Definitions
What is E-commerce?
E-Commerce or Electronic Commerce is the use of electronic devices and the internet, to buy and sell goods and services. It involves the transmission of information and funds between relevant parties.
Identify 2 ways that the internet has impacted the development of a business?
•Allows for speed and flexibility
•Gives less emphasis on size/space
•Enables high volumes of sale
•Restricts the entrepreneur to a low-profit margin on each sale
List 2 approach to e-commerce?
Online Shopping Malls
Vertical Communities
Internet Service Provider
Private Initiative
True or false, technology is the most important element in e-commerce?
False
Identify one strategy for e-commerce success.
Engaging in data mining
Develop an online marketing plan
Develop a community
Attract customers by giving freebies
Make creative use of the e-mail
Ensure credibility
Form strategic alliances
Promote the website online and offline
What is meant by e-commerce myths?
The false idea about e-commerce that persons may have when venturing in this type of business.
Explain how the internet has impacted the development of the business from the list below?
•Restricts the entrepreneur to a low-profit margin on each sale
•Gives less emphasis on size/space
•Restricts the entrepreneur to a low-profit margin on each sale- each item is sold at a lower cost online rather than in a traditional store.
•Gives less emphasis on size/space - the business is online so there is no need to have a physical space also items can come directly from the producer.
State 2 e-commerce myths?
Setting up a website is easy and inexpensive
Customers will flock to my website
It is easy to make money
Privacy is not an important issue
Technology is the most important element
You do not need a strategy only a website
Customer service is not as important as in the traditional retail store
Explain how the strategy 'develop a community' can aim in the success of e-commerce?
Develop a community – An online community must be developed to foster connectivity, closeness, interaction, and likeness. If the entrepreneur can use content marketing to attract and maintain customers on the website, then he/she will be ahead of the game.
Explain how appealing to customers can help a business to assess its online potential?
The entrepreneur needs to understand the level of appeal his/her product offering has. They must be aware of the needs of the target market as they relate to all the components of the marketing mix (product, price, place, and promotion) and carry out tests to see if these needs are being fulfilled by its online business model. this will allow to business to know if they should venture into this type of business.
Explain 2 elements to be considered before launching into e-commerce?
Networking Potential – Networking potential speaks to the size of a network and the ability of the business to influence a network. The entrepreneur must choose a far-reaching medium, attracting the intended persons, and gaining the required information.
ØImportance of lasting relationships with customers- A steady flow of customers must be a part of the equation for the business to succeed. The enterprise must place great value on its relationship with its customers and these relationships after they have been established, must be maintained.
On-going investment of resources – the entrepreneur must ensure that adequate plans are in place to ensure the establishment of an effective website.
ØData Mining – is the process of searching through large volumes of data to identify meaningful and useful data. It is a systematic way of extracting information from data.
Explain the following e-commerce myths:
Customer service is not as important as in the traditional retail store
You do not need a strategy only a website
Customers will flock to my website
Customers will flock to my website - Merely having a website will not attract sufficient numbers of customers that will keep the business going. The business must engage in strong promotion efforts; using, for instance, social media networks such as Twitter and WhatsApp and ensuring that its website address and URL are placed on everything possible that potential customers can see.
You do not need a strategy only a website - A good website is crucial for e-commerce to take place, but it is certainly not the end of it all. Every firm needs to have clearly defined goals and objectives from which strategies must be formulated and carefully implemented.
Customer service is not as important as in traditional retail store – Online shopping entails move that is on the surface. The business must establish and maintain an excellent relationship with its customers. Offering customer service that is superior to that offered by competitors is just as important in the online business, as in a physical store.
Explain how the following strategies can be used in the success of e-commerce:
Attract customers by giving freebies
Form strategic alliances
Attract customers by giving freebies – This is undoubtedly one way to attract customers to an e-commerce site. Giving freebies is an act of goodwill that makes customers and prospective customers happy.
Form strategic alliances - Do not be afraid to form alliances with other businesses. This connection may allow the entrepreneur to benefit from the website traffic of others.