Chapter I: Marketing Internet Marketing
Section II: The contribution of the Internet Marketing Activity
Paragraph 2: Electronic Commerce:
1-Definition and forms of electronic commerce
Electronic commerce has become the vehicle for an industrial revolution.
According to the dictionary, trade: “It’s trading, traffic, purchase or sale of goods or property.” Similarly, the “Cambridge” defines trade as “An activity which involves the purchase, sale or exchange of goods, commodities, securities or services”.
The blossoming of the Internet has sparked a new form of trade which departs from the traditional notion.
It comes to buying and selling online, or more commonly electronic commerce.
a-Definition of Electronic Commerce:
There is no conventional definition of the term “electronic commerce”. According to the technical definition () “Electronic commerce covers EDI () (EDI), electronic mail, audits and all related processes in order to exchange digital from one end to the other d commercial activity of any information necessary to conduct business. It is also used to describe the standards, practices and technologies that define the new approach to trade. ”
According to the French Association of Multimedia Telematics (AFTEL) “Electronic commerce refers to all trade in which the purchase is a telecommunications network, it covers both the simple order taking, as the purchase with payment for all purchases of goods than services, information exchange, transactions involving equipment products or consumer goods. ”
Francis Lorentz in its report submitted January 7, 1998 the French Minister of Economy, Finance and Industry is trying to define electronic commerce as “all trade-related digital business, so it is also good relationship inter-enterprise relationship between business and consumers, among other business and management.
The World Trade Organization, argues that electronic commerce is defined as production, distribution, marketing, sale or delivery of goods and services by electronic means. These means are telephone, fax, electronic payment systems, data interchange (EDI) and Internet.
In France, the turnover of electronic commerce is 7 billion €, there are 24 billion intexnautes in 2004. These figures are expected to increase significantly through the forecast rate of household equipment ADSL should increase from 8% to 3% ().
There are two main types of exchanges: exchanges between businesses (B to B), which represents 80% of the total, and trade between businesses and consumers (B to B).
b-forms of electronic commerce:
Depending on the nature of the authors, e-commerce may take on different forms:
*** Trade “Business-to-business (B to B):
Trade is characterized by a trade exchange between enterprises. Its development is booming but before considering a commercial strategy for the network, the company needs to know if this is profitable.
As B to B sites are aimed at a professional audience, they usually offer specific products and mostly technical. The purpose of this kind of site is mainly to convince the serious surfer positions and encourage them in making direct contact (online form).
Electronic commerce between businesses () which does not require exceptional technical prowess, and is promised a rapid expansion. Moreover, it is in the B to B e-commerce has found its way, well before the B to C.
As for the growth of trade between firms, it seems assured, since it has a direct impact on their competitiveness. And in the United States, this form of sale should reach 1300 billion collar, representing 80% of electronic commerce.
It’s the same for the evolution of B to B global market by 2006 indicating that it is destined to develop a spectacular ways, and has a bright future ahead of him: see table below :
B. Market development B to the global horizon 2006 ()
Predictions of B to B in the world (in billions of §)
Source 2000 2001 2002 2003 2004 2005 2006
IDC 282 516 917 1573 2655 4329 -
Gartner 433 914 1929 3632 5950 8530 -
Trester
Research 604 1138 2160 3675 5904 8823 1227 5
AMR Research 371 704 1375 2261 3350 4739 -
OVUM 218 345 543 858 1400 – -
E-Marketer – 474 823 1409 2267 – -
B. Market development B to the global horizon 2006
(Source: IDC, Gartner Group, e-Markets Research, AMR, OVUM.)
From the table we can see then that electronic commerce is developing at a rapid pace.
This can be explained, among other benefits for buyers and sellers can be drawn.
*** Trade “Business-to-Consumers (BtoC)
Means any type of economic activity for the general public and the final consumer, e-commerce to individuals and the first type of e-commerce have developed as an extension of the model of the mail ().
The B-to-C is less complex compared to the B to B, but it raises security issues less complex because it does not require the establishment of workflow purchases. But also require in terms of safety, when the customer pays online, even if the amounts of purchases are much lower.
A shop on the Internet does not represent a fundamental change in the traditional procurement process, the customer is now a visitor and a visit to a store no longer requires physical movement except that of the mouse! This online store has no wall or roof, it is only an interface between the company’s potential customer. Once connected, users can visit the site of an electronic store of his choice where he can, as in traditional stores:
* Look at the products offered;
* Search for a specific product or products they need,
* Get information (posters, email …)
* Buy now, pay, and have them delivered at home;
* Utilize the after – sales services.
All these actions are achievable by browsing through the site, moving from department to department (from page to page).
2 – The characteristics of electronic commerce ():
Electronic commerce relies on tools and methods used in traditional commerce. It takes place in the existing landscape without necessarily expelling its predecessors.
However, the characteristics of the Internet make it a medium that contains paradoxes that make it a commercial vector requiring specific adaptations of traditional methods. Thus, any company wishing to engage in cyberspace should be aware of the peculiarities of online commerce.
* Speed:
Interactions between companies and individuals “B to C” or inter-company “BTO B” are faster than ever. The duration of written exchanges, contracts or other no longer measured in days but in hours or even minutes. The possibility of convercer real time allows companies to learn about needs and problems of their clients.
Speed and efficiency of transactions reduces the time, which is popular with both customers and suppliers.
Furthermore, the Internet makes trade p ^ read Democratic effort in the smaller companies can compete with huge groups.
* Adaptability:
Online sites can be updated every hour, for example, if a manufacturer changes the price of one of its most requested items, they can simply corrected, catalogs, however, can not be recovered to be updated after sending.
In addition, e-mails and forums can immediately satisfy consumer preferences.
Mass customization:
Retail main advantage was to allow companies to produce the chain of items in large quantities for relatively low cost.
This technology has long been a great success, but it is not without weakness.
The products manufactured are standard regardless of the choice of colors and shapes, and customers are often forced to choose between items that do not suit them really.
The online business can establish an acceptable compromise between these two techniques of production. We commonly call mass customization. In other words, companies are able to produce every item in the catalog according to exact customer specifications, while doing a large scale. The direct satisfaction of their personal taste transports the client to the seventh heaven.
* Gender:
Internet offers small businesses: the democratization that is to say, the opportunity to be a little more equal of the great.
The ease and low cost of advertising on the Web allow each company to enter online.
* Simplification:
Historically, the complexity of machines has generated a lot of red tape in business, most of it is extremely difficult to make a single purchase request, the command is supported by so many people with such diverse functions that the treatment may take days or weeks.
Intermediaries – men or procedures – have long been a fixture in large enterprises. The Internet changes all that intermediaries will disappear from the scene where the term “disintermediation.”
In my name and I have a message for B, why go through C and D, to pass?
It sounds silly, but many employees have worked this way for years. Today the trend is reversed.
* Globality and Locality:
The accessibility of globalization is an essential feature of the network. By allowing small businesses to reach the world market, the Web has greatly contributed to achieving this new data.
Indeed, the primary benefit of the network and allow direct contact between the customer and the enterprise regardless of their geographical location, companies that use it may develop their business globally extremely efficiently.
However, operate on a global scale requires a certain organization and knowledge of customs regulations, for cons, the commercial windows created on the Web does not reflect national or regional boundaries, hence, the globalization of trade.
3 – Electronic commerce: The open problem
Trade, exchange of property for another, has always existed. The introduction of money has come to simplify the then rudimentary barter institution guaranteeing bank currency has brought stability to the monetary system. Banks were in the early local and regional. They deny even expanded to become national.
Today, several international banks, the area has seen the emergence of several electronic payment methods through technological advances. Nothing is perfect, but each has specific advantages which the emergence of several issues that limit the development of electronic commerce.
a- electronic means of payment:
Electronic money is defined as: “all the technical computer magnetic, electrical and data communication for exchange fund paper and without involving a relationship between banks, merchants and consumers or a relationship between the customer and his bank ”
This electronic money is embodied in several forms (), a list of the most common is given below:
* Electronic money:
She is currently growing in popularity as it combines the simplicity of traditional pieces payments to electronic transactions.
There are two main reasons that make electronic money attractive, the first is that electronic money is an attractive alternative to the extent that the accounts can be activated by phone. The data are reported only once and not with every purchase, it reduces the chances of a hacker take over credit card numbers or identity take a break. The gents also feel more confident when communicating with a real person that when they fill out a generic form.
The second reason is that electronic money can be used for micro-payments.
* Features to view:
These are checks that the issuer does not need to fill and carry. He just has to call a third office and fill out and give their bank details over the phone: bank, account number, phone number, etc. ..
* E-Checks:
This is a new electronic payment method, similar to the latest sight drafts.
A client registers with an online merchant by giving him all his bank details. The information is then stored at the merchant who reuses them in all future transactions.
The customer can check his bill online through a password allowing access to his account with the merchant.
* Electronic payment: the blue card:
This is the most used on the Internet. The user communicates its number with its expiration date. This does not pose any difficulties to pay a purchase by telephone or Minitel. The advantage of the blue card is the universality of the process which, combined with a software encryption prevents hackers. In addition, when buying and challenged in the absence of electronic signature, the risk is for the seller.
b-The problem of electronic payment:
The computerization process is not stayed at that level. The client can now pay their goods / services ordered over the Internet. This is called the Electronic Payment: Make the payment process through the Internet. In addition, these electronic content, the client can receive on the field the goods / services ordered. Thus, the electronic payment can not be achieved with traditional silver paper. Therefore, we must find new payment mechanisms adapted to this new context. These new payment options (), which are more physical, are known in terms of electronic cash, digital currency or E-Cash in English. That is why several companies are injecting large sums in developing methods for the management of electronic commerce and management of electronic payments.
The major difficulty is to ensure the safety of parties involved, which is not yet fully resolved. And electronic commerce will take off its true that if we develop ways to secure payment, easy to use and accepted the general public. So the solution that seems most simple is using the credit card. However, several problems constrain the use of credit cards on the Internet ().
The argument often used against the use of credit cards over the Internet is often the mere risk that the recipient uses a bad call the information collected. Yet many people give without hesitation their credit card number to the server in a restaurant or telephone number to order a Pizza.
Therefore, the main concern regarding the transmission of information on credit cards over the Internet is to ensure, with a network filled with millions of users, that such information does not reach the consignee. However, it is likely that there will always be people who try to intercept the information circulating on the Internet. In addition, the information circulating on the Internet passes through many computers before reaching their destination. On each computer through which information passes, the controller said computer can keep a copy, which increases the risk.
One can not deny the existence of this risk: it is the main issue of electronic commerce, we must develop a method of payment also on a purchase by telephone. You must be able to eliminate all risk of interception of information during transactions. However, if the risks of interception can not be excluded, we must make information unusable by a fraudster.
However, it is necessary that the entire use is still friendly enough not to discourage users.
Another problem that arises relates to the collection of taxes, in fact such a transaction may leave no trace. Governments can not then exercise control by cons, a proposal was made thereon by the directors of the IMF (International Monetary Fund) and World Bank, for a possibility of levying taxes on such transactions.
Also, determine how taxes apply in the following example: a client resident in Canada on holiday in the U.S. with a friend, makes Internet shopping a box of premium chocolate, at a merchant located in Belgium, but for delivery to her mother in France.
To track what happens on the Internet is much more difficult than following a transaction goes through the regular mail. In addition, the United States for example, laws concerning the postal service and those governed by the Federal Trade Commission, “does not apply to the Internet, hence the increased risk to consumers and merchants.
c-Suggested Solutions ()
One way to counter malicious people in need of quick money, is the codification of information. A second is to entrust the management of the transaction at an intermediary between the seller and the buyer (such as a bank for example).
A third is to use a prepaid card (like the smart card from Bell). Often, companies offering electronic payment method require (or strongly recommend) that sensitive information (information on the credit card or bank account ..) are transmitted by means other than Internet (eg telephone, mail, in person, …). These companies that offer electronic payment services are neither banks nor charters lending institutions, so they are businesses like any other, having no specific legislation on these activities.
These perspectives are taken very seriously in the United States while “The Office of the Controller of the Currency” has sent a notice to banks and regulators to warn against this type of undertaking under the department against financial crimes networks on the United States (FinCEN), the biggest danger is allegedly linked to whether certain persons or organization for money laundering.
