E business is trying to outdo competition by pleasing customers in new ways. So, they
are trying to find out what are the methods by which customer will be delighted by doing
business online. You find so many online shopping sites now, where from your home
only you can order so many products and they get delivered to your house.
Then what is this E commerce? This E commerce is a fundamental component of E
business. So, for this E business to happen you should have E commerce. Then what
does E business use? It uses technology and also E commerce processes to build better
customer relationships and create new value propositions. So, E business makes use of
the platform of technology and E commerce, to attract the customer.
And when how do you attract this customer? You give him some new value propositions
which he cannot afford to ignore. This is what most of you were, online marketing sites
are doing. So, whether it is in the form of incentives, whether it is in the form of offers,
or whether it is in the form of appealing products, or whether it is in the form of
characteristics of products which you have not noticed earlier all these things. So, this is
what is happening in the present day marketing.
(Refer Slide Time: 03:24)
There are different types of E commerce; one is business to another unit within the same
business. So, you are in the same business, a large company, it may be having so many
business units. And when you are doing business with another unit in the same business
that is in the same company that is also E commerce.
Suppose you are doing it with outside business; that is business to business, that could be
the next type of E commerce. Then it can be business to consumer; so you are operating
the business and you are directly in touch with the consumer. So, what is happening in
the whole process; you are trying to avoid the middlemen. So, in most of these online
marketing sites, the consumer is in direct touch with a business. So, you take any
business for that matter.
Suppose you want to make a book a travel ticket. So, one of the popular online
marketing sites is your Make My Trip. So, you go to that Make My Trip, it gives you so
many options, origin, destination, then time of your travel all those types of things. So, it
is very possible that you will be able to get one slot which is to your convenience and
which is to your liking with respect to an origin and destination.
So, you are in this business you are directly in touch with the consumer; that is a
consumer is also directly in touch with this business that is this Make My Trip. In the
whole process the middleman that is a travel agent gets avoided; he does not come into
the picture at all. You pay money straight to this Make My Trip; whether that is also
made through your credit card or through other online mechanisms.
The other method of E commerce, other type of E commerce could be from government
to business. So, these are essentially the four types of E commerce; one is business to
another unit within the same business, business to business, then business to consumer,
then government to business.
(Refer Slide Time: 06:20)
Now, where do you apply all this E commerce; that is where are these E commerce
applications. You can publish about your own company through your company website.
What happens when you publish through your company website? It allows other
businesses or consumers to access information about the product or its services. So, most
of the times through your web only you can find out what a company is doing, what are
the products it is putting out into the market and what are the types of services it is
So, the same example which I gave you, the Make My Trip it allows the consumer not
just to book his travel tickets; you can book your hotel accommodations also, you can
book your transport to the airport from your residence. He himself gives you an option
this type of taxi is available and we will be able to take you from your house to the
airport at this rate. So, all these are published.
So, in other words consumer is having lot of options at his end; this is what is online
marketing or this E commerce applications have done. So, you can also give more
interactive information publishing application. What is this interactive information
publishing? So, you can, it allows prospects to view the companies page web page and
communicate with the enterprise.
So, you see so many banks; you take the example of Kotak bank. So, whenever you go to
that Kotak bank; one pop up comes, would you like to speak to this Kiya. Kiya is one
interactive information sharing which this Kotak bank has created on its site. So, you can
ask so many questions to this Kiya; whether it is with respect to your credit card or bank
account or anything like that, you are able to get answers for that.
(Refer Slide Time: 09:10)
So, what are the benefits of this E commerce? So, there are; the first major benefit of this
E commerce is open commercial transactions. So, there is no there is nothing fishy about
the whole deals which are being exhibited on the websites. So, it is open, you can see
what is what you are going to get; whether you are going to get two for the price of one
or three for the price of two all those types of things. When increased competitiveness
and savings to the consumer what is going to happen; you can see the websites of
In fact, now this comparisons of different companies with respect to a product say car, is
also available through different web pages; you can see, how much does it cost. If you
take a Honda from this particular company; that is the companies showroom or some
other companies showroom all those types of things. What are the types of savings?
Suppose one outlet of Honda is offering some extra savings that also is getting reflected.
More companies go online; so when you find that your competitor is able to go online
and you are not able to go that is a weakness in the marketplace.
Companies would not try to expose that weakness in the marketplace; they would also
like to go online, this is what is essentially competition does in the marketplace. So, it
puts so many players into the market and when it put so many players into the market;
the consumer is having a more open basket with respect to goods and services. So, he has
so many options to make; he need not stick to one particular option only.
So, more companies go online, interest in E commerce grows; then word of mouth
spreads about potential saving opportunities and prospective competitive advantage. So,
this is a wonderful world of E commerce which has been opened up. Thanks to this
present government, going into digital marketing in a very big way
So, availability of commercial applications; so you are able to access so many
commercial applications and these are also available on site that is you can see it through
your web pages.
(Refer Slide Time: 12:26)
All these are plus points of the E commerce transactions; but this E commerce
companies are companies doing E commerce have to be very careful about security
aspects. So, with respect to their security strategy, they have to look at the company’s
security policy; they have to look at the architectural security strategies; then they have
to look at the individual security products that address hotspots or weak links in the E
If you do not address these points, it is very possible that your site might get hacked by
hackers; or even your individual consumers who are very intelligent, they may also hack
your website. And your company information may be stolen without even your
knowledge. So, this is what is happening very frequently now.
So, this just yesterday, I was told one of the hackers has cheated one consumer on the
Google Pay website only. Even before she could realize that she has been cheated; more
than one lakh rupees had been withdrawn from her account. So, in fact she is
broadcasting to all groups on the WhatsApp to delete this Google pay application from
the play store of your web phone of your mobile phones.
So, if she says that this Google pay is not a trustworthy site and your all your information
can be very easily stolen, do not fill up any Google form. These are some of the types of
security aspects which one has to address in this online transactions.
(Refer Slide Time: 14:59)
The type of building an E commerce strategy is the as the different components or the
different aspects on which you should give lot of importance. These are you should
maximize efforts and minimize pain; so for that first you must gain this expertise, how to
do this. This involves 4 basic steps; identifying the applications, selecting a trusted
partner, learning to work on the website, and planning the resources. So, this is the new
trend; it is not just enough if you are in marketing, you should also be more familiar with
this E marketing as we are calling it now.
So, all these aspects you should your, as a marketer you should try to develop or you
should try to develop this expertise with respect to working on websites also. So, this all
these are becoming key to be successful in the marketplace today; because markets have
become fiercely competitive. When they have become fiercely competitive, all these the
expectations from the marketer are increasing continuously. So, the marketing
professional has to update himself with all this.
(Refer Slide Time: 16:57)
So, what are the types of evaluating tools and applications? It has to be done with an eye
towards the capability to grow with company’s needs. So, you should not really go into
all and all available tools; pick up that tool which will help your company’s needs and
help it to grow further.
The question that next comes is; you should try to as a marketer think whether your
product can be tailored to certain segments. So, this market segmentation whether you
can address through tailoring of products. Then your application itself is it reliable; can it
be expanded. Suppose you want to scale it up let us say, are you able to do that; then will
it be able to handle the new requirements.
You see so many website changes of so many companies happening on a continual basis;
that means, they are continuously updating their websites. What you saw a few days
back may not be there on the website when you see today. You may just wonder what
happened; I only saw it last week, this week it is not there that is the wonderful world of
E commerce applications. You are constantly trying to evaluate yourself and put new
things which are likely to appeal to the customer.
So, during application growth do we have to replace the original set of tools? In order to
do this, whether your website original set of tools or the applications you have to change
or replace these all the things which you should try to think off, ok.
(Refer Slide Time: 19:14)
Now, in order to do all this, people make use of what is called the extranets. What is this
extranet? This extranet actually involves three steps; one is gathering data from relevant,
gathering relevant data from suppliers, customers, and other key sources; adding value
by creating information, often with jointly with strategic partners; disseminating the
added value product to customers. So, these are you are having some website
In order to face this competition or develop a competitive edge, you can tie up with
strategic partners. These strategic partners can add value to this your information; what
you have already put, they can create value and they can disseminate this added value
product to customers. So, these are being done now by so many websites. So, just to give
you one simple example there is an online portal by yes, a very what do you call
mundane product manufacturing company called Sonali dot com, s o n a l i dot com from
It gives you so many things; whether a portable shoe rack, it presents to you so many
options. These are so many slots which are available where you can keep your shoes,
chappals and how it is portable. And it goes into your travel bag. So, when you are in a
hotel and you do not want this footwear’s to be exhibited. This portable shoe rack can be
kept in one corner of your hotel room and keep all this shoes or chappals and whatever it
is or your bathroom chappals all these can be stacked one above the other in this portable
shoe rack and nobody will be able to even notice that, likely to appeal to frequent
So, these all the types of things which you can do and by tying up with strategic partners
this information, this added value products; the strategic partners can give all these types
of things. So, this is the way you develop an extranet.
(Refer Slide Time: 22:35)
Before committing to an extranet; what is important for you is to have the support of the
management team, the required software, then cost of development and maintenance of
the project. And how will the extranet work with and expand upon existing groupware
products and prior technology commitments.
So, you are committing to an extranet, before you coming to that these are the points
which you should give lot of thought to; the new ways to differentiate from competitors.
So, if you are looking at an extranet, are you getting a competitive advantage; if you are
not getting a competitive advantage, it is not wise to get into this strategic partners and
(Refer Slide Time: 23:44)
So, now what all we said; this extranet, this E commerce all this is making E business to
become more intelligent. Earlier it was just in B business; now all these aspects are
making it intelligent E business. So, what are the key aspects of this intelligent E
business; one is optimization. What is optimization?
So, just to give your mundane example, it is a very simple this thing, where let us say
you have an origin and destination; you want to go from this origin to the destination.
What are the things which are looking at; you are looking at how you can reach the
destination in the fastest possible time one, second at the minimum cost.
So, take for example, you want to go from Bangalore to Chennai. Suppose you went by
road let us say; you are able to cover this distance in about 6 hours. Suppose you want to
let us say you want to go by air; now how much time does it take? You have to look at
one that travel from your house to the airport, then generally before you board a flight
you have to be at least some one to one and a half hours before the actual flight timing,
then the actual flight itself.
So, in a city like Bangalore with the present state of availability of transport; you require
about from any points unless of course you are very very close to the airport which is not
so. You are likely to take about one and half hours to reach the airport and put to that
another one and half hours before the actual travel time, actual travel; then the actual
travel time. So, you are like then when you disembark in Chennai from Chennai you
have to collect your luggage, come out of the airport, then again take a transport to your
house or office or whichever place you want. So, you may be going through all this
exercise; you may find that, the time that you take by air and the time you might possibly
take by road not drastically different.
So, this E business, intelligent E business now looks at all these optimization aspects. So,
it provides you a host of options. So, should you travel by air, should you travel by road
only; you reach your destination in the same time or even perhaps earlier all these types
of things are available to you. Then or should you go different or different modes and
other things; I just give you an example; you can amplified it by taking more and more
Then multi enterprise integration and collaboration among organizations using the web;
this is what we are looking at as strategic partnership. That can give you a lot of edge in
the competitive place. So, it can get a lot of competitive edge, then forward visibility,
then business value through clearly established ROI criteria; that is what is the return on
investment. I put so much money into this E business platform; what is a return that I am
going to get. So, all this you have to build it into your product pricing. Kindly note that,
your product pricing has to take into aspects all this E business costs also before you say
this is the price of the product.
So, what does it what does all these means? It means that today’s marketplace is highly
complicated, it is not the one which it use to been. So, this complications we are seeing
in so many ways and this when we looked at the marketing environment, I did explain to
you these aspects through a diagram ok. So, this E business is the one which has made so
many game changes in the marketplace ok, in the present day.
(Refer Slide Time: 29:11)
So, the key business processes that you have to look at. What are the key business
processes; basically customer management, then the supply chain management, then the
inter process planning, then the strategic planning these are the key aspects of business
processes. Four of them that is your customer management, then the supply chain
management, then the inter process planning, then the strategic planning.
(Refer Slide Time: 29:43)
So, why are we doing all this; what was the problem with the conventional systems? The
problem with a conventional system was no direct link to product transportation or
information on arrival and delivery due dates. So, take for example, you send a product
through a well known courier; say or even your speed post from the Indian post and
telegraphs, you can track your speed post. You send it from your origin to destination;
you can at any point of time.
Suppose there is a query have you send this, you can immediately give an answer; yes it
is sent and it is arriving on this particular day, it is now somewhere here. So, you are
sending it from here to Delhi and you may say it is somewhere in Bhopal; you are likely
to get it in a day or 2. So, this is with respect to a simple letter, it is the same with respect
to products also.
There is this conventional systems could not do all this; the present with the present day
E business, the online systems you can get all these types of online tracking information.
Which was unthinkable earlier; there is no ability to link multiple purchases together
with including delivery options. So, suppose there was so many purchases made by a
person; this all these purchases could not be linked together. Now through your E
business platform all these are possible.
Earlier the feedbacks and responses were slow. Now no longer you can give your
feedback immediately on whether the service was good or not good or the product is
good or not good, you are likely to get your response very fast. No true competitive
engines that examine real time information, this is what I just mentioned. So, there were
note in the conventional systems the concept of competitive engines and real time
information was absent; which the present day E business systems are providing.
(Refer Slide Time: 32:29)
Not that everything is hunky dory with E business; there are problems with E tail
companies as well. What are the types of problems which you are facing? It is limited
integration of backend operations on sales side causing unrealistic promise due dates and
inaccurate cause. You have to be very careful when you are putting up all these figures to
the consumer. So, in the end the consumer might feel that the cost which was promised
and the cost which he has to pay in the end they are different.
So, this inaccuracy in costs is now commonly being reported. So, company is coding one
figure, customer in the end has to pay a different figure. No ability to coordinate multiple
line items; similar to the one which we discussed. No ability to see from the website to
the progress of the order; then no coordination between the trading partners; poor
customer care and little ability to provide advanced customer centric solutions. In other
words E tail companies have these types of problems which they have to address; and
unless and until they address all this, they will find it very difficult in the marketplace
(Refer Slide Time: 34:22)
Now, there is something called the brick and mortar companies. So, similar to your
startups; what are the type of problems they are facing? They do not have customer
facing applications tailored to individual customers. So, many times you find youngsters
saying that; they will have their own startup, it is not very easy to have a startup, it has its
own share of problems.
So, whenever you want to market a product, you are coming into contact directly with
the customer or through your E business platforms. So, when you are coming there in to
these types of contacts, you should have this customer facing applications. Many times
this brick and mortar companies do not have that; many times they are not scalable that
is you cannot expand the operations very easily. Existing systems are designed to
provide information in minutes or hours; internet users require responses in less than
second, which result in lost sales.
So, your system suppose you are there are not very fast enough, you may lose your
orders; little or no communication between trading partners. So, in other words what is
all this trying to tell you? When you are in this business of E business, you have to be
more than on your toes; that is many times you keep on saying you should be on your
toes. Now you have to be more than on your toes, something more extra you have to
keep on. So, there is you have to visualize so many scenarios, this is a type of thing
which comes into the marketplace.
(Refer Slide Time: 36:42)
So, that brings you that this E commerce companies or E business companies have to be
more customer centric. What does it mean? It can have smart store fronts, secure
transaction handling, customer care solutions, links to operational planning solutions. In
other words these are things where you manage your CRM much better; CRM stands for
customer relationship management. So, through this platform of E commerce your
customer centric issues are likely to be addressed better.
(Refer Slide Time: 37:37)
So, how do you make up for this operational excel excellence planning and execution. In
order to do this; some of the points you should have in mind or you should be able to
forecast demand. So, demand forecasting becomes very important and in a collaborative
framework. And it should be able to plan distribution and manufacturing in a holistic
approach to maximize customer support and minimize cost; this is what we are referring
to as optimization many times under different scenarios.
Provide insight into a future optimal customer mix to possible to profitability. In other
words for the company you should have a good marketing mix; for the customer it will
be an optimal customer mix, the end result will be to have good profits to the company.
Optimize transportation to reduce costs; then provide end to end process monitoring and
If something goes wrong somewhere and you do not have to immediate; you do not keep
on contacting your immediate boss only, you can do this exception reporting where you
go to the higher ups saying that this has happened and how do we address this particular
(Refer Slide Time: 39:25)
So, all this business processes have this set objectives; one is to get the vision, set the
goal, organization and optima organize and optimize, then identify and analyze current
processes, design processes for information technology, implement the new optimized
processes; then have a good documentation, it can be your E documentation only.
All this will help you to keep it going. So, you should be very very net savvy one and
you should be very very information savvy; that is your you should be able to what do
you call, deal with the information easily. So, you should be able to get so much of
information from so many portals or so many websites of your competitors; not just your
companies, but others also to keep your business process going.
(Refer Slide Time: 40:47)
So, in order to do all these, companies to meet this customer expectations; they have to
be of highest quality, they have to be having good leading technology, competitive
pricing, individual and company accountability, best in class service and support, have
flexible customization capability, superior corporate citizenship, and financial stability
all these are keys to have a good E commerce and the E business application.
(Refer Slide Time: 41:30)
So, that comes with what is called a value pyramid. What is this value pyramid? This
value pyramid with respect to the company has these types of components. What are the
types of components which you should have? You should have good strategies. This is
what we refer to in a marketing place as strategic marketing; and this strategic marketing
should have good defined goals.
What are these defined goals? Generally with respect to sales, we gave this; when we are
discussing earlier we said, there is a strategic planning gap. So, this is the actual value
you may get on your sales, if you go at the present performance levels; but your
management might desire a different level altogether. So, there is a gap between what
you think you can achieve and there is a and the management expectations.
So, how do you bridge this gap? This bridging the gap which we said it can be through
different methods; it can be backward integration or forward integration or
diversification, look through different matrices, you have to be your apply this unsort
product market matrix all this should give you the ability to set up a value pyramid. A
value pyramid where you say, I will be able to achieve this type of strategic planning
projects and keep these core values of the company intact and have a vision.
So, every company has a vision statement; whether you name Infosys or whether you
look at the administrative staff college at Hyderabad from the education stream all
having a vision statement.
So, this value pyramid should be able to give you this four aspects; one is able to help
you to frame good strategies for the strategic marketing aspect; second is set up goals.
When you setup goals, you should be able to look at different methods by which you
bridge the gap, the strategic planning gap; and keep the core values of your company
intact, these are called many times you refer to them as your core competences in the
The core competences you cannot afford to trade off. If the core competences are traded
off, then the company survival itself becomes a question mark. So, keep to your core
competences in the marketplace that will help you to develop a vision. And when you
develop a vision, that vision could be articulated by one phrase; it may not be a full
sentence also, it may not mean much to others, but it mean a lot to you that is the
So, for example, the administrative staff college of India’s statement just says we train
our managers so; that means, a lot to them. Suppose they want to set up a training
program; in order to setup this training program, they do lot of work, groundwork before
they say this program is being launched. So, many times taking several months before
they say yes we are ready to launch this program. So, these are the aspects of the value
pyramid which you are looking at in this E business.
So, the idea of this E business which we have discussed in the present class is to help you
to get an insight into what is happening in the field of this digital marketing or online
marketing. So, if some of you are interested further you can get into this more in depth
going to different this things.
So, the present day field is dominated by marketing analytics and also financial analytics.
So, companies are doubling with analytics; the most important being a marketing
analytics and the financial analytics. So, that is a one which is providing these companies
the competitive edge in the marketplace. With this we will stop here.
Log in to save your progress and obtain a certificate in Alison’s free Fundamentals in Strategic Marketing and the Marketing Environment online course
Sign up to save your progress and obtain a certificate in Alison’s free Fundamentals in Strategic Marketing and the Marketing Environment online course
Please enter you email address and we will mail you a link to reset your password.