UNIT-1

Introduction to E-Business:

Transitioning to the Web:

 The Internet has changed the way people communicate, conduct business and
manage their daily lives
 Technologies reviewed
o Networking
o Communication
o Internet, etc...
 Resources Used
INTRODUCTION

When the Internet started to establish itself in the corporate world, some observers
foresaw a diminishing role for, if not the end to, many intermediary functions.
Consequently it has been argued that suppliers will need to use the Internet and related
technologies to cut costs and establish closer links with consumers by bypassing
organizations that currently play an intermediary role in the traditional transaction
system. The network would serve as the market, enabling the direct exchange between
buyer and seller. However, while many businesses would like to take advantage of the
opportunities that the World Wide Web (WWW) offers, many do not understand what the
advantages are and how they can exploit them. This is particularly true of very small
businesses (VSBs).

While VSB owners may want to jump on the WWW bandwagon, they may not understand
how their company competes, what value their product brings to the consumer, and how
the WWW can facilitate this. How can they know what results to expect from these
opportunities? The objective of this case study is to enhance the understanding of the
process of transition from a traditional business model to an e-commerce model. It focuses
on a very small business that has successfully navigated the transition to e-commerce.

E-Business and E-Commerce overview

 Successful e-business are those that recognize the needs of their target audiences and
match those needs with relevant content
 Not limited to seasoned professionals
 Young entrepreneurs are doable
E-commerce

o Involves exchanges among customers, business partners and the vendors

 A supplier interacts with the manufacture
 Customers interacts with sales representatives
 Shipment providers interact with distributors
 E-business
o Have all the elements of e-commerce
o Also includes operations that are handled within the business itself
 Production
 Development
 Corporate infrastructure
 Product Management
 E-business and E-commerce have increased the speed and ease of business
transactions Intense Competition
o Business must adjust to new technologies and implement new systems
o Customized production capabilities
o Finding and keeping Key employees
o 24-by-7 maintenance responsibilities
o Must be reliable, fast, functional and user friendly
 All companies have to consider the impact that Web enabled business will have on
them.
 Brick-and-mortar businesses
o Business that have only a physical presence
o No single Brick-and-mortar store can offer 50,000 products
o E.g. The traditional stores
 Click-and-mortar businesses
o Businesses that have both an online and an offline presence
o Can offer a limitless number of products
o The transaction from Brick-and-mortar business to Click-and-mortar
business is happening in all of the economy.
 Virtual Office
o All communications are connected via phone, voice mail, fax, e-mail, and the
emerging capabilities of the internet
 Personalization
o Tailoring web pages to user’s individual preferences and letting user bypass
irrelevant content
o Tracking customers behaviors through internet
o Make it easier and more pleasant for many people to surf the internet and
find what they want.
 Copyright infringement
 Privacy invasion
o The sale of personal data to another organization without the consumers
knowledge
o Tracking the internet activity
 o Unauthorized access to credit-card numbers, medical history and criminal
history
o Many privacy protection algorithm
 E.g. PGP(Pretty Good Privacy)

The explosion in the use of the Internet has paved the way for several path-
breaking innovations. One of the most interesting and exciting aspects of this evolution is
the emergence of electronic business (e-business) as a mainstream and viable alternative
to more traditional methods of businesses being conducted today.

E-business is defined as the process of using electronic technology to do business.

It is the day and age of electronic business. Also the structure of the Web is rapidly evolving
from a loose collection of Web sites into organized market places. The phenomena of
aggregation, portals, large enterprise sites, and business-to-business applications are
resulting in centralized, virtual places, through which millions of visitors pass daily.

E-business has become standard operating procedure for the vast majority of
companies. Setting up and running an e-business, especially one that processes a large
number of transactions, requires technical, marketing and advertising expertise.
Consumers like to access to products and services on a 24-by-7 basis, and the easiest way
to provide that is to move operations online. The businesses that provide the most reliable,
most functional, most user-friendly and fastest services will be the ones that succeed.

E-commerce is the subset of e-business that focuses specifically on commerce.

Commerce is the exchange of goods and services for other goods and services or for cash
payment. E-commerce is all that a company conducts commerce through electronic
technology. Since commerce is clearly a sort of business, all the keys to success for e-
business automatically apply for e-commerce also.

E-commerce redefines the very foundations of competitiveness in terms of

information content and information delivery mechanisms. Flows of information over
international networks have created an electronic market-space of firms that are learning
to exploit business opportunities.

A few years ago the only way of buying books is that one has to go to bookstores.
Purchasing clothes meant a trip to the malls. Trading of stocks happened through brokers
only. Not anymore! Today businesses are coming to our doorstep. A number of companies
and large warehouses have successfully managed to put an electronic outlet to traditional
businesses.

Difference between e-commerce and e-business:

e-commerce is nothing but buying and selling of goods around the web. On the contrary, e-
business is a little different as it is not limited to, commercial transactions, but it also
provides other services. These are the two emerging modes of doing business, which are
gaining importance with the passage of time.
Gone are the days, when you have to go to the market to buy a single item. Nowadays you
just have to place an order online, and that item will come to you within few minutes.
Online shopping is getting popular, just because of its simplicity and convenience. This is
possible only because of two electronic networks, namely, as e-commerce and e-business.

E-commerce is concerned with the firm’s dealings with its customers, clients or suppliers.
Conversely, e-business refers to undertaking industry, trade, and commerce, with the help
of information technology and communication. The article presented to you explains the
difference between e-commerce and e-business.

Definition of e-commerce

E-commerce is an abbreviation used for electronic commerce. It is the process through

which the buying, selling, dealing, ordering and paying for the goods and services are done
over the internet is known as e-commerce. In this type of online commercial transaction,
the seller can communicate with the buyer without having a face to face interaction.

Some examples of real world application of e-commerce are online banking, online
shopping, online ticket booking, social networking, etc.

The basic requirement of e-commerce is a website. The marketing, advertising, selling and
conducting transactions are done with the help of internet. Any monetary transaction,
which is done with the help of electronic media is e-commerce. The following are the types
of e-commerce:

 B2B – The process where buying and selling of goods and services between
businesses is known as Business to Business. Example: Oracle, Alibaba, Qualcomm,
etc.
 B2C – The process whereby the goods are sold by the business to
customer. Example: Intel, Dell etc.
 C2C – The commercial transaction between customer to customer. Example: OLX,
Quickr etc.
 C2B – The commercial transaction between customer to the business.

Definition of e-business

Electronic Business, shortly known as e-business, is the online presence of business. It can
also be defined as the business which is done with the help of internet or electronic data
interchange i.e. is known as E-business. E-commerce is one of the important components of
e-business, but it is not an essential part.

e-business is not confined to buying and selling of goods only, but it includes other
activities that also form part of business like providing services to the customers,
communicating with employees, client or business partners can contact the company in
case if they want to have a word with the company, or they have any issue regarding the
services, etc. All the basic business operations are done using electronic media. There are
two types of e-business, which are:

 Pure-Play: The business which is having an electronic existence only. Example:

Hotels.com
 Brick and Click: The business model, in which the business exists both in online i.e.
electronic and offline i.e. physical mode.

Key Differences Between e-commerce and e-business

The points presented below are substantial so far as the difference between e-commerce
and e-business is concerned:

1. Buying and Selling of goods and services through the internet is known as e-
commerce. Unlike e-business, which is an electronic presence of business, by which
all the business activities are conducted through the internet.
2. e-commerce is a major component of e-business.
3. e-commerce includes transactions which are related to money, but e-business
includes monetary as well as allied activities.
4. e-commerce has an extroverted approach that covers customers, suppliers,
distributors, etc. On the other hand, e-business has an ambivert approach that
covers internal as well as external processes.
5. e-commerce requires a website that can represent the business. Conversely, e-
business requires a website, Customer Relationship Management and Enterprise
Resource Planning for running the business over the internet.
6. e-commerce uses the internet to connect with the rest of the world. In contrast to e-
business, the internet, intranet and extranet are used for connecting with the
parties.

Conclusion

e-commerce is the major part of e-business. It can also be said that e-commerce is e-
business websites, but e-business is not necessarily e-commerce. The former is just the
online presence of the conventional commerce and the same is the case with the latter.

At present most of the companies are doing e-business just to capture the maximum part of
the market. Some e-commerce websites have emerged since last few years who are
vanishing the market traditional commercial business, like Flipkart, Amazon, eBay, etc.

History of the Internet and World Wide Web

History of Internet:

 Advanced Research Projects Agency of the Department of Defense(ARPA)

 o Implemented the ARPAnet, the grandparent of today’s Internet
 Packet Switching
o Digital Data is sent in small packages called packets
 Packets
o Contains data, addresses information, error-control information and
sequencing information
 Transmission Control Protocol(TCP)
o Ensure the messages are properly routed from sender to receiver and those
messages arrived intact
 Internetworking Protocol(IP)
o Enabled the intercommunication of inter-organization and intra-organization
networks
 The Internet was initially limited to universities and research institutions
 Bandwidth
o The information carrying capacity of communication lines

History of World Wide Web:

 Locate and view multimedia-based documents on almost any subjects

 Makes information instantly and conveniently assessable worldwide
 Possible for individuals and small businesses to get worldwide exposure
 Changing the way business is done

Internet and World Wide Web Development:

 Computer use is increasing in almost in every field of endeavor

 Dramatic decrease in the cost of computing
 Enhanced multimedia capabilities
 Increased publishing and learning opportunities
 Enhanced communication technologies

Internet Overview
Internet is defined as an Information super Highway, to access information over the web.
However, It can be defined in many ways as follows:

 Internet is a world-wide global system of interconnected computer networks.

 Internet uses the standard Internet Protocol (TCP/IP).

 Every computer in internet is identified by a unique IP address.

 IP Address is a unique set of numbers (such as 110.22.33.114) which identifies a

computer location.
  A special computer DNS (Domain Name Server) is used to give name to the IP
Address so that user can locate a computer by a name.

 For example, a DNS server will resolve a name http://www.tutorialspoint.com to

a particular IP address to uniquely identify the computer on which this website is
hosted.

 Internet is accessible to every user all over the world.

Evolution

The concept of Internet was originated in 1969 and has undergone several technological &
Infrastructural changes as discussed below:

 The origin of Internet devised from the concept of Advanced Research Project
Agency Network (ARPANET).

 ARPANET was developed by United States Department of Defense.

 Basic purpose of ARPANET was to provide communication among the various

bodies of government.

 Initially, there were only four nodes, formally called Hosts.

  In 1972, the ARPANET spread over the globe with 23 nodes located at different
countries and thus became known as Internet.

 By the time, with invention of new technologies such as TCP/IP protocols, DNS,
WWW, browsers, scripting languages etc., Internet provided a medium to publish
and access information over the web.

Advantages

Internet covers almost every aspect of life, one can think of. Here, we will discuss some of
the advantages of Internet:

 Internet allows us to communicate with the people sitting at remote locations.

There are various apps available on the wed that uses Internet as a medium for
communication. One can find various social networking sites such as:

o Facebook

o Twitter

o Yahoo
 o Google+

o Flickr

o Orkut

 One can surf for any kind of information over the internet. Information regarding
various topics such as Technology, Health & Science, Social Studies, Geographical
Information, Information Technology, Products etc can be surfed with help of a
search engine.

 Apart from communication and source of information, internet also serves a

medium for entertainment. Following are the various modes for entertainment
over internet.

o Online Television

o Online Games

o Songs

o Videos

o Social Networking Apps

 Internet allows us to use many services like:

o Internet Banking

o Matrimonial Services

o Online Shopping

o Online Ticket Booking

o Online Bill Payment

o Data Sharing

o E-mail

 Internet provides concept of electronic commerce, that allows the business deals
to be conducted on electronic systems

Disadvantages
However, Internet has proved to be a powerful source of information in almost every field,
yet there exists many disadvantages discussed below:

 There are always chances to loose personal information such as name, address,
credit card number. Therefore, one should be very careful while sharing such
information. One should use credit cards only through authenticated sites.

 Another disadvantage is the Spamming. Spamming corresponds to the unwanted e-

mails in bulk. These e-mails serve no purpose and lead to obstruction of entire
system.

 Virus can easily be spread to the computers connected to internet. Such virus
attacks may cause your system to crash or your important data may get deleted.

 Also a biggest threat on internet is pornography. There are many pornographic

sites that can be found, letting your children to use internet which indirectly affects
the children healthy mental life.

 There are various websites that do not provide the authenticated information. This
leads to misconception among many people.
WWW Overview
WWW stands for World Wide Web. A technical definition of the World Wide Web is : all
the resources and users on the Internet that are using the Hypertext Transfer Protocol
(HTTP).

A broader definition comes from the organization that Web inventor Tim Berners-
Lee helped found, the World Wide Web Consortium (W3C).

The World Wide Web is the universe of network-accessible information, an embodiment

of human knowledge.

In simple terms, The World Wide Web is a way of exchanging information between
computers on the Internet, tying them together into a vast collection of interactive
multimedia resources.
Internet and Web is not the same thing: Web uses internet to pass over the information.

Evolution

World Wide Web was created by Timothy Berners Lee in 1989

at CERN in Geneva. World Wide Web came into existence as a proposal by him, to allow
researchers to work together effectively and efficiently at CERN. Eventually it
became World Wide Web.

The following diagram briefly defines evolution of World Wide Web:

WWW Architecture
WWW architecture is divided into several layers as shown in the following diagram:
Identifiers and Character Set

Uniform Resource Identifier (URI) is used to uniquely identify resources on the web
and UNICODE makes it possible to built web pages that can be read and write in human
languages.
Syntax
XML (Extensible Markup Language) helps to define common syntax in semantic web.
Data Interchange
Resource Description Framework (RDF) framework helps in defining core
representation of data for web. RDF represents data about resource in graph form.
Taxonomies
RDF Schema (RDFS) allows more standardized description of taxonomies and
other ontological constructs.
Ontologies
Web Ontology Language (OWL) offers more constructs over RDFS. It comes in following
three versions:

 OWL Lite for taxonomies and simple constraints.

 OWL DL for full description logic support.

 OWL for more syntactic freedom of RDF

Rules
RIF and SWRL offers rules beyond the constructs that are available
from RDFs and OWL. Simple Protocol and RDF Query Language (SPARQL) is SQL like
language used for querying RDF data and OWL Ontologies.
Proof
All semantic and rules that are executed at layers below Proof and their result will be used
to prove deductions.
Cryptography
Cryptography means such as digital signature for verification of the origin of sources is
used.
User Interface and Applications
On the top of layer User interface and Applications layer is built for user interaction.
WWW Operation

WWW works on client- server approach. Following steps explains how the web works:

1. User enters the URL (say, http://www.tutorialspoint.com) of the web page in the
address bar of web browser.

2. Then browser requests the Domain Name Server for the IP address corresponding
to www.tutorialspoint.com.

3. After receiving IP address, browser sends the request for web page to the web
server using HTTP protocol which specifies the way the browser and web server
communicates.

4. Then web server receives request using HTTP protocol and checks its search for the
requested web page. If found it returns it back to the web browser and close the
HTTP connection.

5. Now the web browser receives the web page, It interprets it and display the
contents of web page in web browser’s window.

Future
There had been a rapid development in field of web. It has its impact in almost every area
such as education, research, technology, commerce, marketing etc. So the future of web is
almost unpredictable.

Apart from huge development in field of WWW, there are also some technical issues that
W3 consortium has to cope up with.
User Interface
Work on higher quality presentation of 3-D information is under deveopment. The W3
Consortium is also looking forward to enhance the web to full fill requirements of global
communities which would include all regional languages and writing systems.
Technology
Work on privacy and security is under way. This would include hiding information,
accounting, access control, integrity and risk management.
Architecture
There has been huge growth in field of web which may lead to overload the internet and
degrade its performance. Hence better protocols are required to be developed.

****************************************************************

By definition the word internet means a collection of networks that are joined together.
Thus, the word Internet, with a capital 'I', means 'The collection of networks that are joined
together.' But what is the Internet, really, and how did it evolve?

The Internet is a packet-orientated network. That means that the data you transfer is
divided in packets. This principle is not new, it was already used in the 1960s. So what
happens when you transfer data across the Internet's various networks? The networks are
linked by special computers, or Routers. A Router checks where your packet (your data) is
supposed to go and decides in which direction to send it. Every Router is not linked with
every other Router, so how is your data routed? Routers use addresses, much like regular
mail to know where the data is going. This address is called the IP Address. Again, the data
transferred with IP is divided in packets. These IP packets are handled by a protocol, TCP.
Together they are TCP-IP.. the communication mechanism of the internet. It was soon
discovered that the IP - addresses (that are, in fact, just numbers) are easy to handle for
computers, but not so for humans. So the Domain Name System was introduced in
1984. The Domain Name System matches an IP address with a friendly name such as
www.microsoft.com
Today the Internet is changing the way people live
their lives in dramatic ways. To understand how this
came about it is useful to review its early history and
the way it came into existence.

The origin of the Internet dates back to 1957 when,

in the shadow of the former Soviet Union's Sputnik
program the United States established the Defense
Advanced Research Projects Agency (DARPA) within
the Department of Defense. Four years later a Ph.D. Packet-switched networks from
student at MIT, Leonard Kleinrock, published the Baran's 1963 paper, "On Distributed
first paper on packet-switching theory. With packet Communications Networks"
switching a message that is sent from one computer
to another is broken down into small packets of digital data. Each packet is given an
address to travel to and is then routed to its destination. Packets can travel different routes
to the point where they are reassembled into the complete message. In 1962 Paul Baran of
the RAND Corporation published, "On Distributed Communication Networks" in which he
formulated the concept of packet-switching networks having no single outage point. With
these theoretical concepts in place, others could develop workable concepts. Two
additional key elements, re-routing around outages and access by other networks, helped
lay the necessary groundwork to create the theoretical basis for the inception of an
Internet.

The underlying motive for developing this technology was to streamline communication
between military command centers, remote missile bases and other installations in the
event of a preemptive nuclear attack. DARPA funds for developing packet switching in the
late 1960s accounted for 60% of the computer research done in the United States at that
time. Much of the concern during this period of the cold war was based upon a study done
by the RAND Corporation that cited the lines of communication as the most vulnerable
portion of U.S. military command.

Web development

Web development refers to building website and deploying on the web. Web
development requires use of scripting languages both at the server end as well as at client
end.
Before developing a web site once should keep several aspects in mind like:

 What to put on the web site?

 Who will host it?

 How to make it interactive?

 How to code it?

 How to create search engine friendly web site?

 How to secure the source code frequently?

 Will the web site design display well in different browsers?

 Will the navigation menus be easy to use?

 Will the web site loads quickly?

 How easily will the site pages print?

 How easily will visitors find important details specific to the web site?

 How effectively the style sheets be used on your web sites?

Web Development Process
Web development process includes all the steps that are good to take to build an
attractive, effective and responsive website. These steps are shown in the following
diagram:

Web development tools

Web development tools help the developer to test and debug the web sites. Now a days
the web development tool come with the web browsers as add-ons. All web browsers
have built in tools for this purpose.
These tools allow the web developer to use HTML, CSS and JavaScript etc.. These are
accessed by hovering over an item on a web page and selecting the “Inspect Element” from
the context menu.
Features
Following are the common features that every web development tool exhibits:

HTML AND THE DOM

HTML and DOM viewer allows you to see the DOM as it was rendered. It also allows
making changes to HTML and DOM and seeing the changes reflected in the page after the
change is made.

WEB PAGE ASSESTS, RESOURCES, AND NETWORK INFORMATION

Web development tools also help to inspect the resources that are loaded and available on
the web page.

PROFIING AND AUDITING

Profiling refers to get information about the performance of a web page or web
application and Auditing provides developers suggestions, after analyzing a page, for
optimizations to decrease page load time and increase responsiveness.
Skills Required
For being a successful web developer, one should possess the following skills:

 Understanding of client and server side scripting.

 Creating, editing and modifying templates for a CMS or web development

framework.

 Testing cross browser inconsistencies.

 Conducting observational user testing.

 Testing for compliance to specified standards such as accessibility standards in the

client region.

 Programming interaction with JavaScript, PHP, and Jquery etc.

 UNIT-2
E-Business Models

• A business model is the method of doing business by which a company can sustain itself
(generate revenue). The business model spells-out how a company makes money by
specifying where it is positioned in the value chain.

• There are many benefits of bringing a business to the Internet. An e-business can offer
personalization, high quality customer service and improved supply-chain management.

Examples of the models include:

– Storefront Model

– Auction Model

– Portal Model

 Storefront Model

• This model is a basic form of e-commerce in which the buyer and the seller interact
directly.

• It combines transaction processing, security, online payment and information storage to

enable merchants to sell their products online.

• To conduct storefront e-commerce, merchants need to organize online catalogs of

products, take orders through their Web sites, accept payments securely, send
merchandize to customers and manage customer data.

• The storefront should be marketed to potential customers. Many of the leading storefront
model companies are B2C (Business to consumer).

• Examples:

– www.more.com (health and beauty e-commerce)

– www. moviefone.com (movie tickets, reviews, movie clips and trailers).

Shopping-Cart Technology

• One of the most commonly used e-commerce enablers is the shopping cart. This order-
processing technology allows customers to accumulate items they wish to buy as they
continue to shop.
• Supporting the shopping cart is a product catalog, which is hosted on the merchant server
in the form of database.

• The merchant server is the data storage and management system employed by the
merchant. It is often a system of computers that conduct all of the functions necessary for
running a Web site.

• A database is a part of the merchant server designed to store and report on large amounts
of information.

• For example, a database for an online clothing retailer would typically include such
product specifications as item description, size, availability, shipping information, stock
level, and on-order information.

• e-businesses that use shopping-cart technology, visit www.amazon.com; www.etoys.com;

www.cdnew.com.

Amazon.com

• Amazon.com is a good example of an e-business that uses shopping-cart technology.

• Founded in 1994, the company has grown up to become one of the world’s largest online
retailers.

• Its product line serves as a mail-order book retailer. It expanded to include music, videos,
DVDs, electronic cards, consumer electronics, hardware, tools, beauty items, and toys.

• Amazon.com uses a database on the server side (the merchant’s computer system) that
allows customers on the client-side (the customer’s computer, handheld device, etc.) to
search for products in various ways.

• Amazon.com database consists of product specifications, availability, shipping

information, stock levels, etc.

• The database keeps records of all previous transactions including items purchased,
shipping and credit-card information.

Online Shopping Malls

• Online shopping malls present consumers with a wide selection of product and services.

• Consumers can find products from a wide variety of vendors, and rather than making
several separate purchases, they can use the mall’s shopping-cart technology to purchase
items from many stores in a single transaction.
 • Often these online shopping-mall sites act as shopping portals, directing traffic to the
leading retailers for a specific product.

• Examples of shopping malls include: www.mall.com; www.gap.com; www.shopnow.com;

www.dealshop.com.

 Auction Model

• The Web offers many kinds of auction sites that search other auction sites to pinpoint the
lowest prices on an available item.

• Auction sites act as forums through which Internet users can assume the role of either
seller or bidder.

• As a seller, you post an item you wish to sell, the minimum price your require to sell your
item and, deadline to close the auction, and many other features depending on the site.

• eBay is one of the most profitable online auction models. On eBay, people can buy and sell
just about anything. The company collects a submission fee, plus a percentage of the sale
amount.

• eBay uses a database to manage the millions of auctions it offers. This database evolves
dynamically as sellers and buyers enter personal identification and product information.

 Portal Model

• Portal models give the visitors the chance to find almost everything they are looking for in
one place. They often offer news, sports, and weather information, as well as the ability to
search the web.

• Examples include www.hotbot.com; www.about.com; www.altavista.com; www.ask.com;

www.yahoo.com; www. agilesysllc.com. These portals provide users with a shopping page
that links them to thousands of sites carrying a variety of products.

• Portals links consumers to online merchants, online shopping malls, and auction sites.
They help users collect information on an item for which they are looking and allow users
to browse independently owned storefronts.

 Dynamic Pricing Models

Dynamic pricing, it seems, is the latest pricing trend that has taken the ecommerce industry
by storm. While it is not an entirely new concept and companies have been using it
randomly over the years, it is certainly something that is much more relevant in the new
age of ecommerce companies.

Simply put, dynamic pricing is a strategy in which product prices continuously adjust,
sometimes in a matter of minutes, in response to real-time supply and demand. For
example: Amazon, the global ecommerce giant, is one of the largest retailers to have
adopted dynamic pricing and updates prices every 10 minutes.

If you own an ecommerce company, you should seriously consider adopting this pricing
model since it has several benefits for your business.

Here are a few of them:

1. It Gives You Greater Control on Your Pricing Strategy

A common argument against dynamic pricing is that it reduces your control over product
pricing. In reality, it has a completely opposite effect. As a retailer using dynamic pricing,
you’ll have access to real-time price trends across thousands of products in your industry.
You’ll be able to see the pricing changes of your competitors, and will have a clear idea of
the supply and demand of individual products. This will help you set the right prices for
different products and maximize your revenues.

2. It Allows Flexibility Without Compromising Your Brand Value

Many eCommerce retailers shy away from dynamic pricing because of the potential
damage it can cause to their brand value and user experience. After all, consumers can
easily mistake your fluctuating product prices to manipulation or even fraud, right?

Wrong!

Brands can actually protect, and even strengthen, their brand value by implementing
dynamic pricing. Retailers can set a price floor that reflects their brand value and allows
them the flexibility to stay profitable. They can use dynamic pricing to launch seasonal and
promotional offers as well, while still remaining profitable (something quite difficult to
achieve with a flat pricing model).

3. It Saves You Money in the Long Run

Dynamic pricing is based on the changes in real-time product supply and demand. It takes
into account the price fluctuations in the market, monitors competitor activity and
individual product demand and supply. As a result, it gives ecommerce retailers the right
data and information that can be used to set optimal product prices and stay profitable
despite the price fluctuations.

This saves retailers money in the long run. Since all the calculations are done by web based
software and applications, there’s no need for spending money in manual calculations and
administrative activities. The reduction in these overheads also adds to your profitability in
the long run.

For example, Walmart uses dynamic pricing and changes its product prices almost 50,000
times a month. Using this pricing model, its global sales grew by 30% in 2013 and the trend
continued in 2014 as well. Amazon also saw a 27.2% increase in revenues and ended up as
one of the top 10 retailers in the US for the first time.

4. It Can Be Managed Effectively with the Right Software

Monitoring hundreds of thousands of products and keeping an eye on the real-time supply
and demand trends is a highly complex and challenging task, beyond the scope of most
ecommerce businesses. However, it can be easily managed with the right software. Wiser,
for example, is a web-based application designed to monitor, calculate and manage
dynamic pricing models based on real-time supply and demand trends.
It takes the guesswork out of dynamic pricing and automates the whole process to provide
you accurate data that can be used to set optimal product prices. Wiser has also helped
global corporations like 3M, McAfee and at&t with dynamic pricing and MAP enforcement
over the last two years.

Note: I personally got to know a lot about the fundamentals of dynamic pricing and how it
can be integrated with existing pricing models, by reading Arie Shpanya, the CEO of Wiser.

5. It’s Not Error Free, But You’re Still In Control

Dynamic pricing is based on supply and demand changes. But like any other technology
based forecast, there is potential for error in dynamic pricing algorithms as well. However,
even if the proposed pricing is inaccurate, it’s still just a proposal. You remain in control all
the time and can review the pricing changes that your application recommends.
Moreover, the experiences of companies like Amazon, Best Buy and Walmart indicate that
potential errors are not only easily manageable but also usually do not have a significant
impact on the overall profits, since the changes are so frequent.

eCommerce retailers have grown in numbers over the last few years. With increased
competition, they face the tough challenge of maximizing profits while keeping their prices
competitive. Dynamic pricing is the ideal solution to this problem since it takes into
account the changes in supply and demand, and recommends the optimal pricing structure.
If implemented for a sustained period, this pricing strategy can significantly boost your
overall revenues and profitability.

 The Web has changed the way products are priced and purchased

 Comparison pricing model

o Comparison pricing Web sites using shopping bot technology to find the
lowest price for a given item

 Demand-sensitive pricing model

o Group buying reduces price as volume sales increase

 Name-your-price model

o Name-your-price for products and services.

 Bartering Model

o Individuals and business trade unneeded items for items they desire.

o Ubarter.com, isolve.com

 Rebate Model

o Sites offer rebates on product at leading online retailers in return for

commission or advertising revenues.

 Free offering model

o Free products and services generate high traffic

o Free merchant, Start Sampling, FreeSamples.com

  Inventory Based Model

Is where you stock seller products at your end and you maintain stock levels, packaging,
shipping, returns, security of the warehouse etc etc.. If some one orders a product A, which
you already maintains at your end, then you can easily process the order with in short time,
rather than taking days. It will help in shipping the product in right time, so that customer
also feel happy to buy from your site again, on the same line you will be shipping the right
product that customer ordered.

But in Drop Ship Model, you are not aware of what seller ships to customer, right product
or damaged product or some other related product etc. until customer raises a query.

So if it is inventory, you got everything under your control. Though it costs more
  Name-Your-Price Model

The name-your-price business model empowers customers by allowing them to state the
price they are willing to pay for products and services. Many e-businesses that offer this
service have formed partnerships with leaders of various industries, such as travel, lending
and retail. The online business passes each customer’s price request to an appropriate
industry partner, who decides whether to sell the product or service to the customer at the
stated price. A customer whose price is rejected can offer another price. However, if a price
is accepted, the customer is obligated to make the purchase. For example, Priceline.com
allows users to submit prices they are willing to pay for airline tickets. However, before the
request is submitted, users must enter their purchasing information, so that if their price is
accepted by one of Priceline.com’s affiliate airlines, the user is required to purchase the
ticket. On average, the user receives an e-mail response within one hour indicating whether
the request is accepted or denied. If no affiliates are willing to offer an airline ticket to a
user’s destination for the specified price, the user can change the price and resubmit the
bid. Many e-businesses use intelligent agents (e.g., shopping bots) to enhance their Web
sites. Intelligent agents are programs that search, arrange and analyze large amounts of
data. Shopping bots can scour data contained within a single database or search the entire
Web to find products and prices.

 Comparison-Pricing Model

The comparison-pricing model allows customers to poll various merchants in search of the
lowest price for a desired product or service. Comparison-pricing sites often generate
revenue from partnerships with merchants. For example, Travelocity.com allows users to
search multiple carriers and merchants for the best prices on airfares, hotels, rental cars,
and other products. Other examples of Web sites that offer these services include
www.shopping.com, www.pricewatch.com and www.froogle.com (see the Froogle feature).
Although such sites can be convenient, users should be careful when employing these
services, because they might not be getting the best prices available on the Web. Some
services promote the products of merchants with which they have partnerships
Business - to - Business (B2B):

 Business - to - Business (B2B) is a transaction that occurs between two companies,

as opposed to a transaction involving a consumer. This term may also describe a
company that provides goods or services for another company.

Business - to - Business (B2B) is a transaction that exists between businesses, such

as those involving

 a manufacturer and wholesaler, or,

 a wholesaler and a retailer.

Business to Business e-commerce facilitates inter organizational interaction and

transaction. This type of e-commerce requires two or more business entities interacting
with each other directly, or through an intermediary.

The intermediaries in Business to Business e-commerce may be markets and directory 18

service providers, who assist in matching buyers and sellers and striking a deal. The
business application of B2B electronic commerce can be utilized to facilitate almost all
facets of interactions among organizations, such as inventory management, channel
management, distribution management, order fulfillment and delivery and payment
management.

Typically, it is done by a dominant supplier in the domain of products it supplies. The

supplier may provide customized solutions and pricing to fit the needs of buyers
businesses. The supplier may also institute different pricing schemes for buyers. Usually
differential price structure is dependent upon the volume and loyalty discount. In buyer-
centric e-commerce, major businesses with high volume purchase capacity create an e-
commerce marketplace for purchase and acquisition by starting a site on their own.

The online ecommerce market place is used by buyer for placing Requests For Quotations
(RFQS) and carrying out the entire purchase process. This kind of facility may be utilized by
high volume and well recognized buyers, as they may have adequate capacity and business
volumes to lure suppliers to bid at the site. The United States Government and the General
Electric’s Trading Process Network are examples of buyer-centric e-commerce. 19 In
intermediary-centric e-commerce, in the B2B context, a third party sets up the e-commerce
market place and attracts both the buyer and seller businesses to interact with each other.
The buyers and sellers both get benefit from the increase options in terms of pricing,
quality, availability and delivery of goods. The third party ecommerce market place acts as
a hub for both suppliers and buyers, where buyers place their request for the quotations
and seller’s respond by bidding electronically, leading to a match and ultimately to a final
transaction. The role of the intermediary company is that of an electronic market maker. It
is essential that the intermediary company represent a large number of members in that
specific market segment, i.e. both the buyers and the sellers. The intermediary reduces the
need for buyers and sellers to contact a large number of potential partners on their own.
The intermediary, by electronically connecting many different buyers and sellers through
database of potential. Suppliers and buyers, fulfills the role. The information available from
the intermediary’s database allows a buyer to screen out obvious unsuitable sellers and to
compare the offerings of many different potential. Sellers quickly, conveniently and
inexpensively.

 Website following B2B business model sells its product to an intermediate buyer
who then sells the product to the final customer. As an example, a wholesaler places
an order from a company's website and after receiving the consignment, sells the
end product to final customer who comes to buy the product at wholesaler's retail
outlet.

Examples of B2B Model:  Let us take an example of www.amazon.com. As we know,

www.flipkart.com is an online store that sells various products from various companies.
Assume that the skyward publishers want to sell the books online. In this case, the
publishers have the option of either developing their own site or displaying their books on
the Amazon site (www.flipkart.com), or both. The publishers mainly choose to display their
books on www.flikart.com at it gives them a larger audience. Do Now, to do this, the
publishers need to transact with flipkart, involving business houses on the both the ends, is
the B2B model.

Electronic data interchange (EDI) is the most commonly used B2B e-commerce
technology today. It is the computer-to-computer exchange of business documents, such as
purchase orders and invoices, in a standard electronic format between business
partners. You can use standards such as ANSI X12, EDIFACT, or an XML-based standard
such as Rosetta Net in the high tech industry.
EDI has been in use across many industries, including retail, banking, manufacturing, high-
tech and services, since the 1980s and it remains a game-changer. In order to achieve the
benefits of EDI, the businesses involved must aim to be as tightly integrated as possible
with each other.

Twenty first century corporations expect a network of business partners – their suppliers,
their customers, their logistics providers, their banks – to function online.
Understanding Online Communication and Behavior

There are numerous ways people communicate with each other over the Internet,
including e-mail, instant messaging (IM), feedback on blogs, contact forms on websites,
industry forums, chat rooms and social networking sites. See e-mail, instant
messaging, blog, contact form, forum, chat room and social networking site.

Online communication is a kind of communication between organization or individuals at

starts and ends on the Internet. Basically, it is how people pass information over the
Internet through a network of computers. Below are some of the 7 different ways to
communicate online
Way 1. Email
Email is one of the digital ways of sending letters. It works almost the same as a traditional
post office mail in that information is sent by one person in one location and received by
another person in a different location. You must have an email account in order to send or
receive these web based text messages. Besides text messages, you can also attach others
files such as images and documents. The messages reaches the intended recipient almost
instantly. If you are the sender, you must have the correct email from the recipient.

Way 2. Video Conferencing

The second way to communicate online vividly and intuitively is via video conferencing. To
make it, you just need a professional and noteworthy video conferencing solution - ezTalks
Meetings. It is often used to hold video conferences and improve online communication
with clients, colleagues, students and partners in various geographical locations across the
world.
Some of the things that makes ezTalks Meetings stands out includes Super HD audio and
video quality, quick access to meetings, easy screen sharing and annotation, interactive
whiteboard, ability to schedule online meetings, cross-platform text messaging, recording
of meetings and many other useful features. This video conferencing solution is tailored for
new businesses, small business and large companies that want to simplify remote
collaborations.
Way 3. Social Networks
Another way to communicate online is through social networks. These platforms allows
members to connect with their friends and make new friends from across the world. They
also allow members to share with their friends, followers or connects within the platform.
To get started, you must register and complete your profile. Once you are done, you can
view other users you want to become friends or communicate with. Some of the most
popular social networks you can sign up for free and start communicating include
Facebook, My Space, Twitter, and Instagram, and others.

Way 4. Audio Conferencing

Apart from the above three ways of communicating online, you can also use audio
conferencing to communicate online with your family members, friends, business partners
and students. Basically, it is a connection between two computers equipped with speakers
and microphones. Participants use either an audio conferencing application such as Skype
or an instant messaging software to communicate with each other. The microphone picks
the audio message from one user and pass it through a computer to the other user almost
instantly. The message is heard by the recipient through the speaker.
Way 5. VoIP
Voice over Internet Protocol commonly known as VoIP, is a combination of software and
hardware that enable you to use the Internet to transmit telephone calls. Rather than using
the public switched telephone network (PSTN), in VoIP, voice data is transmitted by using
IP. You are given a unique phone number and an adapter to send or receive the phone calls
through a traditional phone, a VoIP phone or a computer. One advantage of Voice over
Internet Protocol is that the phone calls do not attract any surcharge apart from the one
you're paying for Internet access.

Way 6. Chat Room

Another way of communicating online is through a chat room. This is an area on the
Internet, typically communicated to a particular topic, where members can communicate
and share their interests with others. One member types a message that is accessed by all
members who are online in the chat room. The member can also see a list of all members
who are online. He or she can also click on another member, whether online or not, to send
a private message or view his profile.

Way 7. Forums
People can also communicate online through forums. A forum is a type of website that
allow members to post questions, start a discussion or contribute to various discussions.
Each individual question or discussion is referred to as a thread. A forum is usually updated
and monitored by the admin or moderator.
These are some of the top ways you can use to communicate online. To pick the best way to
communicate online from the above options, first you must know your needs and what you
want to achieve. You also need to understand that just like all technologies, the way you can
communicate online with other people is constantly evolving

Online communication systems are emerging as real-time communication tools for

individuals, students and business professionals. These systems are a perfect blend of
video, audio and computer technology that allows people to connect in real time
irrespective of their geographical locations and time zones.
Undoubtedly, digital conferencing makes interaction exciting for users at different physical
locations by providing them access to high-quality sound and full-motion video effects.
However, research shows a two-sided report of the impact of these online communication
systems. Below is a detailed review of the advantages and disadvantages of online
communication in business:

Top Benefits of Online Communication

1. Cost effective compared to physical meeting

Web conference services are cost effective in every possible angle, as the services would be
in need of a computer or a mobile along with internet connectivity. To a physical
conference, you have to spare time, money to travel, cost to stay and so on. A digital
connectivity has given huge benefits regarding using web conference option on a regular
basis.
2. Easy connectivity from every place in the world
The online conferencing is not a baby technology anymore, where the connection was
never stable. The web conferencing technology has improved to a great extent and
provides flawless connectivity from any part of the world. You can use the online
conferencing services for both official and personal purposes, as there are multiple
numbers of applications that you can use to initiate a virtual meeting.
3. Best to use in different devices and gadgets
You can do online conferencing both on the computer and on mobile phones. Most of the
smartphones give out an option for users to have a web meeting on a regular basis without
paying any cost. As technology is advancing at a rapid speed, some of the applications are
available free of cost both in mobile and in the computer, which can be used to make long
distance calls without paying a dime.

4. Increase productivity and efficiency

The efficiency of a business house depends more or less on the ease of communication and
smooth flow of information between employees working at different levels. Though
interaction mostly takes place via e-mail, phone or instant messaging system but visually
interactive video-conferencing is providing a better alternative. It gives vital visual images
that enable employees and customers to interpret and collaborate properly over a long
distance. As a result, decisions are taken faster, projects execute on-time and productivity
increases.

5. Long-term competitive advantage

Video-conferencing gives users multiple options for securing competitive advantage. When
employees or business associates interact over video, they can share messages more
rapidly resulting in more wise decisions that minimize both the time and price required to
promote new services and products. Through the technical support of the
videoconferencing company, business owners get an opportunity to leverage video effects
and create more valuable and personal bonding with the customers and build up a loyalty
which is far beyond the capacities of traditional phone conferencing system.
6. Ultimate support for environmental protection
Since the videoconferencing system works on green technology, business organizations can
be prevented from emitting energy and increasing the level of carbon in the environment.
Thus, interaction over video has made every small and medium sized business organization
environment conscious and urged them to stick to environment-friendly communication
methods. With wide scale availability of tools that make on-demand production of live
video footages possible anywhere in the world, students, customers, and employees get a
chance to become part of an environmental initiative.

Notable Cons of Online Communication

1. Time-consuming and costly
One of the major disadvantages of web conference call is that detail planning is essential for
its success. The people engaged in the conference call need to have high discipline and high
level of concentration. For an effective conference call the web cam, microphone and other
gadgets need to be in proper position and in good working condition. Failure in any one of
the key gadgets can lead to the total failure of the conference call.
2. Ineffective
There are some human ways of communicating that do not translate very well over a
distance, such as an eye contact. When you sit in the same room with someone and listen to
a speech or presentation you will make eye contact and they will judge who is paying
attention by looking around the room. Much of this contact is not easily delivered through a
webcam.
Conclusion
The advantages and disadvantages of video conferencing have to be weighed against your
purpose and whether there will be something valuable lost through this technology that
you don't want to give up. ezTalks is a one-stop video and audio conferencing solution
provider offering a wide range of quality online communication services. The company
offers cost effective call solutions which will require an IP or ISDN network connection,
conference equipment (camera, microphone, monitor, and speakers), a codec and an audio
system for being functional. The recent developments in audio and video conferencing
technology have made it far more productive and engaging than conventional
teleconferencing.

 With the evolution of online communication through internet, customers now see
online advertisements of various brands. It is fast catching up with the buying
behavior of consumers and is a major source of publicity for niche segments and
also for established brands. This is the new way of digital revolution and businesses
worldwide have realized their worth.

Examples − Online catalogues, Websites, or Search engines. When customers have

sufficient information, they will need to compare with the choices of products or services.
Online Customer Behavior Process

According to the above figure, in the search stage, they might look for the product reviews
or customer comments. They will find out which brand or company offers them the best fit
to their expectation.

During this stage, well-organized web site structure and attractive design are important
things to persuade consumers to be interested in buying product or service.

Stage 1
The most useful characteristic of internet is that it supports the pre-purchase stage as it
helps customers compare different options.

Stage 2
During the purchasing stage, product assortment, sale services and information quality
seem to be the most important point to help consumers decide what product they should
select, or what seller they should buy from.

Stage 3
Post-purchase behavior will become more important after their online purchase.
Consumers sometimes have a difficulty or concern about the product, or they might want
to change or return the product that they have bought. Thus, return and exchange services
become more important at this stage.

Factors of Online Customer Behavior

The first elements to identify are factors that motivate customers to buy products or
services online. They are divided into two categories − external factors and internal
factors.

 The External Factors are the ones beyond the control of the customers. They can
divide into five sectors namely demographic, socio-economic, technology and
public policy; culture; sub- culture; reference groups; and marketing.

 Internal Factors are the personal traits or behaviors which include attitudes,
learning, perception, motivation, self image.

 The Functional Motives is related to the consumer needs and include things like
time, convenience of shopping online, price, the environment of shopping place,
selection of products etc.
  The Non-Functional Motives related to the culture or social values like the brand
of the store or product.

Filtering Elements

Customers use these three factors to filter their buying choices and decide on the final
selection of stores they are willing to purchase from. They use the knowledge to filter their
purchase options by three factors −

 Security
 Privacy
 Trust and Trustworthiness

Online Shopping Behavior

• Online shopping behavior (also called online buying behavior and Internet
shopping/buying behavior) refers to the process of purchasing products or services via the
Internet.

• Online shopping became popular in the mid- 1990s with the popularization of the World
Wide Web(WWW). 3

Most every business wants to know how consumers tick. In this lesson, you'll learn about
consumer buying behavior, including the standard model. You'll also have a chance to take
a short quiz after the lesson.

Consumer Buying Behavior Defined

Consumer buying behavior is the sum total of a consumer's attitudes, preferences,
intentions, and decisions regarding the consumer's behavior in the marketplace when
purchasing a product or service. The study of consumer behavior draws upon social
science disciplines of anthropology, psychology, sociology, and economics.

Standard Behavioral Model

The standard model of consumer behavior consists of a methodical and structured process.
Let's take a brief look at each step.

1. Problem recognition - The first step is problem recognition. During this step, the
consumer realizes that she has an unfulfilled need or want. Let's use the example of
a consumer who has just been informed by her mechanic that fixing her car will cost
 more than it's worth. Our consumer realizes that she now has a transportation
problem and wants to fulfill that need with the purchase of a car.
2. Information search - The next step is to gather information relevant to what you
need to solve the problem. In our example, our consumer may engage in research on
the Internet to determine the types of vehicles available and their respective
features.
3. Evaluation - After information is gathered, it is evaluated against a consumer's
needs, wants, preferences, and financial resources available for purchase. In our
example, our consumer has decided to narrow her choices down to three cars based
upon price, comfort, and fuel efficiency.
4. Purchase - At this stage, the consumer will make a purchasing decision. The
ultimate decision may be based on factors such as price or availability. For example,
our consumer has decided to purchase a particular model of car because its price
was the best she could negotiate and the car was available immediately.
5. Post-purchase evaluation - At this stage, the consumer will decide whether the
purchase actually satisfies her needs and wants. Is our car purchaser happy with her
purchase? If she is not satisfied, why isn't she?

The 4 Main Types of Consumer Buying Behaviours

Did you know a consumer decision-making differs with the type of buying decision they
need to make. Yes! There would be a lot of difference in the buying behavior of a person
when he\she would be purchasing toothpaste or a new car. It has been observed that
complex and expensive purchases involve more deliberation and more participants.
Keeping this changing buying behavior in mind today, let’s discuss the 4 Main Types of
Consumer Buying Behaviours.

Main Types of Consumer Buying Behaviours

1. Complex Buying Behaviour

Customers go through complex buying behaviour when he\she is highly involved in the
purchase process and know the significant differences between different brands.
Consumers showcase complex behaviour pattern when they are purchasing an expensive,
infrequently bought and risky product. Such a customer does not know much about the
product but needs to learn a lot before investing.

Image CC – Marketing Teacher

2. Dissonance-Reducing Buying Behaviour

Occasionally the consumer is highly, involved in a purchase but he\she sees very little
difference in the brands. The high involvement shown is due to the kind of product which
can be expensive, infrequent, or risky. But in this case since the brand differences are not
pronounced the buyer would buy fairly quickly.

Image CC – TTi Global Research

3. Habitual Buying Behaviour

Consumers who showcase the habitual buying behaviour have very little involvement in
the product or brand category. They simply go to the store and reach for their preferred
brand. Since they keep reaching for the same brand, this shows a habitual pattern, and not
strong brand loyalty.

4. Variety-Seeking Buying Behaviour

Some buying conditions are categorized by very low consumer involvement, but see
noteworthy brand differences. In this category of buyers, it has been often observed that
they switch a lot of brands. Consumer might choose a brand for some set of beliefs, but
without making much evaluation, once they use the product they tend to evaluate it and
when the next time they go out to buy the product they would reach for some other brand
out of boredom or even for a wish for different taste. Here brand switching occurs for the
sake of variety and not for dissatisfaction.

Marketing Mix:
Definition: The marketing mix refers to the set of actions, or tactics, that a company uses
to promote its brand or product in the market. The 4Ps make up a typical marketing mix -
Price, Product, Promotion and Place. However, nowadays, the marketing mix increasingly
includes several other Ps like Packaging, Positioning, People and even Politics as vital mix
elements.

Description: What are the 4Ps of marketing?

Price: refers to the value that is put for a product. It depends on costs of production,
segment targeted, ability of the market to pay, supply - demand and a host of other direct
and indirect factors. There can be several types of pricing strategies, each tied in with an
overall business plan. Pricing can also be used a demarcation, to differentiate and enhance
the image of a product.

Product: refers to the item actually being sold. The product must deliver a minimum level
of performance; otherwise even the best work on the other elements of the marketing mix
won't do any good.

Place: refers to the point of sale. In every industry, catching the eye of the consumer and
making it easy for her to buy it is the main aim of a good distribution or 'place' strategy.
Retailers pay a premium for the right location. In fact, the mantra of a successful retail
business is 'location, location, location'.

Promotion: this refers to all the activities undertaken to make the product or service
known to the user and trade. This can include advertising, word of mouth, press reports,
incentives, commissions and awards to the trade. It can also include consumer schemes,
direct marketing, contests and prizes.

What is the importance of the marketing mix?

All the elements of the marketing mix influence each other. They make up the business plan
for a company and handled right, can give it great success. But handled wrong and the
business could take years to recover. The marketing mix needs a lot of understanding,
market research and consultation with several people, from users to trade to
manufacturing and several others.

Marketing
Marketing is simplistically defined as ‘putting the right product in the right place, at the
right price, at the right time.’ Though this sounds like an easy enough proposition, a lot of
hard work and research needs to go into setting this simple definition up. And if even one
element is off the mark, a promising product or service can fail completely and end up
costing the company substantially.

The use of a marketing mix is an excellent way to help ensure that ‘putting the right
product in the right place,…’ will happen. The marketing mix is a crucial tool to help
understand what the product or service can offer and how to plan for a successful
product offering. The marketing mix is most commonly executed through the 4 P’s of
marketing: Price, Product, Promotion, and Place.
These have been extensively added to and expanded through additional P’s and even a 4C
concept. But the 4Ps serve as a great place to start planning for the product or even to
evaluate an existing product offering.

Save
© Entrepreneurial Insights

THE FOUR P’S

Product

The product is either a tangible good or an intangible service that is seem to meet a specific
customer need or demand. All products follow a logical product life cycle and it is vital for
marketers to understand and plan for the various stages and their unique challenges. It is
key to understand those problems that the product is attempting to solve. The benefits
offered by the product and all its features need to be understood and the unique selling
proposition of the product need to be studied. In addition, the potential buyers of the
product need to be identified and understood.

Price

Price covers the actual amount the end user is expected to pay for a product. How a
product is priced will directly affect how it sells. This is linked to what the perceived value
of the product is to the customer rather than an objective costing of the product on offer. If
a product is priced higher or lower than its perceived value, then it will not sell. This is why
it is imperative to understand how a customer sees what you are selling. If there is a
positive customer value, than a product may be successfully priced higher than its objective
monetary value. Conversely, if a product has little value in the eyes of the consumer, then it
may need to be underpriced to sell. Price may also be affected by distribution plans, value
chain costs and markups and how competitors price a rival product.

Promotion

The marketing communication strategies and techniques all fall under the promotion
heading. These may include advertising, sales promotions, special offers and public
relations. Whatever the channel used, it is necessary for it to be suitable for the product, the
price and the end user it is being marketed to. It is important to differentiate between
marketing and promotion. Promotion is just the communication aspect of the entire
marketing function.

Place

Place or placement has to do with how the product will be provided to the customer.
Distribution is a key element of placement. The placement strategy will help assess what
channel is the most suited to a product. How a product is accessed by the end user also
needs to compliment the rest of the product strategy.

DEVELOPING A MARKETING MIX

Intuition and creative thinking are essential job requirements for a marketing manager. But
relying on just these can lead to inaccurate assumptions that may not end up delivering
results. To ensure a marketing mix that is based in research and combines facts with
innovation, a manager should go through the following systematic process:

Step 1: Defining Unique Selling Proposition

The first item on the marketing manager’s agenda should be to define what the product has
to offer or its unique selling proposition (USP). Through customer surveys or focus groups,
there needs to be an identification of how important this USP is to the consumer and
whether they are intrigued by the offering. It needs to be clearly understood what the key
features and benefits of the product are and whether they will help ensure sales.

Step 2: Understanding the Consumer

The second step is to understand the consumer. The product can be focused by identifying
who will purchase it. All other elements of the marketing mix follow from this
understanding. Who is the customer? What do they need? What is the value of the product
to them? This understanding will ensure that the product offering is relevant and targeted.

Step 3: Understanding the Competition

The next step is to understand the competition. The prices and related benefits such as
discounts, warranties and special offers need to be assessed. An understanding of the
subjective value of the product and a comparison with its actual manufacturing distribution
cost will help set a realistic price point.

Step 4: Evaluating Placement Options

At this point the marketing manager needs to evaluate placement options to understand
where the customer is most likely to make a purchase and what are the costs associated
with using this channel. Multiple channels may help target a wider customer base and
ensure east of access. On the other hand, if the product serves a niche market then it may
make good business sense to concentrate distribution to a specific area or channel. The
perceived value of the product is closely tied in with how it is made available.

Step 5: Developing Communication / Promotion strategy

Based on the audience identified and the price points established, the marketing
communication strategy can now be developed. Whatever promotional methods are
finalized need to appeal to the intended customers and ensure that the key features and
benefits of the product are clearly understood and highlighted.

Step 6: Cross-check of the Marketing Mix

A step back needs to be taken at this point to see how all the elements identified and
planned for relate to each other. All marketing mix variables are interdependent and rely
on each other for a strong strategy. Do the proposed selling channels reinforce the
perceived value of the product? Is the promotional material in keeping with the
distribution channels proposed? The marketing plan can be finalized once it is ensured that
all four elements are in harmony and there are no conflicting messages, either implicit or
explicit.

MARKETING MIX EXAMPLE – NIVEA

The Company

NIVEA is a well-known company that is in the high quality skin and beauty care product
market. NIVEA is one the brands manufactured and sold by Beiersdorf, which was
established in 1882. In UK, the company has always focused on ensuring availability of
their products to as many people as possible. In addition, the company has always strived
to understand the varied needs of its vast consumer base and bring as many specific
products to market as possible.

Marketing mix for new product line

Market research revealed an opportunity in the market for a younger customer base. This
led to the launch of Nivea Visage Young in 2005. This product was developed for girls in the
13 to 19 year age range.

For the eventual launch of the product, the company needed to develop a balanced and
relevant marketing mix to appeal to its young audience. Through its initial launch in 2005
to a subsequent re launch in 2007, the company focused closely on the marketing mix
balance to help ensure that all elements of the product appeal to the target audience to
achieve success.

Product

The company put significant importance in ongoing research to understand the constantly
evolving market and consumer dynamics. This knowledge has helped the company develop
more innovative new products that fulfill consumer needs. Through this research, it
became clear that younger consumers wished for a more specific product that addressed
the skin needs of their age category. The need was for a product that offered a beautifying
regime for daily use rather than a medicated product that targeted specific skin problems.
The latter were abundantly being offered by competition. The product was subsequently
redesigned to meet these specialized requirements.

From the company’s perspective, some of the changes helped meet its commitment to the
environment which included more efficient packaging to reduce waste, the use of more
natural products and the use of recyclable plastic.

Price

An effective pricing strategy takes into account the product’s perceived and actual values.
The final price should be based on both these in order to make the product attractive to
both buyer and seller. After its relaunch, Nivea Visage Young was priced a little higher than
before to account for the new formula, better packaging and extended range of products.
Since the product as being bought by mothers for their daughters, it remained low enough
to remain good value for money. Effective pricing means that sales from this product
account for nearly 7 percent of all Nivea Visage sales.

Place
As mentioned, Nivea aims to have a wide reach for its products to ensure that it is easily
available wherever needed by the extensive target market. The primary channels used are
retail stores. High Street stores such as Boots and Superdrug account for nearly 65 percent
of all sales. Another portion comes from grocery chain stores such as ASDA or Tesco. This
covers young people making their own purchases (mostly high street), as well as their
mothers buying for them (mostly grocery stores). These stores ensure a cost effective
distribution channel that has a wide reach. The company manages its own cost by selling to
wholesalers rather than directly to smaller stores. It also does not sell online directly, but
the product is sold through stockists.

Promotion

Nivea’s has always tried to base its promotions on the actual lifestyle of its target market.
The company does not find above the line promotions to be very effective as these are one
way communications through TV for example. Instead, the promotion is more consumer
led through different below the line solutions. Sample sales are a key activity that allows
consumers to try out the actual product. There is also an interactive online magazine FYI
(fun, young, independent) to increase product visibility and association. The company has
also maintained a strong social media presence on popular social media networks. This
used of new media has ensured a better brand awareness and association among target
audience.

Conclusion

Through its successful use of a balanced marketing mix, Nivea Visage Young has managed
to create a clear position in the market. It addresses a need felt by a specific niche segment.
Traditional distribution methods are balanced by a unique product and updated
promotional strategies. This ensures that the brand message reaches the right people at the
right time in the right way.

As we see from the Nivea example, it is vital for any company to focus equally on all
elements of the marketing mix while planning for a product. Eventually, there may be a
need to divert more resources towards one variable such as strong distribution channels
over promotional activities. But this needs to come after a clear plan and strategy has been
decided upon. An effective marketing mix can mean the difference between a flash in the
pan product or one that is bound to become a well-loved classic.

How To Implement E-Business Solutions Successfully

Getting your business processes online is not an easy job! According to Gartner Group, a
renowned research firm, a full 75 percent of all e-business projects fail due to poor
planning and unrealistic expectations of new technology. The productivity gains and cost
savings promised by e-business solutions are often lost not because of the technology itself
but because of improper management of their implementation. In most of the cases, when a
massive e-business solution installation goes wrong, the management of the business is to
blame. Failure to understand the scale of the project, oversimplification of the project,
inappropriate expectations and lack of resource commitment are few of the mistakes made
by management that debilitate the implementation and use of the systems.

A large distribution company has decided to use a new online supply chain management
solution. The people – those who were supposed to use the system – were quite skeptic
about the ability of the system, as they did not have enough knowledge and had very little
or no training in using a similar system. As a result, it took over a year for the company to
bring the solution to its full operation. Productivity suffered severely. The final
implementation cost came out to be several times more than initial budget. A large number
of companies are reporting to face similar difficulties with the implementation of their e-
business solutions.

The problems that occur while a company tries to implement e-business solutions, most
likely, include:

Senior managers do not spend enough time and efforts to learn and understand the
solutions. As a result, they have no idea how their workers will adapt to this new solution;
and fail to set forth quantifiable objectives for them in terms of efficiency and productivity.
The end users do not receive required training.

As a result, treat the new solution as an added burden rather than a tool to increase
efficiency and productivity. In many cases, IT infrastructure is not up-to-date enough and
lacks power to support the new solution. Due to inadequate understanding by the
management of the e-business solutions that they plan to adopt, often, the time and money
allocated to the project are far less than required. Often the advanced Internet based e-
business solutions require to be integrated with portion of old systems that the company is
presently using, which in turn, sometimes generates software and system incompatibility.
How to avoid pitfalls

E-business solutions are sophisticated systems that encompass significant areas of the
company and its relationship with customers. That’s why implementation of these projects
should be carried out according to detailed plans.

Preparation

Create a well developed scope. In creating the scope involve all end-users of the solution,
not only the technical and business model experts. Get answers to the questions like:
What is the single most important goal that the company is planning to reach thanks to this
solution?

What critical problems the solution is meant to solve?

Are the time and money spent justifies its implementation?

What are the implementation milestones?

How you will know that you have reached those milestones?

Once you got all the relevant people of the company involved in the process, choose an
implementation taskforce of experts from all required sections. This team should be
responsible for developing the implementation plan. According to this plan assign
resources and deadlines. Upon completion of each stage of implementation get senior
management involved in order to review the progress.

 Education and Training

 Education should cover the “why" side of the solution and training the “how" side.
 Identify the people that required getting trained and educated.
 Define objectives
 Define training and education criteria and select syllabus
 Set the evaluation method
 Conduct the actual learning process
 Assess their progress
 Implementation
 Implementation of the solution should take place according to the strict predefined
stages.
 Upon completion of each stage of implementation get senior management involved
in reviewing progress. Conduct reality check!
 How does the solution meet your expectations so far?
 Is it doing what it’s supposed to do?
 Do you need to revise any of your priorities?
Once the implementation is over, set up a thorough post implementation meeting with the
taskforce and the relevant end-users. The important thing here is to identify if everybody
involved with the project is satisfied with the result or not.

In order to successfully implement e-business solutions, it is very important that you fully
understand the technologies behind it. If require hire a consultant and work closely with
her. In the long run, this might save you substantial time and money.

Here are other things to remember:

1. E-business solutions are mere tools. Don’t expect them to radically change everything
that you learnt about business processes.

2. E-business solution implementations like any other project require strict step by step
project management.

3. Before considering an e-business solution, make sure that there is a sound business need
to get it. E-marketplace, Private exchange, Business portal are few of the e-business
solutions that help you attracting new customers and markets. These solutions also allow
streamlining many of the vital business processes. In your e-business strategy these
solutions should be at the top of the list.

4. Keep track of the new technologies and keep an eye to your competitors’ e-business
strategies. E-business is an extremely fast moving segment; you should be ready for
changes and embrace them whenever it’s necessary.

How to develop an e business plan

 Clarification
 E-Business is about interaction. It represents a more focused and comprehensive
involvement of the organization. The platform is attitude shift.
 E-commerce is about transaction. It represents on aspect of E-Business. The
platform is hardware and software
 Introduction
 Developing an e-Business Plan calls for the recognition of Information
Technology as part of a business’s overall Value Chain.
 Developing such a plan is not an easy tasks. Several reasons:
o Technology in infancy
o Not enough historical data.
o A long term proposition
o Requires a fundamental shift in management & organization culture.
o Requires constant attention to technology, customers and to competition.
 Basics
o Plan with needs of the customer in MIND
o Do not try to replicate offline processes online.
o Be fully aware of the changes/trends within your industry.
o Be prepared to shift your attitude
o Encourage a culture of entrepreneurship, learning and adaptability.
 Developing the Plan-Introduction-I
o An e-Business Plan should be a realistic expectation of changes in
 -Customer Behaviour
 -The technology environment
 -The business/Industry environment
  -New business and work practices due to technology,
o Finally, the plan must address the use of information technology at all stages
of the business.
 Developing the Plan-Introduction-II
o Managers must understand the technology that underpins e-Business
 -Infrastructure -Internet Protocols
 -Telecommunication Standards
 -World wide web protocols
 -Wireless
 -The future of the WWW

Planning Stages

 Planning Stage-I
 Clearly define your Vision, Mission and Business Objectives.
 Clearly define your market/markets
 Clearly define your product or service
 Assess your SWOT
 Determine your distinctive competences
 Planning Stage-II

Identify and describe your distinctive advantges

Remember in e-business, low cost is not a distinctive advantage. What is?

Differentiation

 Planning Stage-III
 Clearly define the technology to realise your Vision, Accomplish your Mission,
and reach your Objectives.
 You must asked the following questions
*Is the technology proprietary?
*Are there competing technology?
*Does the technology has multiple applications?
 What comes Next?
Develop the Business Model
 This is the basic process flow indicating how the business will operate. It also
shows how the business functions will be linked together.
Develop the Web Plan

 Managerial Issues
 Consider the strategic value of EB
 Consider the risks
 Integration
 Pilot projects
 ROI

UNIT-3
Design and Development and Management

There are numerous ways to approach designing, developing and maintaining an e-

business. Some businesses can establish an online presence by using a turnkey solution (a
prepackaged e-business). Other options include e-business templates that outline the basic
structure, but allow the design to be determined by the owner. Larger corporations, or
businesses with substantial funding, can outsource the project to an organization offering
ebusiness solution packages or choose to build the e-business in-house through an
application platform.

There are many things you must consider before beginning an e-business. Building,
managing and maintaining a Web site involves advertising, marketing, customer
relationship management, accepting online payments, providing and continuously
updating content, recognizing cultural differences and legal parameters and providing
security features for your visitors and your business. Ultimately, this can become an
expensive venture depending on the degree of sophistication. In this section, we discuss
briefly the decision to build an e-business.

Generating e-Business Ideas

Before beginning to build an e-business, you must have a solid idea of the products and
services you want to offer via the Web. Surf the Web to discover what exists. Are the Web
sites you find providing exceptional services, or could they be offering more? Also, visit
other sites offering different services and determine their best features. Ask yourself if
these features could be adjusted to meet the needs of your viewers.

Above all, a solid business plan is essential. A business plan enables you to envision your e-
business on paper for evaluation purposes (Fig. 3.1). It serves as a presentation of your
business’ objectives and long-term expectations, forcing prospective e-businesses to state
their goals clearly prior to beginning the project. When presenting your idea to others, it
exhibits professionalism and purpose. A brief introduction to the business plan should be
presented first. Introduce your readers to the layout, what you will discuss and when you
will discuss it. This should be followed by an overview of the business premise including
the primary issues. Headings and sub-headings should categorize the content of your
business plan, making it easy for the reader to reference.

Growth of e-Business:

Evaluating Risk In the past few years, many Internet companies have experienced rapid
growth. However, many others have struggled to get off the ground, to find funding and,
especially, to make a profit. It is important to review the current market. What businesses
are successful? Which are struggling? Research will play a crucial role in the development
of your e-business.

Finding Funding and Going Public

Building an e-business can be an expensive and risky venture, whether it is an extension of

a large brick-and-mortar business or a new business. Competition is intense, determining
your market niche and reaching your target audience often requires significant financial
backing. An Internet incubator is a company that specializes in the development of Internet
businesses. Often, incubators will serve as the financiers, as well as work with the
development team for creating e-businesses. E-business ventures such as Disappearing
Inc.™, eToys, NetZero and ConnectedCampus.com™ are incubator clients.

Choosing a Domain Name How many advertisements for various Web sites have you heard
or seen recently? From television commercials to the sides of buses, Internet domain
names are everywhere. Do the people who see your advertisements remember your name?
Do these people return to your site regularly? If your advertisements do not register in the
minds of your target market, your advertising campaign may not be the problem; the
problem may be a poorly chosen domain name. 11 A domain name is the name that you use
in the URL for your Web site. Choose a concise name that people will be able to recognize
and type easily. Because your Web site will be accessible worldwide, it is important to
consider how your domain name will be interpreted in many different languages and
cultures. The fully qualified host name of a computer on the Internet, such as
www.deitel.com, has three major parts: the host name, the domain name and the toplevel
domain (TLD). Most Web servers use www as the host name. A domain name is often the
name of the company that owns a site or a word or phrase that otherwise describes the
site. The TLD usually describes the type of organization that owns the domain name. For
example,the com TLD usually refersto a commercial business, whereasthe org TLD usually
refers to a nonprofit organization. Each country also has its own TLD, such as us for the
United States, ca for Canada and uk for the United Kingdom. International domain name
registration is discussed in Chapter 12, Globalization

As available domain names with the dot-com (.com) extension are becoming rare,
companies are beginning to use dot-net (.net) and dot-org (.org). Dot-net is usually used for
network-related sites, while dot-org normally denotes a non-profit organization. 13 With
the number of available domain names decreasing, ICANN (Internet Corporation for
Assigned Names and Numbers) is considering the possibility of introducing new suffixes,
such as .movie, .inc, .info and .web. 14 15 The following sites assist you in searching for,
registering and purchasing domain names: www.domainit.com, www.register.com and
www.networksolutions.com. The cost to register a domain name depends on the extension.
For example, in some cases it is more costly to register a .com.uk (for the United Kingdom)
than it is to register .com. Usually, ownership of a domain name requires a one-time
registration fee followed by recurring annual fees. These generally fall between $30 and
$200 per name.

Supply-Chain Management: Distributors, Vendors and Shipment Providers

The Internet can also help an e-business owner manage fulfillment (i.e. warehouse storage,
shipping, inventory management and return procedures). For example, businesses are no
longer required to keep large inventories. Instead, through the online management of
fulfillment, these companies can rely on a manufacturer (the direct producer of the
product) or a distributor (the supplier who acts as a middleman to manufacturers and
vendors, often reducing the price of an item by buying in bulk) to supply them with
products as needed. This also allows e-businesses and brick-and-mortar businesses with
Web-enabled supply chains to accept made-to-order requests. For example, Dell
(www.dell.com) allows consumer to select the features they want included in their PCs. 17
This is an advantageous procedure, however, one that must be carefully managed. During
the 1998 Christmas season, when many companies were fined for failing to deliver gifts in
time for the holidays, the need for timely delivery became apparent. 18 The ability for
members of the supply chain to view the fulfillment status increases efficiency.For example,
a Web merchant can serve customers better by knowing the status of each order. Web-
based fulfillment mechanisms will demonstrate if the product is available, if it has left the
warehouse or if it has been delivered (and who signed for it). Wireless Internet access (see
Chapter 6, Wireless Internet and m-Business) has also enhanced this process by allowing
fulfillment status to be checked from any location at any time. 19 B2B supply-chain
management and EDI is discussed in Chapter 2, e-Business Models. ChangePoint™
(www.changepoint.com) offers a hosted supply-chain management solution that can be
viewed by visiting www.changepoint.com/ index2.html and clicking on the appropriate
link. The demonstration allows users to select one particular area in which they wish to
learn more, or to select a full tour. The full tour walks users through the service features,
providing an example screen capture and commentary. It highlights solutions, such as
storing and sorting customer relationship management information, managing employees,
billing procedures and marketing.

Web-Site Hosting

Web-hosting companies provide products, services and support for companies,

organizations and individuals to help them create and maintain Web sites (Fig. 3.5). Many
Webhosting companies offer customers space on a Web server where they can build a Web
site.

For businesses, Web-hosting companies offer more advanced services, including dedicated
servers and colocation. A dedicated server is assigned one specific purpose. This ensures
that the function that the server was intended to manage is not interrupted by other
responsibilities, offering the advantage of consistent download times. Colocation services
provide a secure physical location for a business’ server hardware. Typical colocation
services include dedicated Internet connections and protection from power outages, fire
and other disasters. Each level of service provided by a Web host (see DellHost feature)
offers different amounts of storage space and data transfers. Basic plans allot small
amounts of both, providing sufficient resources for a small-content site—a site that attracts
only a small number of visitors and does notinvolve high levels of interactivity—to operate.
Larger e-commerce sites require more resources to handle the intense activity they receive
each day.

Some e-business owners may choose to hosttheir own sites. This requires the purchase of
the necessary hardware, such as a Web server, a database server, an Internet connection
(for example, a T1 or DSL line) and a Web-site administrator to manage the site. This could
be a costly endeavor, be sure to research equipment prices and other expenses thoroughly.

Several companies offer services and software for creating Web sites (see the feature
"Using Yahoo! Store to set Up an Online Store."). Freemerchant (www.freemerchant.com)
provides a free turnkey solution for building an online store. The site offers hosting, store-
building capabilities and a shopping-cart model at no cost to the user. Once the user gets
the store up and running, Freemerchant supplies other tools to enhance the business.
These tools include online auction tools, package tracking and free technical support.
Merchants are, however, required to pay for a merchant account, which allows them to
accept credit-card payments. Merchant accounts and accepting online payments are
discussed in detail in Chapter 4, Online Monetary Transactions. 23

Web Design

A well-designed, easy-to-navigate Web site is a crucial element in a successful e-business.

While elaborate design and graphics might attract customers initially, content should be
the foundation. Web services such as www.eprise.com help businesses update their
content regularly. This is particularly important for e-businesses offering timely
information. For example, online retailers might not want to reorganize their layout, but
will want to update consistently.

Design consistency, or uniformity among the sections, is also important. Your Web site
should be well connected,in terms of both content and design. International design
elements are discussed in Chapter 12, Globalization. Webtechniques.com suggests visiting
www.cooking.com, www.apple.com and www.crayola.com for examples of well-designed
Web sites. 32 Other good examples of well-designed e-commerce sites include Amazon.com
and eBay.com. These sites exemplify strong branding;their logos and color schemes appear
on every Web page. Contact information is easily located. Crayola® lists its privacy policy
and contact links at the bottom of every page.
 Dell® organizes its site to accommodate the different customer groups—home offices,
small businesses, large corporations, government customers and educational institutions
are each provided links to additional resources. Customers should be able to find and price
products and services easily. For every business category, there are scores of e-businesses
offering their services on the Web. As a result, products and services must be priced
competitively. Low switching costs, or the costs of changing vendors, make e-commerce a
fiercely competitive field. 33 Because online shoppers have access to a large number of
different stores, they will spend less time at your site if it is not conveniently organized.
Other factors that might discourage consumers include poor customer service and weak
return policies. Web sites should be designed with consumers’ preferences in mind. Market
research (see Chapter 8, Internet Marketing) will allow you to discover preferences by
region and by demographic. Understanding these preferences will enable you to strategize
and create more effective Web sites.

Enhancing the User Experience

In addition to designing your site to meet your consumers’ preferences, there are a number
of other features you can implement to enhance their experience. In this section, we review
searching capabilities, intelligent agents, community-building features and product viewing
technology.

There are a variety of features you can add to your site to enhance the consumer’s
shopping experience. For example, ZOOM™ Server software (www.mgisoft.com) allows
consumers to take a closer look at your merchandise. By zooming in by degrees, shoppers
can see texture and quality. ImagePump™ (www.xippix.com) offers a similar
technology.Figures 3.8 and 3.9 show the ImagePump interface that allows the user to focus
on a particular area, zoom in, zoom out and rotate the image.

Community-building tools can also enhance your visitors’ experience and increases the
possibility they will visit the site frequently. For example, your e-business can provide a
place where people can ask questions and find answers or locate an event near them.
MyEvents.com is an application service provider (see Chapter 5, Internet Hardware,
Software and Communications) that offers both Internet and wireless access to common
files, including calendars, reminders and bulletin boards (Figs. 3.10 and 3.11).

Protecting Your e-Business

In addition to providing your consumers with a well-organized Web site, timely shipping
and effective personalization, you must also take steps to protect the consumer and your
ebusiness from misunderstandings and misinterpretations. In this section, we discuss
implementing a privacy policy and a disclaimer on your Web site. Additionallegalissues are
discussed in depth in Chapter 11, Legal and Ethical Issues; Internet Taxation. Your Web site
should include a privacy policy detailing the intended uses of consumers’ private
information. Consumer privacy on the Internet and resources for developing your privacy
policy are discussed in detail in Chapter 11, Legal and Ethical Issues; Internet Taxation.

Telling consumers how their personal information is used can influence their decision to
visit your site. For example, Staples™, an office supplies store, requested that consumers
provide their ZIP code during the shopping process. The ZIP code was to be used to
determine the availability of a product, based on the consumer’s proximity to the nearest
warehouse. In a simple oversight, Staples neglected to inform users of the purpose of the
request. As a result, many users, when asked to enter their ZIP code, abandoned their
purchases before completing the checkout process. Simply changing the phrasing of the
request to alert consumers to the use of their personal information decreased by 75
percent the number of customers who left their shopping carts before making a purchase.
34 There are many Web sites that will help you build a privacy policy. Often, these sites
provide you with their seal, which demonstrates your concern for consumer privacy.Figure
3.12 is an example of Secure Assure’s Privacy Profile™. Users (i.e., e-business owners) can
visitthe site and submittheir use of personalinformation into a questionnaire.

The Web site then generates a graph in HTML that e-business owners can plug into their
code, making it easier for users to educate themselves on the site’s policies. E-businesses
should also host disclaimers on their sites to provide users with the limits of their products
and services.For example,smallspelling or editing errors,such as an inaccurate statistic or
product price could result in product misrepresentation, angry consumers and lost
business. Dated information and inaccurate links can also lead to problems for Web-site
owners. Similar to privacy policies and contact information, disclaimers should be easy to
locate and information should be presented in a clear and concise manner. 35

Streaming Media: How Much Is Too Much?

It is important to recognize that, while multimedia such as streaming video and audio can
enhance content, not all users have the capabilities to download this kind of information
efficiently—or even at all. Your site should be able to provide such consumers with simpler,
but nevertheless effective Web pages. One way to test this is to run trial downloads of your
site through a standard dial-up connection prior to launch. Several services are available to
help you do this. They are discussed in Section 3.4.3, Maintaining and Monitoring Your Web
Site. Streaming media, download speeds and enhancing technologies are discussed in
greater detail in Chapter 5, Hardware, Software and Network Communications.
Preparing for New Technologies

Building a Web site for your e-businessis only the beginning. By keeping new technologies
in mind when designing your site, you can reduce the cost of incorporating these
technologies later. For example, what might fit well on a full-sized computer screen might
not work well on the face of a cell phone, pager or personal digital assistant. The
information sent to each device must be appropriate for that particular device. 37 It is
important to begin thinking about employing new technologies to make your ebusiness
accessible to mobile devices. Wireless Application Protocol (WAP) is discussed in Chapter
6, Wireless Internet and m-Business.

E-Business Solutions

E-business owners may have the skills to manage a business, but they typically do not
know how to program and design a Web site. Web-site building services, e-consulting and
marketing can all be outsourced to an e-business solution provider. In this section, we
explore various e-business solution packages.

End-to-End e-Business Solutions

An end-to-end e-business solution provider offers services to build Web sites from
conception to implementation. In addition to providing design, development and
deployment services such companies provide capabilities such as accepting payments
online, implementing new technologies and monitoring their services. An end-to-end
solution should also provide for easy adaptation to your back-end systems, fulfillment
(payment authorization and account settlement, distribution and shipping) and data
management. Online organizations such as Microsoft’s bCentral (see the bCentral feature)
provide such services.

Once a Web site has been constructed, Webvision can provide a variety of 24-by-7
management services. Members receive notification and reports as problems arise.
Services include Website Monitoring, which reports visitor information and reliability
issues, and ProActive Monitoring, which reports backup, capacity and system information.

End-to-End Solution Provider—Microsoft bCentral

Microsoft’s bCentral (www.bcentral.com) provides aspiring small e-businesse owners with

a list of products and services necessary to building an e-business. For a nominal monthly
fee, users receive a domain name, Web-site construction services and an e-mail account for
managing business communications. Other services offered through bCentral to help e-
business owners get started include assistance in writing a business plan, comparison and
purchasing information for connection media and insurance coverage. Internet marketing
(see Chapter 8, Internet Marketing) including business listings, advertising networks,
banner advertisement exchange and search-engine registration is also available. To further
meet your consumer’s needs, Privacy Wizard will generate a privacy statement to reflect
the uses of a consumer’s personal information.

Other e-Business Solutions

In addition to end-to-end e-business solutions,there are a variety of other options that

assist in e-business development, operation and management. Openair.com is a Web-based
project management, expense-tracking and time-managementservice provider. The service
is available to one employee of a company for free; each subsequent employee of the
company is charged a nominal monthly fee. 42 Online accounting application service
providers (ASPs) offer small organizations the opportunity to operate with current
technologies at reasonable costs. Through these ASPs, financial management can be done
remotely at any time. These services do present challenges, however; you must evaluate
factors such as security, service disruptions and a limited feature set. 43 ASPs are discussed
in greater detail in Chapter 5, Hardware, Software and Communications.

Maintaining and Monitoring Your Web Site

In addition to a balanced scorecard () a method used to measure the success of a business

by its performance in customer satisfaction, integration capabilities and potential for
growth, an e-business must also consider its use of current technologies for management
and production purposes. Outsourcing testing and monitoring services can greatly reduce
the cost of maintaining your e-business. 46 Knowing the limits of your site’s capabilities,
such as average download times and user capacities, can reduce the number of consumer
complaints. Companies such as Mercury Interactive
(testyourlimits.mercuryinteractive.com) measure the capacity of Web sites. This
information can then be used to determine areas that need to be enhanced. For example,
knowing that your Web site can handle only so many visitors at one time might help you
decide to upgrade your services to accommodate a larger capacity. Similarly, eBSure, Inc.
(www.ebsure.com) offers its software suite of eBWatch™, eBTracker™ and eBRobot™. The
suite’s features allow Web-site owners to measure the amount of time transactions take,
gather information about visitors on the site and register the pages visited (i.e. the time
spent waiting for downloads on a particular page and the actions taken by the user).

iSharp.com (www.isharp.com ) provides Web-site testing, monitoring and consulting

services. Interested users can subscribe to iSharp, requesting only the services they
require. Testing services monitor the amount of traffic your site will be able to handle,
enabling you to prepare for increases in traffic. For example, hiring iSharp to run a pretest
before you open your site for business could indicate that the site takes too long to
download via a specific medium, such as a dial-up modem. As a result, you might decide to
reduce the number of images that appear on the site. 47 48 iSharp also monitors user
activity,such asthe amount of time spent completing a transaction and the type of
transaction, and notifies Web-site owners of pressing problems. Design, development,
auditing and certification are available through iSharp’s consulting services. For more
information, visit www.isharp.com

e-Commerce Consulting

Consulting firms guide developing e-businesses. Some operate as advisors, while others
provide building and maintenance services similar to those provided by end-to-end
providers. Figure 3e.15 lists e-business consulting companies. Andersen Consulting
(Accenture as of 01.01.01) devotes one section of its Web site to the discussion of e-
commerce. The e-commerce home page contains several articles anticipating the future of
e-commerce and how to survive as a dot-com, as well as strategies for building e-
businesses. The e-Commerce Defined page offers the e-Intelligence Quiz
(www.ac.com/ecommerce/define.html) to help users determine how much they know
about the industry and to help them to learn more. Users can explore the Andersen
Consulting (Accenture) Web site to find the answers.

SUMMARY

• Building, managing and maintaining a Web site involves advertising, marketing, customer
relationship management, accepting online payments, providing and continuously
updating content, recognizing cultural and legal parameters, providing security features for
your visitors and your business and many other considerations.

• A solid business plan is essential. A business plan enables you to envision your e-business
on paper for evaluation purposes.

• An Internet incubator is a company that specializes in the development of Internet

businesses.

• Some incubators will finance and manage a growing dot-com without requiring
ownership or payment up front. Rather, they provide assistance with the hopes that the
successful e-businesses will compensate them at a later date.

• While elaborate design and graphics might attract customers initially, content should be
the foundation of good Web-site design.
• Customers should be able to find and price products and services easily. Low switching
costs, or the costs of changing vendors make e-commerce a fiercely competitive field.

• Web sites should be designed with consumers’ preferences in mind. Market research can
help you determine preferences by region and by demographic. Understanding these
preferences will help you strategize and create more effective Web sites.

• Your Web site should also display a privacy policy detailing the intended uses of
consumers’ private information. Telling consumers how their personal information is used
can influence their decision to visit your site.

• Answers to common questions can be made available by including a frequently asked

questions (FAQs) link. Company contact information is another important element. Users
should be supplied with an e-mail address, a phone number and a postal address.

• It is important to recognize that while multimedia such as streaming video and audio can
enhance content, not all users have the capabilities to download this kind of information
efficiently—or even at all.

• A domain name is the name that you use in the URL for your Web site. Choose a name that
people will be able to recognize and type easily. Because your Web site will be accessible
worldwide, it is important to consider how different groups of people will interpret your
domain name.

• As domain names with the dot-com (.com) extension are becoming rare, people are
beginning to use dot-net (.net) and dot-org (.org). Dot-net is usually used for network-
related sites, while dot-org is normally used to denote nonprofit organizations.

• The fully qualified host name of a computer on the Internet has three major parts: the
host name, the domain name and the top-level domain (TLD). Most Web servers use www
as a host name.

• A domain name is often the name of the company that owns a site, or it is a word or
phrase that otherwise describes the site.

• It is important to begin thinking about making e-businesses accessible to mobile devices.

• The Internet can also help an e-business owner manage fulfillment (i.e. warehouse
storage, shipping, inventory management and return procedures).
•A manufacturer is the direct producer of the product and a distributor is the supplier who
acts as a middleman to manufacturers and vendors, often reducing the price of an item by
buying in bulk.

• Online supply-chain management also allows e-businesses and brick-and-mortar

businesses with Web-enabled supply chains to accept made-to-order requests.

• Web-based fulfillment mechanisms will demonstrate if the product is available, if it has

left the warehouse or if it has been delivered (and who signed for it).

• E-business owners may have the skills to manage a business, but typically do not know
how to program and design a Web site. Web-site building services, human resources, e-
consulting and marketing can all be outsourced to e-business solutions providers.

• An end-to-end e-business solution offers services to build a Web site from conception to
implementation.

• An end-to-end solution should also provide for easy adaptation to your back-end systems,
as well as fulfillment (payment authorization and account settlement, distribution and
shipping) and data management.

• The Internet can help an e-business owner manage logistics.

• Fulfillment includes warehouse storage, shipping, inventory management and return

procedures.

• Content management allows you to update information on your site in an efficient

manner. It includes the ability to frequently update content, which can increase the
frequency of return visits, and improved site consistency.

• Consulting firms guide developing e-businesses. Some operate as advisors, while others
provide building and maintenance services similar to those provided by end-to-end
providers.

• Creating an appealing employment package enables new companies to meet the needs of
their current employees and serves as an incentive for prospective employees.

• Web-hosting companies provide products, services and support for companies,

organizations and individuals to help them create and maintain Web sites. Many Web-
hosting companies offer customers space on a Web server where they can build a Web site.
• A dedicated server is used by a Web-hosting company to serve only one customer’s Web
site.

• Colocation services provide a secure physical location for a business’ server hardware.
Typical colocation services include dedicated Internet connections and protection from
power outages, fire and other disasters.

Online transaction

WHAT IT IS:

An online transaction, also known as a PIN-debit transaction, is a password-protected

payment method that authorizes a transfer of funds over an electronic funds transfer (EFT)

HOW IT WORKS (EXAMPLE):

When you pay for goods or services with your debit card, you have an option for the
payment to be processed in two different ways: as an offline transaction via a credit
card processing network, or as an online transaction via an EFT system, requiring a
personal identification number (PIN) to complete the process.

When processed as an online transaction, the exchange of funds is completed using an EFT
network, such as Star, Pulse or Interlink, depending on which EFT system your bank is
associated with as a member bank. The cost of the transaction typically amounts to an
interchange fee of 1% of the total purchase price, which is charged to the
vendor/merchant.

WHY IT MATTERS:

$20.5 billion in interchange fees were charged to merchants in 2010. Now they are at the
center of debate among lawmakers, banks and merchant unions in the U.S. On one side of
the argument are the banks, which claim the interchange fees are necessary to cover the
costs of processing transactions and providing fraud protection. On the other side are the
merchants and vendors, who claim the rising interchange fees are increasingly cutting into
their profits, forcing them to raise the prices of their goods and services.

In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed
by Congress, and included in the Act was an amendment to address interchange fee reform
(the Durbin Amendment). Under this amendment the Federal Reserve is now authorized to
review and reform debit card transaction fees. One such proposal will cap interchange fees
at $0.12 per transaction, a 73% reduction from the average charge of $0.44 per transaction.
As a consequence, consumers can expect a loss of financial perks like free checking
accounts, the end of rewards programs for debit cards and an increase in fees for ATM
withdrawals from out-of-network banks.

If interchange fee reform is not passed, the cost of the fees will be borne by the consumer,
as merchants continue to increase the prices on their goods and services to make up for
profits lost to fees.

Online Monetary Transactions

Introduction

• Secure electronic funds transfer is crucial to e-commerce

• Examination of how individuals and organizations conduct monetary transactions
on the Internet
• Credit-card transactions, digital cash and e-wallets, smart cards, micropayments and
electronic bill presentment and payment
• Electronic-payment enablers

Credit-Card Transactions

• Popular form of payment for online purchases

• Resistance due to security concerns
• Many cards offer capabilities for online and offline purchases
– Prodigy Internet Mastercard
– American Express Blue

Anatomy of an Online Credit-Card Transaction

• To accept credit-card payments, a merchant must have a merchant account

• Traditional merchant accounts accept only POS (point-of-sale) transactions
– Transactions that occur when you present your credit card at a store
• Card-not-present (CNP) transaction
– Merchant does not see actual card being used in the purchase
• Authentication
– The person is, in fact, who they say they are
• Authorization
– The money is available to complete the transaction
• Acquiring bank
– The bank with which the merchant holds an account
• Issuing bank
 – The bank from which the buyer obtained the credit card, and the credit-card
association
• Verification
• Money issued to merchant after product/service is distributed
• Step 1
– Consumer makes a purchase at an online store, credit card information
received by e-store
• Step 2
– Credit card information is sent from the merchant to the acquiring bank
• Step 3 and Step 4
– The credit card association and the issuing bank certify the transaction and
the verification is sent to the acquiring bank
• Step 5
– The merchant ships the product and payment is issued

Credit-Card Transaction Enablers

• Credit-Card Transaction Enablers

– Companies that have established business relationships with financial
institutions that will accept online credit-card payments for merchant clients
• iCat
• Trintech
• Cybercash
• NextCard, Inc.

CyberCash Feature

• Enables businesses to receive payments through Internet

– CashRegister
• Makes it possible for merchants to receive credit-card numbers, offer
the numbers to the appropriate financial institution for validation and
accept credit-card payments in a secure environment over the Web
• Establishes direct connection between its servers and the Web sites of
its e-business customers
• Customer enters credit-card and shipping information
• Information sent to CyberCash for validation, once validation is
received, purchase can be completed and funds are transferred
electronically from customer accounts to merchant’s account
• CyberCash Instabuy allows customers to store their purchasing information in an
Instabuy e-wallet
 – An e-wallet electronically stores purchasing information
• Using redundant servers, or identical servers for back up if one server fails,
CyberCash is able to minimize downtime
• CashRegister keeps track of transactions
• All financial information transmitted via the Internet is encrypted and digitally
signed
• CyberCash offers fraud detection to protect merchants

CyberCash FraudPatrol. (Courtesy of CyberCash™, Inc.

CyberCash is a registered trademark of CyberCash Inc.,
in the United States and other countries.)

Online Credit-Card Fraud

• Chargeback
– When a credit-card holder claims a purchase was made by an unauthorized
individual, or when a purchase was not received
– The charges in question are not the responsibility of the credit-card holder
– On the Internet, neither a scan of the card nor a signature is registered and
the cost is incurred by the merchant
• Visa
– High-risk business models
– “Best Practices”
• Mastercard
– Uses the three digit pin code on the back of the card
Digital Currency

• Digital cash
– Stored electronically, used to make online electronic payments
– Similar to traditional bank accounts
– Used with other payment technologies (digital wallets)
– Alleviates some security fears online credit-card transactions
– Allows those with no credit cards to shop online
– Merchants accepting digital-cash payments avoid credit-card transaction fees
– eCash Technologies, Inc. is a secure digital-cash provider that allows you to
withdraw funds from your traditional bank account
• Gift cash, often sold as points, can be redeemed at leading shopping sites
– An effective way of giving those without credit cards, the ability to make
purchases on the Web
– Flooz
• Points-based rewards
– Points are acquired for completing specified tasks including visiting Web
sites, registering or buying products
– Points can then be redeemed
– Beenz

E-Wallets

• E-wallets
– Keep track of your billing and shipping information so that it can be entered
with one click at participating sites
– Store e-checks, e-cash and credit-card information
• Credit-card companies offer a variety of e-wallets
– Visa e-wallets
 – MBNA e-wallet allows one-click shopping at member sites
– Entrypoint.com offers a personalized desktop toolbar that includes an e-
wallet
• A group of e-wallet vendors have standardized technology with Electronic
Commerce Modeling Language (ECML)

Alternate Consumer Payment Options

• Checks or money orders through the mail

• Cash on delivery (COD)
• Debit cards
– Offer an alternative for card-holders to access their accounts
– Funds are instantly deducted from checking account
– Can withdraw cash from Automatic Teller Machines (ATMs)
• Checking-account numbers
– Companies such as AmeriNet allow merchants to accept checking-account
numbers as a valid form of payment
• AmeriNet provides authorization, account settlement, distribution
and shipping (fulfillment) and customer service inquiries

Peer-To-Peer Payments

• Peer-to-peer transactions
– Allow online monetary transfers between consumers
– eCash allows the transfer of digital cash via e-mail between two people who
have accounts at eCash-enabled banks
– PayPal offers X payments
• Allows user to send money to anyone with an e-mail address
• Can be used to enable credit-card payment for auction items in real
time (the transaction begins processing immediately after it is
initiated), reducing the risk of fraud or overdrawn accounts
– BillPoint
• Allows buyers to submit electronic payments to sellers’ checking
accounts
– Tradesafe.com (larger transactions, B2B)

Smart Cards

• Smart card
 – Card with computer chip embedded on its face, holds more information than
ordinary credit card with magnetic strip
– Contact smart cards
• To read information on smart cards and update information, contact
smart cards need to be placed in a smart card reader
– Contactless smart cards
• Have both a coiled antenna and a computer chip inside, enabling the
cards to transmit information
– Can require the user to have a password, giving the smart card a security
advantage over credit cards
• Information can be designated as "read only" or as "no access"
• Possibility of personal identity theft

Micropayments

• Merchants pay fee for each credit-card transaction

• Micropayments
– Payments that generally do not exceed $10, allows companies offering
nominally priced products to profit
• To offer micropayments, some companies form strategic partnerships with utility
companies
– eCharge enables companies to offer this option to customers
• eCharge uses ANI (Automatic Number Identification) to verify the
identity of the customer and the purchases they make
• Outsource payment-management systems (Qpass)

Millicent Feature

• Millicent is a micropayment technology provider

• Companies using Millicent payment technology allow customers to make
micropayments using credit or debit cards, prepaid purchasing cards or by adding
purchases to a monthly Internet Service Provider bill or phone bill
• Millicent handles all payment processing needed for the operation of an e-business,
customer support and distribution services

E-Billing

• Electronic Bill Presentment and Payment (EBPP)

– Offers ability to present a company’s bill on multiple platforms online and
actual payment processes
 – Payments are generally electronic transfers from consumer checking
accounts, conducted through the ACH (Automated Clearing House)
• Current method for processing electronic monetary transfers
– Paytrust
• Users send bills directly to Paytrust which scans them and places
them online
• E-mails customers about newly arrived bills and payment-due dates
• Makes automatic payments on any bill up to a threshold amount
• Services to enable EBPP on a company’s site
– Derivion
• Provides billers with electronic capabilities in conjunction with
Paytrust’s service
• Offers billing companies the technology and expertise needed to
transfer from paper to electronic billing through iNetBillerSM
– Encirq
• Partners with banks that issue credit cards, presenting the consumer
with an illuminated statement (interactive statement, placing special
offers from retail merchants to correspond with the itemized charges
on a credit-card statement)
• Builds highly specific consumer profiles each time charges is received

Developing Payment Standards

• Essential to the success of e-commerce

• Businesses offering domestic and international services must have assurance that
payment will be received, that it is secure and that it is valid
• Open Financial Exchange (OFX)
– Developed and presented by Intuit, Microsoft and Checkfree in 1997
– To serve as a standard mechanism for the exchange of financial information

Jalda Feature

• Developed by Ericsson
• An open standard online payment system that connects content providers (anyone
selling a good or service on the Internet) with an Internet Payment Provider (IPP)
• Accommodates transactions involving small fees
• Purchases can be made through the Web and using wireless devices
• A PIN code authorizes the transaction
Using Alternative Payment Options In Your Business
Consumers can use a variety of payment methods for purchases at small, medium, and
large businesses across the United States and globally across the world. Among the options
are the more traditional or conventional payment methods, as well as what’s known as
alternative payment methods. Offering more payment methods to your customers might
translate into more sales for you, so it might be worthwhile to consider which
options appeal most to your customer base.

I’ve defined an alternative payment as a payment method that’s outside of the traditional
or conventional payment method marketplace. I consider the traditional/conventional
payment methods to be the most popular and most used forms of payment methods today
across the United States and global markets. This includes: cash or checks at point of sale or
sent through the mail; credit or debit cards processed through landline, wireless, computer,
or internet terminals; and ACH and wire transfers.

If you’re wondering whether other payment options would work for your business, here
are some options you might want to incorporate to provide your customers the ultimate
experience in point-of-sale convenience.

Consumer Installment Programs

This is a payment method where, as a merchant, you can set up partnerships with various
consumer lending platforms which can help you close bigger sales with customers. You
sign up with one or multiple consumer lending platforms, which requires approval, then
when customers seek to make a purchase for let’s say $2,000, they would fill out a very
short online loan application while at the point-of-sale at your location.

Approval (or decline) comes from one or more consumer lending platforms within seconds.
Once approved, the terms would be provided and the customer can decide to accept or
decline the terms, including how much interest they’ll pay. The loan would then be used to
pay for the related $2,000 product or service from your location. This program helps you
close larger ticket items as well as provides additional convenience to customers, allowing
them to spread out payments for your products or services over six-, nine-, 12-, or 24-
month terms.
 Pro Tip: Take charge of your financial health today with a FREE Nav
account. We'll protect and monitor your personal and business credit, so
when it comes time to find financing you're prepared on all fronts.

Cash On Delivery

For this payment method, a customer orders a product, but payment for said product does
not occur until a mail carrier delivers the items to the customer. The customer would pay at
delivery instead of providing payment upfront. This provides additional convenience to
customers who might want to inspect items before making purchase.

Some customers might prefer this type of transaction over credit or debit cards. However,
keep in mind that accepting c.o.d. payments means your payment is delayed. You should
also consider the costs of paying for a courier service that collects c.o.d., and the possibility
of a higher rate of returns or cancelled orders. However, you might find that the benefits
outweigh the risks if this model is popular with, and makes sense for, your customers.

Mobile Payments

Mobile payments include a diverse category of methods, but the most central categories are
Near Field Communication (NFC) as well as digital wallets.

With NFC, you’ll have a contactless terminal that allows a customer to wave their Apple or
Android phone or device in front of the equipment to process transactions. For in-person
transactions, the business should set up a contactless payment terminal through their
payment provider.

The customer’s credit card information is already stored in their device, so the transaction
can be processed without the customer having to hand over their card, or having to carry
their cards around in a physical wallet or purse.

Digital wallets are programs such as Google Wallet, which are online programs that allow
customers to register using their telephone number or email. Once registered, the customer
receives a PIN code and is allowed to input their credit card information into the online
program for storage.

While at various merchant websites or in person, the customer would be able to make
payments using the digital wallet by verifying said payments with their unique PIN code.

Cryptocurrencies

A cryptocurrency is an alternative digital currency that operates on a decentralized

transaction database, which is a much different type of operation than traditional money,
which operates on centralized banking systems. Accepting cryptocurrency payments
provides additional convenience to customers who might carry around these types of
currencies. Bitcoin (created in 2009) is the most popular type of cryptocurrency, with a
market cap in the $12 billion dollar range. Besides Bitcoin, there are a number of other
types of cryptocurrencies including, but not limited to, the following:

 Litecoin
 Namecoin
 Peercoin
 Freicoin
 Primecoin
 Ripple
 Sexcoin
 Quark
 Mastercoin
 NXT
 Dogecoin
 Monero
 BlackCoin
 Dash
 Auroracoin
 Ethereum
 Zcash
Accepting cryptocurrencies can potentially increase your sales, especially if your
customers, or potential customers, prefer this payment method. The cryptocurrency
market comes with its own special set of risks—particularly in terms of security and the
volatility of the exchange rate. It’s important to become well versed in how to manage
those risks before you make this an option for your customers.

Electronic billing

Electronic billing offers the potential for significant cost savings for both buyers and sellers.
The difficulty is that there are a number of different styles of electronic billing and a
correspondingly similar number of software standards. This article identifies the main
electronic billing techniques and the benefits to buyers and sellers of adopting them, before
assessing some of the obstacles which need to be overcome before electronic billing
becomes widespread.

The concept of electronic billing

It is no longer unusual for companies to conduct large portions of their business

electronically. For instance, companies communicate with, and within, each other using
email. Intra-company information is increasingly available to staff members via the
corporate intranet. Treasurers are able to manage cash balances throughout the world
from their office in the corporate HQ using a web-based browser. And in our personal lives
many of our bills are available online. As a result of a European Union directive on VAT,
electronic invoices are, in principle, now legally recognized throughout the EU.

As a payment and collection tool, electronic billing offers potential cost advantages to both
participants in a transaction. But electronic invoicing is not just about making and receiving
payments. Because detail on purchases is linked to the payment, more detailed customer
relationship management information can be transmitted along with the simple
remittance.

As a result, the technique has wider implications than just for the finance function.
Electronic invoicing provides the opportunity for companies to integrate both their
accounts payable and receivable cycles more tightly into the business supply chain.

Electronic billing techniques

There are three main alternative ways of structuring an electronic billing process.

Bill direct
The first style of electronic bill requires customers to view the invoice online through a
page on the company’s own website. This style suits companies which issue large numbers
of bills, such as utility and insurance companies. These companies typically send an email
through to the registered customer, which contains a link directing the customer to the
company’s website.

Because this technique requires the customer to visit the company’s website to view their
bill, it offers additional marketing opportunities. As a result, this is an attractive option for
business to-consumer (‘B2C’) billing.

Consolidated billing

The problem for consumers with direct billing is that it does mean that individuals have to
visit as many company websites as they have bills to pay. There are some websites which
consolidate billing for all companies where payments are due. These sites work because
they allow customers to view all their bills on one webpage. In most cases, the site allows
access to detailed information on each bill, in a practice known as ‘thick consolidation’. The
weakness of this technique is that the billing company does not pull the consumer to its
own website and, therefore, it loses the opportunity to reinforce its marketing message and
sell other products and services.

As a compromise, some consolidating websites provide ‘thin’ bills. Summary data is

available to the consumer on the consolidator’s website. More detailed information is
available on every transaction by clicking through a link, taking the consumer to the billing
company’s website. This combination satisfies both the consumer’s wish to view all
transactions in one location, whilst giving the company the opportunity to pull the
consumer to their website.

The problem is that there are still a large number of consolidation websites, all running
different and incompatible systems. Until a clear standard emerges providing for simple
consolidation, it will be difficult for this technique to make significant gains. Their business
models are also a challenge. Some banks sponsor their own consolidation websites, in
which case they will be able to provide other financial services to users. However, third
party consolidators rely on charging fees to generate revenues, which represents an
additional hurdle to such sites’ development.

Buyer-centric model
An alternative technique is to introduce the bill into the customer’s accounts payable
function. Unlike the two previous techniques, this places control of the process with the
buyer and is more common in business to business e-billing. Instead of requiring the payee
to visit the company (or a consolidator’s) webpage, bills can be integrated into the buying
company’s own accounts payable process.

This allows the payer to control outgoing payments to electronic billers in the same way as
any bills provided in a traditional manner. Integration to the accounts payable system
reduces the requirement for manual re-keying of invoice data. It also allows payers to
consolidate payment information quicker, giving them a greater degree of control over
their cash flow forecasting.

One concern is that these systems may require treasurers to set rules which automate
payment in the event that a payment request fulfils preset criteria. Treasurers will need to
take care to ensure the payment instruction is only submitted to the bank at the
appropriate time, which may require additional rules in the billing process.

Benefits for billers

The development of electronic billing has been driven by the larger companies in the B2C
space, such as utilities, which issue the highest numbers of bills. Reducing the cost of
administering these processes is clearly a major driver. However, all companies, not just
the issuers of high numbers of bills, may derive significant benefits from electronic billing.

Working capital benefits

All companies are under pressure to improve the efficiency of their working capital. Raising
invoices electronically allows companies to speed up the process of submitting an invoice
to their customers. Where bills are sent through the postal service, it takes time both to
send the item to the customer’s address and then to transfer the mail to the correct desk
once it has arrived. By eliminating both these activities, the billing company can ensure that
the bill reaches the correct destination quickly. As a result, the process of initiating a
payment can be started earlier. The necessary authorisations can be submitted online, with
the signatories on the account able to access the invoice and all the supporting
documentation from their workstation.

In the event of a dispute, the central benefits of electronic billing can be seen clearly.
Instead of waiting for mail to be sent and answered through the post, companies can
highlight any concerns more quickly. Issues can be resolved online, which has the effect of
reducing both the time taken and the days sales outstanding.

Cost savings
As well as the direct improvements to working capital, companies will also benefit by
eliminating the costs association with the production, mailing and processing of physical
bills and invoices. Incoming payments can also be reconciled online, reducing the back
office costs further. Surveys suggest between 60% and 80% of processing costs could be
eliminated.

Customer relationship management

Depending on the method used, electronic billing can have a significant impact on customer
relationships. This can develop in a number of different ways:

Efficiency of bill processing.

The elimination of delays between the receipt of the goods or service and that of the
invoice should give the company the impression of competence with their customers.

Dispute resolution.

By allowing customers to highlight concerns online, companies will encourage a rapid

dialogue should any dispute arise. A swift resolution to any dispute will enhance the
existing customer relationship.

Credit control.

The billing system will also provide the company with an easily accessible and current
analysis of all their counterparties’ payment profiles. Most companies will conduct rigorous
credit checks before they extend credit to new customers. The task of continuing to manage
the credit risk of existing customers can be easily overlooked and often only becomes an
issue when a customer fails to meet a payment obligation. The automated reconciliation
process allows the company to monitor receivables regularly. Importantly, it also allows
companies to identify counterparties which are taking longer to make their payments,
often an early indication of a potential counterparty failure.

Cost reduction.

Reducing the costs associated with the processing of invoices will allow the billing
company to offer price reductions to customers choosing to receive their bills
electronically.

Benefits for purchasers

As mentioned, much of the drive behind the development of electronic billing has come
from the large billing companies. However, there are also significant potential benefits for
the purchasers in the transaction. This is particularly the case in the business-to-business
environment, although there can be benefits for individual consumers as well.

Working capital benefits

Purchasers can also improve the efficiency of their own working capital through the
improved access to information provided by electronic billing. In particular, companies will
be able to manage outgoing payments much more efficiently. The greater knowledge
covering when payments are due will allow the treasurer to dictate when those payments
are made and to manage liquidity accordingly. In addition, the company will benefit by
being able to manage their bank balances more efficiently. There will be less of a need to
maintain idle cash balances on the ‘off-chance’ that funds will be needed to meet an invoice
that was not in the system.

Processing costs

The purchaser is also able to reduce its processing costs. Payments can be initiated online
and reconciled automatically. The elimination of paper and the associated processors will
contribute a significant saving. Surveys suggest that electronic billing could eliminate about
40% of the cost to a purchaser’s processing an invoice or bill.

Control

Treasurers can also exercise greater control over the approval of outgoing payments.
Under a paper-based system, it can be difficult managing the necessary documentation
which a supervisor needs to inform a decision whether or not to approve a payment. Under
electronic billing, the system can incorporate a document tracker, which allows the
supervisor access to the supporting documentation at the time the invoice comes up on the
system for approval.

Inhibitors to development

The problem for developers of electronic billing and invoicing techniques is that progress
remains slow. Although there are clear cost benefits for both sides in any transactions,
there continue to be significant inhibitors to development. Essentially, these can be
grouped under two headings:

Standards

One of the challenges for the developers is to create a common standard with which
electronic invoices are created. In order to ensure efficiency, all electronic billing systems
must work ‘seamlessly’ with each other. At the moment, no such market standard exists,
although the development of XML standards does offer the opportunity to create one. Until
such a standard exists, the large companies which have developed electronic billing
techniques using EDIFACT standards will be reluctant to migrate to a new system.
Likewise, smaller companies will not adopt an electronic billing system if the gains are
outweighed by the cost of the work required to manage interfaces between an e-billing
system and other internal operating systems (i.e. ERP, treasury management and
accounting systems).

Incentives

For electronic billing and invoicing to succeed, it needs to be widely adopted. Unless there
is a high degree of adoption, companies will continue to have to operate traditional
accounts payable and receivable functions alongside their electronic counterparts.

There will be some benefits should only a small proportion of invoices be generated
electronically. For example, a proportion of costs due to invoice disputes will be reduced.
However, the company will need to continue to have an almost fully staffed accounts
receivable function to continue to process the paper invoices. The major cost, which is
staffing, will continue to exist. Additional information on cash flows will be available, but
will continue to present only part of the story.

There remain significant barriers to potential participants, before the adoption of

electronic billing becomes widespread. These include:

Seller incentives.

The company wanting to bill electronically will need to justify what will be a substantial
level of initial expenditure. Given the uncertainty over standards and the slow progress
beyond the early adopters, senior executives may be unwilling to support a change,
whatever the long-term cash flow and working capital benefits.

Purchaser incentives.

Customers, especially retail consumers, will also need to be persuaded of the benefits to
them. It is increasingly possible to initiate direct debits, for example, electronically.
Customers will still need to be convinced that electronic billing is saving them time and/or
money. There can be two stages to this process. Initially consumers may receive their bills
electronically, but continue to make paper payments. Over time, as the process becomes
more familiar, they may switch to electronic payment as well. On the business to business
side, persuading customers to receive invoices and pay them electronically will require a
coordinated customer relationship approach.

Bank incentives.

For the retail sector, in particular, the support of banks in making electronic payments easy
is important. It is possible, for example, for consumers to purchase online by authorising a
one-off direct debit. There have also been some developments in the business-to-business
environment, which we will examine in future issues of Treasury Today.

Adoption is slow

For the reasons outlined above, there has been a slow take-up of electronic billing. Some of
the largest companies have already implemented EDIFACT-based systems. Although they
would have the leverage to migrate suppliers onto an electronic billing system, they will
remain reluctant to do so until a market standard emerges.

There is a widespread assumption that, once a market standard emerges, there will be a
rapid growth in electronic billing. Although there have been some developments, especially
by the larger banks, many companies recognise that larger potential gains can be made
from streamlining stock control and distribution processes rather than adopting electronic
billing.

At the moment the lead is being taken in industries which also tried to develop EDI.
Typically these are tightly knit industries where one or more buyers or suppliers are able
to dictate the terms and the technology with which everyone else will trade.

UNIT-4
Defining Internet Marketing
Also called online marketing, internet marketing is the process of promoting a business
or brand and its products or services over the internet using tools that help drive traffic,
leads, and sales.

Internet marketing a pretty broad term that encompasses a range of marketing tactics and
strategies – including content, email, search, paid media, and more.

These days, though, internet marketing is often used interchangeably with “content
marketing.”

Why?

Because content marketing is the internet marketing of the present and future.

Content Marketing Institute defines content marketing as:

“A strategic marketing approach focused on creating and distributing valuable, relevant,

and consistent content to attract and retain a clearly defined audience — and, ultimately,
to drive profitable customer action.”
Think of it like this: content marketing (or inbound marketing) is in direct opposition to
traditional advertising (outbound marketing), and in direct integration with the patterns
and habits of today’s generation.

We don’t like to be sold to, we have our ad-blockers on, and we barely watch cable
anymore.

Content marketing serves up content that addresses our pain points, and is there when we
want it.

Here’s a great illustration of that from Voltier Digital:

Content Marketing vs. Traditional Advertising

Here’s the evolutional pathway behind the modernized form of marketing that is most
successful today.

Selling no longer works (a.k.a., traditional advertising).

Why?

Traditional advertising focuses on pushing messages at the consumer to get them to buy.

It’s interruptive, obstructive, and intrusive.

It shouts, “Hey, look at me!” while waving its arms.

You may try to avoid eye contact, but traditional ads are persistent.
You know what traditional ads look like because you’re bombarded with them every single
day.

Think TV commercials, billboards, magazine ads, radio ads, and web banner ads.

Ads have been around for a long time, as evidenced by this traditional ad for “honest-to-
goodness” coffee from the 1950s.

Ads may still work in some strategic places.

But Internet users can just click away from ads if they don’t want to see them.

Which is exactly what happens.

According to a PageFair report, 615 million devices in use today employ ad blockers.
Additionally, ad blocker use increased by 30 percent in 2016 alone.

You know it, I know it, everybody knows it.

Ads are annoying.

And, they aren’t the way consumers prefer to learn about new products anymore.

Instead of businesses shoving themselves in consumers’ faces, they need to take a different,
gentler approach.

Content marketing is exactly that.

Brands and marketers who use it publish content that teaches, inspires, guides, or solves a
problem for their target audience.
With some handy tricks, the targets can find that content on the web without it being
pushed at them.

If the prospects gain something useful from the content, they’ll keep coming back for more.

Finally, consumers can interact with the brand organically and share their content on social
media.

Trust is forged.

Authority is established.

Connections happen.

These loyal followers can then be converted into leads and sales – naturally.

All of the above happens with a focus on giving value to the user.

Help users – offer them value and they’ll reward you in return.

That is what internet marketing/content marketing is all about at its core.

Why Internet Marketing?

Now that you know what internet marketing is, you still may be wondering whythere’s so
much hype around it.

Well, the hype is totally founded.

Internet marketing has shown proven success over and over again.

Here are some stats gathered from around the web to help give you an idea of why
internet/content marketing stands tall:

By 2019, content marketing is set to be an industry worth $313 billion.

91 percent of businesses already are convinced of its power and have already adopted it as
an essential marketing tactic.

Content marketing costs 62 percent less than traditional, outbound marketing, but pulls
in 3x as many leads.

If you’re a small business with a blog, you’ll rake in 126 percent more lead growth than
your competitors without a blog

If you have a blog and publish content, you’re likely to get 434 percent more indexed pages
on Google, on average
And there’s more.

From my own content marketing endeavors, I have seen my small business take off.

With 99 percent of our focus on content marketing, we managed to grow our worth to
millions of dollars.

What is Internet Branding?

Internet branding is one strategy that business owners can employ to establishing their
position in the marketplace. Even well-established companies are investing on creating an
online brand reputation since internet branding strategies have also produced massive
impact on a brand's effort to expand. This is most important these days wherein the
internet has taken on a significant role in the everyday lives of the consumers. Hence, you
need to utilize it as one of the means that you can communicate your message to them.

With internet branding, you are basically utilizing the tools provided by the internet as a
leverage to all your marketing efforts. The objective with using the internet as a medium
for promoting your brand works the same way as any other branding methods, which is to
increase the demand for the products in your brand.

Importance of Internet Branding

Every business owner is aware of the benefits that a good brand can make for your
company. Since the brand is basically what distinguishes you from any other companies
that offer the same product or service, you must execute your branding strategies properly
to produce the results you want. Take a look at some successful brands in the industry, who
have become so distinct to the point wherein their names have been associated with a
certain product. This is what business owners must try to aim for.

In business terms, this is referred to as brand positioning. It establishes the main locus of
your product to the target market. Therefore, you will be utilizing the specific features that
makes your product distinct from the other and use that as a focus of your message in the
internet branding effort. Indeed, product differentiation and product positioning are
closely linked to one another. These are two basic ploys that you can utilize in your internet
branding strategies to "own" a segment of the market and produce a loyal customer base
from that.

Is It Worth Investing In?

Several companies and brands have worked so hard on establishing their brand and yet
they fail to look into the possibilities of producing an online brand. Hence, they lose that
advantage to other brands who worked on appealing to the consumers and making their
offer known.

However, if you opt to embark on an internet branding strategy, you must not also neglect
the positive value or message that you are trying to impart with regards to your company.
To sum it up, a good internet branding strategy is worth your investment. So, don't just go
right into an online campaign for your brand. It must be something that is a product of your
thorough evaluation and planning.

What About Small Businesses?

Despite the large impact of the online industry in people's lives these days, it is only
projected to grow in the years to come. Hence, this makes the internet an even more
reliable avenue to expand their marketing efforts. The best thing about the internet is that
it provides an even playing field for big- and small-time businesses to promote their brand.
Even new businesses can utilize the internet as a means to position their brand and make
their existence known in the market. So, it's no longer new these days to have new
products or brands introduced online as it is one of the fastest growing industries today.

And yet, the benefits of offering your products and brand to a larger market is beneficial for
small time businesses since potential buyers can focus only on the quality of service and
performance. By maintaining the value and continually differentiating your product, then
internet branding will offer several potential benefits for your business.

Uses for Internet Branding

Before building an internet marketing strategy, first focus on the reasoning for the building
this strategy. The primary uses for an internet branding strategy include:

Brand Story

Identifying the customer base

Brand awareness

Building a dialogue with customers

Value proposition

Driving sales

At the start, it is recommended to start with one primary focus and build from there.

Strategies for Internet Branding

When building a brand online, it is easy to get bogged down in the day-to-day tasks of
writing content, worrying about posting, and responding to customers. Before you worry
about the tasks, get a bird's eye view of the project with the strategy you are implementing.

Building a Brand Identity

The first step in building a brand online is found in building brand identity. Brand
identity is how a business wants to be perceived by consumers. The first step is knowing
the target customer and the second is in reaching them.

Branding always involves knowing the target audience. Knowing the target audience
means actually knowing the people getting marketed to. This isn't as simple as
demographics. It is about answering all of these questions: What is the customer's
education level? What does the customer do with his or her time? What drives the
customer? What are their favorite brands or icons? Just like getting to know a friend, a
target audience should be clearly defined. The average business has five to six brand
personas identified as part of their repertoire.

The Eight Essential Types of Internet Promotion

Sometimes your head can be so abuzz with all these Internet marketing details that you
feel overwhelmed. You don’t know where to start. You can’t see the forest for the trees.
While there is a lot of depth to be understood, I think that Internet promotion can be
distilled down to eight essential types. Wrap your mind around these basic concepts and
you can grasp what Internet promotion is all about. Here are the eight:

Search engines Traditional media

Linking strategies E-mail publishing

Viral strategies Networking

Public relations Paid advertising

But if it’s simplicity you crave, I’ve tried to pare it down to the eight essentials.

1. Search engines

Many people, perhaps even a majority of people, will use search engines and the Yahoo!
directory to find what they’re looking for on the Web. So the place to start in promotion is
to design webpages that will be indexed well by the search engines, using descriptive titles
and accurate META tags. When you’re ready, submit your site so that search engines will
index (“spider”) it, using a submission tool such as the All4One Submission Machine
http://www.all4one.com/all4submit/ or JimTools. http://www.jimtools.com/ Getting a
listing in the Yahoo! Directory is the most important task — and the most difficult. You may
even have to pay them $199 to agree to consider within one week whether to add your site.
Search engines are important. Be persistent. If your site doesn’t show up within a few
weeks, submit again … and again … and again.

But with hundreds of millions of webpages, and only 15% to 20% of them indexed, it’s very
easy for your site to get lost. The remedy (which adds to the clutter) is to create a set of
doorway or gateway webpages, each tuned to score high on a specific search engine for a
specific search word or phrase. While there is excellent software available for search
engine positioning, Web Position Gold http://www.webposition.com/d2.pl?r=AQH-55E7
for $150, I recommend that small businesses outsource this task for $1000 or so, plus a
$100 to $150 per month “maintenance” fee. The task is very time intensive; it isn’t really a
spare-time project.

2. Linking strategies

Linking strategies are a second essential type of site promotion. The more links pointing to
your site, the more traffic you’ll experience (and the greater perceived “popularity” will
rank you higher in the search engines). To get someone to link to your site you need to ask.
The simplest way is to find complementary sites, link to them on a linking page, and ask
them to link to you. The key, of course, is for your site to have content that so good that
it’s worth linking to. No one wants to link to a nothing website.

Ask for links on sites that cover your industry, as wells from associations your business
belongs to. One twist on this is to join a Web Ring with each member site linking to the next
member site along the chain. http://www.webring.org/ Other approaches are to offer the
best (and most trafficked) websites an “award” that consists of an award logo with a link
pointing back to your site. Another popular method is to join a banner exchange. For every
two banners displayed on your site promoting other businesses, one of your banners will
be shown an another member site. The biggest exchange is Microsoft bCentral
LinkExchange. http://adnetwork.bcentral.com/ I’ve given up on the so-called Free For All
(FFA) linking sites; don’t even waste your time there. Another important form of linking
promotion involves paying affiliates for sales resulting from links to your site, but we’ll
cover that under paid advertising.

3. Viral strategies

An increasingly important process is to design a strategy that encourages others to carry

your marketing message via e-mail, using their own network of relationships — and
preferably their own resources. This is called “viral marketing” after the way viruses
multiply rapidly in a cell, commandeering the cell’s resources to do the virus’s bidding. The
classic example is HotMail.com, a free e-mail system. Each e-mail message (sent by
definition to a person’s own friends and associates) carries a message encouraging the
recipient to sign up for a HotMail account, too. Another example is postcard or greeting
cards, each of which carries a message encouraging the recipient to send a card to a friend
— carrying the siteowner’s marketing message. If you can write quality articles, you can
offer them to others to use on their websites or in their newsletters, each article carrying a
link to your website. Public relations to get press coverage is a kind of viral strategy, if you
think about it.

4. Public relations

Public relations, the task of getting press coverage, is still a vital type of site promotion. If
you can get a news release picked up by several print and/or Internet publications you’ll
get a tremendous boost in traffic, all for “free,” letting the news periodical’s network carry
your marketing message. Of course, nothing’s really free. You’ll need to have a truly
newsworthy event, contest, free service, chat room — or something — or no decent
publication will consider it news. Coming up with “free” services and events isn’t
inexpensive, but the ensuing publicity can be excellent — you may get an unbiased
editorial recommendations that you couldn’t purchase for any amount of money. While
there are free news release services, expect to pay several hundred dollars to have your
news release sent to hundreds of subscribing periodicals.

5. Traditional media

Don’t discount traditional media in promoting your website — news releases, of course, as
well as paid advertising. A very effective way to promote your site is to place a small
display ad in a targeted trade publication, offering some teaser copy and pointing readers
to your URL or an autoresponder e-mail address for more information. This way your site
serves as an online brochure, providing full information to interested shoppers day and
night. A no-brainer is to make sure that all your company’s literature, cards, letterheads,
and envelopes carry your website URL.

6. E-mail Publishing

If you’re smart you won’t even think of developing a business website without marrying it
to an e-mail publication. The website is the shy partner who passively waits for people to
come to him. But the e-mail publication is the bold, active partner who goes out to where
people are and invites them to come meet her groom. Together they make a great couple.

E-mail publishing is primarily a way to conserve the people who have shown some interest
in your business by coming to your website or responding to one of your offers. One of the
highest priorities of your website MUST be to get your visitor to sign up for your free
newsletter or discussion list or updates publication. Offer a variety of inducements — entry
into a contest, a free gift, a free coupon — whatever you must do to insure a steady stream
of subscribers to your newsletter. Once they are subscribers — if you give them content
they enjoy and learn from — they’ll stay with you for years, and you can gently build their
trust month after month. When they’re ready to make a purchase, your site is at the top of
their mind, and they’ll probably buy from you. Figure the lifetime value to you of a single
subscriber. When you’ve completed this exercise, you’ll know why beginning your own e-
mail publication is so vital to marketing your business.

Though some Internet marketers focus on sending stand-alone e-mail ads to their mailing
lists, I shy away from that. With so much SPAM (unsolicited e-mail) abounding, it’s too easy
for recipients to mistake your promotion for just another ad, and unsubscribe forever.
Though an occasional promotional e-mail may be okay, your marketing messages in the
context of news and helpful information is much more effective, and builds loyalty that you
can never gain by just bombarding your customers with ads.

Of course, you probably know by now that sending out mass e-mails to huge lists of e-mail
addresses is a no-no. It violates the principle of Permission Marketing that says people
respond better to a marketing message they have agreed to receive. Unsolicited
Commercial E-Mail (UCE) also runs contrary to a long-standing Internet tradition that
responds to SPAM with angry flames and enough returned e-mail to cause your ISP to shut
down your account very quickly. If you’re interested in building a long-term business based
on trust, don’t send SPAM.

7. Networking

An extremely important way to promote your website is through networking. Small

business members of a local Chamber of Commerce know how making friends, being
introduced, meeting new people at mixers, and being featured in the Chamber newsletter
can help build your business. Networking isn’t quick, but it’s the basis of relationships that
will grow your business through word-of-mouth over the years.

On the Internet, networking is done primarily through news groups and e-mail discussion
lists such as John Audette’s venerable I-Sales Discussion List.
http://www.audettemedia.com/i-sales/ In discussion lists, people in an industry carry on a
conversation about various current issues. After a while, you get to know the regular
participants from reading their comments week after week. Regular participation fosters
trust and builds your reputation. You don’t brazenly hype your business in this kind of
venue — that’s considered rude. But the “signature” at the end of every e-mail message
identifies you, and tells people about your business and how to contact you. If you aren’t
using a signature in your e-mails, begin today. Search out the newsgroups and discussion
lists in your industry and take an active part. This will result in increased traffic, as well as
referrals and recommendations by list members to their other friends who might need
your products or services.

8. Paid advertising

You’ll notice that most of the first seven types of Internet Marketing can be done in-house
relatively inexpensively (with the possible exception of search engine positioning). Of
course, you may be able to find a marketing firm to which you can outsource some of these
functions, but you can probably do a fine job yourself — after all, it’s your business, and you
are the one who can promote it most effectively.

But there comes a point that to get wider exposure, to break into the consciousness of the
thousands of people who never haunt your end of the Web, you may need to resort to paid
advertising. You’ll be paying high traffic sites or Internet publications to include a graphic
or link that will channel large numbers of people to your site. There are several popular
forms of paid advertising, with new approaches cropping up all the time:

Banner ads have been around the longest. Typically these are 468×60 pixel animated and
linked graphic ads that appear at the top of a commercial webpage. They are usually sold
on a CPM (cost per thousand page views) basis. Targeted sites may get CPM rates of $35 to
$50 or more, but banner ads to reach general audiences are priced $1 to $10 CPM. Banners
that pop up on search sites triggered by a keyword can cost $20 to $30 CPM.

But banner ads can be expensive. Do the math with me. If you’re paying $10 CPM and the
click-through rate is an industry average of 0.5%, then it costs you $10 to get 5 people to
your site, or $2 each. If only 5% (or 1/20th) of the visitors to your site make a purchase,
then the “customer acquisition cost” is $2 x 20 or $40. You need a fairly high transaction
total to pay out $40 per sale for advertising. Your strategy, however, may be to pay a higher
initial customer acquisition cost but get a customer you can keep and market to for the next
several years. You may lose money on the first sale, but make it up on the second, third,
fourth … and 20th.

Paid Listings in Portal Sites. To get noticed, your online pet store may need to pay for a
listing under the “Pets” category at Lycos Shop. For this you may pay a flat fee or a
percentage of the sale. Consider it the equivalent of paying rent to enjoy the foot traffic that
a suburban mall might attract.

Sponsorships are longer term paid ads on websites or e-mail newsletters.

Pay-per-Click Links can be purchased on search engines such as GoTo.com

http://www.goto.com The price per click for the top spots depends upon what your
competitors are willing to bid. ValueClick offers banner advertising on a per click basis.
http://valueclick.com

Pay-per-Sale Advertisingis popularly known as an Affiliate or Associate Program. The

merchant signs up a number of affiliates who place a link or linked graphic on their site. If a
sale is made to a customer coming through that link, the affiliate earns a commission,
typically 5% to 15% of the transaction total. This can be an effective — and safe — way to
advertise, since you only have to pay when a sale is made. You can purchas
e software to run your own program, but I recommend outsourcing this to a service bureau
such as Commission Junction, that charges an initial set-up fee and then 20% of the
commission you pay your affiliates.

Paid ads in targeted e-mail newsletters can be very effective. There are hundreds of
thousands of e-mail newsletters, many of which have very modest advertising fees. Click
through rates are likely to be in the range of 1% to 3%.

Opt-in E-mail Advertising involves sending a stand-alone ad for your business to

individuals who have (hopefully) volunteered to receive information from your kind of
business. These are called “opt-in” lists, since the list members have agreed to receive
information. Avoid “opt-out” lists where recipients are placed on a list involuntarily and
then invited to unsubscribe if they want to. Opt-in lists can be quite targeted, with ads
getting a 1% to 3% click-through rate. Expect to pay about 15 cents to 30 cents per name;
the list broker will do the e-mailing on your behalf. You’ll find a list of brokers in the
Targeted Direct E-Mail Lists Section of the Web Marketing Info Center.
http://www.webmarketingtoday.com/webmarket/lists.htm

Certainly, there are many more types of paid advertising, but these are some of the most
common and most effective.

Internet promotion can seem overwhelming. But hopefully it’s more understandable since
we’ve outlined the eight types that comprise effective website promotion. Here they are,
once again:

Search engines Traditional media

Linking strategies E-mail publishing

Viral strategies Networking

Public relations Paid advertising

What are advertising strategies?

A marketing strategy is a plan to make consumers aware of a product, build the need for
the product, and encourage them to take action in regard to the item. Online advertising
strategies have the same purpose, to educate online consumers and persuade them to buy a
product or service. These advertisements may be through social media, online ads, or on
blogs or other information websites. Use the methods and examples below to improve
online advertising for your offerings to current and potential customers.

Methods and Examples

With the growth of online and social media options, there are powerful and immediate
ways to advertise to consumers. Some of the most common methods and avenues include:

Pay Per Click

Let's imagine you sell handmade jewelry and want to market your items online. You heard
about 'Pay Per Click' advertising, a way to advertise on Google. You learn that you can
identify specific factors to select a target market of consumers that may be interested in
your jewelry.

For instance, you may chose women ages 30-45, have a household income of $50,000 or
more per year, and who have purchased jewelry online before. Your Google ad will appear
to women who are using Google and fit the criteria you have set up. Each time someone
clicks on your ad, Google charges you an advertising fee.

Definition - What does Electronic Customer Relationship Management (E-CRM) mean?

Electronic customer relationship management (E-CRM) is the application of Internet-based

technologies such as emails, websites, chat rooms, forums and other channels to achieve
CRM objectives. It is a well-structured and coordinated process of CRM that automates the
processes in marketing, sales and customer service.

An effective E-CRM increases the efficiency of the processes as well as improves the
interactions with customers and enables businesses to customize products and services
that meet the customers’ individual needs.

Techopedia explains Electronic Customer Relationship Management (E-CRM)

Electronic customer relationship management provides an avenue for interactions

between a business, its customers and its employees through Web-based technologies. The
process combines software, hardware, processes and management’s commitments geared
toward supporting enterprise-wide CRM business strategies.
Electronic customer relationship management is motivated by easy Internet access through
various platforms and devices such as laptops, mobile devices, desktop PCs and TV sets. It
is not software, however, but rather the utilization of Web-based technologies to interact,
understand and ensure customer satisfaction.

An effective E-CRM system tracks a customer’s history through multiple channels in real
time, creates and maintains an analytical database, and optimizes a customer’s relation in
the three aspects of attraction, expansion and maintenance.

A typical E-CRM strategy involves collecting customer information, transaction history and
product information, click stream and contents information. It then analyzes the customer
characteristics to give a transactional analysis consisting of the customer's profile and
transactional history, and an activity analysis consisting of exploratory activities showing
the customer's navigation, shopping cart, shopping pattern and more.

The benefits of E-CRM include the following:

 Improved customer relations, service and support

 Matching the customers' behavior with suitable offers
 Increased customer satisfaction and loyalty
 Greater efficiency and cost reduction
 Increased business revenue

Businesses that strategize and implement an E-CRM solution are able to align their
processes around technology to effectively deliver seamless, high-quality customer
experience across all channels. Customers have the power to help themselves through
online personalized services that are made available on demand. The Internet provides a
simple and ideal medium where customers can get information from websites, buy
products and find answers using FAQ sections, forums or chat rooms.

Meaning of E-CRM:
Customer Relationship Management (CRM) is a way to identify, acquire, and retain
customers – a business’ greatest asset. By providing the means to manage and coordinate
customer interactions, CRM helps companies maximise the value of every customer
interaction and in turn improve corporate performance.

E-CRM, or Electronic Customer Relationship Management, is an integrated online sales,

marketing and service strategy that is used to identify, attract and retain an organisation’s
customers. It describes improved and increased communication between an organisation
and its clients by creating and enhancing customer interaction through innovative
technology. E-CRM software provides profiles and histories of each interaction the
organisation has with its customers, making it an important tool for all small and medium
businesses.

E-CRM software systems may contain a selection of the following features:

i. Customer management:

Provides access to all customer information including enquiry status and Correspondence

ii. Knowledge management:

A centralised knowledge base that handles and shares customer Information

iii. Account management:

Access to customer information and history, allowing sales teams and customer service
teams to function efficiently

iii. Case management:

Captures enquiries, escalates priority cases and notifies management of unresolved issues

iv. Back-end integration:

Blends with other systems such as billing, inventory and logistics through relevant
customer contact points such as websites and call centres

v. Reporting and analysis:

Report generation on customer behaviour and business criteria

Evolutions of E-CRM:

Customer Support – A Historical Perspective:

The Customer is King. This mantra, although used for a long time, has not been put into
practice until recently. Forget the notion of royal treatment, customers were not even
treated with dignity by most organizations.

As recently as the 1970s and 80s, the concept of customer support meant that
organizations were doing a favor by answering a few questions for the customer on the
phone – after putting them on hold for an hour! Standing in line to buy something was
common and expected. Remember when the customers had to go to the airports to buy
tickets only because the airlines kept them there? Organizations simply lost touch with the
realization – that they existed because of these customers.
Evolution of Customer Relationship:

The 1990s brought two new concepts that challenged the prevailing business landscape:
deregulation and the Internet. These forces brought down the barriers of entry resulting in
an environment of intense competition.

Stores faced competition from on-line start-ups. Traditional bricks-and-mortar banks

fought for customers with online or virtual banks. Airline tickets were increasingly
purchased from the convenience of your home. The explosion in information allowed
consumers to compare features, and prices across multiple providers. Products became
commodities and prices could not be lowered further to ensure survival.

Customer service became the only major differentiator in many cases. Customers received
what they have always deserved – respect. The customer was now truly the king. Business
customers, although always treated with more respect than individual consumers, were
more or less ignored in the early stages of the Internet boom.

The emphasis focused on expanding the consumer base regardless of positive cash flow,
revenues, and margins. The demise of many dot-coms brought an epiphany. Companies
realized that they needed to focus on their enterprise customers. The advent of e-CRM
applications was the first big step toward providing better support to the strategic business
customers. Although these solutions provided automated self-service to customers, they
still treated all customers the same.

Furthermore, the focus of these applications is more on improving call-center productivity.

Clearly, these applications add value and help many organizations execute their CRM
initiatives.

However, they are not effective in meeting the needs of an organization’s strategic
enterprise customers. Each enterprise customer has its own needs and craves personalized
support.

Evolution of Customer Relationship Management:

The genesis of CRM (Customer Relationship Management) lies in Sales Force Automation
(SFA) tools. Companies like Siebel and Vantive (now part of PeopleSoft) took the early lead
by introducing tools to help the sales personnel become more efficient in tracking their
customers.

There were also a few problem-tracking tools for help desk such as Remedy. As companies
focused more on customer relationships, additional applications emerged in areas of
customer support, field support, and marketing automation. Most CRM companies today a
retrying to address these four areas usually by partnering with other companies. Most of
the ERP players are also expanding their solutions to include CRM. There are a number of
niche players focused only on certain pieces of CRM such as e-mail management, sales force
automation, technical support, marketing campaigns, among others.

“CRM is a business strategy designed to optimize profitability, revenue, and customer

satisfaction” – Gartner Group

Although there are quite a few vendors providing CRM related products and services, there
is still a lot of confusion around the concept of CRM. CRM is not just an application or a
technology that can be thrown at the customer satisfaction problem to make it go away.

CRM, essentially, is a strategy that involves applications, processes, policies, business

context, and people, to enable companies to manage and increase profitable relationships
with their customers. An enterprise’s strategic customers expect top-notch treatment. They
want the vendor to understand their needs. They want companies to build a strong
relationship with them – on a 1- to- 1 basis.

Current CRM and E-Support Environment:

There are currently over 200 CRM software vendors and the number continues to grow.
Although, there are various types of applications included in CRM suites, as described
earlier, the core application within the CRM landscape that truly builds customer
relationships is the customer service application. Other pieces, though useful, are focused
on helping the vendor rather than the customer.

Many of these applications were initially focused on providing an environment to improve

the productivity of call-centers. In addition, some of these applications integrated message
queuing functionality to provide a common environment for all channels. So, whether the
customer was trying to reach the call-center by making a call, via e-mail, by fax, or through
the Web site, their query is prioritized and channeled through the same mechanism. Most
customer service applications now provide Web-based self-service features for companies
to offer their customers.

Customers can look up their basic information like billing ,order status, etcetera by logging
in to the vendor’s Web site. While this solution works for a B2Cmodel, for enterprise
customers with hundreds of users and hundreds of products to support, this simply doesn’t
work.

Enterprise customers demand personalized support in order to access their information

quickly and easily. In the era of information-glut, they want specific and relevant
information. Companies are trying to manage relationships with their customers, partners,
and suppliers in a personalized and automated manner. True personalization is not easy as
each customer has its own needs and requirements. The issue is further complicated by the
fact that

Business Benefits of E-CRM:

Implementation of an E-CRM system enables an organisation to streamline processes and

provide sales, marketing and service personnel with better, more complete customer
information. The result is that E-CRM allows organisations to build more profitable
customer relationships and decrease operating costs.

Direct benefits of an E-CRM system include:

i. Service level improvements:

Using an integrated database to deliver consistent and improved customer responses

ii. Revenue growth:

Decreasing costs by focusing on retaining customers and using interactive service tools to
sell additional products

iii. Productivity:

Consistent sales and service procedures to create efficient work processes

iv. Customer satisfaction:

Automatic customer tracking and detection will ensure enquiries are met and issues are
managed. This will improve the customer’s overall experience in dealing with the
organisation.

v. Automation:

E-CRM software helps automate campaigns including:

(i) Telemarketing

(ii) Telesales

(iii) Direct mail

(iv) Lead tracking and response

(v) Opportunity management

(vi) Quotes and order configuration

Across every sector and industry, effective CRM is a strategic imperative for
corporate growth and survival:

a. Sales organisations can shorten the sales cycle and increase key sales-performance
metrics such as revenue per sales representative, average order size and revenue per
customer.

b. Marketing organisations can increase campaign response rates and marketing driven
revenue while simultaneously decreasing lead generation and customer acquisition costs.

c. Customer service organisations can increase service agent productivity and customer
retention while decreasing service costs, response times and request-resolution times.

Working of E-CRM:

In today’s world, customers interact with an organisation via multiple communication

channels—the World Wide Web, call centres, field salespeople, dealers and partner
networks. Many organisations also have multiple lines of business that interact with the
same customers.

E-CRM systems enable customers to do business with the organisation the way the
customer wants – any time, via any channel, in any language or currency—and to make
customers feel that they are dealing with a single, unified organisation that recognises
them every step of the way.

The E-CRM system does this by creating a central repository for customer records and
providing a portal on each employee’s computer system allowing access to customer
information by any member of the organisation at any time. Through this system, E-CRM
gives you the ability to know more about customers, products and performance results
using real time information across your business.

Implementation of an E-CRM System:

When approaching the development and implementation of E-CRM there are

important considerations to keep in mind:

i. Define customer relationships:

Generate a list of key aspects of your customer relationships and the importance of these
relationships to your business.
ii. Develop a plan:

Create a broad Relationship Management program that can be customized to smaller

customer segments. A suitable software solution will help deliver this goal.

iii. Focus on customers:

The focus should be on the customer, not the technology. Any technology should have
specific benefits in making customers’ lives easier by improving support, lowering their
administrative costs, or giving them reasons to shift more business to your company.

iv. Save money:

Focus on aspects of your business that can contribute to the bottom line. Whether it is
through cutting costs or increasing revenue, every capability you implement should have a
direct measurable impact on the bottom line.

v. Service and support:

By tracking and measuring the dimensions of the relationship, organisations can identify
their strengths and weaknesses in the relationship management program and continually
fine tune it based on ongoing feedback from customers.

The 4-Step Marketing Data Analysis Strategy To Drive Business Growth

1. Define a Problem

First, you must know what you want to accomplish or what problem you want to solve.
This will show you what digital marketing data you need to track and how you need to
analyze it. Tracking the wrong data or conducting the wrong digital marketing data
analysis will lead you to incorrect assumptions. Similarly, making decisions without data
will prevent you from moving forward in a measurable way.

Ask yourself what you want to know or what problem you want to solve. At this stage, it’s
okay to be general, but your problem should have a KPI attached to it. This might be leads,
brand awareness, sales, conversion rates, or ROI.

With this example, we’ll go through each step in the digital marketing data analysis process
to solve a problem.

You are a marketing manager and you’ve decided to take a hard look at your website.
You feel like your website is underperforming, and you want to generate more leads
from it.
2. Set Data-Driven Goals

With your problem and objective defined, a measurable goal will help you determine if
you’re moving in the right direction. Digital marketing data analysis must be based on goals
and benchmarks to give the numbers any meaning. Your goals should be based on previous
digital marketing data analysis, or other benchmarks you’ve gathered. The goals you set
should be difficult to reach, but possible.

To adjust your goals accordingly, determine the level of performance you would need to
accomplish them. This will help you get specific. From here, you can determine what you
would have to improve and by how much to reach a certain goal.

Previously, you’ve determined from your web analytics that your best landing page
generates 13,000 visitors a month, and 130 leads, with a lead conversion rate of 1%. In
this case, you decide improving lead conversions makes more sense than improving
traffic. Previously, you’ve doubled conversion rates on similar pages simply by
optimizing the page load speed, however no landing page has a conversion rate higher
than 5%. From this, you determine how many leads you’ll need to meet a challenging
goal.

Goal Leads Lead Conversion Rate

Current Status 130 1%

Minimum Goal 260 2%

Challenging Goal 520 4%

Improbable Goal 780 6%

3. Collect Accurate Data

To generate the right conclusion and to focus on the right improvements, your digital
marketing data analysis tools must be reliable. The data you receive should also be easy to
interpret.

To gather data accurately, you will need a way to track user behavior. The right codes,
URLs, or plugins can show you how a user arrived on the page, what they clicked, or
whether or not they saw an ad. These tracking codes may include a Google Analytics
JavaScript snippet, URL tracking codes, Facebook Pixel, or HotJar plugin, among others.
When using these tracking devices, make sure you set events properly, so the device knows
what to track. Google Analytics’ code snippets, for example, may need to be set up to track
conversion events.

Once your tracking devices are installed and events are set up, you’ll need to integrate them
with a data gathering or compilation platform so you can assess your digital marketing data
analysis strategy. For this, you may need to integrate your website and analytics tools with
a CRM system like Hubspot. Or you may prefer to use a data compilation platform like Data
Box or Google Data Studio.

When assessing the performance of your landing page, you notice that conversion rates
dipped the last two months. To make sure you have accurate data, you talk to your web
design team about the Google Analytics tracking code. You determine that a recently
installed chatbot interfered with the tracking code. The design team fixes this problem,
and you test the code to make sure your conversion events are tracking properly.

You realize there’s still an issue; your sales team hasn’t seen any of the leads from the
new landing pages. You know some of the leads generated must be sales-qualified, so
you suspect an issue between your marketing and sales CRM systems. Sure enough, you
see that the leads marketing determined to be sales-qualified were being delivered to
the wrong regional salesperson due to a CRM system error.

Lastly, to get a full picture of page performance, you add your Google Analytics and
CRM system reports to Data Studio. You build a custom report to look at the landing
page you’re working on, and you get an easy-to-read chart showing traffic, traffic
types, clicks, conversions, leads, marketing qualified leads, sales-qualified leads, and
more.

4. Make Informed Changes

To achieve your goals, you need to decide what to change and how to change it. At this
stage, you’ll want to hypothesize changes based on previous digital marketing data analysis
or other estimates. Use A/B testing or user testing and study the results individually and
gauge the impact of each change.

Improving the loading speed of other landing pages has doubled their conversion rates
in the past. Though you’re reasonably sure this will be the case again, you make this
change first and study the results so the improved conversion rates from the speed
upgrades don’t affect the other changes you’ll make.

As you expected, the conversion rates doubled after the speed upgrade and are now at
2%. Next, you suspect that making the form on the page shorter and adding an
explanatory video to the page will improve it further. You conduct an A/B test to first
test your form hypothesis. It turns out to be correct; conversion rates improve to 3%.
Then you conduct another A/B test for the video. This is also correct; conversion rates
improve from the original 2% to 3%. Finally, you make both the changes together and,
just as you expected, you’ve reached 4%!

Marketing Analytics - Success Through Analysis

Understanding Marketing Analytics

Marketing analytics is the practice of measuring, managing and analyzing marketing

performance to maximize its effectiveness and optimize return on investment (ROI).
Understanding marketing analytics allows marketers to be more efficient at their jobs and
minimize wasted web marketing dollars.

Beyond the obvious sales and lead generation applications, marketing analytics can offer
profound insights into customer preferences and trends. Despite these compelling benefits,
a majority of organizations fail to ever realize the promises of marketing analytics.
According to a survey of senior marketing executives published in the Harvard Business
Review, "more than 80% of respondents were dissatisfied with their ability to measure
marketing ROI."

Figure 1: A Survey of Sr. Marketing Executives on their Marketing Analytics

Effectiveness

However, with the advent of search engines, paid search marketing, search engine
optimization, and powerful new software products from WordStream, marketing analytics
is more powerful and easier to implement than ever.

The Importance of Marketing Analytics

Marketing analytics, Internet (or Web) marketing analytics in particular, allow you to
monitor campaigns and their respective outcomes, enabling you to spend each dollar as
effectively as possible.
The importance of marketing analyics is obvious: if something costs more than it returns,
it's not a good long-term business strategy. In a 2008 study, the Lenskold Group found that
"companies making improvements in their measurement and ROI capabilities were more
likely to report outgrowing competitors and a higher level of effectiveness and efficiency in
their marketing." Simply put: Knowledge is power.

In search marketing in particular, one of the most powerful marketing performance

metricscomes in the form of keywords. Keywords tell you exactly what is on the mind of
your current and potential customers. In fact, the most valuable long-term benefit of
engaging in paid and natural search marketing isn't incremental traffic to your website, it's
the keyword data contained within each click which can be utliized to inform and
optimize other business processes.

Product Design: Keywords can reveal exactly what features or solutions your customers
are looking for.

Customer Surveys: By examining keyword frequency data you can infer the relative
priorities of competing interests.

Industry Trends: By monitoring the relative change in keyword frequencies you can
identify and predict trends in customer behavior.

Customer Support: Understand where customers are struggling the most and how
support resources should be deployed.

Marketing Analytics: How and Where to Start

The Web is clearly the only game in town. Statistics show that almost 90% of the entire
North American population is online. The quickest and easiest way to reach out to this huge
market is through paid search marketing, for example, advertising on Google AdWords or
through other search engines.

Reports and information received from search marketing help in all areas of your business,
including offline revenue and product development.

When implementing your search efforts, be sure keep these five tips in mind.

Five Online Marketing Tips:

Start with Keyword Research: A stagnant keyword list is dangerous as it neglects trends
and information on new products or developments.
Set up some Paid Search Marketing Campaigns: Group keywords in relevant groups and
write appropriate ad text to help improve your Quality Score, which will lower your bid
and improve ad position.

Analyze the Results: Displaying your keywords in ad text prove to the searcher and to
Google that your ad is relevant to their search.

Implement Natural Search: Google estimates that 80% of searchers click on an organic
result over a paid advertisement. Incorporate your best performing keywords into your
website and continue to generate relevant content.

Repeat Ad Nauseum: Negative keywords are great because they prevent unnecessary
clicks and spend, ensuring your advertisement displays only for applicable searches.

Improve Your Marketing Strategy with the AdWords Performance Grader

A successful online marketing strategy relies on a winning AdWords campaign. The

strength of your Adwords campaigns will dictate how well you rank in Google; without a
decent ranking, your site will never be seen by prospective clients.

Wordstream’s AdWords Performance Grader is a comprehensive Google AdWords

analytics toolthat helps you evaluate how your AdWords campaigns are performing on
several key criteria, such as:

Effective use of negative keywords

Quality Score

Long-tail keyword optimization

Text ad optimization

The AdWords Performance Grader shows you where and how to make improvements to
your AdWords campaign that will improve your performance and save you money. It’s an
expert analysis, and it’s absolutely free! Consider utilizing this great tool in your efforts to
improve your online marketing campaign.

Tracking Your Marketing Efforts: Why It's Important And How To Start

Marketers are quick to espouse the importance of what they do, but few can back their
claims. A 2015 Forbes Insights Report indicates as much, noting that only 22% of
marketers have data-driven initiatives achieving significant results.

This is startling considering the importance and prevalence of analytics in marketing

success and proving ROI. According to ITSMA and Vision Edge Marketing, 74% of
marketers can't measure or report how their efforts impact their business. It’s uncertain
whether this stems from lack of resources or lack of knowledge on using marketing
analytics. However, with the rise of digital marketing, there’s no longer an excuse for failing
to keep up with data.

The Importance Of Marketing Analytics

Marketing analytics are measurements of marketing efforts and successes and depend on
collecting data related to marketing actions and the journey of your buyers. This can
include everything from website traffic to Facebook page likes. The ability to collect,
aggregate and calculate this data allows insight into what’s working, what can be improved
and the return on your methods.

For marketing analytics to be useful, they must be tracked, watched and measured.
Analytics for a single time frame can be useful but lose relevance when not viewed over
longer periods. Multiple views over multiple time periods can provide insights around
trends. Comparing a year view to a quarterly or monthly view allows you to witness
developing trends and make adjustments. For example, one of our clients saw a dip in
traffic followed by a large surge in the first three months after a new website launch. This
might seem normal for a new website. However, looking at the data on a granular level
showed a jump in a single day that was exponential. Further research suggested this was
fake traffic. By identifying this, we were able to filter the traffic for a more accurate
view and found that, while website traffic did improve with the redesign, it was at a
realistic rate.

Analytics can also provide perspective. Using analytics allows insight into your status quo,
which helps set expectations and goals. If your site receives 2,000 monthly viewers, growth
to 10,000 monthly viewers in two to three months is unlikely. That’s a 400% increase in a
short amount of time. However, an increase to 4,000 monthly viewers might be more
realistic based on traffic history. Similarly, tracking analytics on social media, like Facebook
likes, can show trends that shape strategy. If you’re posting on Facebook on behalf of a
multifamily property, for example, and your posts are split among community events,
apartment specials and local news, tracking the engagement and clicks on individual posts
will show which perform best.

Get Tracking

If you’re not already tracking and measuring analytics, starting is easy. The simplest (and
free) way to track web analytics, such as visitors or time on page, is through Google
Analytics. Anyone can create a free Google Analytics account to track a website or app, and
Google has a number of tools to get you started. A heatmapping tool like Hotjar can show
where your viewers are spending the most time on the site, or an event tracking behavior-
based tool like Kissmetrics can offer deeper insights into the performance of a website.

Social sites like Facebook and Twitter offer their own analytics, but there are a number of
tools that can break these down more simply. Buffer and Hootsuite both offer social
analytics features.

If you’re looking to get all of your analytics in a single space, it's possible, but it will cost
you depending on your needs and the depth you require. HubSpot is a marketing
automation tool that can tie together all of your analytics and help you develop insights
based on individual contacts and user engagement. A marketing dashboard
like Cyfe or Klipfolio can also help organize tools in a single place. However, they do require
some technical knowledge to use.

Make It Count

Once you begin tracking your analytics, you’ll want to follow these steps:

1. Find the data most relevant to your needs. If you’re building a brand from scratch,
you may want to pay attention to social media engagement and general website traffic, but
less attention to conversion rates. If you have difficulty capturing leads, time on site, exit
pages and conversion rates can all be significant.

2. Once you’ve decided what to measure, create SMART goals.Goals should be Specific,
Measurable, Attainable, Relevant and Timely.

3. Follow up. Set a weekly check-in pattern to be consistent, and be sure to document.
Compare over time.

4. Find trends and the source of those trends. Then make some decisions. If it's a
positive trend, let it go on longer but keep a close eye on it. If it’s negative, consider making
a single small change, then track that change and document it.

5. Report regularly on your goals and your progress. This may be bi-weekly, monthly or
quarterly. Show time frames, indicate trends, and offer insights to your fellow team
members and your executive team.

6. Compare and repeat. When you’ve met your goals, set new ones.

Now you’re ready to prove the value of your marketing.

As marketing continues to evolve, it’s increasingly important to evaluate and improve your
efforts. With new technologies and cost considerations as a factor, you’ll also need to prove
results and value. By maintaining a steady analytics process and making decisions based on
data, you can both offer measurable results and prove the value of your efforts.

What is Personalized Marketing

Personalized marketing is the ultimate form of targeted marketing, creating messages for
individual consumers (See also Targeted Marketing). That said, it is most often an
automated process, using computer software to craft the individual messages, and building
customer-centric recommendation engines instead of company-centric selling engines.

In addition to customized promotions, personalized marketing can also be applied to the

products themselves by using a configuration system which allows customers to choose
individual specifications for the products they’re interested in. By offering consumers
products they already want, businesses are far more likely to convert online visits to sales.

Who employs Personalized Marketing

More companies are implementing some level of personalization into their marketing
campaigns, with Internet-based companies leading the way.

Internet software allows companies to identify the physical locations customers are signing
in from, keep records of customers’ transactions with them, and use tracking cookies to
learn about consumers’ other shopping interests. With this data, a website can personalize
a visitor’s experience by showing them a customized page, featuring their language
preference and products and offers they are more likely to be interested in. (See
also Behavioral Marketing)

Other companies are leading the way in terms of product personalization. For years, Dell
Computers has invited customers to “build” their computers by selecting the various
specifications for their machine. Meanwhile shoe sellers Mi Adidas and NIKEiD both invite
their customers to do the same with their shoe purchases, selecting design elements and
color according to their individual preferences.

Outside of the Internet, grocery stores with loyalty cards are also personalizing the
shopping experience, sending coupons to customers based on their purchase history.
Personalized service has always been an element of the small business and local store,
where people know their customers by name; now database technologies are equipping
larger businesses to personalize as well.

For what kinds of customers is personalized Marketing effective?

In contrast to mass marketing, sending messages to large groups of customers—or even

targeted marketing, which focuses on a particular consumer segment—personalized
marketing delivers to an audience of one. So, theoretically it should be effective with every
customer. In practice, however, the ability to personalize depends on the information that’s
available about the customer; therefore, personalized marketing is most effective with
consumers who are most comfortable with sharing information.

The good news is that more people are willing to exchange a modicum of privacy for a
personalized experience. Compared to the total population, younger people—who have
grown up with technology—are more comfortable with sharing information than older
customers.

How is personalized marketing campaign developed?

Internet marketing. In addition to making personalized recommendations, web pages can

also be designed to display other content based on customer history; in fact, entire landing
pages can be built out of this. Thus, when a customer arrives at the website, the referral
source, geographic location, and purchase history can all influence what is presented on the
page.(See also Internet Marketing)

Direct mail and e-mail. Greeting somebody by first name is more engaging than “Dear
customer,” but direct mailings can do so much more than that. Lead data can be integrated
into the mailings, so that specific products or offers are highlighted accordingly. This is
markedly easier with e-mail, but reductions in variable printing costs make it possible for
physical mail as well. For example, if your mailing list is generated from your customer
database, then information on prior purchases can be used to suggest future ones. Database
marketing activities that already generate highly targeted lists can be used to cater to
specific individuals as well. (See also Email Marketing)

Business-to-business (B2B). Before contacting agents and decision-makers in the target

business, lead intelligence can be collected on the specific challenges they are facing in
their position, and this used to frame pitches. Additionally, a search on LinkedIn can turn
up mutual contacts that can be leveraged for references, or making a point of common
contact. (See also B2B Marketing)

Social media marketing. This method enables you to respond to customers on social
media, answering their questions and engaging them. A personal interaction here (as
opposed to automated responses) goes a long way. It may seem like a lot of effort for a
single customer, but those active in social media are more likely to share with friends, thus
connecting you to even more contacts.

What Is Personalized Marketing?

Personalized marketing (or one-to-one marketing) can be defined in a number of ways, but
at the most basic level, it can be explained as follows:
Personalized marketing is the implementation of a strategy by which companies deliver
individualized content to recipients through data collection, analysis, and the use of
automation technology.

The goal of personalized marketing is to truly engage customers or prospective customers

by communicating with each as an individual.

You’re right, this all sounds impossible. To help break down personalized marketing and
provide more clarity around the term, we’ve outlined below the benefits, challenges,
frequently asked questions, and Emarsys resources on the topic.

The Benefits of Personalized Marketing

There are numerous advantages of personalized marketing, for both businesses and
consumers. When strategies are implemented successfully, the following benefits come into
play:

Improved Customer Experience: Customers are more comfortable providing personal

information to their favorite brands if they get something in return. They fill out forms,
download whitepapers, participate in surveys to get discounts, and indicate their favorite
purchases or preferences. So, what’s the catch? With all of this customer data being offered,
the consumer expects brands to protect any sensitive information and offer more
personalized experiences when they come back.

Drive Revenue: By identifying and responding to the preferred channel for each customer,
companies can increase ROI. With the right automation technology, marketers can identify
which channel customers engage with, then automatically follow up across channels as part
of an omnichannel approach.

Increase Brand Loyalty: When consumers provide information and data, they expect to be
treated as unique individuals with specific preferences. Businesses that dedicate time and
resources to implement successful personalized marketing strategies will benefit from a
competitive advantage in both brand loyalty and customer satisfaction.

Create Consistency Across Channels: Consumers are interacting with brands across a
number of channels, including email, social, mobile, etc., sometimes all in a single day. For
this reason, it’s more important than ever for brands to create consistency across various
channels. The in-store experience should match the app experience, which should match
email messaging. You get the point.

Challenges of Personalized Marketing

Like all marketing strategies, there are challenges that arise when it comes to personalized
marketing. Let’s take a look at some of the most common hurdles:

Finding the Right Technology: One of the biggest problems with personalized marketing
comes from outdated technology that is not fit for the mobile era. A key element of
personalization success is data collection and automation, and with this comes the need for
an intelligent algorithm. Unfortunately, many marketers struggle to find a smart
personalization engine that meets their needs.

Time and Resources: While the right software is needed for personalization, companies
also need a devoted team. Not all companies are prepared to dedicate the time and
resources toward a successful personalized marketing strategy.

Creating a Single Customer View: When looking for common threads across channels,
marketers are able to establish a better picture of who the customer really is by piecing
together their customer data into a single unified customer profile. However, research
shows that marketers have trouble linking datato individual customer profiles.

Implementing Smart Segmentation: Smart segmentation across channels isn’t just for
show, it actually boosts performance. Unfortunately, many marketers still struggle to get
past basic segmentation strategies. In fact, 85% of brands agree their segmentation
strategy is based on broad segments and simple clustering.
How to Create a Successful Personalized Marketing Strategy

No one said it was easy. When launching a successful personalized marketing strategy, the
following should be considered:

Compare: To start, if you’re not using any kind of content personalization engine, you
should be. If you are already leveraging a personalization platform, make sure to compare
your existing solution against any other that claims to offer more value.

Capture: Typically, the implementation of this type of solution is fairly easy (requiring only
a few lines of code on your webpages). Once code has been added to your website, you can
start capturing data, including clicks, time on site, abandoned shopping carts, purchase
history, and much more.

Analyze: Capturing data, building analytical capabilities, and developing adaptable

websites are all beneficial to an organization, but they are most valuable when fully
synchronized with each other. After just a few short weeks, your personalization solution
should be able to provide relevant content recommendations to customers. This is when
you should run an A/B test to validate the performance of your system vs. a control.

Act: Data collection and analysis inform your marketing decisions, but you should still let
the machine do the heavy lifting. Don’t play with the calculation method more than
necessary (for example: new promotions, out of stock products, etc.)

Examples of Personalized Marketing Campaigns

Nowadays, the average consumer is fully expecting personalization in every campaign your
brand runs. Here’s a look at some examples of personalized campaigns that can lead to a
great deal of success.
Targeted Emails

Marketers are using personalization to jumpstart their email campaigns. Through

personalization, marketers can create and send individualized emails to a specific group
with certain needs.

Getting a better understanding of your audience is key to increasing the relevancy of email
content. One way to start collecting customer information is through sign-up forms. When
someone signs up, they would fill out a questionnaire with details about themselves that
could range from their birth date to particular interests. For example, a clothing retailer
might send emails based on age and interests to potential customers to determine what
clothing styles they would like best.

Custom Video Messages

Did you know that the average online reader loses interest in about ? Leveraging videos
with custom messaging can be a very effective approach to keep customers engaged.

Perhaps you’ve seen the dancing holiday elves before – you can add a picture of yourself
and friends, then watch as the elves boogie down with your faces on them. Or, social media
videos that show your name and personalized information that you might’ve included in
your profile.

Although this type of personalization is memorable for your audience, it’s can be time-
consuming without the right automation technology in place. So, be sure that you have the
tools and resources needed to make this as scalable as possible.

Product Recommendations

This is a pretty common tactic and for good reason – it works. This type of campaign uses
data collection to determine what type of product, service or offer a user is most likely
interested in and tailor’s recommendations accordingly.

Say the last three movies you watched were all drama, it wouldn’t make sense if you were
recommended the latest Adam Sandler film. Similarly, customers have the ability to rate
these campaigns and provide feedback based on whether they enjoyed it or not. This allows
customers to filter through what they like and don’t like much easier without having to go
through the trouble watching everything.

Social Media Marketing

Interacting with consumers and potential customers across social media networks can help
increase customer satisfaction and brand loyalty. Not surprisingly, social media has quickly
become the backbone of multichannel initiatives and has helped continue conversations
online that keep brands on the minds on potential customers. By sending highly
personalized and relevant social media messages through automation, marketers are able
to collect responses and customer data from social media channels, which in turn helps
improves communication and drive conversions.

Fear of Missing Out (FOMO)

Want to know what really drives conversions? Fear – or fear of missing out to be exact. As
humans, we aggressively seek out information that could be deemed vital and get an
uneasy feeling when we sense we’re missing out on something special. By showing how
many other people are currently looking at this same product or have bought it recently,
ecommerce sites are incorporating FOMO personalized messages as a way to convince
customers that they need make a purchase before leaving. These messages are often times
brief and to the point, while requiring very little effort from a marketers’ standpoint.

5 Personalized Marketing Statistics & Trends to Watch For

We’ve talked a lot about how personalization can help marketers drive conversions, boost
engagement and improve customer loyalty, but where are the facts to back it up? Seeing is
believing, right? Take a look at these 5 personalized marketing statistics that have turned
even the biggest skeptics into believers.

1. Growing Customer Expectations

Customers don’t just want personalization – they demand it. In fact, of customers feel
frustrated when website content is not personalized. Marketers must take that into account
as personalization represent a huge portion of customer satisfaction.

2. Purchasing Behaviors

Did you know that of consumers said spending more time engaging with personalized
content makes them more likely to make a purchase? That means that creating engaging,
personalized content can be difference between pretty much doubling your potential
customers purchase rate.

3. Email Transaction Rates

Personalized emails deliver a six times higher transaction rate, but of brands fail to
properly use them. While this is a challenge that comes along with delivering personalized
emails, the pros should far outweigh the cons. Numbers don’t lie and brands should adjust
their campaigns accordingly.

4. Customers’ Preferences
Any business searching for a way to drive conversions need not look further. of consumers
have chosen, recommended, and even paid more for a brand that provides a personalized
service or experience. This is a great example that going the extra mile really pays off.

5. Email Open Rates

Emails with personalized subject lines are more likely to be opened. Personalization makes
content marketing messages feel more customized to the individual. By leveraging the data
you’ve collected from your audience, you can drive open rates while also increasing the
overall effectiveness of your marketing efforts.

Common Personalized Marketing Questions

There are some common questions that come up around personalized marketing. We’ve
outlined some of the ones we hear most often below:

Why is personalized marketing important?

With technological improvements, customer expectations are evolving. When customers

provide their personal information, they want to be treated an as individual with unique
traits. As marketers, we need to provide the information that customers want, in the right
place and at the right time.

How do I measure personalized marketing efforts?

Similar to any marketing campaign, there are many ways to measure the effectiveness of
personalized marketing campaigns. Using intuitive reporting dashboards is especially
important when it comes to understanding and targeting your customers. With
advanced reporting and insights, you have the ability to measure the performance of your
strategy and the direct impact on business.

How does personalized marketing impact the customer experience?

Great question! The key here is that personalized campaigns turn browsing customers into
buying customers. Customers are continuously seeking great buying experiences, and
delivering individualized content to recipients strengthens the relationship between
businesses and their consumers.

What’s the relationship between personalized marketing and omnichannel

marketing?

Basically, personalized marketing strategies support the broader objectives of an

omnichannel approach. By understanding the preferred channel for each contact,
marketers can automatically follow up across channels as part of a coordinated
omnichannel strategy.

The Future of Personalized Marketing

As customer expectations and marketing technology constantly evolve, the shift toward
personalized marketing will become more important for brands. Customers expect tailored
communication, a better experience, and consistency across channels.

With the right automation technology, you can individualize your content for each
customer, with a wide variety of options to choose from.

Final Thoughts

Consumers demand more personalization throughout the buying journey now more than
ever. If your personalized marketing strategy isn’t properly tailored to each and every
individual, they won’t feel engaged and therefore are less likely to purchase from you.
Having a successful personalized marketing strategy in place can be the greatest asset your
business has to offer.

contact center

A contact center -- also referred to as a customer interaction center or e-contact center -- is

a central point from which all customer contacts are managed.

The contact center typically includes one or more call centers, but may include other types
of customer contact, as well. A contact center is generally part of an enterprise's overall
customer relationship management (CRM) strategy.

Contact center vs. call center

Contact centers and call centers are both centers for customer service, and the two terms
are often used interchangeably, but a contact center supports more services than a typical
call center.
Contact centers offer omnichannel customer support, including email, chat, voice over IP
(VoIP) and website support. A call center typically uses phones as the main channel of
communication and can handle a mass volume of calls.

Contact center capabilities and infrastructure

Contact centers are used for inbound communication, outbound communication or a

hybrid of both. Contact center agents also interact with customers via webchat, phone,
email or other communication channels.

The contact center infrastructure that is necessary to support communications may be

located on the same premises as the contact center, or it can be located externally.
In an on-premises scenario, the company that owns the contact center also owns and
manages its own hardware and software. This requires staffing and IT investments that
some companies choose to forgo by outsourcing those tasks to cloud providers or hosting
companies.

Cloud-based contact centers

Cloud-based contact centers are hosted on a cloud provider's internet server and are the
point from which all inbound and outbound communications filter. Cloud-based contact
centers are accessible anywhere via the internet and function the same as other contact
centers.

Hosted contact centers

Hosted contact centers are centers where the contact center infrastructure is outsourced to
another company that manages the systems externally. This often leads to a better return
on investment (ROI) for companies by minimizing upfront costs and maintenance of the
infrastructure.

Virtual contact centers

Virtual contact centers enable agents employed by the company to work remotely from
home. Virtual contact centers enable flexibility and comfort for the agent, while
simultaneously lowering costs for the company.

Contact center technologies

A contact center typically uses specialized contact center software that enables contact
information to be routed, contacts to be tracked and data to be gathered. Technologies
within contact centers include:

Automatic call distributor (ACD) system -- this is a computerized system that analyzes
incoming calls and distributes the calls based on varying factors.

Email response management system -- a system that collects and analyzes customer
inquiries submitted via email, and then routes the inquiries to the appropriate agent.

Interactive voice response (IVR) system -- a computer-based system that enables

customers to use a keypad or voice commands to provide information without the
assistance of a human agent.

Knowledge management system -- a central repository of information that can be easily

searched, helping to cut down on agent training time.
TTY/TDD communications -- telecommunication devices for individuals who are deaf or
have a hearing impairment.

Workforce management system -- a computerized system that helps with scheduling and
staffing agents and managing agent performance.

The future of contact centers

As technology evolves and customers rely on more communication channels, contact

centers will have to continue to adapt and grow. Contact center trends that have affected
contact center communications in recent years, and continue to do so, include:

Social media -- social media platforms, such as Twitter, have become popular customer
communication platforms, making it important for companies to support these channels.

Mobile access -- customers demand support for mobile-friendly communication services,

such as application and text support.

Video telephony -- IP/video telephony services such as FaceTime and Skype enable
customers to interact with companies using video chat, allowing for more personal, face-to-
face interactions.

Advanced analytics -- analytics play an increasingly important role in predicting customer

behavior. Speech analytics is also used to monitor, evaluate and train contact center
employees.

What is contact center CRM?

Contact center customer relationship management (CRM) is a contact center software

solution that provides employees with access to account information and history in an
effort to provide a real-time, personalized customer experience across all channels,
including voice, web and social.

Today, many organizations fail to effectively integrate their CRM systems with contact
center operations. Without integration, important data stored in the CRM—including
customer preferences and details on past interactions—cannot be utilized as a tool to
enhance customer experience.

CRM

CRM Call center/call center CRM is computer software solutions made to help each and
every call center agent in accessing the right knowledge and information regarding on the
history of their costumer. The purpose of this is to simply make some improvement on the
total customer experience. It is typically desktop software which integrates on the existing
back-office and telephony applications.

The Benefits/Importance

One of the greatest help of this software is for each call center to enable them to collect all
the necessary data of their client which serves as the top value for each and every company.
Moreover, this tool is made for the intention to have a level of increase regarding on the
automation together with the reduction of expenses. It also helps in increasing the
customer service level and to boot its productivity and efficiency altogether the satisfaction
of the clients

With this, you will also be able to reduce the call duration to prevent damage regarding on
the level of the overall service. It can also help in handling bigger amount of calls and at the
same will help in the reduction level of the misrouted calls. CRM call center software is
necessary whenever you want an accurate, complete and clear picture of all your
costumers. You can also store all those necessary information and the history which is
important on the improvement of the service quality level. With the use of this, managers
can receive all of the necessary data regarding with client immediately right before making
call. In other words, it’s a great help to learn all about their customer preferences in the
given period of time.

This software tends to be vital for all the employees and managers that work on call
centers. On the other hand, they will be able to have the chance in forming and storing
every necessary information and history of every costumers for a purpose of having a
precise and fast result.

With the continuous development of the modern software and technologies, new trends
that will move the traditional CRM to network that is multi-channel, also continue to
appear. Everything for a purpose of having a fast interaction with each and every costumer.
Its main idea primarily is to simply prevent the clients in holding a line for a much longer
period of time and querying with several managers. With the use of CRM call center
software, the processing can now be made as fast as it is while reducing the time necessary
for each call.

All those benefits can be made possible with this software. This software is just on the
latest product of the fast and improving technology which primarily contributes a big help
in the industry of a call center. For a company searching for the best solution in call center
industry, this thing can surely be a big one to be consider because everything that CRM call
center software can give is a pure benefit and help for the better of each and every
company. For the progress of your company, better to try this one now for a fast and even
faster change.
 UNIT-5

Legal & Ethical Issues in E-Business

In the Information Age, technology evolves fast and data travels even faster. It can be
difficult for the law to keep up with new technologies and inventive ways to conduct e-
business. Because of this, the law often lags behind, and lawmakers end up drafting laws to
clean up Internet messes instead of preventing them. Take digital file sharing -- dubbed
piracy -- for example, laws were not created to prevent digital piracy until millions of
albums were stolen and the music industry was crippled. The lag in laws mean that e-
business executives must rely on ethics as they move forward in e-commerce.

Client Privacy
Internet businesses have a legal obligation to protect the private information of their
customers. E-commerce activity often involves collecting secure data such as names and
phone numbers associated with email addresses. Many e-business activities also involve
transactions, so customer banking or credit card information also ends up stored online.
Legally, it is up to the e-business to store and protect or dispose of this sensitive data. The
Children’s Online Privacy Protection Act, for example, protects the online privacy rights of
children. Under this law, parents have control of what personal information their children
can give to e-businesses.

Advertising Online
Several online marketing issues spring from the inherent anonymity of the Internet. It is
often difficult to know the real identity of an e-business owner. A few online businesses
take advantage of this in unethical or illegal ways. Some e-businesses track the online
activity of their customers so that they can show advertisements based on the customer’s
behavior. Behavioral advertising is not illegal, and it is not illegal to refrain from disclosing
that an e-businesses tracks activity, although many people consider this nondisclosure
unethical.

Copyright Infringements
Due to the Internet’s free flow of information, plagiarism and copyright infringement is a
continual problem. The Digital Millennium Copyright Act addresses plagiarism and
copyright infringement in the specific context of the Internet and e-business. Under this
law, it is illegal to use online technology to copy and distribute legally copyrighted material,
such as photography, articles or books, music or videos.

Net Neutrality
Net neutrality is the hotly debated idea that Internet users should have equal access to all
websites. Most computers retrieve websites at the same speed, depending on the user's
Internet account settings or service, no matter if the site is a multibillion-dollar company or
a neighbor’s blog. But some Internet providers have the capability to deliver different
websites at different speeds. This is an issue because some websites could pay providers to
deliver their content at faster speeds, while smaller business with less capital might not be
able to afford the faster processing, and the Internet would lose its free-access-for-all feel.
The Federal Communications Commission currently supports net neutrality and bans
providers from participating in any program that offers extra pay for higher speed access
to any websites.

Internet Confidentiality & Privacy

The Internet provides little assurance of privacy or confidentiality. The use of firewalls,
anonymizers, and encryption can help mitigate the risks. Major considerations to keep in
mind are discussed below.

Silent communications. There are thousands of rogue actors and infected computers
probing machines across the Internet at any given second. These bad apples are almost
certainly trying to get control of your machine through any security fault or unpatched
module they can find. Fortunately, their communications are fairly straightforward to trap,
since by definition they are unsolicited -- it is easy to tell the difference between a packet
from a website you just accessed from a probe from some site you never heard of before.
The technological solution to this threat is called a "firewall", a program that monitors all
communications and traps all illicit packets. Most operating systems now come with a
firewall preinstalled. However, some, such as the Windows firewall, only block suspect
incoming communications, leaving completely open access to the Internet from your
machine. This is a barn-door sized hole that is eagerly used by almost every program you
have on your computer to contact the home company for all sorts of reasons ranging from
automatic checking for updates to transmission of usage metric data for their own
proprietary purposes. The solution to this is a third party firewall that protects both
incoming and outgoing communications. The free version of Zone Alarm is widely used.

Surfing leaves tracks. There is little privacy or confidentiality on the Internet. Websites can
track your surfing on their site by IP address and related system information, including
system names and Internet network addresses that often uniquely identify your computer.
Search engines generally record your queries together with your computer identification,
building up a profile of your interests over time. To minimize these threats, you can turn
your default browser settings to exclude cookies, since they can be used to build up
detailed profiles of your surfing patterns over time (advertising sites with presence on
many sites can even use cookies to track your surfing patterns across different sites). You
can also use networked or single-point anonymizers to obscure all your computer's local
identifying information and obtain the maximum available Internet privacy.
Posting is public. When you post anything to a public Internet newsgroup, mailing list, or
chat room, you generally give up the rights to the content and any expectation of privacy or
confidentiality. In most countries, anything you post to a public space can be saved,
archived, duplicated, distributed, and published, even years later, by anyone in the same
way as a photograph taken in a public space like a city park. If you have ever posted
anything to the newsgroups, you might find it interesting to search them now for the email
address you used at the time, which is one reason you should disguise your email address
when posting to the Usenet newsgroups.

Personal data is cross-referenced. If you give a site personal data like an email address,
home address, phone number, birth date, or credit card number, be aware that the
information can be easily cross referenced by a range of large service companies to
assemble a detailed database of your buying habits, surfing patterns, and interests. And it
usually is. If you do give a site personal information, it is a good idea to first read their
Internet privacy policy to see how confidential they promise to keep it.

Tap, tap. Without speculating on who or why, Internet communications interception is

technically easy to do at any of the perhaps five and twenty-five routers through which
your packets are switched on the way to their destination. Software taps are easy to add.
Direct physical interception through tapping into copper network cable near a house or in
a switching station is straightforward with inexpensive equipment, and enables an
eavesdropper to copy all of the traffic that passes over the line. Radio frequency
interception of the traffic on copper lines is possible. Tapping into fiber optic line is more
difficult, usually requiring a high angle bend to get a bit of light leakage, but is also
technically possible. Encryption is the only sure solution.

Governments can do anything. Many national governments are large enough with enough
resources that they can and do intercept Internet communications. However, because of
the volume of information if for no other reason, you can be reasonably assured that no-
one is taking the time to look at your specific Internet packets unless you are connected to
an investigation.

The bottom line is that you have little privacy or confidentiality on the Internet, and unless
your communications are encrypted and/or anonymized, you should assume they can be
read by others. At the same time you need to make a realistic threat assessment depending
on what you are doing -- how much do you (or others) really care?
Privacy & Confidentiality in Internet Research

IRB Issues „
 Research on the Internet presents new concerns Research on the Internet presents
new concerns to the traditional IRB issues of privacy & to the traditional IRB issues
of privacy & confidentiality „
 Privacy concerns relate to whether Internet Privacy concerns relate to whether
Internet activity
o – Is identifiable
o – Constitutes public or private behavior „
 Confidentiality concerns relate to inappropriate Confidentiality concerns relate to
inappropriate disclosure of information obtained over the disclosure of information
obtained over the Internet

Privacy
 Identifiable vs. Anonymous
o – Online participants usually use pseudonyms Online participants usually use
pseudonyms (screen names, handles, etc.)
o – Although not publicly linked to actual names, Although not publicly linked
to actual names, identities can often be “readily ascertained” identities can
often be “readily ascertained” (e.g., using search engine)
o – People’s online identity may be as important People’s online identity may
be as important to them as their actual identity to them as their actual
identity
 Public vs. Private Behavior
o – Most online activity Most online activity is open to the public
o – Federal regulations base the definition of Federal regulations base the
definition of “private information” on the subjects’ “private information” on
the subjects’ “reasonable expectation” of privacy
o – In many situations (e.g., chat rooms), In many situations (e.g., chat rooms),
participants expect privacy and don’t expect participants expect privacy and
don’t expect their activity to be studied
o – Determination of privacy more complicated Determination of privacy more
complicated than it seems

Confidentiality
 Two potential sources of breach of Two potential sources of breach of
confidentiality
o – inadvertent disclosure ƒ
 Investigator who sent out research database to entire Listserv ƒ
  Investigator who’s computer was stolen
o deliberate attempts to gain access ƒ
 No recorded incidents of hacking research data „
 Technology can provide reasonable security but Technology can provide reasonable
security but cannot guarantee absolute security
 Data transmitted via e-mail cannot be mail cannot be anonymous without the use
anonymous without the use of additional steps. of additional steps. Almost all forms
of e-mail contain the sender's mail contain the sender's e-mail address.
o – use an "anonymizer" - a third party site that strips off the sender's e-mail
address „
 Web servers automatically store a great deal of Web servers automatically store a
great deal of personal information about personal information about visitors to a
web site visitors to a web site and that information can be accessed by others.
 Web sites can leave “Cookies”, a small file Web sites can leave “Cookies”, a small file
left on the user’s hard drive that is sent left on the user’s hard drive that is sent back
to the web site each time the back to the web site each time the browser requests a
page from that site. Browser requests a page from that site. Cookies can record
which computer the Cookies can record which computer the user is coming from,
what software and user is coming from, what software and hardware is being used,
details of the links, details of the links clicked on, and possibly even email clicked on,
and possibly even email addresses, if provided by the user.
 Degree of concern over confidentiality depends on sensitivity of the information „
Since it is impossible to guarantee
 Since it is impossible to guarantee absolute data security over the Internet, absolute
data security over the Internet, some extremely sensitive research may some
extremely sensitive research may not be appropriate for the Internet not be
appropriate for the Internet.

IRB Requirements
 Investigators are going to have to provide Investigators are going to have to provide
technical information on how they will deal this technical information on how they
will deal these issues. „
 IRBs need to have sufficient expertise on the IRBs need to have sufficient expertise
on the technical aspects of the Internet in order to ask technical aspects of the
Internet in order to ask the right questions and evaluate the information evaluate
the information provided. „
 IRBs that review Internet research without IRBs that review Internet research
without sufficient expertise are not in compliance with sufficient expertise are not in
compliance with the regulations!
Overview of the Internet and Internet Information Privacy
As information technology involves, people derive a great number of benefits from using
the internet. If people have internet access, they can share information or data with anyone
in the worldwide. Researchers can talk to each other to obtain feedbacks or share updates.
It is an economical way to share information with others by using the internet. Also, people
are aware of that a substantial amount of information is deposited on a lot of web servers
of the internet. People can find and collect abundant information from millions and billions
websites. Popular and powerful search engines such as Google enable people to collect
latest data and information for meeting different needs. Information stored over the
internet is usually free of charge and available for twenty four hours a day. Another benefit
of using the internet is people can communicate with anyone through using the internet.
There are different communication solutions. Email, video conferencing and instant
messages are widely popular around the world.

The power of the internet can connect people across the world and enables the flow of
information. The internet makes large volumes of information and data available to the
general public. However, a number of issues concerning the internet spark debates. For
instance, Amazon, the online book seller has forced many traditional book stores to close
(Solove et al, 2006). Also, the digital divide leads to a wide range of social implications
(Solove et al, 2006). As a matter of fact, people have to face and deal with these issues.
Among them, the ethical impact of the internet on information privacy has attracted a lot of
attention (Solove et al, 2006). Information privacy is a right to control and manage how
personal information stored over the internet is accessed, used, collected and shared with
others. Many technologies can be used to capture personal information. Internet
information privacy is associated with confidentiality. When people use browsers to surf
the internet, their activities are recorded in browsers and cookies. Personal identities can
be revealed through information collected by cookies and browsers. Internet information
privacy is also associated with internet censorship. In addition, Internet information
privacy is related to internet security.

Internet Information Privacy and Confidentiality

The concept of confidentiality is different from that of internet information privacy.

Confidentiality concerns information or data about individuals, and is about refraining
others from disclosing personal information or data to unauthorised parties. Privacy
relates to individuals. It involves individual control over sharing information with others.
Also, the concepts of confidentiality and privacy are linked. When personal information and
data are gathered, stored or shared, people need to consider the issue of privacy and the
issue of confidentiality. Confidentiality is a primary ethical duty provided in ethical
frameworks such as codes of ethics of a specific profession or association (Babor, 2006). In
the context of the internet, privacy involves an individual right to decide what information
can be collected and how such information can be used, to access personal information and
to enjoy anonymity. Confidentiality, in the context of the internet, is about implementing
security arrangements for protecting personal information and ensuring the safety of
computer systems and equipments (Kelly & McKenzie, 2002). When websites fails to take
the ethical duty of confidentiality, personal information and data are disclosed and
revealed, internet information privacy can be violated.

There is a view that technology solutions or methods can help to achieve or enhance
confidentiality. Internet service providers can use firewalls to recognise where queries or
messages come from, and only permit those IP addresses that are considered good and
trusted. Cookies are a type of technology that can be utilised to capture personal
information such as browsing preferences, shopping habits or internet usage preferences
(Brown & Muchira, 2004). JavaScript is typically used to write cookies. Although internet
users may use different browsers, they can delete cookies files to protect personal
information or data. Kelly and McKenzie (2002) believe that a popular encryption
technique can be adopted to protect data in transit. This technique is called message
encryption. If two users want to exchange information and data, both of them can use
algorithms in a form of pass phrase. Information exchanged between the two users will be
encrypted, and both users need to use pubic and private keys to decrypt and encrypt
information. Kelly and McKenzie (2002) also introduce digital signature as a way of
protecting the flow of information.

However, ensuring internet information privacy is more about carrying out the ethical duty
of confidentiality rather than only applying high technology solutions into practice.
Internet service providers, internet businesses, websites and many others who deal with
personal information have an ethical duty to keep the information of users or customers
confidential. Many businesses claim that they might collect personal data or information
for improving their services or target advertising. However, it is found that many of these
businesses make huge profit by selling personal information. For example, email addresses
of users can be traded. The worse scenario is that personal financial or medical information
is revealed and sold. Internet businesses that have access to personal data or information
are required to make sure that they do not compromise code of ethics by disclosing
personal identifiable information. They need to justify the objectives and purposes for
using personal information or data. Also, the person who uses personal information should
understand his responsibilities, and use the minimum information.

Internet Information privacy and Internet Censorship

Censorship refers to the control over the flow of information within a particular society.
Censorship has been understood as a moral and legal process within which the authority
agrees to limit what individuals can do or say (Bitso et al, 2012). Traditionally, censorship
can be achieved through examining contents of books, films, television programs, news and
many other forms of communication. With the rapid growth of the internet, the trend is
transiting from traditional censorship to internet censorship (Bitso et al, 2012). The
internet has provided opportunities for people to access different kinds of information.
Internet censorship and empowers individual to communicate with international audience.
Internet censorship can be determined and undertaken by government authorities or non-
government bodies. Internet censored contents may vary greatly based on different
countries or cultures.
There is argument that internet censorship is necessary. Governments can use internet
censorship to screen websites and internet activities that may be illegal nature. Many adult
websites provide woman and child pornography. With internet censorship, governments
can filter and also censor sexually contents. Children can be prevented from viewing these
materials. Internet pornography is viewed as an influential problem. Pornography
advocates violent and sexual abuse of women or children, and internet revolution makes
easy access to pornography. People who watch internet pornography are more likely to
commit crimes such as rape, molestation or even murder (Australian Institute of
Criminology, 2011). It is really a part of government’s responsibility to apply internet
censorship into managing the internet. Child pornography or any other internet businesses
that carry out illegal activities can not be tolerated. Apart from internet pornography,
internet censorship implemented by internet service providers can protect users from
email spam. Usually, email spam may include malware or phishing schemes which attempt
to steal personal information and data. By implementing internet filtering, internet service
providers can guard internet users against spam and financial loss. Consequently, internet
censorship with respect to illegal activities is considered necessary (Ekholm & Karhula,
2012).

The debate about internet censorship and individual information privacy has been around
for a long time. China is a typical example of breach of information privacy. The Chinese
government uses the special force of cyber police to observe, monitor and control internet
users. For instance, sensitive words or topics such as Tiananmen Square or Fa Lun Gong
are highly restricted. Internet companies in China are required by the government to filter
sensitive words and topics and restrain internet search results (Ekholm & Karhula, 2012).
Google has withdrawn its business operation from China because of internet censorship.
The Chinese government is afraid of enabling internet users to access political information.
As a result, the government closely monitors all data of internet users and overrides the
right of information privacy of internet users. In 2008, the Australian government
proposed to install a mandatory internet filtering to deal with child pornography
(Nicholson, 2008). With the implementation of the mandatory internet filtering, the
government will know what and when internet users watch. Many people believe that
information privacy could be greatly threatened by installing the mandatory internet
filtering (Nicholson, 2008). The Australian government eventually gave up such form of
internet censorship.

Internet Information Privacy and Internet Security

The internet has become an integral part of our work and daily lives. People need to use the
internet to get access to their financial records, banking statements, tax returns and other
sensitive individual information. While the internet offers good things to people, it causes
serous and destructive threats to people. While people and businesses enjoy the high-
speed internet connections, they also have concerns of internet security. In fact, internet
security is an urgent issue facing personal and commercial internet users (Ekholm &
Karhula, 2012). Internet access is affordable to people since the cost of broadband services
has decreased. Also it is an indispensable component of businesses. Breaches to internet
security may lead to violations of information privacy (Solove et al, 2006). When
unauthorised people obtain access to personal information, they can read and copy such
personal information. The breach of internet security caused by poor data handling can
also result in violation of information privacy (Solove et al, 2006).. It is noted that in some
industries such as banking and finance, it is a strict obligation to protect information
privacy. Banking institutions and financial consulting companies are required to protect
customer’s information such as residential address, financial records and other sensitive
information. If the information is hacked and stolen, these organisations are considered
violate customer’s right of information privacy.

Personal computers, laptops or other devices usually have virus protection, but they are
lack of strong safeguards. The computer and network systems of commercial companies
and government are installed with security protection solutions. However, these
organisations still face the issue of internet security due to their complexity. A survey finds
that over 95% of internet users have limited protection from online attacks (Bigplant, ).
According to Information Warfare Task Force, almost 20 million people possessed skills
and experience to hack computers in 2002. The internet is vulnerable to hackers. A
successful attack can lead to great loss of valuable personal data. The number of victims of
cyber crime has been growing, ranging from virus attacks, identity theft and email scams in
the online environment (Australian Institute of Criminology, 2011).

Conclusion

It is true that the internet plays a significant role in our lives and work, and people derive a
great number of benefits from using the internet. Internet Information privacy is a right to
control and manage how personal information stored over the internet is accessed, used,
collected and shared with others. In the first, internet information privacy is associated
with confidentiality. Confidentiality in the online environment is about implementing
security arrangements for protecting personal information and ensuring the safety of
computer systems and equipments. When websites fails to take the ethical duty of
confidentiality, personal information and data are disclosed and revealed, internet
information privacy can be violated. Ensuring internet information privacy is more about
carrying out the ethical duty of confidentiality. Secondly, internet information privacy is
also associated with internet censorship. Although internet censorship with respect to
managing illegal activities is necessary, it can violate the right of information privacy. In
addition, internet information privacy is related to internet security. Breaches to internet
security may lead to violations of information privacy.

Defamation

What was wrong with the old law?

 Chilling effect – Simon Singh

 Libel tourism
 Out of date – internet/social media
  Claims were too easy
 Abused by the rich and powerful?

The important changes

 Seriousness threshold (s1)

 Defense of Truth (s2)
 Defense of Honest Opinion (s3)
 Publication on a matter of public interest (s4)
 Defense for operator of websites (s5)
 Peer reviewed statements (scientific/academic) (s6)
 Privileged reports (s7)
 Single publication rule (s8)
 Non-domiciled persons (s9)

Seriousness threshold

 Sounds like good news..

 Previous reluctance to strike out
 But..
o How will the test be applied? Front loading?
o Corporates/LLPs etc?

Publication in the public interest

 Abolishes Reynolds
 Act is thin on how defense will be assessed
 Return to checklist? More holistic approach?
 Who can benefit?
 Objective? Subjective?

Libel Tourism

 Before...Reputation for being an easy place to claim. Good damages.

 Now...s10:
o England must be clearly the most appropriate place in the world to bring an
action in respect of this statement.

Website Operators

 Defense if it can establish it was not the operator who “posted” the statement
 Not defeated if operator “moderated” posts
  But:
o Lots of key terms undefined
o Operator needs to take a notice of complaint seriously
o If author can be identified by C, then defence unless malice

Single Publication Rule

 One year limitation period

 Before:
o News item on 1 January
o Google search 31 December – new one year period6.

Good News6.

 There should be far fewer claims from:

o Corporations
o Overseas claimants
o Vexatious litigants
o Scientists/academics
 Limitation will mean something
 Better protection for ISP type customers
 Generally supports freedom of speech

Intellectual Property

Intellectual Property Act 2014

 Long process of consultation

 Key features:
o Simplifying & improving:
 design protection
 Patent protection
o Clarifying the IP legal framework
o Making the international and EU IP system work better
o Series of tidying up measures

Designs..

 New criminal offence (s13) to protect designs from blatant copying

 New voluntary Design Opinions Service from the IPO (s11) – prevent litigation
 Exemptions under s4 for experiments/teaching etc.
 Support for good faith investments (s7)
 New provisions under s10 – route to appeal from unfavourable IPO decision.
Patents

 Easier public notice of patent rights (s15) – use of a web address

 Patent Opinions Service extended (s16)

Other provisions

 Simplification of UK unregistered design rights

 Alignment with EU structure
 Improves process for protecting copyright works produced outside the UK
 Unified Patent Court s17
 Annual report to Parliament on IPO activities

Why is this important?

 Check the cover you are writing:

o Do the new designs provisions affect risk?
o Are civil claims more likely because of new offences?
 Claims handling:
o Use the opinions service as new form of ADR
o Should be quicker/more cost effective66
 You may be covering trademark infringement?
 Brands getting more aggressive – unrecognised liabilities?
 Check proposal forms – proper supply chain?
 Risk applies to:
o Retailers
o Distributors
o Wholesalers
o Importers

Intellectual Property Risks

Intellectual property risks refer to the analysis of what an individual or company needs to
be prepared for when deciding to protect their intellectual property (IP).

What Is Intellectual Property?

Businesses in today's economy have to be on the lookout for several aggressive threats to
IP, including:

 Copyright pirates
 Patent flouters
 Brand impersonators
 Trade secret thieves
Intellectual property is legally protected and includes anything that is created and original.
Creators, artists, inventors, and others are rewarded for their creativity when IP laws work
to ensure that their works are protected from those who would steal them for profit or
personal gain.

Economies and cultures flourish when their people create and innovate. If a government
wants to encourage a healthy economy, it is in their best interest to offer IP protection and,
therefore, give creators incentive to keep creating.

Depending on what you create or invent, your work might automatically be protected once
it's created. Some forms of IP need to be registered with an agency in order to have
protection.

Most countries throughout the world have laws in place to protect IP, but not everyone
enforces those laws. Counterfeiting can become a big issue in countries without strictly-
enforced IP laws.

Types of IP Protection

Intellectual property can be protected in several ways, but the most basic forms of
protection are:

Copyrights - protect artistic works like written works, paintings and drawings, sculpture,
music, movies and tv, and even software

Patents - protect inventions that are unique and show progress in technology

Trademarks - protect symbols or words that are used to denote specific brands

Trade secrets are another field of IP that is protected by law. If a business has information
that gives them an advantage over other businesses in their market, and they want to keep
it secret, that is called a trade secret. Coke and Pepsi keep their process for creating their
beverages confidential, so these formulas are trade secrets.

Publicity rights are also considered IP rights, and these cover a business's right to use their
company name in commercials. These are commonly used in endorsement deals, like when
a professional football player does a commercial for a sports drink.

Why Protect IP?

Physical property is well-protected, but it only became necessary to protect intellectual

property in more recent years. As artists and inventors create products or processes,
everything is made so readily available to people across the world. IP is not always in the
form of a tangible object, so it can be harder to protect from theft than something like a
house or car.

If a musician creates a song, it can become accessible to people everywhere fairly easily and
quickly. Because the song is intangible, an individual in China can be listening to it at the
same time as someone else in Canada.

With such ease of accessibility, IP is also very easy to copy. A song that took a long time to
write and record can be downloaded and redistributed in seconds. IP law now works to
protect the creator's right to profit from their own work. It is illegal for a work to be copied
and distributed without the consent of its creator.

IP protection usually expires after a certain period, depending on the type of work. Once
the creator of a work has been given the chance to profit from their work for a time, it can
be accessed by the rest of society free of charge. If someone invents a new form of
telecommunication, they are given ample time to market their invention and profit from
their work, but after the set period, other companies are allowed to make their invention
without owing royalties to the inventor.

Intellectual Property Risks

When the risks involved in protecting a piece of intellectual property are analyzed, this is
called IP risk management. There are two main perspectives to consider in this type of risk
management, the first party and third party.

The first party is the creator and owner of the IP. This company or individual will want to
assess the cost of protecting their IP. Risks to the first party include:

Legal costs if IP must be defended in court

Costs if the IP loses value or is no longer considered an asset

Decreased revenue for a protected product or service if the IP is found to be invalid in some
way

The third party, individual or company considering IP rights infringement, must consider:

Cost of a lawsuit and resulting consequences

Potential for poor reputation and subsequent effects

If you need help with intellectual property risks, you can post your legal
need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to
its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law
and average 14 years of legal experience, including work with or on behalf of companies
like Google, Stripe, and Twilio.

Intellectual Property at Risk

Intellectual property may be the single most important asset a company possesses.
Whether it is physical or digital, customer data or operational information, trade secrets or
business strategies, intellectual property (IP) is often the main driver of revenue for any
organization. It is what distinguishes one company from another and is the main reason
customers buy the products and services that they do. But, of course, this also means that
any vulnerabilities in the security of these assets are primed for exploitation by parties
looking to gain an edge. And given the sheer amount of data available, achieving total
protection has never been more difficult or required such a broad scope of attention.

In this special section on intellectual property protection, we look at multiple facets of the
issue, including basic elements of a protection program, how and why investors need to
assess cyberrisk, protection of intellectual property assets in the cloud, the often-
overlooked risk of poor patent translation, and the use of security assessments to strike a
balance between collaboration and information protection. While even this only scratches
the surface of the risks related to intellectual property, hopefully it will provide some food
for thought for any risk manager looking to strengthen an organization’s IP defenses.

The legal and privacy issues of doing e-business

What laws apply to e-business?

In general, all existing laws that apply to traditional commerce apply to business conducted
via the Internet. Laws governing business incorporation, business name registration,
taxation, consumer protection, advertising, importing or exporting, product safety, product
standards, intellectual property and liability and so on, apply to e-business.

"If you are doing business in different jurisdictions, you must comply with the law of any
jurisdiction where you are deemed to be ‘carrying on business’."

Source: E-business Information Guide – Canada-Ontario Business Service Centre

(www.canadabusiness.ca).

Protecting privacy

Almost all websites collect information about users. This information helps you to enhance
your business and better meet customers’ needs. You may collect personal information
voluntarily provided by customers, such as their names, contact information, and credit
card information. If you adopt and follow a reasonable privacy policy and develop sound
practices to protect personal information, you can reduce your risk of liability and enhance
customer confidence.

Make sure you are familiar with your obligations for protecting personal information.
The Personal Information Protection and Electronic Documents Act
(PIPEDA) describes these obligations.

What are cookies?

Cookies are messages given to a Web browser by a Web server. The main purpose of a
cookie is to identify users and to save information about how people use the site. This
provides a basis for improving the website to better meet customer needs. Some cookies
(session cookies) are erased when you close the Web browser. Permanent cookies are
stored on the user’s hard drive until it expires or the person deletes the cookie. If your
website uses ‘cookies’, you should explain to the website users how and why this
information is used.

The Personal Information Protection and Electronic Documents Act (PIPEDA)

The Personal Information Protection and Electronic Documents Act (PIPEDA) applies to
businesses and it provides that you must have consent to collect, use or disclose personal
information. If you collect, use or disclose personal information in the course of your
commercial activities, this Government of Canada Act applies to your business.

In particular, the Act provides that businesses must obtain the consent of consumers to use
their personal information. The Act also requires businesses to give consumers access to
their personal information, and to information regarding redress procedures. PIPEDA is
based on balancing an individual’s right to the privacy of personal information with the
need of organizations to collect, use or disclose personal information for legitimate
business purposes.

Personal Information Protection and Electronic Documents Act

Under PIPEDA, personal information must be:

 Collected for identifiable purposes and with consent.

 Used and disclosed for the limited purposes for which it was collected.
 Accurate.
 Accessible for inspection and correction.
 Safeguarded.

What can I do to protect personal information?

The list below presents some ways you can protect personal information.
  Do you have a privacy policy in place? The policy should outline how information
will be collected and used, and the security procedures that will be used to protect
information from being lost, stolen or tampered with. You should post this policy on
your website.
 Do your business computers have passwords to protect against unauthorized
access?
 Do you have firewall installation and support to prevent unauthorized access to the
computers and servers?
 Do you adequately protect your laptops and computer(s) from theft?
 Have you clearly explained your policies and procedures with respect to security
and privacy on your website and other communications materials?
 Do you restrict access to personal information to authorized employees?
 Do you collect and store only as much personal information as you need?
 Have you stored personal information in a secure environment? Avoid storing
customer credit card information in your systems if possible. Note that more
sensitive information requires greater security measures. If you are storing
customer information in your computer systems make sure it is secure from access
by employees or computer hackers.
 If you are sending out bulk or advertising emails, have you used an opt-in method to
ensure you have permission to contact recipients?
 If you are selling products online, have you considered applying for a privacy seal?
The privacy seal icon is displayed on the website and can increase consumer
confidence. Three examples of privacy seal programs are TRUSTe, BBBOnline and
WebTrust
 If you are selling online, do you have a secure server and SSL (Secure Socket
Layer)? SSL technology encrypts all confidential information during transmission
and authorization of transactions.
 If you are selling online, do you have appropriate security features for storing
transaction information? For example a PCI (peripheral component interconnect
hardware) card is often added for protection. Another approach is SET (Secure
Electronic Transaction) that has been developed by Visa and MasterCard. With this
approach, sensitive information is not seen by the business and is not stored on the
company’s website.
 Does your web hosting agreement describe your rights to user data collected by the
hosting service? You should maintain exclusive ownership of user data along with a
nondisclosure provision.

Intellectual Property

Intellectual Property (IP) is an area of law that protects ideas. With respect to the Internet
there are generally four areas of Intellectual Property: Copyright, Trademarks, Domain
Names, and Patents. This booklet will describe the first three areas.

Where would I go to register copyright, trademarks and patents with the Canadian
government?
Canadian Intellectual Property Office

Copyright

Copyright is the right to make a copy and applies to pictures and written materials on your
website. It can also relate to computer codes used to create computer programs. In
Canada, people who create original works automatically have copyright protection
over their work.

The new Copyright Modernization Act came into effect in November 2012, bringing
changes to Canada’s copyright laws to adapt them to the digital economy. The new act
provides stronger provisions to protect the rights of creators, while at the same time
legalizing a number of common activities for users. It is important to recognize, however,
that many of the new user-oriented provisions are meant for non-commercial purposes.
Below are some of the key provisions of the act:

 Users have greater freedom to include copyrighted content into their own works, as
long as it is not for commercial gain and does not affect the artist’s reputation or
his/or her market.
 Users may include copyrighted content in their own products and activities if it
pertains to the areas of education, satire or parody.
 Users can make back-up copies of material as long as they are not protected by a
digital lock or part of an on-demand service.
 Users are prohibited from breaking digital locks, the technological measures that
copyright holders have implemented to prevent users from copying the material.

Service providers are prohibited from offering services over the internet that will assist in
the violation of copyright laws.
Sources: www.balancedcopyright.gc.ca, http://www.thestar.com/business/2012/11/10/w
hat_the_new_copyright_law_means_for_you_geist.html

Intellectual property considerations – copyright

The following list highlights some measures you can take to protect copyright on the
Internet and minimize the risk of infringing on the rights of others:

 Do you have the right to use or copy all the materials (including text and images) on
your website? You should realize that most material available through the Internet
is copyright protected. This includes e-mails and downloaded material.
 Have you obtained permission for the use of any copyright material (including
information found on the Web)?
 Do your Internet-related agreements (e.g. agreements with web hosting service,
web developers, website use agreements) outline the permitted and prohibited use
of the website content? Do they include procedures for responding to claims of
copyright infringement and other misconduct?
  Have you checked whether your web developer has copyright over the material
(information and images)? If you want to own the copyright to the work contained
on your website, you will need to have a written agreement that transfers the
copyrights to you.
 If you are a copyright owner, have you registered your copyright?
 If you are a copyright owner, have you included copyright notices in your materials?

Trademarks

Trademarks are names or marks that are associated with your products and services.
While trademark rights are acquired by use, registering your trademark with the Canadian
Intellectual Property Office will enhance your rights. A trademark is typically a name, word,
phrase, logo, symbol, design, image, or a combination of these. Keep in mind that website
content can infringe on trademark rights. The similarity of the marks and the similarity of
the goods or services are important factors in assessing infringement of trademark rights.
If you have a unique name for your business or product you should seek advice from an
experienced trademark lawyer. Internet trademark use that is lawful in the website
owner’s jurisdiction may infringe trademark rights in other jurisdictions. Canadian courts
have tended to apply jurisdiction over foreign owners of websites only in cases where the
foreign owned websites are used to communicate and conduct commerce with Canadian
residents.

Trademark infringements – beyond website content

When considering whether your website is at risk for trademark infringement you need to
consider more than the content. For example, meta tags and links to other sites may lead to
trademark infringement.

Meta tags provide information about the content of your website. They are codes (not
visible to the user) that identify and describe the website content. The inclusion of another
company’s trademarks into the meta tag is a trademark infringement.

Carefully consider how links are used on your website. For example, if the logo, trademark
or descriptive text of the linked-to company is used, this may lead to trademark
infringement.

The following are some measures that may be taken to protect trademarks on the Internet.

 Has the Internet been searched for the trademark you intend to use? It is wise to
conduct this search before registering and using domain names.
 Have you considered using and registering your domain name as a trademark? This
will help you support a claim of trademark rights if someone challenges your use of
a particular trademark. Registrations should be made in as many common domains
as possible (e.g. .com, .ca, .org, .net).
  Have you declared your trademark right on your websites? Have you declared your
trademark rights in website use agreements? Any trademark use should use a
trademark designation (e.g. TM or Registered Trademark).
 If you are using another business/person’s trademark, is it authorized by a
trademark license? Similarly you should not allow others to use your trademark
without a trademark license.
 Have you registered your domain names with local registrars? This will reduce the
risk for infringing foreign trademarks.
 Do you (or your service provider) regularly search the Internet for unauthorized use
of your domain name?

Domain names

Domain names are the addresses of sites on the Internet. They can include key trademarks
and can be valuable assets in terms of branding your business or product. The registration
and use of website domain names are subject to trademark laws. You can opt to register
your domain name as a trademark. Consult a lawyer if you think you might be infringing on
another company’s trademark. Your domain name should not include the name of another
company or product.

Domain names should be carefully selected so that you do not violate the trademark of
another business. You can opt to have a web host select and register your domain name. If
you wish to register a .ca domain name, you must do so through an accredited registrar.
You can go to a domain registration site to check if your selected domain names are taken
and also to register your domain name. Examples of accredited registrars where you can
register a .ca domain name include:

 The Canadian Internet Registration Authority

 Internic.ca
 ICANN

You may wish to choose to buy more than one domain name to protect your brand and
encourage more Internet users to visit your website (for example, you could use two
domain names – one ending in .ca and the other ending in .com).

Legal considerations for selling online

Applicable laws and codes

The Electronic Commerce Act and the Ontario Consumer Protection Act have implications
for selling online. In addition, the Canadian Code of Practice for Consumer Protection in
Electronic Commerce identifies good business practices for businesses conducting
commercial activities with consumers online. Review the following table for a brief
description of each.
The Law vs Unsolicited Commercial Communications
Unsolicited commercial communications, also known as “SPAM“, whether in the form of e-
mail, SMSs or instant messages, have been described as being the mosquitoes of the
Internet – numerous, annoying and often carrying objectionable content and nasty viruses.

What is spam?

The word “spam” as applied to e-mail (and more recently, SMSs or instant messages)
means “unsolicited commercial communications” and usually takes the form of unsolicited
commercial e-mail (UCE) and unsolicited bulk e-mail (UBE).

“Spam” is a registered trademark owned by Hormel Foods, Minnesota and is the

descriptive name of one of their meat product which many people find unpalatable. “Spam”
as applied to e-mail shares the same negative connotations as the meat product. This is
often misleading as genuine marketing activities are often tarnished by the same brush:
spam often does not equate to “unwanted” and often, not all bulk email is spam.

How do you define “spam”?

Precisely how to define spam is a contentious issue. Some define spam as UBE. Others
believe that “bulk” is irrelevant. They argue that the issue is merely whether the
communication sent was solicited. For others, the issue is whether the communication was
commercial in nature. An issue which is common to all the various definitions is that due to
the low cost of sending spam, each spam communication costs the consumer more in terms
of both money and resources than it costs the sender to send.

From a legal perspective, the absence of a definition of spam in South Africa brings the
efficacy of the anti-spam provisions in our law firmly under the spotlight.

SPAM is a problem

SPAM is a significant and growing problem representing as it does close to 50% of all e-
mail traffic. Whilst it creates significant productivity costs for business and the Internet
community, it also threatens the underlying IT systems and network integrity. In order to
solve the SPAM problem, a holistic approach is required which balances legislative, self-
regulatory, technical and education/awareness elements. This article focuses on the
legislative component in the context of a greater spam reduction strategy.

The Legal Position in South Africa

[Update: 23 April 2013. What is set out below is the legal position as it was in August
2003. The law has changed a lot in the last 10 years. For a brief synopsis of the current
position, click here. If you want to complain about receiving unwanted electronic
marketing, for example via telephone, email or SMS click here.]

SPAM is pertinently addressed in section 45 of the Electronic Communications Act, 25 of

2002 (“the ECT Act“). There are, however, several other areas of law which would cast a
wider net over several spamming activities.

SPAM per se is not illegal in South Africa. However, if a sender fails to do one of three
things she is guilty of an offence and liable on conviction to an unspecified fine, or a
maximum of 12 months imprisonment. A consumer may choose not to institute criminal
proceedings against a spammer, but rather lodge a complaint with the Consumer Affairs
Committee established by section 2 of the Consumer Affairs (Unfair Business Practices)
Act, 71 of 1988. This option is created in terms of section 49 of the ECT Act.

Section 45 of the ECT Act requires the sender of an unsolicited commercial communication
to observe 3 rules: firstly, to provide the consumer “with the option to cancel his or her
subscription to the mailing list“, secondly, to furnish the consumer “with the identifying
particulars of the source from which that person obtained the consumer’s personal
information, on request of the consumer” and thirdly, not to send a second unsolicited
commercial communication to a person “who has advised the sender that such
communications are unwelcome“.

Problems with Section 45

There are essentially 6 problems with section 45, all of which revolve around the absence
of a definition of an “unsolicited commercial communication“.

While it will ultimately be left up to the Courts to interpret the meaning of certain words
used in section 45, this article attempts to highlight some of the problems with the current
wording.

Given the high cost of litigation, coupled with the fact that no organisation ordinarily wants
to be the subject of a “test case“, and given the enormity of the SPAM problem, it might be
necessary for the legislature to either revisit section 45 of the ECT Act, or enact a
standalone “anti-SPAM” law, or for the South African Law Commission to deal with the
issue in the pending Privacy Act which they are currently working on.

(1) Section 45 does not apply to ‘legal persons’

Section 45 only offers protection to “consumers” who are spammed. The Act defines a
“consumer” as a “natural person”. Therefore if spam is sent to legal persons, such as
companies or close corporations, for example, the provisions of section 45 do not apply.
However, certain spam related actions could be covered under other sections of the ECT
Act or other laws. For example (i) forgery of message headers could be a crime under
section 86(2) of the ECT Act which makes the unintentional and unauthorised interference
with data “in a way which causes such data to be modified …” a criminal offence, (ii)
unsolicited bulk e-mail which causes an e-mail server to crash could be considered a denial
of service attack which would also constitute a cyber crime under section 86(2) of the ECT
Act inasmuch as it would constitute an unauthorised interception or interference with data
and (iii) senders who use trademark material in their unsolicited communications without
permission could be violating our trademark laws, or render them susceptible in terms of
our common law to legal action based on passing-off.

(2) What constitutes a proper opt-out?

On a strict legal interpretation of sections 45(1)(a) and (b) it is a moot point as to whether
the sender is statutorily obliged to provide “the option to cancel” (whether in the form of
an e-mail address or a hyperlink to a website) in the first e-mail sent. The issue is
important as the sometimes innocent act of a sender (e.g. where the sender is negligent and
simply forgets to provide the option to cancel in their first electronic communication) is
now criminalized.

The effectiveness of an “opt-out” request is questioned as all it often serves to do is validate

the existence of an e-mail address being spammed.

Was it correct for parliament to legislate an “opt-out” provision as opposed to an “opt-in”

provision in section 45(1)(a)?

It is important to remember that at the time the ECT Act was being drafted (in the first half
of 2001) SPAM was not the scourge that it is today. A reading of section 46 of the ECT
Bill will show that failure to comply with the SPAM provisions was not a criminal offence at
Bill stage and was only made a criminal offence by the Parliamentary Portfolio Committee
when they dealt with the Bill in May 2002, at a time when SPAM was on the increase and
the Parliamentary Portfolio Committee was of the view that it was necessary to impose
some criminal sanctions for failure to adhere to the SPAM requirements.

With the benefit of hindsight, and after having surveyed the legal landscape in other
jurisdictions, perhaps a more circumscribed opt-out policy or opt-in policy should have
been adopted.

It is important to remember that much of the thinking around opt-out provisions

worldwide tends to involve benchmarking them in the first instance against direct mail
where the incremental cost of each communication provides marketers with a sufficient
incentive to refrain from communicating with persons who have submitted opt-out
requests. Moreover, the cost factor restricts marketers from sending unsolicited non-
electronic communications to consumers in other countries – whereas with e-mail, one
rarely receives unsolicited electronic communications from South African
senders. Unsolicited and bulk e-mail do not involve an analogous incremental cost and
spammers lack a similar incentive to respect opt-out requests. Further, e-mail opt-out
requests are rarely effective and some spammers collect and sell e-mail addresses of those
who have submitted such requests.

(3) No definition of “sender“

If the “option to cancel” in section 45(1)(a) is in the form of the provision of an e-mail
address of the sender and the consumer “has advised the sender” that its
“communications are unwelcome” in terms of section 45(4) it follows that the consumer
must be able to make contact with the sender in order to inform them that they have
elected to cancel or that their unsolicited commercial communications are unwelcome. The
snag, however, is that the sender is not statutorily obliged to provide accurate information
as to his identity. Section 45 does not require that the sender provide accurate details of his
name or physical or electronic addresses, thereby making practical compliance with
section 45 problematic. Issues also arise pertaining to what a consumer opts in to
receive: is it a single communication, or multiple communications in respect of other
products offered by a sender.

(4) No definition of “unsolicited“

In general (not in terms of the ECT Act) a communication is considered to be unsolicited if

3 factors are present: (i) if there is no prior relationship between the parties, (ii) the
consumer has not expressly consented to receive that communication and (iii) the
consumer has previously sought to terminate the relationship, usually by instructing the
sender not to send any more communications in the future.

From a technical perspective, it is often difficult to assess whether an e-mail

communication is unsolicited. This is particularly so if the prior relationship comprised
something other than a previous exchange of e-mail messages. A broad interpretation of
“unsolicited” might include all contracts that are not part of a current transaction, for
example, where a consumer purchases a product from a supermarket using a credit card
and the supermarket is somehow able to obtain the purchaser’s e-mail address. If the
supermarket in this example subsequently sends the consumer an e-mail advertising a sale
on products, even those similar to the product he purchased, the communication could be
considered unsolicited. The scenario is more likely if the consumer is a member of the
supermarket’s loyalty programme during the transaction, thereby enabling the
supermarket to link the transaction to personal information about the consumer already on
their files. The consumer may have also previously consented to receive subsequent
unrelated communications from the supermarket when he signed up for the loyalty
programme, in which event the communication would probably not be considered
unsolicited.

(5) No definition of “commercial“

Commercial is generally defined in terms of message content, rather than the intention of
the sender for sending the communication. As is apparent from the wording of the heading
of section 45, the communication must promote the sale of goods or services.

Examples of where an unsolicited communication is of a commercial nature but in the

writer’s opinion should not be subject to criminal sanction is where the electronic
communication:

does not include or promote illegal or offensive content

the e-mail does not have a fraudulent or otherwise deceptive purpose

does not collect personal information

is not sent in a manner that disguises the originator

offers a valid and functional address to which consumers can send messages opting out of
receiving further unsolicited communications.

There are many varieties of non-commercial SPAM including charitable fundraising

solicitations, opinion surveys, religious messages, political advertisements, virus hoaxes
and other urban legends and chain letters.

(6) No definition of “communication” in the context of SPAM

Section 45 is slanted in favour of unsolicited commercial e-mail (UCE). However, given that
the real problem with SPAM lies in the volume of e-mail messages, and not their content,
measures need to be put in place to deal with unsolicited bulk e-mail (UBE) as well. If one
is able to demonstrate that UBE falls within the ambit of section 45, it then becomes
necessary to define what constitutes UBE. A single message sent to a very large number of
recipients clearly qualifies as bulk. By the same token, separate but identical copies of a
message that are sent to a large number of recipients, are also considered to be sent in
bulk. The only distinction between the two is the stage at which the e-mail server takes the
incoming message and forwards copies of the message to multiple recipients. Substantially
similar, as well as identical copies of a single message, would probably also qualify as
“bulk“. The main issue appears to lie in how many copies of a message are sent and within
what time period they are dispatched, for them to qualify as a bulk transmission.
Whilst drawing a distinction between UCE and UBE may be somewhat academic, it has
been the subject of considerable controversy within the anti-SPAM community as well as
among legislative bodies in other jurisdictions that have considered enacting restrictions
on SPAM.

SPAM issues can be covered by other laws

The ECT Act specifies what constitutes an offence under section 45 of the ECT Act. Certain
SPAM-related actions could, however, also be covered under other sections of the ECT Act,
or other laws. For example:

Forgery of message headers could be a crime under section 86(2) which makes the
intentional and unauthorised interference with data “in a way which causes such data to be
modified …” a criminal offence.

UBE which causes an e-mail server to crash could be considered a denial of service which
would also constitute a cyber crime under section 86(2) of the ECT Act inasmuch as it
would constitute an unauthorised interception or interference with data.

Senders who use trademarked material in their unsolicited communications without

permission could be violating our trademark laws or render themselves susceptible in
terms of our common law to legal action based on passing off.

As indicated above, unsolicited communications would constitute an unlawful business

practice which could be reported to the Consumer Affairs Committee under section 49 of
the ECT Act.

Roles of Interested Parties

Internet Service Providers

Apart from the senders and recipients of unsolicited communications, Internet service
providers which typically manage the consumers e-mail through their servers (as well as
those organisations which run their own e-mail servers) are part of the “SPAM chain” and
thus have an important role to play.

SPAM is a known nuisance. From a legal perspective, an important question is whether

Internet service providers (ISPs) can be liable for negligence if they fail to adhere to the
standard of care legally required of them? In terms of South African law if a reasonable
person in the position of an ISP:

would foresee the reasonable possibility of its conduct injuring a subscriber/ s and causing
him loss; and
would take reasonable steps to guard against such occurrence; and

fails to take such steps, the ISP is negligent.

The negligent conduct envisaged on the part of the ISP would likely be in the nature of an
omission – e.g. by not taking technical steps to deal with the problem. Such steps could
include not implementing subject line blocking, the use of blacklists and reverse domain
name look-ups (establishing whether a sender is real).

The type of loss envisaged would include a situation where a virus attached to a spam
email which passes through the ISPs email server deletes all the subscriber’s data on his
hard-drive.

The taking of reasonable steps to guard against such occurrence would include the taking
of steps necessary to empower their subscribers and assist them manage the SPAM
problem by, for example, making SPAM filtering software and blacklists available to them,
or by making facilities available to report SPAM (whether in the form of a helpdesk or
reporting on a customised e-mail application – which AOL provides to its subscribers for
example) as well as by creating an awareness of the issues directly to the subscribers and
in joint collaborative efforts with other interested bodies such as the South African
Marketing Federation.

Organisations

Very often organisations manage their own e-mail servers (or outsource same to a third
party) instead of getting an ISP to do so for them. It is a moot point as to whether an
employer owes a common law duty of care to its employees and whether the standard of
legal care applicable to ISPs also applies to such organisations.

The Marketing Federation of Southern Africa

The Marketing Federation of Southern Africa (MFSA) should consider self-regulation and
require its members to subscribe to an E-mail Best Practice Guide and be seen to be
engaging with the South African Internet Service Providers Association (ISPA) in the eyes
of the public and possibly even compiling a white list of its members who have subscribed
to its code of conduct and whose IP addresses can be trusted for purposes of bulk e-
mailing. This white list would be accepted by all ISPA members.

Both ISPA and the MFSA should be engaging in discussion with various government
departments with a view to establishing a body which would play a monitoring and
overseer role in the war against SPAM in much the same way as the Federal Trade
Commission in the United States does. It is our understanding that such discussions have
been initiated.
The FTC encourages consumers in the United States to report SPAM to them and the FTC
uses the unsolicited e-mails stored in their database to institute legal proceedings against
persons who send SPAM e-mail in the United States. The creation of a body to perform the
same role in South Africa would be particularly important given the high cost of litigation
in South Africa: again, no one organisation would ordinarily want to be the subject of a test
case and that the law enforcement agencies have other competing priorities.

A SPAM reduction strategy

The provisions of section 45 and any possible changes to section 45 of the ECT Act will not
in itself provide a comprehensive answer to the SPAM problem. The practical difficulties in
identifying spammers, a lack of jurisdiction over offshore offenders and competing
priorities faced by the South African law enforcement agencies will all contribute
significantly to paralysis in practical implementation of the protection seemingly offered by
the ECT Act.

Technological solutions per se are also not a comprehensive answer to the problem. The
war between spammers and anti-spammers has frequently been described as an “arms
race“, with each side constantly developing new “weapons”. A law that attempts to
neutralise these weapons is likely to be obsolete before it even takes effect because of the
rapid advancement in technology.

South Africa should be endeavouring to follow a SPAM reduction strategy which strives to
achieve 2 objectives:

Recognition of the fact that permission is ultimately what the consumer says it is; and

Balance through combined legislative, self-regulatory, technical and consumer

education/awareness.

Legislative changes should aim at least deal with the following key features:

Introducing a definition of “unsolicited commercial communications”;

Providing that no commercial electronic communications may be sent without the prior
consent of the end user unless there is an existing customer/business relationship;

All commercial electronic messaging must contain accurate details of the sender’s name
and physical and electronic addresses;

Recognition of appropriate industry codes of conduct;

Appropriate enforcement sanctions;

Recognition of prevailing trends in SPAM legislation in other jurisdictions so as to ensure a
measure of interoperability with those laws, given that SPAM knows no geographical
borders or boundaries.

Conclusion

Worms and viruses come and go and to the largest extent they don’t affect the day-to-day
use and enjoyment of the electronic oriented consumer. Spam on the other hand is a daily
scourge which clogs the virtual mailboxes of almost every email user in a more pervasive,
intrusive and offensive way than any junk mail wedged in the garden gate.

On a technological level it has the potential to threaten network overload to the point of
near collapse. It is the equivalent of virtual rampant cholesterol clogging the arteries of the
Internet.

Undoubtedly urgent retaliation is need and foot-soldiers from every interested quarter
need to be urgently conscripted to stem the onslaught, or we all face SPAMICIDE!

Cybercrime

Definition - What does Cybercrime mean?

Cybercrime is defined as a crime in which a computer is the object of the crime (hacking,
phishing, spamming) or is used as a tool to commit an offense (child pornography, hate
crimes). Cybercriminals may use computer technology to access personal information,
business trade secrets or use the internet for exploitative or malicious purposes. Criminals
can also use computers for communication and document or data storage. Criminals who
perform these illegal activities are often referred to as hackers.

Cybercrime may also be referred to as computer crime.

Common types of cybercrime include online bank information theft, identity theft, online
predatory crimes and unauthorized computer access. More serious crimes like
cyberterrorism are also of significant concern.

Cybercrime encompasses a wide range of activities, but these can generally be broken into
two categories:

Crimes that target computer networks or devices. These types of crimes include viruses
and denial-of-service (DoS) attacks.
Crimes that use computer networks to advance other criminal activities. These types of
crimes include cyberstalking, phishing and fraud or identity theft.

The FBI identifies cybercrime fugitives who have allegedly committed bank fraud and
trafficked counterfeit devices that access personal electronic information. The FBI also
provides information on how to report cybercrimes, as well as useful intelligence
information about the latest cybercriminals.

What is cybercrime?

Cybercrime is an issue which impacts the lives of many Australians. Cybercrimes are
crimes which are:

 directed at computers or other devices (for example, hacking), and

 where computers or other devices are integral to the offence (for example, online
fraud, identity theft and the distribution of child exploitation material).

Common types of cybercrime include hacking, online scams and fraud, identity theft,
attacks on computer systems and illegal or prohibited online content.

The effect of cybercrime can be extremely upsetting for victims, and not necessarily just for
financial reasons. Victims may feel that their privacy has been violated, and that they are
powerless. Unfortunately, as Australia’s reliance on technology grows, the cost and
incidence of cybercrime is expected to increase.

5 Types of Cybercrime and How to Protect Against Them

The Internet is a dangerous place. That's because some tech-savvy individuals engage in
various types of criminal activities online or by abusing computer networks. Those
nefarious operations usually result in the theft of unsuspecting users' personal or financial
information, data which actors on the dark web monetize for their own gain.

Here's five types of cybercrime with which users should familiarize themselves.

Phishing

Phishing is a type of attack were actors attempt to trick unsuspecting users into doing
something they wouldn't ordinarily do, such as clicking on a malicious URL or email
attachment. Actors usually leverage phishing attacks to steal users' login credentials,
details which they can then abuse to gain unauthorised access to their victims' emails or
financial accounts.

Users can protect themselves against phishing by exercising caution around suspicious
links or email attachments. They should also be on the lookout for other tell-tale signs of a
phishing scam, like frequent grammar or spelling mistakes in what might seem to be an
official piece of correspondence from a bank or other institution.

Learn more about phishing with the Ultimate Guide To Phishing

Ransomware

Ransomware is a subset of crimeware that in most cases infects a victim's computer via
phishing attacks or an exploit kit campaign. Upon successful infection, the ransomware
commonly encrypts the victim's data. It then demands a ransom payment in exchange for
the return of their data. But that's not set in stone. There's no guarantee victims will ever
get their data back.

In addition to following the anti-phishing steps laid out above, users should formulate a
data recovery plan for their computers. Such a program will help ransomware victims
recover their data for free if they ever experience an infection. As part of that plan, users
should in the very least maintain two local backups to which they copy their data on a
regular basis.

Malware

Malware comes in many different forms. Some specifically target users' financial
information by installing keyloggers onto victims' computers. Malware samples can also
reach users via a number of delivery methods, including phishing attacks and malicious
software packages that exploit unpatched software vulnerabilities.

People can protect against malware by always checking the domain of a login page for their
web accounts. If something seems off, the website might be a fake and could attempt to
steal users' login information. Users should also implement security updates as soon as
possible and store their passwords in a secure location such as a password manager.

Identity Theft

Attackers can do all kinds of things with a person's identity. They can seize control of
victims' banking credentials, apply for new banking accounts, steal users' hard-earned
savings, and more. All they need are some key bits of information about you to convince a
bank or a customer service representative that they're you.

To protect against identity theft, users should take care not to reveal too much about
themselves on social media and other websites. There is no reason to ever publicly disclose
financial information. In addition, users should never use email to transmit their Social
Security Number or other personal information to another person, especially someone they
don't know.
Scams

Scams don't come in one size. But many of them have something in common: they convey
an enticing offer that in many cases attempts to trick users into sending over money. Of
course, those offers are baseless, and victims end up losing money in the process.

In life, when something sounds too good to be true, it probably is. Users should never buy
into incredible scenarios where they're offered money or other rewards in exchange for a
fee. Instead they should see those messages for what they are: campaigns designed
specifically to steal their money. Below are some more tips to protect against
cybercrimes.

Conclusion

By exercising common sense and following security best practices, users can protect
against phishing attacks, ransomware, malware, identity theft, scams, and some of the
other most common types of cybercrime.

But as we all know, nothing is stagnant on the web. Cybercrime is continually evolving,
which is why organizations must continually train their employees and help them build
upon their awareness of IT security threats.

Common forms of cybercrime

Common forms of cybercrime include:
 phishing: using fake email messages to get personal information from internet
users;
 misusing personal information (identity theft);
 hacking: shutting down or misusing websites or computer networks;
 spreading hate and inciting terrorism;
 distributing child pornography;
 grooming: making sexual advances to minors.
Nowadays, all digital devices (including computers, tablets, and smartphones) are
connected to the internet. In theory, cyber criminals could bring a large part of the
Netherlands to a halt. The government rightly takes cybercrime very seriously, and we are
working hard to fight it.

Internet Taxation: Issues and Legislation

History The Internet Tax Freedom Act (ITFA) was enacted on October 21, 1998, as Title XI
of Division C of P.L. 105-277, the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999.1 The ITFA placed a three-year moratorium on the ability of state
and local governments to (1) impose new taxes on Internet access or (2) impose any
multiple or discriminatory taxes on electronic commerce. The act grandfathered the state
and local access taxes that were “... generally imposed and actually enforced prior to
October 1, 1998....” This initial Internet tax moratorium expired on October 21, 2001. The
Internet Tax Nondiscrimination Act, P.L. 107-75, was enacted on November 28, 2001. It
provided for a two-year extension of the prior moratorium, through November 1, 2003.
The moratorium was extended for an additional four years, through November 1, 2007, by
P.L. 108-435, enacted on December 3, 2004. Taxes on Internet access that were in place
before October 1, 1998, were protected by a grandfather clause. The latest extension also
grandfathered pre-November 1, 2003, taxes (mostly on digital subscriber line or DSL
services) through November 1, 2005, and excluded from the moratorium taxes on voice or
similar service utilizing voice over Internet protocol (VoIP).

These services were not as prevalent at the time the original moratorium was enacted. As
part of compromise negotiations in the 108th Congress, the grandfathering protection for
Internet access taxes in Wisconsin was limited to three years (through November 1, 2006)
instead of four, and the ability of Texas municipalities to collect franchise fees from
telecommunications providers that use public lands was protected. The 2004 act included
several modifications and refinements to the original ITFA. Specifically, the 2004 act:

 Extended the Internet tax moratorium for four years, retroactively one year to
November 1, 2003, and forward three years until November 1, 2007. The
moratorium bars state and local governments from imposing any new taxes on
Internet access or imposing any multiple or discriminatory taxes on electronic
commerce
 Clarified that the term “tax on Internet access” applies regardless of whether the tax
is imposed on a provider or buyer of Internet access.
 Made explicit that a “tax on Internet access” does not include a tax levied on net
income, capital stock, net worth, or property value.
 Provided that the terms “Internet access” and “Internet access service” do “not
include telecommunications services, except to the extent such services are
purchased, used, or sold by a provider of Internet access to provide Internet access.”
(This permits some portion of telecommunications services to be included under
the tax moratorium.)
 Extended the grandfather protection from November 1, 2003, until November 1,
2007, for state and local governments which taxed Internet access prior to October
1, 1998. An exception was made for a state telecommunications service tax in
Wisconsin, for which protection was extended only until November 1, 2006.
Protection was extended only until November 1, 2005, for taxes on Internet access
that were generally imposed and actually enforced as of November 1, 2003. This
provision applies mainly to taxes on digital subscriber line (DSL) services.
  Explicitly protected the Texas municipal access line fee. This provision is intended
to protect the ability of Texas municipalities to collect franchise fees from
telecommunications providers that use public lands.
 Included a new accounting rule that charges for Internet access may be subject to
taxation in cases where they are aggregated with charges for telecommunications
services or other charges that are subject to taxation — unless the Internet access
provider can reasonably identify the charges for Internet access.
 Stated that nothing in the act prevents the collection of any charges for federal or
state universal service programs (for telephone service), or for state or local 911
and E-911 (emergency call) services, nor does it affect any federal or state
regulatory non-tax proceeding (such as FCC regulatory proceedings).
 Clarified that the moratorium does not apply to taxes on Voice over Internet
Protocol (VoIP) services. This section does not apply to services that are incidental
to Internet access, such as voice-capable e-mail or instant messaging.
 And Provided for the GAO (Government Accountability Office) to study the effects of
the Internet tax moratorium on the revenues of state and local governments and on
the deployment and adoption of broadband technologies for Internet access
throughout the United States, including under-served rural areas.The study was to
compare deployment in states that tax broadband Internet access service with
states that do not. The Comptroller General is to report the findings, conclusions,
and any recommendations from the study CRS-3 2 U.S. Government Accountability
Office, Internet Access Tax Moratorium: Revenue Impacts Will Vary by State, GAO-
06-273, Jan. 2006. 3 For a longer discussion of the extension of the moratorium,
grandfathering of existing access taxes, and collecting sales and use taxes on
interstate sales — in relation to bills introduced in the first session of the 107th
Congress — see CRS Report RL31177, Extending the Internet Tax Moratorium and
Related Issues, by Nonna A. Noto. to the Senate Committee on Commerce, Science,
and Transportation and the House Committee on Energy and Commerce by
November 1, 2005. The report was published in January 2006

Issues

The five main issues surrounding Internet taxation and e-commerce that the 110th
Congress may address are as follows:

 whether or not to extend the moratorium on Internet access taxes and if so,
temporarily or permanently;
 whether, if the moratorium was to be extended, to grant grandfather protection for
states that imposed taxes on Internet access before the original moratorium was
enacted;
 how to better define Internet access and discriminatory taxes to the satisfaction of
all stakeholders;
 whether to grant states the authority to require remote sellers to collect use taxes if
the states adopted a streamlined sales tax system; and
 if congressional codification of guidelines is needed for establishing whether or not
a business engaged in interstate commerce has nexus in a jurisdiction for purposes
of business activity tax (BAT, e.g., corporate income tax, franchise tax, business
license tax) liability.

These issues remain similar to those considered in 2001 and 2004, the two previous
times the Internet tax moratorium was temporarily extended.