Which academic disciplines have a technical approach to e-commerce?

What is each
discipline interested in to contribute to the overall success of e-commerce?
Answer:
Computer scientists, operations management scientists, and certain technical groups within
the information systems discipline all take a technical approach to e-commerce. Computer
scientists are interested in e-commerce as an exemplary application of Internet technology.
They are concerned with the development of computer hardware, software, and
telecommunications systems, as well as standards, encryption, and database design and
operation. Operations management scientists are primarily interested in building mathematical
models of business processes and optimizing these processes. They are interested in e-
commerce as an opportunity to study how business firms can exploit the Internet to achieve
more efficient business operations. Technical groups within the information systems specialty
focus on data mining, search engine design, and artificial intelligence.

What is Big Data and why are marketers interested in it?

Answer:
Big Data usually refers to very large data sets in the petabyte and exabyte range–in other
words, billions to trillions of records, often from different sources. Big Data is produced in
much larger quantities and much more rapidly than traditional data collection mechanisms.
Even though tweets are limited to 140 characters each, Twitter generates more than eight
terabytes of data daily. According to the IDC technology research firm, data is more than
doubling every two years, so the amount of data available to organizations is skyrocketing.
The next frontier will be data derived from the Internet of Things (IoT). Making sense out of
it quickly in order to gain a market advantage is critical.
Marketers are interested in Big Data because it can be mined for patterns of consumer
behavior and contain more interesting anomalies than smaller data sets, with the potential to
provide new insights into customer behavior, weather patterns, financial market activity, or
other phenomena. For instance, Evrythng, an IoT platform company, is partnering with
Trueffect, a digital ad firm, to develop ways that marketers can use data generated by
connected appliances and other devices in order to directly communicate with and target
advertising with consumers. However, to derive business value from this data, organizations
need new technologies and analytic tools capable of managing and analyzing nontraditional
data along with their traditional enterprise data.

What tools or technologies are available for providing interactivity and active content on
a website and what functionality do they add? Describe at least five.
Answer:
Among the tools that are available for providing interactivity on a website are CGI scripts,
Active Server Pages and ASP.NET, Java, Java Server Pages, JavaScript, ActiveX, VBScript,
Cold Fusion, PHP, Ruby on Rails, and Django, as well as widgets and mashups.
CGI or Common Gateway Interface is a set of standards for communications between a
browser and a program running on a server that allows for interaction between the user and
the server. CGI allows an executable program to access all of the information within incoming
requests from clients. The program then generates the required output for a web page and
sends it back to the client through the web server. For example, CGI scripts are behind the
display of the contents of a shopping cart to a user. The CGI script retrieves the contents from
a database and returns it to the server, which sends it as an HTML page to the user’s client
computer. All of the computing takes place on the server side, thus this is referred to as
server-side computing.
Active Server Pages (ASP) and its successor, ASP.NET, are Microsoft’s versions of server-
side programming. ASP and ASP.NET enable web developers to easily create and open
records from a database and execute programs within an HTML page. They also handle all of
the various forms of interactivity found on e-commerce sites.
Java is a programming language that allows programmers to create interactivity on the user’s
client computer. The leading browsers today have a Java Virtual Machine (VM) that enables
Java applets to be downloaded to the client over the Web. Although Java can display
interesting graphics and create small interactive programs such as calculators and calendars
that are executed entirely on the user’s computer, thus saving considerable load on the server,
it is not used extensively on corporate e-commerce sites for several reasons. First, the
different vendors produce different versions of Java, resulting in applets built using
proprietary versions that would only work well in the vendor’s own browser or that would
crash or malfunction in some browsers. Second, many firms will not allow Java applets
through their firewalls for security reasons.
Java Server Pages (JSP), like CGI and ASP, is a web page coding standard. Developers use a
combination of HTML, JSP scripts, and Java to dynamically generate web pages. Java
servlets (small programs) are specified in the web page and run on the web server to modify
pages before they are sent to the user. JSP is supported by most of the popular application
servers on the market today.
JavaScript is a programming language invented by Netscape that is used to control objects on
HTML pages as well as the interactions with the browser. It is much more acceptable to
corporations because it is more stable than Java and it is restricted to the operation of
requested web pages. It is used for many common, yet crucial functions such as verifying and
validating customer input. For example, it is used to verify that a valid phone number or e-
mail address has been entered.
ActiveX is Microsoft’s programming language that competes with Java, while VBScript is the
competitor for JavaScript. ActiveX controls are the equivalent of Java applets; however, when
the browser receives a web page containing an ActiveX control, the browser simply runs the
program on the page rather than downloading it to the client’s computer. ActiveX also has full
access to the client’s resources (printers, networks, and hard drives), unlike Java. However,
neither ActiveX nor VBScript work in any browser other than Internet Explorer. Due to the
proprietary nature of Java, ActiveX, and VBScript, they are generally avoided by e-commerce
site developers. CGI scripts, JSP, and JavaScript are the leading tools for providing interactive
content.
ColdFusion is an integrated server-side environment for developing interactive web
applications. It combines an intuitive tag-based scripting language and a tag-based server
scripting language (CFML) that lowers the cost of creating interactive features. It provides
visual design, debugging, and deployment tools that make it a complete web application
development platform.
PHP is an open source, general purpose scripting language that is most frequently used in
server-side web applications to generate dynamic web page content, although it can also be
used for client-side graphical user interface applications. PHP is also a part of many web
application development frameworks, such as CakePHP, CodeIgniter, and others, and is also
part of the LAMP (Linux, Apache, MySQL, PHP) open source web development model for
building dynamic websites and web applications (Perl and Python are sometimes substituted
for PHP in some LAMP projects).
Ruby on Rails (RoR or Rails) is an open source web application framework based on the
Ruby programming language. RoR is based on a philosophy known as convention over
configuration, or coding by convention (CoC), which means that the framework provides a
structured layout that minimizes the number of decisions that the programmer needs to make,
thereby simplifying and speeding development. JavaScript and Ajax are highly integrated into
RoR, which makes it easy to handle Ajax requests for page updates. Django is also an open
source web application framework. It is based on the Python programming language. Django
is optimized for the creation of complex, database-driven websites. It allows for fast
development, focuses on automating as much as possible, emphasizes the reusability of
various components, and follows the DRY (Don’t Repeat Yourself) programming principle.
Widgets are small chunks of code that execute automatically in your HTML web page. They
typically present users with dynamic content such as news headlines, calendars, clocks,
weather, live TV, games, and other functionality. Mashups pull functionality from one
website and include it in another, such as a real-estate agent incorporating Google Maps data
in his or her own website.

Discuss the implications of each of the unique features of e-commerce technology for the
overall business environment.
Answer:
The ubiquity of e-commerce creates new marketing channels and expands the size of the
overall market. It also creates new efficiencies in industry operations and lowers the costs to
firms of sales operations. By reducing the cost of information, the Internet provides each of
the key players in the value chain for an industry with new opportunities to maximize their
positions by lowering costs and/or raising prices. Manufacturers can develop direct
relationships with their customers through their own Web sites and bypass the costs of
distributors and retailers. Distributors can develop highly efficient inventory management
systems to reduce their costs, and retailers can develop efficient customer relations
management systems to strengthen their service to customers. Customers can use the Web to
search for the best quality, prices, and delivery methods, thus reducing their transaction costs
and the prices they pay for goods.
The global reach of e-commerce lowers barriers to entry and expands the market at the same
time. This lowers the costs of both industry and firm operations through production and sales
efficiencies. When the operational efficiency of an entire industry increases, it helps the
industry to compete with alternative industries and lowers prices and adds value to
consumers.
The universal standards of e-commerce lower barriers to entry while at the same time
intensifying competition within an industry. Universal standards also reduce the costs for
communications and computing, enabling firms to engage in broad-scope strategies.
Communications efficiencies can also enable firms to outsource some primary and secondary
activities to specialized, more efficient providers without affecting the consumer. The Internet
can also be used to precisely coordinate the steps in the value chain for a firm, thus reducing
overall costs.
The richness of e-commerce reduces the strength of powerful distribution channels. It also
allows firms to reduce their reliance on traditional sales forces and can enhance post-sales
support services.
The interactivity of e-commerce reduces the threat of substitutes through the enhanced use of
customization. It also reduces industry and firm costs by enabling differentiation strategies. In
their totality, the differentiation features of a product constitute the customer value
proposition for a firm. The ability of the Web to personalize the shopping experience and to
customize a product to the particular demands of each consumer are the most significant ways
in which the interactivity of the Web can be used to differentiate products.
The use of Internet technology to personalize and customize a customer’s experience or
product reduces threats of substitutions, raises barriers to entry, reduces value chain costs by
lessening reliance on sales forces, and enables personalized marketing strategies.
The information density on the Web weakens powerful sales channels, thus shifting
bargaining power to the consumer, while also lowering the costs of obtaining, processing, and
distributing information about suppliers and consumers.
The use of social technologies shifts programming and editorial decisions to consumers;
creates substitute entertainment products; and energizes a large group of new suppliers.
E-commerce firms can also leverage the ubiquitous nature, the global reach, the interactivity,
and the information density of the Web to differentiate products and services. Firms can make
it possible for consumers to purchase a product from home, work, or on the road, anywhere in
the world. They can create Web-based experiences with unique interactive content and store
and process product information, warranties, and helpful hints to differentiate their product
and their firm from the competition.

What has changed in online marketing since 2007?

Answer:
Since 2007, Facebook and other social networking sites have grown rapidly, smartphones
have taken the market by storm, and local marketing has taken off. Prior to 2007, online
marketing consisted of creating a corporate Web site, buying display ads on Yahoo and
purchasing AdWords on Google, and sending e-mail. The display ad was the most prevalent
form of online advertising. “Eyeballs” were the primary measure of a site’s success, and
“impressions” were the measure of an advertising campaign’s success. Today, marketing is
based on businesses marketing themselves as partners in multiple online conversations with
customers and critics. Marketing requires firms to locate and participate in conversations
happening on social media. Businesses can no longer tightly control their brand messaging. In
addition, in 2007, mobile marketing was in its infancy, but it is now more than double the size
of social marketing and location-based marketing.

How are social networks being used in B2B e-commerce?

Answer:
In B2B e-commerce, social networks are beginning to be common tools for procurement
offers, managers of supply chains, logistics managers and others engaged in B2B e-
commerce. Social networks can provide personal connections among customers, suppliers,
and logistics partners that are needed to keep the supply chain functioning, and to make
decisions based on current conditions. Participants in the supply chain are using social
networks for purchasing, scheduling, exception handling, and deciding with their B2B
customers and suppliers. In many cases, supply chain social networks are private and owned
by the largest firm in the supply chain network. In other cases, firms develop Facebook pages
to organize conversations among supply chain network members. Public social network sites
like Facebook and Twitter can be excellent for coordinating the flow of information among
business partners through the supply chain.

Define and describe the transaction broker business model and discuss the eight
components of the business model for this type of B2C firm.
Answer:
The transaction broker business model is most commonly found in the financial services,
travel services, and job placement services industries. The eight elements of a business model
are value proposition, revenue model, market opportunity, competitive environment,
competitive advantage, market strategy, organizational development, and management team.
The primary value proposition for a transaction broker is the saving of time and money. These
sites also often provide timely information and opinion. They offer the consumer the
opportunity to increase their individual productivity by helping them to get things done faster
and more cheaply.
The revenue model for these firms is based upon receiving commissions or transaction fees
when a successful business deal is completed. Online stock trading firms receive either a flat
fee for each transaction or a fee based on a sliding scale according to the size of the
transaction. Job sites charge the employers a listing fee up front, rather than when the position
is filled as traditional “head hunter” firms have done.
The market opportunity for transaction brokers in financial services appears to be large due to
the rising interest in receiving financial planning advice and conducting stock transactions
online. Demand is also increasing for job placement help that is national and even global in
nature and for purchasing travel services quickly and easily online. However, there is some
market resistance due to consumers’ fear of loss of privacy and loss of control over their
personal financial information.
The competitive environment for financial services has become fierce as new entrants,
including the traditional brokerage firms that have now entered the online marketspace, have
flooded the market. In order to compete effectively, online traders must convince consumers
that they have superior security and privacy procedures. The number of job placement sites
has also multiplied, and the largest sites such as Monster, which have the greatest number of
job listings, are the most likely to survive. Consolidation in all of the transaction broker
markets is presently occurring, making the market opportunity and competitive environment
for new firms looking to enter the marketspace bleak.
The market strategies for such firms typically include expensive marketing campaigns to
convince consumers to switch from their current provider or to choose their company over
other more well-established competitors, also a daunting task in the present economic
environment.
Achieving a competitive advantage is crucial to firms trying to enter these industries. Possible
strategies are to lure well-known names in the industry away from their present positions to
head a new endeavor, giving the firm instant credibility in the market. Experienced,
knowledgeable, and well-known employees may be able to give a new firm a competitive
edge.
New companies may have to start out recruiting a specialized highly skilled staff, with an
organizational development plan that is far more advanced than the typical startup. A strong
management team will attract investors and convince investors and consumers alike that a
new firm has plenty of market-specific knowledge and the experience necessary to implement
the business plan.

In developing an e-commerce presence, what questions must be asked and answered

about the firm’s target audience?
Answer:
Without a clear understanding of a firm’s target audience, it is difficult to develop a
successful e-commerce presence. There are two primary questions: who is the target audience
and where can they best be reached? A target audience can be described in a number of ways:
demographics, behavior patterns (lifestyle), current consumption patterns (online vs. offline
purchasing), digital usage patterns, content creation preferences (blogs, social networks, sites
like Pinterest), and buyer personas (profiles of your customer). Understanding the
demographics of the firm’s target audience is usually the first step. Demographic information
includes age, income, gender, and location.

What is cross-platform attribution and why is it difficult?

Answer:
Cross-platform attribution involves understanding how to assign appropriate credit to
different marketing initiatives on a variety of platforms that may have influenced a consumer
along the way to an ultimate purchase. There is increasing recognition that first-click and last-
click models that focus on either the first or last marketing channel or advertising format that
a consumer engages with prior to a purchase, are not sufficient. Cross-platform attribution is
difficult because there is a lengthy path from simple online ad impressions, Web site visits,
and page views to the purchase of a product.

What are some of the downsides of social marketing?

Answer:
Social marketing is not without its disadvantages. One problem is that brands lose a
substantial amount of control over where their ads appear in terms of other content and what
people say about their brands on social sites. Ads placed on Facebook according to an
algorithm can be placed near content that does not represent the values of the brand. This is
not peculiar to social marketing, as advertising using Google’s advertising platform faces the
same problem. This is very different, however, from TV ads where brands maintain near
complete control. Social sites are unique in that disgruntled consumers, or just malicious
people, can post material that is inaccurate and/or embarrassing.

Describe at least five characteristics of Net marketplaces.

Answer:
Characteristics of Net marketplaces include 1. bias–whether the marketplace advantages
sellers, buyers, or each group equally (neutral); 2. ownership–who owns the marketplace, a
specific firm, group of firms, or an industry group; 3 . pricing mechanism–how are prices
determined for products sold: fixed prices, bidding, RFPs; 4. Scope/focus–does the
marketplace serve horizontal or vertical markets; 5. value creation–what benefits are offered
to customers or suppliers; and 6. access to market–is the marketplace open to everyone or
limited to invitees only.

What is marketing analytics software and what is it used for?

Answer:
Marketing analytics software is a software package that collects, stores, analyzes, and
graphically presents data on each of the stages in the conversion of shopper to customer
process on e-commerce sites. Marketing analytics packages help business managers optimize
the return on investment on their Web sites and social marketing efforts, by building a
detailed understanding of how consumers behave when visiting their Web sites. They help
analyze where customers come from, what they do on the site, and which content is most
appealing, as well as how users shop, add to their shopping cart, and whether they abandon
their shopping cart. Marketing analytics also allows managers to measure the impact of
specific marketing campaigns.

Name and describe the five steps in the social marketing process.
Answer:
The five steps in the social marketing process are fan acquisition, engagement, amplification,
community, and brand strength.
Social marketing campaigns begin with fan acquisition, which involves using any of a variety
of means, from display ads to News Feed and page pop-ups, to attract people to your
Facebook page, Twitter feed, or other platform like a Web page. The next step is to generate
engagement, which involves using a variety of tools to encourage users to interact with your
content and brand located on your Facebook or Web pages. You can think of this as “starting
the conversation” around your brand.
Once you have engaged visitors, you can begin to use social site features to amplify your
messages by encouraging users to tell their friends by clicking a Like or +1 button, or by
sending a message to their followers on Twitter. Amplification involves using the inherent
strength of social networks to continue the spread of its message. Once you have gathered
enough engaged fans, you will have created the foundation for a community – a more or less
stable group of fans who are engaged and communicating with one another over a substantial
period of time (say several months or more). The ultimate goal is to enlarge your firm’s
“share of the online conversation.” The process ends with strengthening the brand and,
hopefully, additional sales of products and services.

Define and explain supply chain management systems, supply chain simplification, and
collaborative commerce, and the relationship between these concepts.
Answer:
Supply chain management systems coordinate and link the activities of suppliers, shippers,
and order entry systems to automate the order entry process from start to finish including the
purchase, production, and moving of a product from a supplier to a purchasing firm.
Supply chain simplification refers to the reduction of the size of a firm’s supply chain. Firms
today generally prefer to work closely with a strategic group of suppliers in order to reduce
both product costs and administrative costs. Instead of open bidding for orders, large
manufacturers have chosen to work with strategic partner supply firms under long-term
contracts that guarantee the supplier business and also establish quality, cost, and timing
goals. These strategic partnership programs are essential for just-in-time production models.
They often involve joint product development and design, integration of computer systems,
and tight coupling of the production processes of two or more companies.
Collaborative commerce is a direct extension of supply chain management systems and
supply chain simplification. The goal is for organizations to collaboratively design, develop,
build, and manage products throughout their life cycles. The focus has changed from the
simplification of transactions to the relationships between the supply chain participants.
Collaborative commerce fosters the sharing of sensitive internal information between
suppliers and purchasers. A rich communications environment is cultivated so that inter-firm
sharing of designs, production plans, inventory levels, and delivery schedules can take place.
Strategic partners in a supply chain are connected for much broader purposes, including
potentially the development of shared products.
What are the major stages in the development of corporate computing, and how does
the Internet and Web fit into this development trajectory?
Answer:
The major stages of computer technology are the following Mainframe Computers (1950-
1975); Minicomputers (1970-1980); Personal Computers (1980-present): Local Area
Networks and Client/Server Computing (1980-present); Enterprise-wide Computing (1990-
present); and the Internet and Web/Mobile Platform/Cloud Computing era (1995-present).
The Internet, while representing a sharp break from prior corporate computing and
communications technologies, is nevertheless just the latest development in the evolution of
corporate computing and part of the continuing chain of computer-based innovations in
business.

What are Web transaction logs, and how do they work in combination with registration
forms, shopping cart databases, and tracking files to help firms understand how
customers behave online?
Answer:
Transaction logs, which are built into Web serversoftware, record user activity at a Web site.
Log file analysis tools cull information from these files, which can contain tens to hundreds of
entries for each user. Transaction log data becomes more useful when it is combined with
registration form data and shopping cart data. Registration forms and shopping cart database
are two other visitor generated data trails. Merchants use registration forms to gather personal
data such as the name, address, phone number, zip code, e-mail address, and other optional
information on the tastes and interests of the consumer. The shopping cart database captures
all the item selection, purchase, and payment data. The data from transaction logs, registration
forms, and the shopping cart database can also be combined with other information that users
submit on product forms, contribute in chat rooms, or submit via e-mail messages to a firm to
produce a veritable treasure trove of information for both individual merchant sites and for the
industry as a whole.
Although the transaction log represents the foundation of online data collection, it is
supplemented by the use of cookies that are placed on a user’s hard drive when he or she
visits a site. Cookies allow a Web site to store data on a user’s machine that can be retrieved
later. Cookies provide Web marketers with a very quick means to identify each customer and
to understand his or her prior behavior at the site. Cookies can be used to determine how
many people are visiting a site, how many are repeat visitors, and how often they have visited.
They also make shopping cart and quick checkout possible by allowing a site to keep track of
a user as he or she adds to the shopping cart. Cookies can be combined with Web bugs to
create cross-site profiles. Web beacons (sometimes called Web bugs) are graphic files that are
embedded in e-mails and on Web sites. When a user opens an HTML format e-mail with an
embedded Web beacon, a request is sent to the server for the graphic data. Web beacons are
used to automatically transmit information about the user and the page being viewed to a
monitoring server in order to collect personal browsing behavior and other personal
information.