E-commere Flashcards
What is meant by the term e-commerce?
E-commerce (electronic commerce) is the trading of goods and services via the internet. Using e-commerce gives businesses access to customers all over the world.
Distinguish between business-to-business transactions and business-to-consumer transactions and give 2 examples of each
A B2B transaction is where one business caters to the needs of another and relates to professional buyers. Some examples of business-to-business transactions are Insurance Companies, banking services and advertising agencies.
A B2C transaction caters to the end user (consumers). Some example are Amazon, Woolworths, and basically any online shopping outlet. However, some businesses are engaged in both, for example Google; consumers use it as a search engine and businesses buy advertising slots from them.
List and explain three advantages and three disadvantages of using the internet for commercial purposes for a business.
Advantages for a Business
• Provides another source of revenue and distribution channel
• Represents opportunity for organizations to respond to competitors quickly
• Excessive packaging can be reduced
• More cost-effective, savings on showrooms
• Reduces barriers to entry
• Speedy transactions are possible
• 24 hours a day, 7 days a week
• World-wide market
Disadvantages for a Business
• Set up costs may be high
• Credit card companies will impose finance charges
• May not be suitable for some businesses
• Too reliant on advanced technology
• May result to job losses
Advantages for a Consumer • Information can be accessed at any convenient time • Email makes follow-up contact easier • Comparison shopping is made easier • Prices are often lower than in shops • Huge range of goods to choose from • Ratings of store from other consumers • Good for people with disabilities
Disadvantages for a Consumer
• Fraudulent trade, spam and unethical marketing may occur
• Need to have a computer and know how to access and search effectively
• Difficult to assess quality and suitability of products
• Inconvenience of returning unwanted goods
• Security risks of buying on-line
• There is a delay between delivery and purchase of products
What goods and services are best suited to selling on-line?
- Everyday entertainment goods (CDs, Books).
- Products for fans or enthusiasts (craft supplies, sports memorabilia)
- Services where you don’t often meet face-to-face (travel services, online trading)
- Frequently used business items (office stationery and cleaning products)
- Technology (software, hardware)
- Rare items (out-of-print books, rare autographs)
Why should a business have an online presence?
Accessibility
Brand Building
Greater Audience
Easier Selling and Marketing
What sort of questions should a business owner ask themselves before starting an e-business?
- Are your customers online? Do they have internet access, use it and use it to buy things.
- Are your competitors online?
- Can you commit to e-commerce? Can you manage the communications, privacy obligations, security, logistics and financial commitment of having e-commerce?
When thinking about your digital strategy what three areas should you look at? Give an example for each area.
• What goals do you have for your organisation?
o Attract more local, national or global customers
o Raise awareness about your organisation
o Ensure that people can engage with their organisation including on their mobile phones
• Which online activities would benefit you?
o Developing a search engine and/or social media marketing strategy
o Incorporating e –commerce functionality for donations and sales
• How can your online activities help you achieve your goals?
o Increase sales outside geographic area
o Drive web traffic to foot traffics
o Promote fundraising initiate
As IP addresses are difficult to remember, what is used instead as it is more functional for everyday users. Give an example to highlight your answer.
Another name for an IP address is the domain name. A domain name is the name of your address on the web, one of the main ways to find you. Before you decide on a domain name, a business must ask themselves;
o Does it suit my reputation and branding?
o Is it easy to remember?
o Is it easy to spell?
o Is it easy to say over the phone?
o How easily will users be able to guess my domain name.
What does outsourcing mean in regards to e-business?
Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house.
What are some advantages and disadvantages of outsourcing your e-business?
Outsourcing benefits include better customer service, remote access, specialities in the area and you can concentrate on your core business. Outsourcing risks include long-term contracts, possibly unstable companies and security risks like hackers and virus.
List and explain three marketing methods an e-business might use.
Social Networking
• To reach a broader range of age demographics for a low or non-existent price.
o Equal users: Male (47%), Female (53%)
o 61% of Facebook users are middle aged
o 18-24 year olds are spread over a range of social networking sites
o Hyperlinks to your own website and potentially free.
o Promote special offers
• Search Engine Marketing
• To increase site visitors by matching potential customers by searches or keywords.
o The higher and more frequent a website appears in the list of results the more visitors it will receive
o One of the most popular marketing outlets on the internet due to popularity of search engine as a tool
o Known as PPC – pay per click
• Email
• To target specific customers
o Only target people with an interest your information for greater feedback
o Permission marketing – not SPAM – you have to ask people to subscribe which means they are interested in hearing about your offers.
o You can include exclusive offers and incentives to make the emails more effective.
Why is it important for businesses to keep their websites updated?
Your website should convey to readers that your business is up to par with the competition and always striving to meet the needs of your customers. Readers tend to get bored reading the same content over and over again. Disorganized content can be quite confusing, and will not reflect well on you, or your company. Not keeping your contact information updated sends the message that you are lazy, or even worse, careless and sloppy. As the worldwide web has a broad audience, think about the potential business you could be missing out on if your website reflects incorrect information.
How can companies improve their online customer service?
FAQ Page, Live chat, instant messaging, email support.
Explain the types of information an online company can collect from software such as Google Analyze.
- The number of visitors to your website
- The geographic location of visitors to your site
- What website they came from (known as the referring site)
- The landing page (the web page they enter your site on, which may or may not be your homepage)
- The number of pages they viewed
- The time they spent on your website
Explain the term ‘customer conversion’.
Conversion rate refers to the changing of site surfers into buyers. It is the rate at which your visitors are transformed into customers.
