Electronic commerce
J. Ohene-Djan
CO3323
2008
Undergraduate study in
Computing and related programmes
This is an extract from a subject guide for an undergraduate course offered as part of the
University of London International Programmes in Computing. Materials for these programmes
are developed by academics at Goldsmiths.
For more information, see: www.londoninternational.ac.uk
,This guide was prepared for the University of London International Programmes by:
Dr James Ohene-Djan
This is one of a series of subject guides published by the University. We regret that due to pressure of work the author is
unable to enter into any correspondence relating to, or arising from, the guide. If you have any comments on this subject
guide, favourable or unfavourable, please use the form at the back of this guide.
University of London International Programmes
Publications Office
32 Russell Square
London WC1B 5DN
United Kingdom
www.londoninternational.ac.uk
Published by: University of London
© University of London 2008
The University of London asserts copyright over all material in this subject guide except where otherwise indicated. All rights
reserved. No part of this work may be reproduced in any form, or by any means, without permission in writing from the
publisher. We make every effort to respect copyright. If you think we have inadvertently used your copyright material, please
let us know.
,Contents
Introduction to Study Guide .......................................................................................................... 1
1 Introducing electronic commerce ................................................................................................7
Introduction.....................................................................................................................................7
Student reading ........................................................................................................................7
Learning objectives..................................................................................................................7
Subject summary.............................................................................................................................8
Chapter overview.....................................................................................................................8
The second wave of e-commerce.............................................................................................8
Definition of e-commerce........................................................................................................8
Categories of e-commerce ....................................................................................................... 8
The nature of e-commerce .....................................................................................................10
The historical development of e-commerce...........................................................................11
Electronic data interchange....................................................................................................11
The dot-com boom, bust and rebirth......................................................................................11
The rebirth of e-commerce ....................................................................................................11
The second wave ...................................................................................................................12
Business models, revenue models, and business processes ...................................................13
Traditional commerce and business processes ......................................................................13
Advantages of electronic commerce......................................................................................14
Disadvantages of electronic commerce .................................................................................15
Economic forces and electronic commerce ...........................................................................15
Value chains in electronic commerce ....................................................................................16
Industry value chains .............................................................................................................16
SWOT analysis: evaluating business unit opportunities.......................................................16
International nature of electronic commerce .........................................................................17
Review questions ..........................................................................................................................18
True/False questions ..............................................................................................................18
Multiple choice questions ......................................................................................................19
Essay questions......................................................................................................................20
2 Technology infrastructure: the internet and the world wide web ..........................................21
Introduction...................................................................................................................................21
Student reading ......................................................................................................................21
Learning objectives................................................................................................................21
Subject summary...........................................................................................................................22
Chapter overview...................................................................................................................22
The internet and the world wide web.....................................................................................22
Emergence of the world wide web ........................................................................................23
Packet-switching networks ....................................................................................................23
Transmission control protocol/internetworking protocol (TCP/IP).......................................24
IP addresses and domain names.............................................................................................24
Webpage request and delivery protocols ...............................................................................25
Other internet protocols .........................................................................................................25
Unsolicited commercial e-mail (UCE) ..................................................................................25
Markup languages and the web .............................................................................................26
Internet connection options....................................................................................................27
Connectivity overview...........................................................................................................27
Review questions ..........................................................................................................................29
True/False questions ..............................................................................................................29
Multiple choice questions ......................................................................................................29
Essay questions......................................................................................................................30
3 Selling on the web: revenue models and building a web presence..........................................31
Introduction...................................................................................................................................31
Student reading ......................................................................................................................31
Learning objectives................................................................................................................31
Subject summary...........................................................................................................................32
Chapter overview...................................................................................................................32
1
, Revenue models.....................................................................................................................32
Revenue models in transition.................................................................................................34
Revenue strategy issues .........................................................................................................35
Creating an effective web presence .......................................................................................36
Consumer-centric website design ..........................................................................................38
Connecting with consumers...................................................................................................38
The nature of communication on the web..............................................................................38
Measuring website effectiveness ...........................................................................................39
Review questions ..........................................................................................................................40
True/False questions ..............................................................................................................40
Multiple choice questions ......................................................................................................40
Essay questions......................................................................................................................42
4 Marketing on the web .................................................................................................................43
Introduction...................................................................................................................................43
Student reading ......................................................................................................................43
Learning objectives................................................................................................................43
Subject summary...........................................................................................................................44
Chapter overview...................................................................................................................44
The four Ps of marketing: ......................................................................................................44
Communicating with different marketing strategies..............................................................44
Market segmentation .............................................................................................................45
Market segmentation on the web ...........................................................................................45
Offering consumers a choice on the web...............................................................................46
Beyond market segmentation: consumer behaviour and relationship intensity .....................46
Consumer relationship intensity and life-cycle segmentation ...............................................46
Five-stage model of consumer loyalty...................................................................................46
Acquisition, conversion, and retention of consumers ............................................................47
Consumer acquisition, conversion, and retention: the funnel model .....................................47
Advertising on the web..........................................................................................................48
Banner ads .............................................................................................................................48
Other web ad formats ............................................................................................................48
Sites sponsorships..................................................................................................................49
Effectiveness of online advertising........................................................................................49
E-mail marketing and permission marketing.........................................................................49
Combining content and advertising .......................................................................................49
Outsourcing e-mail processing ..............................................................................................49
Technology-enabled consumer relationship management .....................................................50
CRM as a source of value in the marketspace .......................................................................50
Creating and maintaining brands on the web.........................................................................50
Elements of branding:............................................................................................................50
Emotional branding vs. rational branding..............................................................................50
Brand leveraging strategies....................................................................................................51
Brand consolidation strategies...............................................................................................51
Costs of branding...................................................................................................................51
Affiliate marketing strategies ................................................................................................51
Viral marketing strategies......................................................................................................52
Search engine positioning and domain names .......................................................................52
Search engines and web directories .......................................................................................52
Paid search engine inclusion and placement..........................................................................52
Website naming issues...........................................................................................................53
Review questions ..........................................................................................................................54
True/False questions ..............................................................................................................54
Multiple choice questions ......................................................................................................54
Essay questions......................................................................................................................55
5 Business-to-business strategies: from electronic data interchange to electronic commerce.57
Introduction...................................................................................................................................57
Student reading ......................................................................................................................57
Learning objectives................................................................................................................57
Subject summary...........................................................................................................................58
Chapter overview...................................................................................................................58
2
J. Ohene-Djan
CO3323
2008
Undergraduate study in
Computing and related programmes
This is an extract from a subject guide for an undergraduate course offered as part of the
University of London International Programmes in Computing. Materials for these programmes
are developed by academics at Goldsmiths.
For more information, see: www.londoninternational.ac.uk
,This guide was prepared for the University of London International Programmes by:
Dr James Ohene-Djan
This is one of a series of subject guides published by the University. We regret that due to pressure of work the author is
unable to enter into any correspondence relating to, or arising from, the guide. If you have any comments on this subject
guide, favourable or unfavourable, please use the form at the back of this guide.
University of London International Programmes
Publications Office
32 Russell Square
London WC1B 5DN
United Kingdom
www.londoninternational.ac.uk
Published by: University of London
© University of London 2008
The University of London asserts copyright over all material in this subject guide except where otherwise indicated. All rights
reserved. No part of this work may be reproduced in any form, or by any means, without permission in writing from the
publisher. We make every effort to respect copyright. If you think we have inadvertently used your copyright material, please
let us know.
,Contents
Introduction to Study Guide .......................................................................................................... 1
1 Introducing electronic commerce ................................................................................................7
Introduction.....................................................................................................................................7
Student reading ........................................................................................................................7
Learning objectives..................................................................................................................7
Subject summary.............................................................................................................................8
Chapter overview.....................................................................................................................8
The second wave of e-commerce.............................................................................................8
Definition of e-commerce........................................................................................................8
Categories of e-commerce ....................................................................................................... 8
The nature of e-commerce .....................................................................................................10
The historical development of e-commerce...........................................................................11
Electronic data interchange....................................................................................................11
The dot-com boom, bust and rebirth......................................................................................11
The rebirth of e-commerce ....................................................................................................11
The second wave ...................................................................................................................12
Business models, revenue models, and business processes ...................................................13
Traditional commerce and business processes ......................................................................13
Advantages of electronic commerce......................................................................................14
Disadvantages of electronic commerce .................................................................................15
Economic forces and electronic commerce ...........................................................................15
Value chains in electronic commerce ....................................................................................16
Industry value chains .............................................................................................................16
SWOT analysis: evaluating business unit opportunities.......................................................16
International nature of electronic commerce .........................................................................17
Review questions ..........................................................................................................................18
True/False questions ..............................................................................................................18
Multiple choice questions ......................................................................................................19
Essay questions......................................................................................................................20
2 Technology infrastructure: the internet and the world wide web ..........................................21
Introduction...................................................................................................................................21
Student reading ......................................................................................................................21
Learning objectives................................................................................................................21
Subject summary...........................................................................................................................22
Chapter overview...................................................................................................................22
The internet and the world wide web.....................................................................................22
Emergence of the world wide web ........................................................................................23
Packet-switching networks ....................................................................................................23
Transmission control protocol/internetworking protocol (TCP/IP).......................................24
IP addresses and domain names.............................................................................................24
Webpage request and delivery protocols ...............................................................................25
Other internet protocols .........................................................................................................25
Unsolicited commercial e-mail (UCE) ..................................................................................25
Markup languages and the web .............................................................................................26
Internet connection options....................................................................................................27
Connectivity overview...........................................................................................................27
Review questions ..........................................................................................................................29
True/False questions ..............................................................................................................29
Multiple choice questions ......................................................................................................29
Essay questions......................................................................................................................30
3 Selling on the web: revenue models and building a web presence..........................................31
Introduction...................................................................................................................................31
Student reading ......................................................................................................................31
Learning objectives................................................................................................................31
Subject summary...........................................................................................................................32
Chapter overview...................................................................................................................32
1
, Revenue models.....................................................................................................................32
Revenue models in transition.................................................................................................34
Revenue strategy issues .........................................................................................................35
Creating an effective web presence .......................................................................................36
Consumer-centric website design ..........................................................................................38
Connecting with consumers...................................................................................................38
The nature of communication on the web..............................................................................38
Measuring website effectiveness ...........................................................................................39
Review questions ..........................................................................................................................40
True/False questions ..............................................................................................................40
Multiple choice questions ......................................................................................................40
Essay questions......................................................................................................................42
4 Marketing on the web .................................................................................................................43
Introduction...................................................................................................................................43
Student reading ......................................................................................................................43
Learning objectives................................................................................................................43
Subject summary...........................................................................................................................44
Chapter overview...................................................................................................................44
The four Ps of marketing: ......................................................................................................44
Communicating with different marketing strategies..............................................................44
Market segmentation .............................................................................................................45
Market segmentation on the web ...........................................................................................45
Offering consumers a choice on the web...............................................................................46
Beyond market segmentation: consumer behaviour and relationship intensity .....................46
Consumer relationship intensity and life-cycle segmentation ...............................................46
Five-stage model of consumer loyalty...................................................................................46
Acquisition, conversion, and retention of consumers ............................................................47
Consumer acquisition, conversion, and retention: the funnel model .....................................47
Advertising on the web..........................................................................................................48
Banner ads .............................................................................................................................48
Other web ad formats ............................................................................................................48
Sites sponsorships..................................................................................................................49
Effectiveness of online advertising........................................................................................49
E-mail marketing and permission marketing.........................................................................49
Combining content and advertising .......................................................................................49
Outsourcing e-mail processing ..............................................................................................49
Technology-enabled consumer relationship management .....................................................50
CRM as a source of value in the marketspace .......................................................................50
Creating and maintaining brands on the web.........................................................................50
Elements of branding:............................................................................................................50
Emotional branding vs. rational branding..............................................................................50
Brand leveraging strategies....................................................................................................51
Brand consolidation strategies...............................................................................................51
Costs of branding...................................................................................................................51
Affiliate marketing strategies ................................................................................................51
Viral marketing strategies......................................................................................................52
Search engine positioning and domain names .......................................................................52
Search engines and web directories .......................................................................................52
Paid search engine inclusion and placement..........................................................................52
Website naming issues...........................................................................................................53
Review questions ..........................................................................................................................54
True/False questions ..............................................................................................................54
Multiple choice questions ......................................................................................................54
Essay questions......................................................................................................................55
5 Business-to-business strategies: from electronic data interchange to electronic commerce.57
Introduction...................................................................................................................................57
Student reading ......................................................................................................................57
Learning objectives................................................................................................................57
Subject summary...........................................................................................................................58
Chapter overview...................................................................................................................58
2
