Chapter 4 – Building an E-Commerce Presence

business models
Portal, e-tailer, content provider, transaction broker, market creator, service provider, community provider
revenue models
Advertising, subscriptions, transaction fees, sales, and affiliate revenue.
how do you determine the target audience?
1. Demographics
Age, gender, income, location
2. Behavior patterns (lifestyle)
3. Consumption patterns (purchasing habits)
4. Digital usage patterns
5. Content creation patterns (blogs, FB)
6. Buyer personas
How do you characterize the marketplace?
1. demographics
2. size, growth, changes
3. structure: competitors, suppliers, substitutes
4. where the content is coming from (static vs dynamic)
How can you imagine your e-commerce presence?
1. Know yourself – SWOT Analysis
2. Develop an EC presence map
3. Develop a timeline: milestones
How much does EC cost?
simple web site: up to $5K
small web start-up: $25-50K
large corporate site: $100K – millions
Type of presence:
social media
offline media
web sites: platform
web sites: activity
e-mail: platform
internal lists
purchased lists
e-mail: activity
social media: platform
social media: activity
offline media: platform
TV & radio
offline media: activity
most important mgt challenges in building a successful e-commerce site are:
1. developing a clear understanding of bus objectives
Req you to: build a plan for developing your firm’s site
2. knowing how to choose the right technology to achieve those objectives
Req you to: understand some of the basic elements of EC infrastructure
areas where you need to make decisions in building a site
1. HR & org capabilities – creating a team that has the skill set to build and manage a successful site
2. hardware
3. software
4. telecomm
5. site design
systems development life cycle
methodology for understanding bus objectives of a sys and designing an approp soln
5 steps of SDLC
1. Systems analysis/planning
2. systems design
3. Building the system
4. Testing
5. Implementation
web site systems development life cycle
1. Systems Analysis/Planning
2. Systems Design
3. Building the System
4. Testing
5. Implementation System Delivery
Web site systems development best practices
1. Continuous availability 99%+
2. Design for scalability
3. Build in mgt for end-to-end delivery
4. Plan for growth
5. Design pages for high-speed performance
6. Understand and optimize workload on system
What are the 3 components of system analysis?
1. business objectives
2. system functionality
3. information requirements
business objectives
list of capabilities you want your site to have
system fxnalities
List of IS capabilities needed to achieve business objectives
information requirements
Info elements that system must produce to achieve bus objectives
What are the 9 basic business objectives?
1. Display goods
2. Provide product info (content)
3. Personalize/customize product
4. Engage customers in conversations
5. Execute a transaxn
6. Accumulate customer info
7. Provide after-sale customer support
8. Coordinate marketing/advertising
9. Understand marketing effectiveness
10. Provide prodxn + supplier links
system design specification
Description of main components of a system and their relationship to one another
2 components of sys design
logical and physical
logical and physical design are all on paper!!!
logical design
Data flow diagrams
processing fxns
physical design
1. translates logical –> physical components
2. Specifies actual physical, software components, models, etc.
Hiring vendors to provide services involved in building site
Build own vs outsourcing
Build your own requires team with diverse skill set; choice of software tools; both risks and possible benefits
Host own vs outsourcing: hosting
Hosting company responsible for ensuring site is accessible 24/7, for monthly fee
host own vs outsourcing: co-location
Firm purchases or leases Web server (with total control over its operation), but server is located at vendor’s facility
3 Types of testing
unit testing
system testing
acceptance testing
unit testing
involves testing the site’s program modules one at a time
system testing
involves testing the site as a whole, in a way the typical user will use the site
acceptance testing
verifies that the business objectives of the system as originally conceived are in fact working
Comparing site to competitors in terms of response speed, quality of layout, and design
Costs of maintenance parallel to
development costs
t/f: maintenance is ongoing
factors in web site optimization:
1. page generation
2. page delivery
3. page content

Purpose of website is to deliver content to customers and to complete transaxns. The faster + more reliably this is met, the more effective the web site

page generation
server response time
device based accelerators
efficient resource allocation
resource utilization thresholds
monitoring site performance
page delivery
content delivery networks
edge catching
page content
optimize html & images
site architecture
efficient page style
system architecture
Arrangement of software, machinery, and tasks in an information system needed to achieve a specific functionality
2-Tier architecture
Web server and database server
multi-tier architecture
Web application servers
Backend, legacy databases
all EC sites require basic web server software to answer HTTP requests from customers
leading web server software (54% of mkt)
Works only with UNIX, LINUX OSs
Microsoft’s Internet Info Server (IIS)
2nd major web server software (25% of mkt)
Windows based
Basic Fxnality Provided by Web Servers
1. Processesing of HTTP requests
2. Security services (secure sockets layer)
3. File transfer protocol
4. Search engine
5. Data capture
6. E-mail
7. Site mgt tools
Basic site mgt tools
included in all web servers
verify that links on pages are still valid
identify orphan files
3rd party software and services for advanced site mgt
monitor customer purchases, mkting campaign effectiveness

ex: WebTrends Analytics 10, Google Analytics

Dynamic page generation
Contents of Web page stored as objects in db, rather than being hard-coded in HTML. When the user requests a Web page, the contents for that page are then fetched from the db
Common dynamic page gen tools:
CGI = Common Gateway Interface
ASP = Active Server Pages
JSP = Java Server Pages
advantages of dynamic page gen tools
1. lowers menu costs (costs incurred by merchants for changing prod dx + prices)
2. permits easy online mkt segmentation (ability to sell same product to diff mkts)
3. enables cost-free price discrimination (ability to sell the same product to diff customers @ diff prices)
4. enables web content sys (WCMS)
web app servers provide…
specific business fxnality req for a website
application servers are…
kind of middleware software that provides the glue connecting trad’l corporate systems to the customer as well as all the fxnality needed to conduct EC
2 types of app servers
1. isolated business apps (from web servers + DBs)
2. single-fxn apps (which are increasingly being replaced by integrated software tools that combine all fxnality needed for EC site)
Fxns of app servers
Do I Need to know this???
EC merchant server software provides…
provides basic fxnality for online sales:
-online catalog
-shopping cart
-credit card processing
merchant server software packages (EC suites) offer
integrated environment with most of functionality needed
EC merchant services
ex: Yahoo’s Small Business Merchant Solns
Open source web building tools
ex: Apache web server, MySQL, PHP, PERL
key factors in selecting a package:
-Support for diff business models
-Bus process modeling tools
-Visual site mgt + reporting
-Performance + scalability
-Connectivity to existing bus systems
-Compliance with standards
-Global + multicultural capability
-Local sales tax + shipping rules
Hardware platform (for EC site)
refers to all underlying computer equipment that system uses to achieve EC fxnality
Objective of choosing the hardware for an EC site:
have enough platform capacity to meet peak demand but not so much that you waste money
Important to understand the different factors that affect 1, 2, 3 of a site
1. speed
2. capacity
3. scalability
the most important factor affecting the speed of your site is…
the demand that customers put on the site
Factors involved in overall demand:
1. # of simultaneous users in peak periods
2. nature of customer requests (user profile)
3. type of content (dynamic vs static web pages)
4. req’d security
5. # of items in inventory
6. # of page requests
7. speed of legacy apps
refers to ability of site to increase in size as demand warrants
ways to scale hardware:
1. vertically – increase processing power of indiv components
2. horizontally – employ multiple computers to share workload
3. improve processing architecture of site
basic business considerations for web site design
need design guidelines and software tools that can cost-effectively achieve req’d bus fxnality
*enabling customers to find what they need, make purchase + leave
___% users say they would not revisit a web site that they found annoying to use
small pre-built chunk of code that executes automatically in an HTML web page
Pull fxnality/data from one program and include it in another
CGI (Common Gateway Interface)
standards for cx b/w browser + program running on a server that allows for interaxn b/w user + server
ASP (Active server pages)
Used to build dynamic pages with Microsoft’s IIS
Used to create interactivity and active content on client computer
JSP (Java Server Pages)
Similar to CGI and ASP; allows developers to use HTML, JSP scripts, and Java to dynamically generate web pages
used to control objects on a web page and handle interaxns with browser
invented by microsoft to compete with Java
invented by microsoft to compete with Javascript
integrated server-side environment for developing interactive web apps
ability to treat ppl based on their personal qualities and prior history with your site
ability to change the product to better fit then eeds of the customer
small text file placed on the user’s client computer that can contain any kind of info about the customer
(customer ID, purchases at the site)


privacy policy
set of public statements declaring how site will treat customers’ personal info that is gathered by the site
accessibility rules
set of design objectives that ensure disabled users can affectively access site
3 types of m-commerce software
1. mobile web site (responsive web design)
2. Mobile web app
3. native app
planning + building mobile presence uses…
systems analysis/design to identify unique and specific bus objectives
Most unique features that must be taken into account when designing a mobile web presence
1. Hardware
*smaller, more resource constraints in data storage +processing power
2. Connectivity
*constrained by slower connection speeds
3. Displays
*smaller + req simplicification (some are not good in sunlight either)
4. Interface
*touch screen technology introduces new interaxn routines diff from tradl mouse and keyboard (not good data entry tool but can be a good navigational tool)
design considerations
platform constraints: smartphone/tablet
performance + cost
1. mobile web site (least expensive)
2. mobile app (can use browser API)
3. native app (most expensive, requires more programming)