E commerce TOC e-commerce commerce ecommerce
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INTRODUCTION TO E-COMMERCE ...................................................................................................1
E-COMMERCE: THE DEFINITION ..................................................................................................................2
E-COMMERCE AND E-BUSINESS...................................................................................................................2
INTERNET ECONOMY, E-COMMERCE, AND E-BUSINESS ...............................................................................3
DIMENSIONS OF E-COMMERCE ....................................................................................................................4
INTERNET VS NON-INTERNET E-COMMERCE ..............................................................................................5
CATEGORIES OF E-COMMERCE ....................................................................................................................5
Business-to-Business (B2B) ..................................................................................................................5
Business-to-Consumer (B2C) ................................................................................................................5
Business-to-Business-to-Consumer (B2B2C)........................................................................................6
Business-to-Government (B2G) ............................................................................................................6
Consumer-to-Business (C2B) ................................................................................................................6
Consumer-to-Consumer (C2C) ..............................................................................................................7
Business-to-Employee (B2E) .................................................................................................................7
Government-to-Government (G2G).......................................................................................................7
Government-to-Employee (G2E) ...........................................................................................................8
Government-to-Business (G2B) ............................................................................................................8
Government-to-Citizen (G2C) ...............................................................................................................8
Other Forms of E-commerce ..................................................................................................................8
ELECTRONIC DATA INTERCHANGE (EDI)....................................................................................................9
FORMS OF E- COMMERCE ORGANIZATIONS ..............................................................................................10
Brick-and-Mortar business ...................................................................................................................10
Click-and-Mortar Business ..................................................................................................................10
Virtual Business ...................................................................................................................................11
E-marketplaces .....................................................................................................................................11
INTERMEDIATION, DISINTERMEDIATION, REINTERMEDIATION, HYPERMEDIATION, AND SYNDICATION IN
E-COMMERCE ............................................................................................................................................12
DEVELOPMENT AND GROWTH OF E-COMMERCE .......................................................................................13
GENERATIONS OF E-COMMERCE ...............................................................................................................14
E-COMMERCE: CRITICAL SUCCESS FACTORS (CSF) .................................................................................15
Internal Factors.....................................................................................................................................15
External Factors ...................................................................................................................................16
E-COMMERCE: TECHNOLOGY TRENDS......................................................................................................18
E-COMMERCE: SUITABILITY OF PRODUCTS AND SERVICES .......................................................................20
ADVANTAGES AND DISADVANTAGES OF E-COMMERCE ............................................................................21
Advantages of E-commerce .................................................................................................................22
Disadvantages of E-commerce .............................................................................................................23
IMPACTS OF DIGITAL ECONOMY AND ORGANIZATIONAL RESPONSES .......................................................24
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The New Business Environment ..........................................................................................................24
Business Pressures ...............................................................................................................................25
Organizational Responses ....................................................................................................................25
PROMOTING GLOBAL E-COMMERCE: INTERNATIONAL COOPERATION, COLLABORATION, AND
REGULATIONS ...........................................................................................................................................28
E-COMMERCE FUTURE OUTLOOK..............................................................................................................29
REVIEW QUESTIONS ..................................................................................................................................30
BIBLIOGRAPHY..........................................................................................................................................31
E-COMMERCE INFRASTRUCTURE ...................................................................................................35
PRINCIPAL COMPONENTS OF E-COMMERCE INFRASTRUCTURE .................................................................36
E-COMMERCE AND BUSINESS PROCESSES .................................................................................................37
MAJOR PLAYERS IN E-COMMERCE ............................................................................................................38
THE INTERNET...........................................................................................................................................40
Switching .............................................................................................................................................40
Routing .................................................................................................................................................41
TCP/IP ..................................................................................................................................................41
Working of Internet ..............................................................................................................................41
Function of Router ...............................................................................................................................42
Protocol ................................................................................................................................................43
IP Addresses .........................................................................................................................................43
Domain Name Systems (DNS) ............................................................................................................44
URL: Uniform Resource Locator.........................................................................................................45
Internet Servers and Clients .................................................................................................................47
Ports and HTTP ....................................................................................................................................47
E-mail Protocols ...................................................................................................................................47
World Wide Web (WWW) ..................................................................................................................48
Markup Languages and the Web..........................................................................................................49
INTRANETS AND EXTRANETS ....................................................................................................................51
Intranets ................................................................................................................................................52
Extranets...............................................................................................................................................52
VIRTUAL PRIVATE NETWORK (VPN) ........................................................................................................52
STORAGE AREA NETWORKS (SANS) ........................................................................................................54
INTERNET CONNECTIVITY OPTIONS ..........................................................................................................54
Dial-up..................................................................................................................................................55
Integrated Services Digital Network (ISDN) .......................................................................................56
Broadband Connections .......................................................................................................................57
Wireless Connections ...........................................................................................................................61
EVOLUTION OF INTERNET AND WORLD WIDE WEB ..................................................................................63
Internet2 ...............................................................................................................................................63
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Web 2.0 ................................................................................................................................................64
Semantic Web ......................................................................................................................................64
E-COMMERCE 2.0 ......................................................................................................................................64
REVIEW QUESTIONS ..................................................................................................................................65
BIBLIOGRAPHY..........................................................................................................................................66
ELEMENTS OF E-COMMERCE ...........................................................................................................69
INTRODUCTION..........................................................................................................................................70
CLIENT-SERVER COMMUNICATION ...........................................................................................................70
WEB CONTENT ..........................................................................................................................................70
Static Content .......................................................................................................................................70
Dynamic Content .................................................................................................................................71
Dynamic Page-Generation Technologies .............................................................................................71
SOFTWARE FOR WEB SERVERS .................................................................................................................72
Open Source Software Vs Commercial Software ................................................................................72
Web Server Software ...........................................................................................................................72
Evaluating Efficiency of Your Website ...............................................................................................74
Operating Systems (OS) for Web Servers ...........................................................................................74
Web Server Market ..............................................................................................................................76
Finding Web Server Information .........................................................................................................78
Database Management Systems for Web Severs .................................................................................79
E-MAIL ......................................................................................................................................................81
SPAM.........................................................................................................................................................81
Solutions to the Spam Problem ............................................................................................................82
CONTENT FILTERING .................................................................................................................................84
E-mail Content Filtering ......................................................................................................................84
Web Content Filtering ..........................................................................................................................85
Bypassing Content Filtering.................................................................................................................85
WEBSITE AND INTERNET UTILITY PROGRAMS ..........................................................................................85
Finger and Ping Utilities ......................................................................................................................85
Traceroute and Other Route-Tracing Programs ...................................................................................86
Telnet and FTP Utilities .......................................................................................................................86
Indexing and Searching Utility Programs ............................................................................................87
Data Analysis Software ........................................................................................................................87
Link-Checking Utilities........................................................................................................................87
Remote Server Administration Software .............................................................................................88
E-COMMERCE HARDWARE ........................................................................................................................88
Web Server Hardware: Components and Requirements ......................................................................88
Web Server Performance .....................................................................................................................89
Web Server Hardware Architectures ...................................................................................................91
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E-COMMERCE SOFTWARE .........................................................................................................................91
Selecting E-commerce Software ..........................................................................................................91
Basic Functions of E-commerce Software ...........................................................................................92
Advanced Functions of E-commerce Software....................................................................................97
E-commerce Software for Small and Medium Enterprise ...................................................................99
E-commerce Software for Mid-size to Large Businesses ..................................................................102
Mid-Range E-commerce Software .....................................................................................................103
E-commerce Software for Large Businesses .....................................................................................105
REVIEW QUESTIONS ................................................................................................................................107
BIBLIOGRAPHY........................................................................................................................................109
E-COMMERCE BUSINESS MODELS ................................................................................................112
TRADITIONAL VS ELECTRONIC BUSINESS MODELS ................................................................................113
E-COMMERCE BUSINESS MODELS ...........................................................................................................113
Benefits of E-commerce Business Model ..........................................................................................113
COMPETITION IN THE E-COMMERCE ........................................................................................................114
INTERNET AND ITS IMPACT ON BUSINESS ................................................................................................114
KEY ELEMENTS OF E-COMMERCE BUSINESS MODEL ..............................................................................115
PRIMARY REVENUE MODELS IN E-COMMERCE .......................................................................................116
Revenue Model Issues........................................................................................................................117
FUNDAMENTAL CATEGORIES OF E-COMMERCE BUSINESS MODELS ........................................................118
Business to Consumer (B2C) Models ................................................................................................118
Consumer to Consumer (C2C) Models ..............................................................................................122
Business to Business (B2B) Models ..................................................................................................122
Other Business Models ......................................................................................................................124
REVIEW QUESTIONS ................................................................................................................................129
BIBLIOGRAPHY........................................................................................................................................130
E-COMMERCE STRATEGY ................................................................................................................132
DEFINING E-COMMERCE STRATEGY .......................................................................................................133
STRATEGY INITIATION ............................................................................................................................134
STRATEGY FORMULATION ......................................................................................................................136
STRATEGY IMPLEMENTATION .................................................................................................................137
COMMON E-COMMERCE STARTUP MISTAKES .........................................................................................139
BUILDING E-COMMERCE WEBSITE ..........................................................................................................140
Method for Building E-commerce Site ..............................................................................................141
FEATURES OF GOOD E-COMMERCE SITE .................................................................................................142
SIX WEB PAGES OF GOOD E-COMMERCE SITES ......................................................................................143
COMPLIANCE WITH WEB STANDARDS .....................................................................................................143
MEASURING SUCCESS OF E-COMMERCE .................................................................................................144
E-COMMERCE INVESTMENTS ...................................................................................................................144
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REVIEW QUESTIONS ................................................................................................................................146
BIBLIOGRAPHY........................................................................................................................................147
WEBSITE USABILITY ..........................................................................................................................150
IMPORTANCE OF EFFECTIVE WEB PRESENCE ..........................................................................................151
WEB PRESENCE GOALS ...........................................................................................................................151
Achieving Web Presence Goals .........................................................................................................152
Web Presence and Brand Image ........................................................................................................152
WEBSITE USABILITY ...............................................................................................................................152
What does usability measure? ............................................................................................................153
CUSTOMER-CENTRIC WEB SITE DESIGN .................................................................................................153
Creating a User-Centric Web Site ......................................................................................................155
USABILITY IMPROVEMENT CHECKLIST ...................................................................................................161
REVIEW QUESTIONS ................................................................................................................................178
BIBLIOGRAPHY........................................................................................................................................179
E-COMMERCE MARKETING.............................................................................................................180
INTRODUCTION........................................................................................................................................181
INTERNET MARKETING AND E-MARKETING ............................................................................................181
COMMON INTERNET MARKETING MISTAKES ..........................................................................................182
ADVANTAGES AND DISADVANTAGES OF INTERNET MARKETING ............................................................183
THE 4 P'S OF INTERNET MARKETING .......................................................................................................184
ONLINE BRANDING .................................................................................................................................184
Cost of Branding ................................................................................................................................185
Emotional Vs Rational Branding .......................................................................................................186
Online Brand Leveraging ...................................................................................................................186
Online Brand Consolidation...............................................................................................................186
Affiliate Marketing.............................................................................................................................187
APPLICATIONS OF INTERNET TOOLS IN INTERNET MARKETING ...............................................................188
INTERNET, INTRANETS, EXTRANETS, AND INTERNET MARKETING ..........................................................189
INTERNET MARKETING COMMUNICATION ..............................................................................................190
INTERNET MARKETING COMMUNICATION TOOLS ...................................................................................191
Online Advertising .............................................................................................................................191
Online Personal Selling ......................................................................................................................202
Online Sales Promotion .....................................................................................................................203
Online Public Relations .....................................................................................................................204
Online Direct Marketing ....................................................................................................................205
The Corporate Web Site .....................................................................................................................208
Web Positioning .................................................................................................................................212
Web Positioning Strategies ................................................................................................................212
SOCIAL NETWORKING SITES AND E-COMMERCE .....................................................................................217
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Generating Sales through Social Networking Sites ...........................................................................218
WEB 2.0 TOOLS AND E-COMMERCE ........................................................................................................219
Examples of Web 2.0 Tools Usage ....................................................................................................220
VIRTUAL WORLDS FOR E-COMMERCE .....................................................................................................221
MARKET SEGMENTATION........................................................................................................................221
THE INTERNET USERS: POPULATION AND USAGE TRENDS ......................................................................222
Internet Users Population ...................................................................................................................222
Internet Usage Trends ........................................................................................................................222
ONLINE CONSUMER BEHAVIOR...............................................................................................................223
ONLINE CONSUMER PURCHASE DECISION ..............................................................................................224
Online Consumer Purchase Decision Aids ........................................................................................225
INTERNET MARKETING IN B2B ...............................................................................................................226
Characteristics of B2B and B2C Online Buyers ................................................................................226
Marketing and Advertising in B2B E-commerce...............................................................................227
B2B Online Marketing Methods ........................................................................................................227
BUILDING TRUST IN E-COMMERCE .........................................................................................................229
Factors That Influence Trust Building in E-commerce......................................................................231
ELECTRONIC WORD OF MOUTH (EMOW) ...............................................................................................232
E-COMMERCE MARKET RESEARCH ........................................................................................................233
Advantages of Online Market Research ............................................................................................233
Disadvantages of Online Market Research ........................................................................................233
Methods of Online Market Research .................................................................................................234
PARTNER RELATIONSHIP MANAGEMENT IN E-COMMERCE......................................................................235
REVIEW QUESTIONS ................................................................................................................................236
BIBLIOGRAPHY........................................................................................................................................238
E-COMMERCE PAYMENT SYSTEMS ..............................................................................................246
PAYMENT METHODS ...............................................................................................................................247
CASH AS METHOD OF PAYMENT .............................................................................................................247
INTRODUCTION TO ELECTRONIC PAYMENTS ...........................................................................................247
Domestic and International Payments Mechanisms ..........................................................................248
Basic Problems with Electronic Payments .........................................................................................248
Electronic Payments Terminology .....................................................................................................249
Electronic Payments: Major Stakeholder and Requirements .............................................................250
Methods of Electronic Payments .......................................................................................................251
Electronic Payment Technologies ......................................................................................................252
TRANSACTION SECURITY PROTOCOLS ....................................................................................................257
SET (Secure Electronic Transactions) ...............................................................................................257
PHISHING ATTACKS ................................................................................................................................259
Phishing Attack Countermeasures .....................................................................................................260
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MICROPAYMENTS....................................................................................................................................261
BUSINESS-TO-BUSINESS (B2B) TRANSACTIONS......................................................................................261
B2B Electronic Payment Solutions ....................................................................................................262
E-Billing .............................................................................................................................................263
Electronic funds transfer (EFT) .........................................................................................................264
E-PAYMENT STANDARDS ........................................................................................................................265
OFX ....................................................................................................................................................265
Jalda....................................................................................................................................................266
EMV ...................................................................................................................................................266
OPEN AND CLOSED LOOP PAYMENT SYSTEMS ........................................................................................266
PAYMENT CARDS ....................................................................................................................................267
Credit Card .........................................................................................................................................267
Debit Card ..........................................................................................................................................270
Charge Card .......................................................................................................................................271
Single-Use Payment Cards.................................................................................................................271
ELECTRONIC WALLETS ...........................................................................................................................271
Electronic Wallet Characteristics .......................................................................................................272
Electronic Wallet Categories..............................................................................................................272
STORED VALUE CARDS ...........................................................................................................................274
Magnetic Strip Cards..........................................................................................................................274
Smart Cards ........................................................................................................................................274
PAYMENT GATEWAYS .............................................................................................................................276
How Payment Gateways Works ........................................................................................................276
Getting a Merchant Account ..............................................................................................................280
Selection Process for Payment Gateways ..........................................................................................280
Rate and Fee Structures and their Determination ..............................................................................282
Value-Added Services ........................................................................................................................283
Payment Gateways: Available Alternatives .......................................................................................283
PAYMENT AGGREGATORS .......................................................................................................................284
ALTERNATIVE PAYMENT SYSTEMS .........................................................................................................284
Cash on-delivery (COD) ....................................................................................................................285
Payment by Telephone using the Payment Code ...............................................................................285
INTERNET TECHNOLOGIES AND BANKING INDUSTRY ..............................................................................285
Electronic Banking .............................................................................................................................285
Electronic Checks...............................................................................................................................286
REVIEW QUESTIONS ................................................................................................................................291
BIBLIOGRAPHY........................................................................................................................................292
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E-CRM AND E-SCM ...............................................................................................................................294
CUSTOMER RELATIONSHIP MANAGEMENT (CRM) .................................................................................295
ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT (E-CRM) .........................................................295
Components of e-CRM ......................................................................................................................296
Benefits of e-CRM .............................................................................................................................297
Limitations of e-CRM ........................................................................................................................297
Working of e-CRM ............................................................................................................................298
Implementing e-CRM ........................................................................................................................298
Integration among CRM, ERP, SCM, and other application systems ...............................................299
E-CRM Solutions ...............................................................................................................................300
Choosing the Best CRM Application for Your Business ..................................................................300
Metrics in Customer Service and CRM .............................................................................................301
E-SCM ...................................................................................................................................................302
E-SCM: Key Processes and Infrastructure Components ...................................................................302
Critical Success Factors for E-supply Chains ....................................................................................303
Benefits of E-supply Chains ..............................................................................................................304
Functions of E-SCEM Software.........................................................................................................304
Categories of e-SCM Solutions..........................................................................................................305
Preparing for e-SCM ..........................................................................................................................306
REVIEW QUESTIONS ................................................................................................................................308
BIBLIOGRAPHY........................................................................................................................................309
E-COMMERCE SECURITY .................................................................................................................313
OVERVIEW ..............................................................................................................................................314
COMPUTER SECURITY .............................................................................................................................314
CLASSIFICATION OF INFORMATION ASSETS.............................................................................................315
Unrestricted Information ....................................................................................................................315
Protected Information.........................................................................................................................315
Confidential Information ....................................................................................................................315
Restricted Information .......................................................................................................................315
BASIC SECURITY ISSUES .........................................................................................................................316
THREAT, VULNERABILITY, AND COUNTERMEASURES .............................................................................316
GOVERNANCE OF E-COMMERCE SECURITY IN AN ORGANIZATION ..........................................................316
Key elements of an E-commerce Security Governance Structure .....................................................317
THREATS TO E-COMMERCE SYSTEMS ......................................................................................................318
Threats to E-commerce Service-side .................................................................................................319
Threats to Front-end systems .............................................................................................................320
Threats to Back-end Systems .............................................................................................................321
Threats to E-commerce Transactions .................................................................................................322
Threats to Client-Side ........................................................................................................................323
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Legal and Regulatory Threats ............................................................................................................326
SOLUTIONS FOR E-COMMERCE SECURITY ...............................................................................................327
Solutions for Service Side Security ...................................................................................................327
Solutions for E-commerce Transaction Security ...............................................................................329
Solutions for Client-Side ....................................................................................................................338
Solutions for Legal and Regulatory Issues ........................................................................................340
REVIEW QUESTIONS ................................................................................................................................342
BIBLIOGRAPHY........................................................................................................................................343
MOBILE COMMERCE..........................................................................................................................345
INTRODUCTION........................................................................................................................................346
M-COMMERCE TERMINOLOGY................................................................................................................346
WHY M-COMMERCE ...............................................................................................................................348
SPECIFIC CHARACTERISTICS OF M-COMMERCE ......................................................................................349
Value-Added Attributed of M-commerce ..........................................................................................349
BUILDING BLOCKS OF M-COMMERCE .....................................................................................................350
M-Commerce Hardware.....................................................................................................................350
M-Commerce Software ......................................................................................................................351
Mobile Networks ................................................................................................................................353
PROS AND CONS OF M-COMMERCE .........................................................................................................354
For Users ............................................................................................................................................354
For Network Operators ......................................................................................................................354
For Service Providers .........................................................................................................................354
APPLICATIONS OF M-COMMERCE ...........................................................................................................355
Mobile Financial Applications ...........................................................................................................355
Mobile Marketing and Advertising ....................................................................................................356
Mobile Auction ..................................................................................................................................357
Mobile Booking and Ticketing ..........................................................................................................357
Mobile CRM ......................................................................................................................................358
Mobile Content ..................................................................................................................................358
Mobile Purchases ...............................................................................................................................358
Mobile Payments ................................................................................................................................359
Wireless Wallets.................................................................................................................................359
Wireless Telemedicine .......................................................................................................................360
M-COMMERCE SECURITY ISSUES ............................................................................................................360
Physical Security Issues .....................................................................................................................360
Transactional Security Issues .............................................................................................................360
Post-Transaction Issues ......................................................................................................................360
M-COMMERCE SECURITY TECHNIQUES ..................................................................................................361
SIM-Based Authentication .................................................................................................................361
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Wireless Transport Layer Security (WTSL) ......................................................................................361
Wireless Identity Module (WIM).......................................................................................................362
VOICE TECHNOLOGIES FOR M-COMMERCE .............................................................................................362
Interactive Voice Response (IVR) .....................................................................................................362
Voice Portals ......................................................................................................................................362
M-COMMERCE: CHALLENGES AND FUTURE ............................................................................................362
COLLABORATIVE COMMERCE (C-COMMERCE) .......................................................................................363
PERVASIVE COMPUTING ..........................................................................................................................363
REVIEW QUESTIONS ................................................................................................................................364
BIBLIOGRAPHY...................................................................................
1340345
INTRODUCTION TO E-COMMERCE ...................................................................................................1
E-COMMERCE: THE DEFINITION ..................................................................................................................2
E-COMMERCE AND E-BUSINESS...................................................................................................................2
INTERNET ECONOMY, E-COMMERCE, AND E-BUSINESS ...............................................................................3
DIMENSIONS OF E-COMMERCE ....................................................................................................................4
INTERNET VS NON-INTERNET E-COMMERCE ..............................................................................................5
CATEGORIES OF E-COMMERCE ....................................................................................................................5
Business-to-Business (B2B) ..................................................................................................................5
Business-to-Consumer (B2C) ................................................................................................................5
Business-to-Business-to-Consumer (B2B2C)........................................................................................6
Business-to-Government (B2G) ............................................................................................................6
Consumer-to-Business (C2B) ................................................................................................................6
Consumer-to-Consumer (C2C) ..............................................................................................................7
Business-to-Employee (B2E) .................................................................................................................7
Government-to-Government (G2G).......................................................................................................7
Government-to-Employee (G2E) ...........................................................................................................8
Government-to-Business (G2B) ............................................................................................................8
Government-to-Citizen (G2C) ...............................................................................................................8
Other Forms of E-commerce ..................................................................................................................8
ELECTRONIC DATA INTERCHANGE (EDI)....................................................................................................9
FORMS OF E- COMMERCE ORGANIZATIONS ..............................................................................................10
Brick-and-Mortar business ...................................................................................................................10
Click-and-Mortar Business ..................................................................................................................10
Virtual Business ...................................................................................................................................11
E-marketplaces .....................................................................................................................................11
INTERMEDIATION, DISINTERMEDIATION, REINTERMEDIATION, HYPERMEDIATION, AND SYNDICATION IN
E-COMMERCE ............................................................................................................................................12
DEVELOPMENT AND GROWTH OF E-COMMERCE .......................................................................................13
GENERATIONS OF E-COMMERCE ...............................................................................................................14
E-COMMERCE: CRITICAL SUCCESS FACTORS (CSF) .................................................................................15
Internal Factors.....................................................................................................................................15
External Factors ...................................................................................................................................16
E-COMMERCE: TECHNOLOGY TRENDS......................................................................................................18
E-COMMERCE: SUITABILITY OF PRODUCTS AND SERVICES .......................................................................20
ADVANTAGES AND DISADVANTAGES OF E-COMMERCE ............................................................................21
Advantages of E-commerce .................................................................................................................22
Disadvantages of E-commerce .............................................................................................................23
IMPACTS OF DIGITAL ECONOMY AND ORGANIZATIONAL RESPONSES .......................................................24
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The New Business Environment ..........................................................................................................24
Business Pressures ...............................................................................................................................25
Organizational Responses ....................................................................................................................25
PROMOTING GLOBAL E-COMMERCE: INTERNATIONAL COOPERATION, COLLABORATION, AND
REGULATIONS ...........................................................................................................................................28
E-COMMERCE FUTURE OUTLOOK..............................................................................................................29
REVIEW QUESTIONS ..................................................................................................................................30
BIBLIOGRAPHY..........................................................................................................................................31
E-COMMERCE INFRASTRUCTURE ...................................................................................................35
PRINCIPAL COMPONENTS OF E-COMMERCE INFRASTRUCTURE .................................................................36
E-COMMERCE AND BUSINESS PROCESSES .................................................................................................37
MAJOR PLAYERS IN E-COMMERCE ............................................................................................................38
THE INTERNET...........................................................................................................................................40
Switching .............................................................................................................................................40
Routing .................................................................................................................................................41
TCP/IP ..................................................................................................................................................41
Working of Internet ..............................................................................................................................41
Function of Router ...............................................................................................................................42
Protocol ................................................................................................................................................43
IP Addresses .........................................................................................................................................43
Domain Name Systems (DNS) ............................................................................................................44
URL: Uniform Resource Locator.........................................................................................................45
Internet Servers and Clients .................................................................................................................47
Ports and HTTP ....................................................................................................................................47
E-mail Protocols ...................................................................................................................................47
World Wide Web (WWW) ..................................................................................................................48
Markup Languages and the Web..........................................................................................................49
INTRANETS AND EXTRANETS ....................................................................................................................51
Intranets ................................................................................................................................................52
Extranets...............................................................................................................................................52
VIRTUAL PRIVATE NETWORK (VPN) ........................................................................................................52
STORAGE AREA NETWORKS (SANS) ........................................................................................................54
INTERNET CONNECTIVITY OPTIONS ..........................................................................................................54
Dial-up..................................................................................................................................................55
Integrated Services Digital Network (ISDN) .......................................................................................56
Broadband Connections .......................................................................................................................57
Wireless Connections ...........................................................................................................................61
EVOLUTION OF INTERNET AND WORLD WIDE WEB ..................................................................................63
Internet2 ...............................................................................................................................................63
ii
Web 2.0 ................................................................................................................................................64
Semantic Web ......................................................................................................................................64
E-COMMERCE 2.0 ......................................................................................................................................64
REVIEW QUESTIONS ..................................................................................................................................65
BIBLIOGRAPHY..........................................................................................................................................66
ELEMENTS OF E-COMMERCE ...........................................................................................................69
INTRODUCTION..........................................................................................................................................70
CLIENT-SERVER COMMUNICATION ...........................................................................................................70
WEB CONTENT ..........................................................................................................................................70
Static Content .......................................................................................................................................70
Dynamic Content .................................................................................................................................71
Dynamic Page-Generation Technologies .............................................................................................71
SOFTWARE FOR WEB SERVERS .................................................................................................................72
Open Source Software Vs Commercial Software ................................................................................72
Web Server Software ...........................................................................................................................72
Evaluating Efficiency of Your Website ...............................................................................................74
Operating Systems (OS) for Web Servers ...........................................................................................74
Web Server Market ..............................................................................................................................76
Finding Web Server Information .........................................................................................................78
Database Management Systems for Web Severs .................................................................................79
E-MAIL ......................................................................................................................................................81
SPAM.........................................................................................................................................................81
Solutions to the Spam Problem ............................................................................................................82
CONTENT FILTERING .................................................................................................................................84
E-mail Content Filtering ......................................................................................................................84
Web Content Filtering ..........................................................................................................................85
Bypassing Content Filtering.................................................................................................................85
WEBSITE AND INTERNET UTILITY PROGRAMS ..........................................................................................85
Finger and Ping Utilities ......................................................................................................................85
Traceroute and Other Route-Tracing Programs ...................................................................................86
Telnet and FTP Utilities .......................................................................................................................86
Indexing and Searching Utility Programs ............................................................................................87
Data Analysis Software ........................................................................................................................87
Link-Checking Utilities........................................................................................................................87
Remote Server Administration Software .............................................................................................88
E-COMMERCE HARDWARE ........................................................................................................................88
Web Server Hardware: Components and Requirements ......................................................................88
Web Server Performance .....................................................................................................................89
Web Server Hardware Architectures ...................................................................................................91
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E-COMMERCE SOFTWARE .........................................................................................................................91
Selecting E-commerce Software ..........................................................................................................91
Basic Functions of E-commerce Software ...........................................................................................92
Advanced Functions of E-commerce Software....................................................................................97
E-commerce Software for Small and Medium Enterprise ...................................................................99
E-commerce Software for Mid-size to Large Businesses ..................................................................102
Mid-Range E-commerce Software .....................................................................................................103
E-commerce Software for Large Businesses .....................................................................................105
REVIEW QUESTIONS ................................................................................................................................107
BIBLIOGRAPHY........................................................................................................................................109
E-COMMERCE BUSINESS MODELS ................................................................................................112
TRADITIONAL VS ELECTRONIC BUSINESS MODELS ................................................................................113
E-COMMERCE BUSINESS MODELS ...........................................................................................................113
Benefits of E-commerce Business Model ..........................................................................................113
COMPETITION IN THE E-COMMERCE ........................................................................................................114
INTERNET AND ITS IMPACT ON BUSINESS ................................................................................................114
KEY ELEMENTS OF E-COMMERCE BUSINESS MODEL ..............................................................................115
PRIMARY REVENUE MODELS IN E-COMMERCE .......................................................................................116
Revenue Model Issues........................................................................................................................117
FUNDAMENTAL CATEGORIES OF E-COMMERCE BUSINESS MODELS ........................................................118
Business to Consumer (B2C) Models ................................................................................................118
Consumer to Consumer (C2C) Models ..............................................................................................122
Business to Business (B2B) Models ..................................................................................................122
Other Business Models ......................................................................................................................124
REVIEW QUESTIONS ................................................................................................................................129
BIBLIOGRAPHY........................................................................................................................................130
E-COMMERCE STRATEGY ................................................................................................................132
DEFINING E-COMMERCE STRATEGY .......................................................................................................133
STRATEGY INITIATION ............................................................................................................................134
STRATEGY FORMULATION ......................................................................................................................136
STRATEGY IMPLEMENTATION .................................................................................................................137
COMMON E-COMMERCE STARTUP MISTAKES .........................................................................................139
BUILDING E-COMMERCE WEBSITE ..........................................................................................................140
Method for Building E-commerce Site ..............................................................................................141
FEATURES OF GOOD E-COMMERCE SITE .................................................................................................142
SIX WEB PAGES OF GOOD E-COMMERCE SITES ......................................................................................143
COMPLIANCE WITH WEB STANDARDS .....................................................................................................143
MEASURING SUCCESS OF E-COMMERCE .................................................................................................144
E-COMMERCE INVESTMENTS ...................................................................................................................144
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REVIEW QUESTIONS ................................................................................................................................146
BIBLIOGRAPHY........................................................................................................................................147
WEBSITE USABILITY ..........................................................................................................................150
IMPORTANCE OF EFFECTIVE WEB PRESENCE ..........................................................................................151
WEB PRESENCE GOALS ...........................................................................................................................151
Achieving Web Presence Goals .........................................................................................................152
Web Presence and Brand Image ........................................................................................................152
WEBSITE USABILITY ...............................................................................................................................152
What does usability measure? ............................................................................................................153
CUSTOMER-CENTRIC WEB SITE DESIGN .................................................................................................153
Creating a User-Centric Web Site ......................................................................................................155
USABILITY IMPROVEMENT CHECKLIST ...................................................................................................161
REVIEW QUESTIONS ................................................................................................................................178
BIBLIOGRAPHY........................................................................................................................................179
E-COMMERCE MARKETING.............................................................................................................180
INTRODUCTION........................................................................................................................................181
INTERNET MARKETING AND E-MARKETING ............................................................................................181
COMMON INTERNET MARKETING MISTAKES ..........................................................................................182
ADVANTAGES AND DISADVANTAGES OF INTERNET MARKETING ............................................................183
THE 4 P'S OF INTERNET MARKETING .......................................................................................................184
ONLINE BRANDING .................................................................................................................................184
Cost of Branding ................................................................................................................................185
Emotional Vs Rational Branding .......................................................................................................186
Online Brand Leveraging ...................................................................................................................186
Online Brand Consolidation...............................................................................................................186
Affiliate Marketing.............................................................................................................................187
APPLICATIONS OF INTERNET TOOLS IN INTERNET MARKETING ...............................................................188
INTERNET, INTRANETS, EXTRANETS, AND INTERNET MARKETING ..........................................................189
INTERNET MARKETING COMMUNICATION ..............................................................................................190
INTERNET MARKETING COMMUNICATION TOOLS ...................................................................................191
Online Advertising .............................................................................................................................191
Online Personal Selling ......................................................................................................................202
Online Sales Promotion .....................................................................................................................203
Online Public Relations .....................................................................................................................204
Online Direct Marketing ....................................................................................................................205
The Corporate Web Site .....................................................................................................................208
Web Positioning .................................................................................................................................212
Web Positioning Strategies ................................................................................................................212
SOCIAL NETWORKING SITES AND E-COMMERCE .....................................................................................217
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Generating Sales through Social Networking Sites ...........................................................................218
WEB 2.0 TOOLS AND E-COMMERCE ........................................................................................................219
Examples of Web 2.0 Tools Usage ....................................................................................................220
VIRTUAL WORLDS FOR E-COMMERCE .....................................................................................................221
MARKET SEGMENTATION........................................................................................................................221
THE INTERNET USERS: POPULATION AND USAGE TRENDS ......................................................................222
Internet Users Population ...................................................................................................................222
Internet Usage Trends ........................................................................................................................222
ONLINE CONSUMER BEHAVIOR...............................................................................................................223
ONLINE CONSUMER PURCHASE DECISION ..............................................................................................224
Online Consumer Purchase Decision Aids ........................................................................................225
INTERNET MARKETING IN B2B ...............................................................................................................226
Characteristics of B2B and B2C Online Buyers ................................................................................226
Marketing and Advertising in B2B E-commerce...............................................................................227
B2B Online Marketing Methods ........................................................................................................227
BUILDING TRUST IN E-COMMERCE .........................................................................................................229
Factors That Influence Trust Building in E-commerce......................................................................231
ELECTRONIC WORD OF MOUTH (EMOW) ...............................................................................................232
E-COMMERCE MARKET RESEARCH ........................................................................................................233
Advantages of Online Market Research ............................................................................................233
Disadvantages of Online Market Research ........................................................................................233
Methods of Online Market Research .................................................................................................234
PARTNER RELATIONSHIP MANAGEMENT IN E-COMMERCE......................................................................235
REVIEW QUESTIONS ................................................................................................................................236
BIBLIOGRAPHY........................................................................................................................................238
E-COMMERCE PAYMENT SYSTEMS ..............................................................................................246
PAYMENT METHODS ...............................................................................................................................247
CASH AS METHOD OF PAYMENT .............................................................................................................247
INTRODUCTION TO ELECTRONIC PAYMENTS ...........................................................................................247
Domestic and International Payments Mechanisms ..........................................................................248
Basic Problems with Electronic Payments .........................................................................................248
Electronic Payments Terminology .....................................................................................................249
Electronic Payments: Major Stakeholder and Requirements .............................................................250
Methods of Electronic Payments .......................................................................................................251
Electronic Payment Technologies ......................................................................................................252
TRANSACTION SECURITY PROTOCOLS ....................................................................................................257
SET (Secure Electronic Transactions) ...............................................................................................257
PHISHING ATTACKS ................................................................................................................................259
Phishing Attack Countermeasures .....................................................................................................260
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MICROPAYMENTS....................................................................................................................................261
BUSINESS-TO-BUSINESS (B2B) TRANSACTIONS......................................................................................261
B2B Electronic Payment Solutions ....................................................................................................262
E-Billing .............................................................................................................................................263
Electronic funds transfer (EFT) .........................................................................................................264
E-PAYMENT STANDARDS ........................................................................................................................265
OFX ....................................................................................................................................................265
Jalda....................................................................................................................................................266
EMV ...................................................................................................................................................266
OPEN AND CLOSED LOOP PAYMENT SYSTEMS ........................................................................................266
PAYMENT CARDS ....................................................................................................................................267
Credit Card .........................................................................................................................................267
Debit Card ..........................................................................................................................................270
Charge Card .......................................................................................................................................271
Single-Use Payment Cards.................................................................................................................271
ELECTRONIC WALLETS ...........................................................................................................................271
Electronic Wallet Characteristics .......................................................................................................272
Electronic Wallet Categories..............................................................................................................272
STORED VALUE CARDS ...........................................................................................................................274
Magnetic Strip Cards..........................................................................................................................274
Smart Cards ........................................................................................................................................274
PAYMENT GATEWAYS .............................................................................................................................276
How Payment Gateways Works ........................................................................................................276
Getting a Merchant Account ..............................................................................................................280
Selection Process for Payment Gateways ..........................................................................................280
Rate and Fee Structures and their Determination ..............................................................................282
Value-Added Services ........................................................................................................................283
Payment Gateways: Available Alternatives .......................................................................................283
PAYMENT AGGREGATORS .......................................................................................................................284
ALTERNATIVE PAYMENT SYSTEMS .........................................................................................................284
Cash on-delivery (COD) ....................................................................................................................285
Payment by Telephone using the Payment Code ...............................................................................285
INTERNET TECHNOLOGIES AND BANKING INDUSTRY ..............................................................................285
Electronic Banking .............................................................................................................................285
Electronic Checks...............................................................................................................................286
REVIEW QUESTIONS ................................................................................................................................291
BIBLIOGRAPHY........................................................................................................................................292
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E-CRM AND E-SCM ...............................................................................................................................294
CUSTOMER RELATIONSHIP MANAGEMENT (CRM) .................................................................................295
ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT (E-CRM) .........................................................295
Components of e-CRM ......................................................................................................................296
Benefits of e-CRM .............................................................................................................................297
Limitations of e-CRM ........................................................................................................................297
Working of e-CRM ............................................................................................................................298
Implementing e-CRM ........................................................................................................................298
Integration among CRM, ERP, SCM, and other application systems ...............................................299
E-CRM Solutions ...............................................................................................................................300
Choosing the Best CRM Application for Your Business ..................................................................300
Metrics in Customer Service and CRM .............................................................................................301
E-SCM ...................................................................................................................................................302
E-SCM: Key Processes and Infrastructure Components ...................................................................302
Critical Success Factors for E-supply Chains ....................................................................................303
Benefits of E-supply Chains ..............................................................................................................304
Functions of E-SCEM Software.........................................................................................................304
Categories of e-SCM Solutions..........................................................................................................305
Preparing for e-SCM ..........................................................................................................................306
REVIEW QUESTIONS ................................................................................................................................308
BIBLIOGRAPHY........................................................................................................................................309
E-COMMERCE SECURITY .................................................................................................................313
OVERVIEW ..............................................................................................................................................314
COMPUTER SECURITY .............................................................................................................................314
CLASSIFICATION OF INFORMATION ASSETS.............................................................................................315
Unrestricted Information ....................................................................................................................315
Protected Information.........................................................................................................................315
Confidential Information ....................................................................................................................315
Restricted Information .......................................................................................................................315
BASIC SECURITY ISSUES .........................................................................................................................316
THREAT, VULNERABILITY, AND COUNTERMEASURES .............................................................................316
GOVERNANCE OF E-COMMERCE SECURITY IN AN ORGANIZATION ..........................................................316
Key elements of an E-commerce Security Governance Structure .....................................................317
THREATS TO E-COMMERCE SYSTEMS ......................................................................................................318
Threats to E-commerce Service-side .................................................................................................319
Threats to Front-end systems .............................................................................................................320
Threats to Back-end Systems .............................................................................................................321
Threats to E-commerce Transactions .................................................................................................322
Threats to Client-Side ........................................................................................................................323
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Legal and Regulatory Threats ............................................................................................................326
SOLUTIONS FOR E-COMMERCE SECURITY ...............................................................................................327
Solutions for Service Side Security ...................................................................................................327
Solutions for E-commerce Transaction Security ...............................................................................329
Solutions for Client-Side ....................................................................................................................338
Solutions for Legal and Regulatory Issues ........................................................................................340
REVIEW QUESTIONS ................................................................................................................................342
BIBLIOGRAPHY........................................................................................................................................343
MOBILE COMMERCE..........................................................................................................................345
INTRODUCTION........................................................................................................................................346
M-COMMERCE TERMINOLOGY................................................................................................................346
WHY M-COMMERCE ...............................................................................................................................348
SPECIFIC CHARACTERISTICS OF M-COMMERCE ......................................................................................349
Value-Added Attributed of M-commerce ..........................................................................................349
BUILDING BLOCKS OF M-COMMERCE .....................................................................................................350
M-Commerce Hardware.....................................................................................................................350
M-Commerce Software ......................................................................................................................351
Mobile Networks ................................................................................................................................353
PROS AND CONS OF M-COMMERCE .........................................................................................................354
For Users ............................................................................................................................................354
For Network Operators ......................................................................................................................354
For Service Providers .........................................................................................................................354
APPLICATIONS OF M-COMMERCE ...........................................................................................................355
Mobile Financial Applications ...........................................................................................................355
Mobile Marketing and Advertising ....................................................................................................356
Mobile Auction ..................................................................................................................................357
Mobile Booking and Ticketing ..........................................................................................................357
Mobile CRM ......................................................................................................................................358
Mobile Content ..................................................................................................................................358
Mobile Purchases ...............................................................................................................................358
Mobile Payments ................................................................................................................................359
Wireless Wallets.................................................................................................................................359
Wireless Telemedicine .......................................................................................................................360
M-COMMERCE SECURITY ISSUES ............................................................................................................360
Physical Security Issues .....................................................................................................................360
Transactional Security Issues .............................................................................................................360
Post-Transaction Issues ......................................................................................................................360
M-COMMERCE SECURITY TECHNIQUES ..................................................................................................361
SIM-Based Authentication .................................................................................................................361
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Wireless Transport Layer Security (WTSL) ......................................................................................361
Wireless Identity Module (WIM).......................................................................................................362
VOICE TECHNOLOGIES FOR M-COMMERCE .............................................................................................362
Interactive Voice Response (IVR) .....................................................................................................362
Voice Portals ......................................................................................................................................362
M-COMMERCE: CHALLENGES AND FUTURE ............................................................................................362
COLLABORATIVE COMMERCE (C-COMMERCE) .......................................................................................363
PERVASIVE COMPUTING ..........................................................................................................................363
REVIEW QUESTIONS ................................................................................................................................364
BIBLIOGRAPHY...................................................................................