4.8 E-commerce

Question 1

E-commerce

Answer 1

The purchasing of goods and services online using Internet technologies

Question 2

Features of e-commerce

Answer 2

• low set-up and operating costs
• don’t require physical retail stores (enables them to broaden their product range and eliminates overheads like rent and utilities)
• customers are empowered due to price transparency (compare prices easily)
• operate 24/7

Question 3

Types of e-commerce

Answer 3

Business to Consumer (B2C)
Business to Business (B2B)
Consumer to Consumer (C2C)

Question 4

Business to consumer (B2C)

Answer 4

When online business sell goods and services directly to consumers
- removes the need for intermediaries in the distribution channels (reduces costs)

Question 5

Business to business (B2B)

Answer 5

E-commerce that takes place between two or more businesses
- often involves wholesalers/ retailers
- transactions are often in large quantities (allows businesses to benefit from economies of scale)

Question 6

Consumer to consumer

Answer 6

When customers sell directly to other consumers
- C2C service providers are intermediaries between selling and buying customers (they earn revenue by charging fees to sellers who put their items on sale)
- difficulty authenticating the product’s quality/ genuinity

Question 7

The effect of changing technology and e-commerce on PRODUCT

Answer 7

• allows any product to be sold
• provide customers with up-to-date info about its products (convenient and easy to access)
• no need for printed menus catalogues or brochures reducing costs

Question 8

The effect of changing technology and e-commerce on PLACE

Answer 8

• eliminates the need for an intermediary (shortening supply chain reduces costs)
• greater accessibility as customers can access businesses from around the world

Question 9

The effect of changing technology and e-commerce on PRICE

Answer 9

• allows customers to easily compare prices between suppliers (price transparency)
• a reduction in intermediaries allows businesses to reduce costs

Question 10

The effect of changing technology and e-commerce on PROMOTION

Answer 10

• increased use of social media marketing/ viral marketing
• reduced importance of packaging as a form of promotion
• must be creative in their promotion to stand out from the advertising spam on the internet

Question 11

The effect of changing technology and e-commerce on PEOPLE

Answer 11

• since it is an impersonal service the importance of sales people lessens
• greater necessity for technical/ IT support staff/ customer service

Question 12

The effect of changing technology and e-commerce on PROCESSES

Answer 12

• transactions are done through credit card which is convenient for customers who value not waiting in queues
• security risks with Internet safety (inputting personal data)

Question 12

The effect of changing technology and e-commerce on PHYSICAL EVIDENCE

Answer 12

• becomes less important in regards to e-commerce
• they do however value the physical layout and ease of navigation of the website