Electronic data interchange provides a standard protocol for encoding the data exchange that is needed by the business for establishing the electronic communication with other trading partners to process the volume of transactions carried out. (Curtis: 204)
Internet commerce is a category of e-commerce that incorporates the popular image of home computer users making purchase over the Internet (Curtis: 205). According to Curtis, in Internet commerce, businesses advertise goods and services and two kinds of transactions are involved. The business-to-business (B2B) transaction happens if both participants are businesses; on the other hand, a business-to-customer (B2C) transaction will take place if the participants involve a private individual.
E-commerce has brought significant changes to the businesses. Firstly, in many market sectors, the introduction of e-commerce has changed the nature of the business itself. (Curtis: 205) For example, as Curtis argued, in the music and software industries, because of the use of advances in the hardware, the media used to create and store the products has evolved and the distributions of the products are being revolutionized coming along with the releases of Internet as well as online products update.
Secondly, e-commerce provides a more convenient way to communicate with the customers. As the Internet provides global access, the business can have a worldwide audience through its websites. (Curtis: 204). This is important for the businesses, just like Mike Johnston, International Chairman of the CIM (Chartered Institute of Marketing's) said: "Customers want to know more and more about the companies they do business with. To serve them well, businesses also need to know more about their customers. The interactivity of new technologies enables companies to get ever closer to their customers - to really understand their needs and their behaviour. Know your customers and you can give them what they really want."
Thirdly, the electronic markets can help the business reduce the cost for advertisement and generate more profits. As has been discussed above, this can be crucial when the businesses want to keep the existing customers and attract the new ones. Because traditionally when the businesses are trying to sell products, they may rely heavily on advertising in the media as a way for promotion. According to Curtis, the cost may be considerable and running a website is relatively cheap as the computer hardware, the design of the site and the maintenance seldom take up a start-up cost of more than a few thousand pounds or dollars, and once running, the website provides 24-hour access daily across the world (Curtis: 203) For example, in 2001, in Waverley Excursion the General Manager Kathleen O'Neill and team identified that the web site would be an ideal medium to reach the corporate market - an important target for their marketing activities. As Kathleen O’Neill commented: “The benefits of the web site were immediately apparent. The online booking facility significantly reduced the burden on the telesales team and cash flow was improved as people paid prior to the excursion. Also, by integrating our online and offline marketing activities and continuing to monitor activity on the site, we are able to establish what is proving to be successful and where further work is required. It has proved to be an inexpensive way of successfully reaching our target corporate market."
Fourthly, e-commerce enables businesses to be price competitive and increase the sales. Because as Curtis argued, providing information on a website to provide electronic access offers a cheaper way to disperse information for host organization compared with using the traditional ways such as paper based publications or recorded telephone messages. In addition, reduced transaction costs in automated ordering and invoicing systems can lead to lower prices. (Curtis: 207) Thus, as prices go down, the sales may increase. For example, according to , companies marketing online are generating two-thirds more sales than their competitors using marketing activities.
However, e-commerce also has brought costs to the businesses. First, it caused significant security issue. For example, when the businesses use Internet to do financial transactions, which require the transmission of financial data.
Bibliography:
http://www.ukonlineforbusiness.gov.uk/cms/template/news-details.jsp?id=181954
