
services

• Revenue models:
– Advertising, referral fees, transaction fees,
subscriptions for premium services
• Variations:
– Horizontal/general
– Vertical/specialized (vortal)
– Search

B2C Models: Transaction Broker
• Process online transactions for consumers
– Primary value proposition—saving time and money

• Revenue model:
– Transaction fees
• Industries using this model:
– Financial services
– Travel services
– Job placement services

B2C Models: Market Creator
• Create digital environment where buyers and sellers can
meet and transact
– Examples: Priceline, eBay
– Revenue model: Transaction fees, fees to merchants
for access

• On-demand service companies (sharing economy):
platforms that allow people to sell services
– Examples: Uber, Airbnb

B2C Models: Service Provider
• Online services
– Example: Google—Google Maps, Gmail, and so on

• Value proposition
– Valuable, convenient, time-saving, low-cost
alternatives to traditional service providers
• Revenue models:
– Sales of services, subscription fees, advertising, sales
of marketing data

B2B Business Models
• Net marketplaces
– E-distributor
– E-procurement
– Exchange
– Industry consortium

• Private industrial network

B2B Models: E-Distributor
• Version of retail and wholesale store, MRO goods, and
indirect goods

• Owned by one company seeking to serve many
customers
• Revenue model: Sales of goods
• Example: Grainger

B2B Models: E-Procurement
• Creates digital markets where participants transact for
indirect goods
– B2B service providers, SaaS and PaaS providers
– Scale economies
• Revenue model:
– Service fees, supply-chain management, fulfillment
services
• Example: Ariba

B2B Models: Exchanges
• Independently owned vertical digital marketplace for
direct inputs

• Revenue model: Transaction, commission fees
• Create powerful competition between suppliers
• Tend to force suppliers into powerful price competition;
number of exchanges has dropped dramatically

B2B Models: Industry Consortia
• Industry-owned vertical digital marketplace open to select
suppliers

• More successful than exchanges
– Sponsored by powerful industry players
– Strengthen traditional purchasing behavior
• Revenue model: Transaction, commission fees

• Example: SupplyOn

Private Industrial Networks
• Digital network used to coordinate among firms engaged
in business together

• Typically evolve out of large company’s internal
enterprise system
– Key, trusted, long-term suppliers invited to network
• Example: Walmart’s network for suppliers

How E-Commerce Changes Business
• E-commerce changes industry structure by changing:
– Rivalry among existing competitors
– Barriers to entry
– Threat of new substitute products
– Strength of suppliers
– Bargaining power of buyers

• Industry structural analysis

Industry Value Chains
• Set of activities performed by suppliers, manufacturers,
transporters, distributors, and retailers that transform raw
inputs into final products and services
• Internet reduces cost of information and other
transactional costs

• Leads to greater operational efficiencies, lowering cost,
prices, adding value for customers

Figure 2.4 E-Commerce and Industry
Value Chains

NOTE: Figure 2.4, Page 90.
Every industry can be characterized by a set of value-adding activities performed by a
variety of actors. E-commerce potentially affects the capabilities of each player as well
as the overall operational efficiency of the industry.
Copyright © 2019 Pearson Education, Ltd.

Firm Value Chains
• Activities that a firm engages in to create final products
from raw inputs

• Each step adds value
• Effect of Internet:
– Increases operational efficiency
– Enables product differentiation
– Enables precise coordination of steps in chain

Figure 2.5 E-Commerce and Firm Value
Chains
NOTE: Figure 2.5, page 91.
Every firm can be characterized by a set of value-adding
primary and secondary activities performed by a variety of
actors in the firm. A simple firm value chain performs five
primary value-adding steps: inbound logistics, operations,
outbound logistics, sales and marketing, and after sales
service.

Firm Value Webs
• Networked business ecosystem
• Uses Internet technology to coordinate the value chains
of business partners

• Coordinates a firm’s suppliers with its own production
needs using an Internet-based supply chain management
system

Figure 2.6 Internet-Enabled Value Web

NOTE: Figure 2.6, page 92.
Internet technology enables
firms to create an
enhanced value web in
cooperation with their
strategic alliance and
partner firms, customers,
and direct and indirect
suppliers.
Copyright © 2019 Pearson Education, Ltd.

Business Strategy
• Plan for achieving superior long-term returns on capital
invested: that is, profit

• Five generic strategies
– Product/service differentiation
– Cost competition
– Scope
– Focus/market niche
– Customer intimacy

E-Commerce Technology and Business
Model Disruption
• Disruptive technologies
• Digital disruption
• Sustaining technology

• Stages
– Disruptors introduce new products of lower quality
– Disruptors improve products
– New products become superior to existing products
– Incumbent companies lose market share

Careers in E-Commerce
• Position: Assistant Manager of E-business
• Qualification/Skills
• Preparing for the Interview

• Possible Interview Questions

E-Commerce 2018: Business. Technology.
Society
Fourteenth Edition

Chapter 6
E-commerce Marketing and
Advertising

Learning Objectives
6.1 Understand the key features of the Internet audience,
the basic concepts of consumer behavior and purchasing,
and how consumers behave online.
6.2 Identify and describe the basic digital commerce
marketing and advertising strategies and tools.

6.3 Identify and describe the main technologies that
support online marketing.
6.4 Understand the costs and benefits of online marketing
communications.

InMobi’s Global Mobile Ad Network
• Class Discussion
– What advantages do mobiles have over traditional
banner ads?
– Where do social networking sites such as Facebook
fit in to a marketing strategy featuring mobile ads?
– What are some of the challenges and risks of placing
ads on the Web?
– Do you think Internet users will ever develop
“blindness” toward ads on the Web as well?

Consumers Online: The Internet Audience
and Consumer Behavior (1 of 3)
• Over 75% (94 million) U.S. households have broadband
Internet access in 2016

• Growth rate has slowed
• Intensity and scope of use both increasing
• Some demographic groups have much higher
percentages of online usage
– Income, education, age, ethnic dimensions

Consumers Online: The Internet Audience
and Consumer Behavior (2 of 3)
• Broadband and mobile
– Significant inequalities in broadband access
– Older adults, lower income, lower educational levels
– Non-broadband household still accesses Internet via
mobile or other locations

• Community effects
– Role of social emulation in consumption decisions
– “Connectedness”
▪ Top 10–15% are more independent
▪ Middle 50% share more purchase patterns of friends
– Recommender systems – co-purchase networks
Copyright © 2019 Pearson Education, Ltd.

Consumers Online: The Internet Audience
and Consumer Behavior (3 of 3)
• Consumer behavior models
– Study of consumer behavior; social science discipline
– Attempt to predict or explain wide range of consumer
decisions
– Based on background demographic factors and other
intervening, more immediate variables
• Profiles of online consumers
– Consumers shop online primarily for convenience

Figure 6.1 A General Model of Consumer
NOTE: Figure 6.1, Page 351.
Behavior
Consumer behavior models try to
predict the decisions that
consumers make in the
marketplace.
SOURCE: Adapted from Kotler
and Armstrong, 2009.

The Online Purchasing Decision (1 of 2)
• Five stages in consumer decision process
– Awareness of need
– Search for more information
– Evaluation of alternatives
– Actual purchase decision
– Post-purchase contact with firm

Figure 6.2 The Consumer Decision Process
and Supporting Communications

The Online Purchasing Decision (2 of 2)
• Decision process similar for online and offline behavior
• General online behavior model
– User characteristics
– Product characteristics
– Website features: latency, usability, security
– Attitudes toward online purchasing
– Perceptions about control over Web environment
• Clickstream behavior

Figure 6.3 A Model of Online Consumer
NOTE: Figure 6.3, Page
353.
Behavior
In this general model of
online consumer behavior,
the decision to purchase is
shaped by background
demographic factors,
several intervening
factors, and, finally,
influenced greatly by
clickstream behavior very
near to the precise
moment of purchase.

Shoppers: Browsers and Buyers
• Shoppers: Over 90% of Internet users
– Over 78% are buyers
– 13.2% are browsers (purchase offline)

• Online research influenced over $2.1 trillion of retail
purchases in 2016
• Online traffic also influenced by offline brands and
shopping
• E-commerce and traditional commerce are coupled: Part
of a continuum of consuming behavior

What Consumers Shop for and Buy Online
• Big ticket items ($1000 or more)
– Travel, computer hardware, electronics
– Consumers now more confident in purchasing costlier
items
• Small ticket items ($100 or less)
– Apparel, books, office supplies, software, etc.

• Sales of bulky goods, furniture and large appliances,
rapidly expanding

How Consumers Shop
• How shoppers find online vendors
– Highly intentional, goal-oriented
– Search engines
– Marketplaces (Amazon, eBay)
– Specific retail site

• About 8% of Internet users don’t shop online
– Trust factor
– Hassle factors (shipping costs, returns, etc.)

Trust, Utility, and Opportunism in Online
Markets
• Two most important factors shaping decision to purchase
online:
– Utility:
▪ Better prices, convenience, speed
– Trust:
▪ Perception of credibility, ease of use, perceived
risk
▪ Sellers develop trust by building strong reputations
for honesty, fairness, delivery

Digital Commerce Marketing and
Advertising: Strategies and Tools
• Features of Internet marketing (v s. traditional)
– More personalized
– More pa…
Purchase answer to see full
attachment

Share This Post

Order a Similar Paper and get 15% Discount on your First Order

Our Services

project E-commerce101 part 1,2 and presentation

Description

Share This Post

Related Questions

MGT 675 – Porject Title

ECOM500 Critical Thinking Modul#04

563 waled moudel3

563 faisal 3

Marketing Question

MKT-640: Digital Marketing Analytics

i need just editing the comment of my dr

MGT520 Module 02-Discussion Forum: The Performance Management Process

ct

Reply to discussion (Module 02: The Performance Management Process)

Reply to discussion (Module 02: The Performance Management Process)

375 ass 5

Reply to Globalization and Decision-Making Discussion 1

Reply to Globalization Discussion 2

506 waled

506 faisal

ECOM 500 – Dis 01 – M 02

MGT 672 – Dis 01 – M 02