Logistics Management - E-Commerce - Part 2 - Notes - Business Management, Study notes for Business Accounting. Banaras Hindu University
neela
neela17 February 2012

Logistics Management - E-Commerce - Part 2 - Notes - Business Management, Study notes for Business Accounting. Banaras Hindu University

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Purchasingis, Business, Connectivity, Digitizationand, Cdnow, Establishing, Physical, Distribution Channel, Holdavarietyofproducts, Pricethefinalproduct, Management Geographicallydispersemarkets, Thevariousissues Retaili...
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ONLINE RETAILERS Online retailers are business firms that buy products and resell them

online. Here the consumers can access pictures of products, read the specs, shop

among online retailers for the best prices and terms, and click to order and pay.

Business-to-business purchasing is growing fast on the internet. Purchasing

agents can use book-marked websites to shop for routine items. Personal selling can

increasingly be conducted electronically, with buyer and seller seeing each other on

their computer screens in real time.

Underlying electronic business undergoes two phenomena

a) digitization and

b) connectivity.

a) Digitization consists of converting text, data, sound and image into a stream

of ―bits‖ that can be dispatched at incredible speed from one location to another.

b) Connectivity involves building networks and expresses that fact that much of

the world‘s business is carried over networks connecting people and

companies. These networks are intranets when they connect people within a

company, extranets when they connect a company with its suppliers and

customers, and the internet when they connect users to an amazingly large

―information highway‖. ONLINE RETAILING

Online retailing is one of the most visible e-business models. Merchants

set up online storefronts and sell to businesses and/or consumers. Digital goods may

be delivered directly over the Internet while physical goods are shipped via logistics

provider such as UPS, USPS, or FedEx. Firms selling physical goods online can make

any level of commitment from pure play to barely dabbling. Well-known electronic

storefronts include CDNOW (www.cdnow.com) and Dell Computer (

www.dell.com).

While a pre-Internet presence carries brand equity, it does not guarantee

online success. Often the pure plays are free from the cultural constraints of the

established businesses and can innovate more quickly in response to customer needs.

Now some internet pure plays are establishing brick-and-mortar operations to

enhance branding through additional exposure and an additional channel for

customers to experience their products.

DIGITAL PRODUCTS One great hope for the internet is to serve as a medium for the physical

distribution of goods and services. Although great strides are being made, there is still

a way to go. Yet, as mentioned earlier, content that can be digitized can be transmitted

over the internet. The New York Times (www.nytimes.com) digitally distributes an online version of its newspaper, thousands of radio stations broadcast live

programming over the internet; software has a long history of online distribution.

Clearly, distribution costs are significantly lower for digital products, compared with

physical distribution.

TANGIBLE PRODUCTS Many products sold online are still distributed through conventional

channels. For example, most major record labels will not allow their music to be

distributed online.

The Internet consumer may make the purchase online but the physical product

will arrive via the any physical channel like postal service, courier, transport etc. or

through some other carrier. This type of distribution is relatively inefficient.

Furthermore, local regulations sometimes impede the direct distribution of

product. For example, Wine.com (the former Virtual Vineyards at

www.wine.com), a wine distributor, has been forced by some state regulations to

operate through local intermediaries – which lengthens its distribution channel.

Features of E-retailing as a channel of distribution

F 0 B 7 Much stronger personal relationship with the consumer.

F 0 B 7 Hold a variety of products.

F 0 B 7 Offer consumers credit.

F 0 B 7 Promote and merchandise products.

F 0 B 7 Price the final product.

SUMMARY

E-commerce or E-business means business done by using internet

technologies to perform the key business processes. Assess to internet

various geographical locations of the world. It directly varies with the

overall level of economic development of a country and it is higher for highly

developed countries and goes down with lowering of the development of the

country. India has a very low rate of access to internet.

E-commerce channels of distribution are of two types viz. : commercial

channels and the internet. Various companies set up their own online

information and marketing services that can be accessed by those who have

signed up for the services and pay a monthly fee. The internet is a global web of

computer internet that has made instantaneous and decentralize global

communication possible.

E-commerce as a channel of distribution enables the companies to sell to a

geographically disperse markets, allows specific segment at a relatively low cost.

E-retailing includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use. E-retailer is any

business entrepreneur whose sales volume comes primarily from e-retailing.

E-retail facilitates electronic interface between retailers and

manufacturers, order processing and tracking, product management, post sales

customer service and inventory management.

Online retailers are business firms that buy products and resell them online.

Personal selling can be conducted electronically with buyers and sellers where

they can see each other on their computer screen in real time. Online retailing is

one of the most visible e-business models. Merchants setup online store fronts

and sell to business and or consumers.

E-retailing as a channel of distribution helps in developing stronger

relationship between the buyer and retailer, promotes and merchandise

products, price the final product and build the retailers brand in the high esteem.

IMPORTANT QUESTIONS

1. What is e-commerce? What are its basic benefits to the consumers.

2. Discuss the size of e-market w.r.t various countries of the globe. Explain the

reasons for the varying rate of number of households with internet access.

3. Discuss the development of e-commerce.

4. Discuss the salient features of e-commerce as a channel of distribution.

5. What is e-retailing? Discuss the various issues retailing to it.

6. Discuss the various features of e-retail.

7. Discuss the terms ‗online retailer and online retailing‘.

8. Distinguish the salient features of digital products and tangible products.

Differentiate between the two.

9. Briefly discuss the various salient features of e-retailing as a channel of

distribution.

10. Discuss the future of e-commerce and e-retailing.

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