IS chapter 5

Electronic commerce (e-commerce)
– commerce, but it is commerce accelerated and enhanced by IT
Build powerful relationships with customers
Build powerful relationships with suppliers
Build powerful relationships with partners
path-to-profitability (P2P)
a formal business plan that outlines key business issues such as…
Customer targets
Marketing strategies
Operations strategies
Projected income statement and balance sheet targets`
Business to Government (B2G) e-commerce
– when a business sells products and services to a government entity.
Consumer to Government (C2G) e-commerce
– when an individual sells products and services to a government entity
Government to Business (G2B) e-commerce
– when a government entity sells products and services to businesses
Government to Consumer (G2C) e-commerce –
e-commerce activities performed between a government and its citizens
Paying taxes, registering vehicles, etc
Government to Government (G2G) e-commerce –
e-commerce activities within a nation’s government (can also refer to e-commerce activities between 2 or more nations’ governments)
Business to Business (B2B) e-commerce –
when a business sells products and services to customers who are primarily other businesses
Business to Consumer (B2C) e-commerce
– when a business sells products and services to customers who are primarily individuals
Consumer to Business (C2B) e-commerce
– when an individual sells products and services to a business
Consumer to Consumer (C2C) e-commerce
– when an individual sells products and services to another individual.
Mass customization
– the ability of an organization to give its customers the opportunity to tailor its products or services
Maintenance, repair, and operations (MRO) materials (indirect materials)
– materials necessary for running a company but do not relate to the company’s primary business activities
Demand aggregation
– combining purchase requests from multiple buyers which justifies a larger discount
Direct materials
– materials that are used in production in a manufacturing company or are placed on the shelf for sale in retail environments
Reverse auction
– process in which a buyer posts its interests in buying items and sellers compete by submitting successively lower bids
The lowest bidder wins
Electronic marketplace (e-marketplace)
– interactive business providing a central market where multiple buyers and sellers can engage in e-commerce
Horizontal e-marketplaces
Vertical e-marketplaces
Horizontal e-marketplace
– connects buyers and sellers across many industries
Vertical e-marketplace
– connects buyers and sellers in a given industry
Marketing mix
– set of marketing tools your organization will use to pursue its marketing objectives in reaching and attracting potential customers
Online ads (banner ads)
– small advertisements that appear on other sites
Pop-up ad
– small Web page advertisement that appears on your screen outside the current Web site
Pop-under ad
– pop-up ad you do not see until you close your current browser window
Viral marketing
– encourages users of a product or service supplied by a B2C business to encourage friends to join in as well
Affiliate program
– arrangement between two e-commerce sites that directs viewers from one site to another
– count of the number of people who visit one site and use an ad to get to another
Conversion rate
– percentage of potential customers who actually buy something
Financial cybermediary
– Internet-based company that makes it easy for one person to pay another person or organization over the Internet
PayPal ( is the most well-known
Electronic check
– mechanism for sending money from your checking or savings account to another person or organization
Electronic Bill Presentment and Payment (EBPP)
– system that sends bills over the Internet and provides an easy-to-use mechanism (perhaps a button) to pay for them if the amount looks correct
Smart card
– plastic card (the size of a credit card) that contains an embedded chip on which digital information can be stored and updated
Digital wallet
– software and information
Software provides transaction security
Information includes delivery information and other forms of necessary information
Electronic data interchange (EDI)
– direct computer-to-computer transfer of transaction information in standard business documents, such as invoices and purchase orders, in a standard format
value-added networks (VANs)
– B2B service that offers information-sharing services among organizations
Financial EDI
– an electronic process used primarily within B2B for the payment of purchases
– scrambles the contents of a file so that you can’t read it without having the right decryption key
public key encryption (PKE)
– uses two keys: a public key for everyone and private key for only the recipient of the encrypted information
Secure Sockets Layer (SSL)
Creates a secure connection between a Web client and server
Encrypts the information
Sends the information over the Internet
Denoted by lock icon on browser or https:// (notice the “s”)
Secure Electronic Transaction (SET)
– transmission method that ensures transactions are legitimate as well as secure
Helps verify use of a credit card, for example, by sending the transaction to the credit issuer as well as the seller/supplier
Long Tail
first offered by Chris Anderson; explains e-commerce profitability in terms of a sales curve
– when businesses provide enabling technologies that allow people – instead of designated employees – to create, modify, and oversee the development of a product or service.
Virtual good
– nonphysical object
Toys, weapons, clothes, and accessories you buy in online communities like Farmville and World of Warcraft
Mobile computing
– your ability to use technology to wirelessly connect to and use centrally located information and software
Mobile commerce
– electronic commerce transactions conducted over a wireless device such as a smartphone, laptop, or tablet PC.