Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 08832320109599664
Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The E-Business Opportunity: A Key Role for
Business Educators
Leanne C. McGrath & William L. Lomerson
To cite this article: Leanne C. McGrath & William L. Lomerson (2001) The E-Business
Opportunity: A Key Role for Business Educators, Journal of Education for Business, 77:1, 9-14,
DOI: 10.1080/08832320109599664
To link to this article: http://dx.doi.org/10.1080/08832320109599664
Published online: 31 Mar 2010.
Submit your article to this journal
Article views: 24
View related articles
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 13 January 2016, At: 00:03
The E-Business Opportunity:
A Key Role for Business Educators
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:03 13 January 2016
LEANNE C. MCGRATH
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WILLIAM L. LOMERSON
University of South Carolina-Aiken
Aiken, South Carolina
T
he growing importance of e-business and its inevitable effect on
organizations of all sizes presents challenges as well as opportunities for business educators as they prepare students
for the future. Specifically, electronic
commerce has created the need for
business educators to understand the
strategic issues associated with starting
an e-business. E-business can arise in
association with an existing bricksand-mortar operation, or it can be started as a Web-only operation. This new
business model affects every business
discipline.
The Internet has been called “The
Great Equalizer.” Researchers have
found that it levels the playing field to
the benefit of smaller businesses, letting
them compete with the big retailers
(Schultz, 1997). Data from Forrester
Research, Cambridge, MA, reveal that
“small and medium-sized retailers have
a 50% share of offline retail revenue but
are barely capturing 9% of online sales”
(Colbert, 1999, p. 30). In a 1999 study,
the International Data Corporation
found that “one-third of the small businesses that use the Internet increased
their revenues by at least 10 percent over
the previous year” (Smith, 1999). Such
growth is certainly worth pursuing.
Many businesses are asking themselves whether they can afford to do
business on the Web. The realistic ques-
Appalachian State University
Boone, North Carolina
ABSTRACT. In this article, the
authors provide a comprehensive,
practical guide to facilitate the understanding of the issues faced by a business endeavoring to expand into the
e-business environment. This presentation should help business educators
understand some of the quintessential
questions and concerns that a typical
business must answer to pursue business on the Web.
strict sense, e-business is a broader term
of which e-commerce is only one part.
E-business is generally defined as “a
business model for generating and sustaining revenue, designed to take advantage of the unique characteristics of the
Web” (Emigh, 1999, p. 53). In other
words, it involves an entire approach to
doing business on the Internet, beginning with a business strategy specifically designed for Web competition.
Whether a business expands from bricks
and mortar to the Internet or is created
from the beginning to exist as an Internet storefront, adjustments need to be
made in many areas of the traditional
business process for the e-business to
succeed.
The starting point for creating an ebusiness is the same as that for a traditional one: a complete strategic analysis
that begins with the question “What is
the mission of the business?” Once
incorporated into an existing mission,
the e-business venue results in a new
integrated mission statement. An e-business cannot be successful without first
being a good business (Hartman &
Sifonis, 2000), which is proving to be
the key to e-business success (Hill &
King, 2000). After clearly defining
the e-business contribution to the business mission, the specific goals and
objectives for the overall business can
be set.
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tion is whether they can afford nut to be
doing business on the Web. Although
the rewards of e-business can be large,
the results are not automatic (Hartman
& Sifonis, 2000). This new business
dimension provides an important opportunity for business educators who want
to prepare their students for the burgeoning employment opportunities and
the long-term impact on the conducting
business. In this article, we address the
overall e-business decision, the selection of the type of Web site; the cost
issues associated with creating and
hosting a Web site, the “must have” criteria for designing a successful site, the
importance of a customer-centered
focus, the basics of marketing and promoting the site, and the need to update
and evolve it to maintain its currency.
Business Considerations
The terms e-commerce and e-business often are used interchangeably.In a
September/October 2001
9
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:03 13 January 2016
The general market in which a business competes does not change as a
result of the decision to go online. For
example, a company will still be in the
education, automobile, toy, or investments business even if it elects to sell its
products on the Web. Hence, a company
must work the Internet issues into its
overall business strategy, taking into
consideration “backend’ issues such as
call centers for customer service, information dissemination, distribution,
order processing, and adjusted inventory. After integrating all the various
processes, the business can develop a
strategic business plan that goes far
beyond merely introducing and using a
new technology (Goldberg & Sifonis,
1998).
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obtain additional information as well as
communicate with the sales agents for
showing.
Level 3, the database-driven site,
extends the site’s capability to providing
interaction with items contained in a
database. The site visitor can search for
and obtain information about a desired
item. For example, searching a real
estate company site for houses with certain features or within a price range can
provide very beneficial results. Sometimes the search process can be frustrating if the user does not know specifics
about the item or what is available overall from the site. Maintenance of a database-driven site can be very time consuming.
Level 4, the storefront, is the most
complicated type of site. In these sites, a
company uses the Web to actually conduct business, including the selection
and payment for items purchased by the
site visitor. The scope of business can
vary from a listing of only certain highlighted items to a complete database of
every item in inventory. A storefront site
requires a WHS with a secure server and
the capability to support database interactions. The secure server provides a
higher level of security for processing
the order page that receives credit card
and other sensitive customer information. Some WHSs charge extra for the
use of their secure servers, and others do
not.
site service, hiring an independent Web
designer, or developing it internally.
Regardless of the development choice,
to ensure proper content and integration
into the overall business strategy, management should be involved in the sitedesign process.
Using a prefabricated site service, a
small business can embark on the Internet instantly. However, such services
provide limited long-run potential and
very little flexibility (“Build Your . . .,”
2000). Usually, a few standard format
pages are provided for free or for a low
fixed cost, but the prefabricated
approach can result in the lack of the
distinctive look and feel that customization delivers. It can, however, give the
business an effective operational presence on the Web in a short time.
Before contracting with a designer,
business management should review a
portfolio of designed sites, obtain an
estimate of the number of hours
required to design the site, and contact
three to five references. A professional
designer also will invest time in understanding the business before beginning
the design. The fee for a Web-site
design can be under $1,000 (Smith,
1999), but of course the complexity and
elaborateness of the site can increase
these costs significantly. Though they
may lack experience, senior college students can be hired to design Web sites at
reasonable cost to a business.
For those businesses interested in
designing their own sites, authoring
software can be purchased that creates
and maintains the HTML code required
to develop a modest Web site. There are
many user-friendly authoring packages
on the market that cost significantly less
than hiring an independent designer,
although business personnel must invest
a fair amount of time to create the site.
Two of the more popular packages are
Macromedia
Dreamweaver
and
Microsoft FrontPage. Features such as
graphical design and wizards (a userfriendly process that walks the user
through complicated procedures) make
the entire process relatively easy. Multiple rewards often accrue from this
approach, as the business can update
and enhance its site and thereby save the
additional dollars required for site
maintenance.
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Site Content
Determining the type of site needed
and how it will be operationalized are
critical issues for developing an e-business. Web sites can be divided into
essentially four content levels that culminate with a fully interactive e-commerce site (Smith, 1999).
Level 1, the static billboard, is the
most common type and serves mostly as
a detailed advertisement. Typically
called “brochureware,” such a Web site
describes the company, lists products or
services, phone, fax, e-mail address,
hours of operation, and often a map to
the business location. This approach is
easy and inexpensive enough for almost
any small business. In fact, many Webhosting sites (WHSs) provide this level
of service for free. A restaurant, for
example, might use this type of site to
make customers aware of its presence,
location, general menu, and seasonal
specialties.
Level 2, the dynamic billboard, is a
site requiring daily or weekly updates to
keep it current and often includes an email communication capability. If a
business adds e-mail to the site, it must
be prepared to respond to the e-mail
received. For a modest additional
charge, some WHSs provide an autoresponder feature to acknowledge that the
e-mail has been received and to thank
the visitor. A real estate company might
use this type of site to let prospective
buyers regularly view new listings and
10
Journal of Education for Business
Cost Factors
Cost issues are often the first concern.
A price tag of $1 million or more to
launch a major Web site is not uncommon and can be daunting to a small
business (Malina, 1999). However, the
operational and cost requirements for a
small business are much more modest
and well within its budget range. The
three major elements associated with
creating a Web site are authoring, hosting, and registration.
Authoring
Authoring refers to the physical
design and creation of the Web site for
delivery of the operational mission that
has been identified by the business. The
choices include using a prefabricated
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:03 13 January 2016
Hosting
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Hosting is the process of supplying
the operational online environment for
the Web site. A Web hosting service
(WHS) is a business that will store the
Web site on its server and provide
access to that content over the Internet
for users. From a resource perspective,
most small businesses are much better
off contracting with one of the numerous WHSs than attempting to host the
site themselves. Many WHSs provide
short-term and month-to-month contracts that can help the small business
control the initial startup costs.
The price of hosting a site is determined by a combination of factors,
including the number of services, the
amount of disk storage, the transaction
volume, the physical capabilities of the
host, and whether a secure server is
used. Many WHSs will guarantee in
their contracts the level of availability of
the Web site to Internet users. This is an
important factor because, for example,
95% availability would mean that the
site could be out of service for up to 8
hours a week, a level perhaps unacceptable for a retail site.
When financial transactions are
involved, small businesses should use a
WHS with a secure server to foster customer confidence. The secure server
causes information to be sent back and
forth between the customer and the site
through an encrypting process that
transmits undecipherable messages.
This enables a purchaser to send credit
card information to the e-business site
with complete confidence that the card
number cannot be stolen en route. To
verify visually that a secure site is processing a transaction, the server adds
the letter “s” to the normal protocol
identifier ), a service that registers
a Web site on up to 12 search engines
and directories. Alternatively, 1st Place
Ranking ()
is a fee-for-service company that guarantees top-20 search engine placement.
The key registration objective is
obtaining prominent placement (at least
within the top 30) on the search request
response. This is very hard to achieve
because each search site uses different
criteria and engines to select and rank
Web sites. Considering that more than
1.5 million new pages are going on the
Web each day (Smith, 1999), the
response ranking is critical if the e-business uses no other method of marketing
its site.
in 1999. Even so, banners are still considered by some proponents as cost
effective for raising brand awareness.
Use of alternative media such as TV or
print, although they cost more, has been
found to work effectively in raising
brand awareness (Tweney, 1999).
Links are a cooperative traffic-building technique for an e-business Web
site. In a reciprocal agreement with suppliers or with noncompetitors who market to the same aggregates, an e-business places links on its Web site, often
in the form of a clickable logo, that connect to other e-business sites.
The affiliate program is a more elaborate marketing concept for attracting
customers. These programs, estimated
to have more than I million participants,
generally involve an e-business Web site
providing a link to its affiliated retail
Web site. If a visitor to the first site links
to the retail site and makes a purchase at
that time, the first Web site receives a
percentage of the sale, while having no
other cost but providing the link. Affiliate programs are basically a pay-forperformance arrangement (King, 1999a).
Many large sites (e.g., Amazon.com)
have affiliate programs. Amazon, who
has around 200,000 affiliates, pays out
up to 15% of the sales channeled to its
site from an affiliate (Stone, 1999).
One-to-one marketing via e-mail is
an inexpensive alternative to consider.
With the customers’ consent, information about their buying habits allows a
business to target selected markets with
e-mail. However, spamming (sending
unsolicited e-mail messages without the
individual’s consent) is not an acceptable practice (Brondmo, 2000).
Non-Web-based methods of advertising Web sites are increasing in scope
and are being reported as successes
(Tweney, 1999). Piggy-back Web advertising through regular modes such as
store bags, shipping boxes, business
cards, TV, radio, newspapers. stenciling
on company vehicles, yellow pages,
brochures, promotional items, and
bricks-and-mortar
storefronts are
increasingly evident everywhere.
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Building Traffic and Marketing
The main concern for e-business, as
for a bricks-and-mortar business, is
building customer traffic. Lack of planning and failure to budget for attracting
customers are two of the key reasons
many e-businesses fail. The traditional
business challenges involved in acquiring and retaining customers are still present: something to bring the customer to
the site, a process to assist with the decision to buy (site design, ordering ease,
etc.), and a way to fix any problems that
emerge (Keenan, 1999). To attract customers, sites use two primary venues:
search sites (indirect) and promotional
activities (direct).
Search Sites
Promotional Techniques
Once the e-business has been discovered by visitors, it is important that they
be provided with a way to return easily
to the site. The homepage for every site
as well as other strategic areas within a
site should request that the visitor bookmark the page. Generally, sites with
bookmarks receive a higher frequency
of return visits.
Banner ads are promotional pieces
for other e-businesses that appear on the
visited Web site. Exchange of banners
among e-businesses is a simple, costeffective way to market. There are at
least 40 banner exchanges currently
operating, offering a wide variety of
quality and services. A typical arrangement requires the e-business to place two
or three banner ads of other businesses
on its site for every one of its banners
placed elsewhere (Colbert, 1999).
Click-through rates for banners (percentage of those viewing a banner ad
who actually click on it and go to the
advertised site) averaged 2% in 1997
and fell to half a percent (0.5%) or less
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Search sites play an important role in
helping Web surfers to locate a business
Maintenance
Maintaining a Web site is a dynamic
process because business on the Web is
SeptembedOctober 2001
13
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always changing. To capture new customers and retain existing ones, a successful Web site must be kept fresh with
updated information.
applied to the traditional challenges of
businesses in inventory management,
marketing, fulfillment systems, and customer service (Davis, 1998).
Updating
Summary
Although the frequency of site updating depends on the business and industry, no site should ever remain static. In
e-business storefronts, updating certainly must be done quite often, just as it is
done in traditional stores. New merchandise, new seasons, sales, and new
information necessitate frequent site
updating.
The elevated visibility of similar
businesses as they expand onto the Web
is creating increased competition (Sterrett & Shah, 1998). E-businesses should
engage in frequent surfing on the Web
to discover new innovations and new or
revamped competitors.
Because the Internet is changing the
way companies do business, business
educators must incorporate this change
into their courses. Most businesses,
large or small, new or old, will want to
start their e-business effort with controlled investment and risk. To engage
in e-business successfully, an organization must develop an integrated business
strategy that considers traditional as
well as e-business issues and has a customer-centric focus. Though the present
article focused primarily on the business-to-consumer channel, most comments are equally applicable to the
business-to-business channel. By understanding how a company expands into an
e-business, business educators will be
better equipped to address the e-business
dimension in the courses they teach.
Technology will continue to push the
marketplace toward new business models that must be integrated into the business pedagogy. Today, doing business
online is a strategic imperative for all
types of industries and organizations.
By preparing their students to create and
implement strategies for the new Internet economy, business educators can
help businesses, especially ones with
more limited resources, to be ready for
the e-business plunge. Failure to meet
this instructional imperative could mean
that many businesses, especially small
ones, will miss the benefits of an e-business channel and be increasingly left
behind in the marketplace.
Davis, C. (1998) Marketing & retail. Business
Horizons, 4/(4),2-4.
Emigh. J. (1999, August 16). E-commerce strategies. Computerworld, 33(33), 53.
Fahrland, B., & Hawes-Davis, D. (1999, September 24). Customer service starts with a userfriendly site. iMarketing News, p. 32.
Goldberg, B., & Sifonis, J. (1998). Focusing your
e-commerce vision. Management Review,
87(8), 48-5 1.
Hartman, A,, & Sifonis, J. (2000). Net re&;
Strategies for success in the e-conomy (p. 3).
New York: McGraw-Hill.
Hill, G., & King, R. (2000). Dry spell: A startup
survival guide. eCompany Now, I ( 14),
106-1 12.
Jaye, D. (1999, July 23). Discrete online marketing: A privacy primer. iMarketing News, p. 18.
Kalin, S. (1999, April I). Mazed and confused.
C/O Web Business, Section 2, 39-44.
Karakaya, F., & Karakaya, F. (1998). Doing business on the Internet. SAM Advanced Mnnagement Journal, 63(2), 10-14.
Keenan, Jr., W. (1999). E-Business. IW Growing
Companies, April, 36-42.
King, J. (1999a. June 7). Affiliates: Smart marketing. Computerworld, 33(23), 50.
King, J. (1999b, October 25). Teen buyers now
have new ways to pay online. Computerworld,
33(43), 40.
Kirsner, S. (1999a, June I). Get fewer hits. C/O
Web Business, Section 2, 24-26.
Kirsner, S. (1999b. September I ) . The dirty
dozen. CIO Web Business, Section 2, 22-25.
Lavery, L. (1999, December I ) . Rights and
wrongs. C/O Web Business, Section 2, 4 W 2 .
Malina, D. (1999, July 19). The high price of a
Web presence. Computerworld. 33(29), 40.
Rhodes, J. (2000, October). Expert interviews:
John S. Rhodes [On-line: Available: http://www.
promotionworld.com/interviews/jrhodes.htmI
Santosus, M. (1999, October 15). But wait, there’s
more. C/O Enterprise, Section 2, 28.
Schultz, J. (1997). Revolutionary selling. M m ugement Review, 86( 10). 22-24.
Smith, V. (1999, January). Got web? PC World
Online. [On-line]. Available: http://www I .
pcworld.com/shared/printable-a~icles/
0,1440,8764,OOhtml
Sterrett, C., & Shah, A. (1998). Going global on
the information super highway. SAM Advanced
Management Journal, 63( I), 43-48.
Stone, M. (1999, March 3). Affiliate programs
greasing e-business. ZDNN Tech News Now
[On-line]. Available: http://www.zdnet.com/
zdm/stories/news/0,4586,22 I98 15.00.html
Sweet, L. (1999, September 6). Is your storefront
in the know? Infoworld, E4-E8.
Thibodeau, P. (1999, August 9). A sign of the
times. Cumputerworld, 33(32), 41.
Tweney, D. (1999, October 4). Online advertising:
A $3 billion industry limping on its last legs.
Info World, 72.
Weiss, T. (2000, June 30). Update: Clinton signs
digital signatures bill. Computerworld [Online]. Available: http://computerworld.com/
cwi/story/O, 1 199,NAV47-ST046596,0O.html
zyxwvutsrqpo
Evolution
Today increasing numbers of traditional retailers are getting on the Internet and competing very effectively with
both traditional and Web-only stores. In
fact, many are finding that this approach
offers numerous competitive advantages. Many shoppers already know and
trust the bricks-and-mortar businesses.
Businesses can enhance ustomer service
by allowing customers to buy on the
Web and, if necessary and more convenient, to return that merchandise to the
bricks-and-mortar store.
Other businesses are setting up kiosks
in their stores to enable their customers
to order online at the bricks-and-mortar
location if an item is not in stock. In the
future, Web-linked kiosks may be
placed in public places for access that is
as easy as using a pay phone today
(Karakaya & Karakaya, 1998) New
technology incorporated with new business strategies will continue to expand
e-business opportunities. Creative Webbased solutions are already being
14
Journal of Education for Business
REFERENCES
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zyxwvut
Brondmo, H. (2000). Spam not, want not. eCompuny Now, 1(14), 185-186.
Build your e-business. (2000) Fortune. Winter,
187-188.
Colbert, K. (1999, October 22). Helping small businesses get big results. Marketing News, p. 30.
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
The E-Business Opportunity: A Key Role for
Business Educators
Leanne C. McGrath & William L. Lomerson
To cite this article: Leanne C. McGrath & William L. Lomerson (2001) The E-Business
Opportunity: A Key Role for Business Educators, Journal of Education for Business, 77:1, 9-14,
DOI: 10.1080/08832320109599664
To link to this article: http://dx.doi.org/10.1080/08832320109599664
Published online: 31 Mar 2010.
Submit your article to this journal
Article views: 24
View related articles
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 13 January 2016, At: 00:03
The E-Business Opportunity:
A Key Role for Business Educators
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:03 13 January 2016
LEANNE C. MCGRATH
zyxwvut
WILLIAM L. LOMERSON
University of South Carolina-Aiken
Aiken, South Carolina
T
he growing importance of e-business and its inevitable effect on
organizations of all sizes presents challenges as well as opportunities for business educators as they prepare students
for the future. Specifically, electronic
commerce has created the need for
business educators to understand the
strategic issues associated with starting
an e-business. E-business can arise in
association with an existing bricksand-mortar operation, or it can be started as a Web-only operation. This new
business model affects every business
discipline.
The Internet has been called “The
Great Equalizer.” Researchers have
found that it levels the playing field to
the benefit of smaller businesses, letting
them compete with the big retailers
(Schultz, 1997). Data from Forrester
Research, Cambridge, MA, reveal that
“small and medium-sized retailers have
a 50% share of offline retail revenue but
are barely capturing 9% of online sales”
(Colbert, 1999, p. 30). In a 1999 study,
the International Data Corporation
found that “one-third of the small businesses that use the Internet increased
their revenues by at least 10 percent over
the previous year” (Smith, 1999). Such
growth is certainly worth pursuing.
Many businesses are asking themselves whether they can afford to do
business on the Web. The realistic ques-
Appalachian State University
Boone, North Carolina
ABSTRACT. In this article, the
authors provide a comprehensive,
practical guide to facilitate the understanding of the issues faced by a business endeavoring to expand into the
e-business environment. This presentation should help business educators
understand some of the quintessential
questions and concerns that a typical
business must answer to pursue business on the Web.
strict sense, e-business is a broader term
of which e-commerce is only one part.
E-business is generally defined as “a
business model for generating and sustaining revenue, designed to take advantage of the unique characteristics of the
Web” (Emigh, 1999, p. 53). In other
words, it involves an entire approach to
doing business on the Internet, beginning with a business strategy specifically designed for Web competition.
Whether a business expands from bricks
and mortar to the Internet or is created
from the beginning to exist as an Internet storefront, adjustments need to be
made in many areas of the traditional
business process for the e-business to
succeed.
The starting point for creating an ebusiness is the same as that for a traditional one: a complete strategic analysis
that begins with the question “What is
the mission of the business?” Once
incorporated into an existing mission,
the e-business venue results in a new
integrated mission statement. An e-business cannot be successful without first
being a good business (Hartman &
Sifonis, 2000), which is proving to be
the key to e-business success (Hill &
King, 2000). After clearly defining
the e-business contribution to the business mission, the specific goals and
objectives for the overall business can
be set.
zyxwvu
zyxwvuts
zyxw
tion is whether they can afford nut to be
doing business on the Web. Although
the rewards of e-business can be large,
the results are not automatic (Hartman
& Sifonis, 2000). This new business
dimension provides an important opportunity for business educators who want
to prepare their students for the burgeoning employment opportunities and
the long-term impact on the conducting
business. In this article, we address the
overall e-business decision, the selection of the type of Web site; the cost
issues associated with creating and
hosting a Web site, the “must have” criteria for designing a successful site, the
importance of a customer-centered
focus, the basics of marketing and promoting the site, and the need to update
and evolve it to maintain its currency.
Business Considerations
The terms e-commerce and e-business often are used interchangeably.In a
September/October 2001
9
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:03 13 January 2016
The general market in which a business competes does not change as a
result of the decision to go online. For
example, a company will still be in the
education, automobile, toy, or investments business even if it elects to sell its
products on the Web. Hence, a company
must work the Internet issues into its
overall business strategy, taking into
consideration “backend’ issues such as
call centers for customer service, information dissemination, distribution,
order processing, and adjusted inventory. After integrating all the various
processes, the business can develop a
strategic business plan that goes far
beyond merely introducing and using a
new technology (Goldberg & Sifonis,
1998).
zyxwvut
obtain additional information as well as
communicate with the sales agents for
showing.
Level 3, the database-driven site,
extends the site’s capability to providing
interaction with items contained in a
database. The site visitor can search for
and obtain information about a desired
item. For example, searching a real
estate company site for houses with certain features or within a price range can
provide very beneficial results. Sometimes the search process can be frustrating if the user does not know specifics
about the item or what is available overall from the site. Maintenance of a database-driven site can be very time consuming.
Level 4, the storefront, is the most
complicated type of site. In these sites, a
company uses the Web to actually conduct business, including the selection
and payment for items purchased by the
site visitor. The scope of business can
vary from a listing of only certain highlighted items to a complete database of
every item in inventory. A storefront site
requires a WHS with a secure server and
the capability to support database interactions. The secure server provides a
higher level of security for processing
the order page that receives credit card
and other sensitive customer information. Some WHSs charge extra for the
use of their secure servers, and others do
not.
site service, hiring an independent Web
designer, or developing it internally.
Regardless of the development choice,
to ensure proper content and integration
into the overall business strategy, management should be involved in the sitedesign process.
Using a prefabricated site service, a
small business can embark on the Internet instantly. However, such services
provide limited long-run potential and
very little flexibility (“Build Your . . .,”
2000). Usually, a few standard format
pages are provided for free or for a low
fixed cost, but the prefabricated
approach can result in the lack of the
distinctive look and feel that customization delivers. It can, however, give the
business an effective operational presence on the Web in a short time.
Before contracting with a designer,
business management should review a
portfolio of designed sites, obtain an
estimate of the number of hours
required to design the site, and contact
three to five references. A professional
designer also will invest time in understanding the business before beginning
the design. The fee for a Web-site
design can be under $1,000 (Smith,
1999), but of course the complexity and
elaborateness of the site can increase
these costs significantly. Though they
may lack experience, senior college students can be hired to design Web sites at
reasonable cost to a business.
For those businesses interested in
designing their own sites, authoring
software can be purchased that creates
and maintains the HTML code required
to develop a modest Web site. There are
many user-friendly authoring packages
on the market that cost significantly less
than hiring an independent designer,
although business personnel must invest
a fair amount of time to create the site.
Two of the more popular packages are
Macromedia
Dreamweaver
and
Microsoft FrontPage. Features such as
graphical design and wizards (a userfriendly process that walks the user
through complicated procedures) make
the entire process relatively easy. Multiple rewards often accrue from this
approach, as the business can update
and enhance its site and thereby save the
additional dollars required for site
maintenance.
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Site Content
Determining the type of site needed
and how it will be operationalized are
critical issues for developing an e-business. Web sites can be divided into
essentially four content levels that culminate with a fully interactive e-commerce site (Smith, 1999).
Level 1, the static billboard, is the
most common type and serves mostly as
a detailed advertisement. Typically
called “brochureware,” such a Web site
describes the company, lists products or
services, phone, fax, e-mail address,
hours of operation, and often a map to
the business location. This approach is
easy and inexpensive enough for almost
any small business. In fact, many Webhosting sites (WHSs) provide this level
of service for free. A restaurant, for
example, might use this type of site to
make customers aware of its presence,
location, general menu, and seasonal
specialties.
Level 2, the dynamic billboard, is a
site requiring daily or weekly updates to
keep it current and often includes an email communication capability. If a
business adds e-mail to the site, it must
be prepared to respond to the e-mail
received. For a modest additional
charge, some WHSs provide an autoresponder feature to acknowledge that the
e-mail has been received and to thank
the visitor. A real estate company might
use this type of site to let prospective
buyers regularly view new listings and
10
Journal of Education for Business
Cost Factors
Cost issues are often the first concern.
A price tag of $1 million or more to
launch a major Web site is not uncommon and can be daunting to a small
business (Malina, 1999). However, the
operational and cost requirements for a
small business are much more modest
and well within its budget range. The
three major elements associated with
creating a Web site are authoring, hosting, and registration.
Authoring
Authoring refers to the physical
design and creation of the Web site for
delivery of the operational mission that
has been identified by the business. The
choices include using a prefabricated
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Hosting
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Hosting is the process of supplying
the operational online environment for
the Web site. A Web hosting service
(WHS) is a business that will store the
Web site on its server and provide
access to that content over the Internet
for users. From a resource perspective,
most small businesses are much better
off contracting with one of the numerous WHSs than attempting to host the
site themselves. Many WHSs provide
short-term and month-to-month contracts that can help the small business
control the initial startup costs.
The price of hosting a site is determined by a combination of factors,
including the number of services, the
amount of disk storage, the transaction
volume, the physical capabilities of the
host, and whether a secure server is
used. Many WHSs will guarantee in
their contracts the level of availability of
the Web site to Internet users. This is an
important factor because, for example,
95% availability would mean that the
site could be out of service for up to 8
hours a week, a level perhaps unacceptable for a retail site.
When financial transactions are
involved, small businesses should use a
WHS with a secure server to foster customer confidence. The secure server
causes information to be sent back and
forth between the customer and the site
through an encrypting process that
transmits undecipherable messages.
This enables a purchaser to send credit
card information to the e-business site
with complete confidence that the card
number cannot be stolen en route. To
verify visually that a secure site is processing a transaction, the server adds
the letter “s” to the normal protocol
identifier ), a service that registers
a Web site on up to 12 search engines
and directories. Alternatively, 1st Place
Ranking ()
is a fee-for-service company that guarantees top-20 search engine placement.
The key registration objective is
obtaining prominent placement (at least
within the top 30) on the search request
response. This is very hard to achieve
because each search site uses different
criteria and engines to select and rank
Web sites. Considering that more than
1.5 million new pages are going on the
Web each day (Smith, 1999), the
response ranking is critical if the e-business uses no other method of marketing
its site.
in 1999. Even so, banners are still considered by some proponents as cost
effective for raising brand awareness.
Use of alternative media such as TV or
print, although they cost more, has been
found to work effectively in raising
brand awareness (Tweney, 1999).
Links are a cooperative traffic-building technique for an e-business Web
site. In a reciprocal agreement with suppliers or with noncompetitors who market to the same aggregates, an e-business places links on its Web site, often
in the form of a clickable logo, that connect to other e-business sites.
The affiliate program is a more elaborate marketing concept for attracting
customers. These programs, estimated
to have more than I million participants,
generally involve an e-business Web site
providing a link to its affiliated retail
Web site. If a visitor to the first site links
to the retail site and makes a purchase at
that time, the first Web site receives a
percentage of the sale, while having no
other cost but providing the link. Affiliate programs are basically a pay-forperformance arrangement (King, 1999a).
Many large sites (e.g., Amazon.com)
have affiliate programs. Amazon, who
has around 200,000 affiliates, pays out
up to 15% of the sales channeled to its
site from an affiliate (Stone, 1999).
One-to-one marketing via e-mail is
an inexpensive alternative to consider.
With the customers’ consent, information about their buying habits allows a
business to target selected markets with
e-mail. However, spamming (sending
unsolicited e-mail messages without the
individual’s consent) is not an acceptable practice (Brondmo, 2000).
Non-Web-based methods of advertising Web sites are increasing in scope
and are being reported as successes
(Tweney, 1999). Piggy-back Web advertising through regular modes such as
store bags, shipping boxes, business
cards, TV, radio, newspapers. stenciling
on company vehicles, yellow pages,
brochures, promotional items, and
bricks-and-mortar
storefronts are
increasingly evident everywhere.
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Building Traffic and Marketing
The main concern for e-business, as
for a bricks-and-mortar business, is
building customer traffic. Lack of planning and failure to budget for attracting
customers are two of the key reasons
many e-businesses fail. The traditional
business challenges involved in acquiring and retaining customers are still present: something to bring the customer to
the site, a process to assist with the decision to buy (site design, ordering ease,
etc.), and a way to fix any problems that
emerge (Keenan, 1999). To attract customers, sites use two primary venues:
search sites (indirect) and promotional
activities (direct).
Search Sites
Promotional Techniques
Once the e-business has been discovered by visitors, it is important that they
be provided with a way to return easily
to the site. The homepage for every site
as well as other strategic areas within a
site should request that the visitor bookmark the page. Generally, sites with
bookmarks receive a higher frequency
of return visits.
Banner ads are promotional pieces
for other e-businesses that appear on the
visited Web site. Exchange of banners
among e-businesses is a simple, costeffective way to market. There are at
least 40 banner exchanges currently
operating, offering a wide variety of
quality and services. A typical arrangement requires the e-business to place two
or three banner ads of other businesses
on its site for every one of its banners
placed elsewhere (Colbert, 1999).
Click-through rates for banners (percentage of those viewing a banner ad
who actually click on it and go to the
advertised site) averaged 2% in 1997
and fell to half a percent (0.5%) or less
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Search sites play an important role in
helping Web surfers to locate a business
Maintenance
Maintaining a Web site is a dynamic
process because business on the Web is
SeptembedOctober 2001
13
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always changing. To capture new customers and retain existing ones, a successful Web site must be kept fresh with
updated information.
applied to the traditional challenges of
businesses in inventory management,
marketing, fulfillment systems, and customer service (Davis, 1998).
Updating
Summary
Although the frequency of site updating depends on the business and industry, no site should ever remain static. In
e-business storefronts, updating certainly must be done quite often, just as it is
done in traditional stores. New merchandise, new seasons, sales, and new
information necessitate frequent site
updating.
The elevated visibility of similar
businesses as they expand onto the Web
is creating increased competition (Sterrett & Shah, 1998). E-businesses should
engage in frequent surfing on the Web
to discover new innovations and new or
revamped competitors.
Because the Internet is changing the
way companies do business, business
educators must incorporate this change
into their courses. Most businesses,
large or small, new or old, will want to
start their e-business effort with controlled investment and risk. To engage
in e-business successfully, an organization must develop an integrated business
strategy that considers traditional as
well as e-business issues and has a customer-centric focus. Though the present
article focused primarily on the business-to-consumer channel, most comments are equally applicable to the
business-to-business channel. By understanding how a company expands into an
e-business, business educators will be
better equipped to address the e-business
dimension in the courses they teach.
Technology will continue to push the
marketplace toward new business models that must be integrated into the business pedagogy. Today, doing business
online is a strategic imperative for all
types of industries and organizations.
By preparing their students to create and
implement strategies for the new Internet economy, business educators can
help businesses, especially ones with
more limited resources, to be ready for
the e-business plunge. Failure to meet
this instructional imperative could mean
that many businesses, especially small
ones, will miss the benefits of an e-business channel and be increasingly left
behind in the marketplace.
Davis, C. (1998) Marketing & retail. Business
Horizons, 4/(4),2-4.
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Goldberg, B., & Sifonis, J. (1998). Focusing your
e-commerce vision. Management Review,
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Hartman, A,, & Sifonis, J. (2000). Net re&;
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Evolution
Today increasing numbers of traditional retailers are getting on the Internet and competing very effectively with
both traditional and Web-only stores. In
fact, many are finding that this approach
offers numerous competitive advantages. Many shoppers already know and
trust the bricks-and-mortar businesses.
Businesses can enhance ustomer service
by allowing customers to buy on the
Web and, if necessary and more convenient, to return that merchandise to the
bricks-and-mortar store.
Other businesses are setting up kiosks
in their stores to enable their customers
to order online at the bricks-and-mortar
location if an item is not in stock. In the
future, Web-linked kiosks may be
placed in public places for access that is
as easy as using a pay phone today
(Karakaya & Karakaya, 1998) New
technology incorporated with new business strategies will continue to expand
e-business opportunities. Creative Webbased solutions are already being
14
Journal of Education for Business
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Colbert, K. (1999, October 22). Helping small businesses get big results. Marketing News, p. 30.