Unit 2
Planning of Online Business
Internet is inseparable from ecommerce. Ecommerce develop and expand its business with the network of internet. The nature and dynamics of internet in ecommerce are-
1. Web technology enables the e-business to go for buying and selling of goods and services both on retail and whole sale basis.
2. Different software are developed from time to time to provide better services to ecommerce consumers for online shopping, internet banking, mobile banking, e-ticket, information dissemination etc.
3. It facilitates to develop secured payment gateway for ecommerce businesses to make online payment, transfer etc.
4. It facilitates the businesses to store their data conveniently and retrieve it when necessary with the help of cloud system.
5. It facilitates the ecommerce businesses to go for digital marketing of their products and services.
6. It facilitates the publishers to sell e-books through appropriate application software.
Key takeaways-
Electronic business models are formed according to the parties involved in it while transacting with each other. There are mainly four types of business models-
1. Business to business (B2B): It refers to buying and selling of goods or services electronically between the companies. Such transactions are bulk in nature. For example, Alibaba, Walmart, Amazon etc. are some of the largest market place where businesses purchases products online.
2. Business to consumer (B2C): It refers to buying and selling of goods and services electronically between businesses and final consumers. It is also termed as retail section of e-commerce. For example, Netflix is an OTT platform that sales entertainment services to consumer, Amazon is an online shopping site that sales products and services to consumers, etc.
3. Consumer to consumer (C2C): It refers to buying and selling of goods and services electronically between consumers. Generally, these transactions are conducted through a third party. For example, eBay and Craigslist are online marketplaces where individuals buy and sell products to each other.
4. Consumer to business (C2B): In this type of e-commerce model, individuals make their services or products available for purchase for companies. Here, paintings, images, photos etc. are purchased and sold. For example, Freelancer connects workers and companies, bloggers sell their articles/contents to businesses.
Key takeaways-
Website as market place of ecommerce
Websites of ecommerce e are considered as marketplace for ecommerce where products and services of different brands, vendors etc. are sold to customers. Websites are designed to provide an online market platform to different manufacturers, sellers etc. to sell their products and services to the customers of different geographical locations. Customers are also able to purchase variety of products and services at competitive prices from far away vendors. There are different types of e-marketplaces are –
• Buyer-oriented e-marketplace – This type of online market place is established by the group of buyers to reduce the administrative cost and also get products/services at competitive prices from the suppliers. It is also beneficial for suppliers to advertise about their products among the potential buyers. Here the buyer opens its market in the server and invites bidding from the potential server. For example, Exostar, GE lightening’s TPN etc.
• Supplier-oriented e-marketplace - This type of online marketplaces are operated by a large group of suppliers to access large number of buyers and also to increase their sales. The buyers can also access information about the suppliers, products prices, delivery time and any other material information. Some examples are Cisco’s electronic marketplace, Dell: PC and high end users.
• Vertical and horizontal e-marketplaces - Vertical e-marketplace provides online access to businesses vertically across every segment of a particular industry sector such as automotive, chemical, construction or textile. It satisfies specific needs of specific customers. For example, Uber, OYO, Red bus etc.
On the other hand, a horizontal e-marketplace connects buyers and sellers across different industries or regions and also provides wide range of products/services from different vendors. For example, Amazon, Etsy, OLX etc.
• Independent e-marketplace: It is the e-marketplace where different businesses purchases and sales products with each other through a third party. It is B2B model ecommerce and the users must register with the third party/market place to use the platform. For example, Alibaba.com, eBay.com, Amazon etc.
Some of the benefits of websites as place of ecommerce are-
• The buyers able to compare quality, price, design, size etc. products/services by visiting a single website or different websites of sellers.
• It enables the buyers to purchase the best products/services without visiting to the market in person. Thus it saves time of customers.
• E-marketplaces provide a transparent purchasing process as factors such as the prices of the product and availability of the stock are all accessible on a single platform in an open environment.
• Smaller stores or vendors who are not sure about establishing their own ecommerce website or want to reduce their marketing costs can align themselves with these larger businesses.
• It enables cross-border sales by providing opportunities to trade in the international e-marketplace and also reduces the geographical limitations.
• It facilitates banking companies to provide banking services through a secured website. The stock exchanges also involve in trading of stocks through their websites.
Key takeaways-
Pure v/s brick and click business
The difference between pure online business and brick and click online business are –
| Basis of difference | Pure online business | Brick and click online business |
1. | Meaning | It operates only on internet. | It is the blender of online business and physical existence of business. |
2. | Cost | It incurs less overhead cost as compared to brick and click online business. | It incurs more overhead cost in terms of property, large employee set up, warehouses etc. |
3. | Nature | It directly started its through internet without physical existence. | It initially started its business offline and later added an online website for greater reach of customer. |
4. | Benefits to customer | It able to provide huge discount and rebate to customers due to less overhead costs. | It is not able to provide huge discount and rebate to customers due to the overhead costs. |
5. | Marketing | It needs to invest more money and give more promotional effort to attract customers and gain their confidence because it has no physical existence. | It incurs less expenses and promotional effort because of its physical presence. |
6. | Examples | Amazon, Flip kart, Make my trip etc. | Reliance trends, Big bazar, State Bank of India, LICI etc. |
Key takeaways-
Assessing requirement for an online business designing developing and deplaying the system
Before starting any online business the founder/founders must assess the market requirements and potentiality of business in the market. There are certain steps to assess the requirement for an online business designing, developing and deplaying the system-
1. Identify product/service and customer: The first step to start online business is to identify the product/service to be sold through online and the target customer group. In this process the vendor must keep in mind-
• The chosen product/service for online sale must have sufficient demand in the market.
• The price of the ecommerce product/service must be reasonably decided so that the customer can afford it and the seller able to earn revenue from it.
• The ecommerce product/service must have sufficient stock.
2. Choose the ecommerce website: In the next step the vendor should choose the appropriate ecommerce website to sell their ecommerce product/service. The vendor must select the appropriate ecommerce platform to sell their product/service. Some of the points to be keep in mind to select ecommerce website are-
• The ecommerce website should have good brand image in the market.
• The ecommerce website should have reliable payment gateway for quick transfer.
• The ecommerce system should have well integrated logistic system for fast delivery of goods.
• The vendor should fulfill the conditions of ecommerce websites.
3. Ecommerce website testing: Testing of ecommerce website is necessary to access large number customers conveniently. It is tested by considering the elements like-
• Customer flow/visitors in the ecommerce website.
• The functionalities of the website i.e., filters, payment option, category, cart etc.
• Security and reliability of the website.
• Performance of the website etc.
4. Marketing: In the next step the vendor should go for effective marketing of products with the help of effective marketing tools to access the target customer group. Some of the popular marketing methods are print media, electronic media, social media marketing, content marketing etc.
5. Develop and grow: In this stage, the vendor should continuously adopt the changing needs and preferences of customers and innovative marketing techniques to develop and grow in the market. Satisfied customers help to survive in the market as well as grow in the market.
Key takeaways-
References-
1. Kotlar, P. (2019). Marketing management (4th edition.). New Delhi, Pearson Education India.
