BIT 2103:: ELECTRONIC COMMERCE NOTES -MKU

DEPARTMENT OF:  INFORMATION TECHNOLOGY
COURSE CODE: BIT 2103
COURSE TITLE: ELECTRONIC COMMERCE
Instructional manual for :BBIT – Distance Learning
CHAPTER ONE ……………………………………………………………………………………… 7
INTRODUCTION TO E-COMMERCE …………………………………………………………………………………………….. 7
1.1 Definition of terms …………………………………………………………………………………………………….. 7
1.2 History of EC ……………………………………………………………………………………………………………… 9
1.3 Classification of E-Business Transactions …………………………………………………………………….. 10
1.4 Revenue Models ……………………………………………………………………………………………………… 10
1.5 Benefits and Limitations of E-commerce ………………………………………………………………. 11
1.6 The Limitations of EC and Factors Affecting Adoption in Kenya …………………………….. 13
Chapter Review Questions ………………………………………………………………………………………………………. 15
CHAPTER TWO …………………………………………………………………………………… 16
ENABLING TECHNOLOGIES AND INFRASTRUCTURE ……………………………………………………………………. 16
2.1 The Internet and the World Wide Web ………………………………………………………………………. 16
2.2 Client –server technologies ……………………………………………………………………………………….. 21
Description …………………………………………………………………………………………………………………………… 21
2.3 Intranet and extranets ……………………………………………………………………………………………… 22
What is an extranet? ……………………………………………………………………………………………………………. 23
Why would you use an extranet? ……………………………………………………………………………………… 23
2.4 Connecting technologies for networks such as broadband ……………………………………………. 23
Chapter Review Questions ………………………………………………………………………………………………………. 25
CHAPTER THREE ………………………………………………………………………………… 26
THE E-MARKETPLACES STRUCTURES AND MECHANISMS ……………………………………………………………. 26
3.1 Introduction to Electronic Markets …………………………………………………………………………….. 26
3.2 E-Marketplace Components and Participants ……………………………………………………………… 27
3.3 Electronic Auctions ………………………………………………………………………………………………… 30
3.4 Information Portals ………………………………………………………………………………………………….. 31
3.5 Transactions, intermediation, and processes in E-commerce ………………………………………… 32
Chapter Review Questions ………………………………………………………………………………………………………. 35
CHAPTER FOUR ………………………………………………………………………………….. 36
Internet Consumer Retailing ……………………………………………………………………………………………………. 36
4.1 Introduction and Definition of Terms …………………………………………………………………………. 36
4.2 E-Tailing Business Models …………………………………………………………………………………………. 38
4.3 Travel and Tourism Services On-line …………………………………………………………………………… 40
4.4 The Internet Job Market …………………………………………………………………………………………… 41
4.5 Real Estate, Insurance, and Stock Trading On Line ……………………………………………………….. 43
Chapter Review Questions ………………………………………………………………………………………………………. 45
CHAPTER FIVE …………………………………………………………………………………… 46
CONSUMER BEHAVIOUR MARKET RESEARCH AND ADVERTISEMENT …………………………………………… 46
5.1 The consumer decision making process ……………………………………………………………………… 46
5.2 Personalization, Loyalty, Satisfaction and Trust in EC …………………………………………………… 47
5.3 Market Research For EC ……………………………………………………………………………………………. 51
Chapter Review Questions ………………………………………………………………………………………………………. 54
CHAPTER SIX …………………………………………………………………………………….. 55
INTERNET MARKETING……………………………………………………………………………………………………………. 55
6.1 Internet Marketing in B2B…………………………………………………………………………………………. 55
6.2 Web Advertising ………………………………………………………………………………………………………. 56
6.3 Online Advertising Methods ……………………………………………………………………………………… 58
Chapter Review Questions ………………………………………………………………………………………………………. 60
CHAPTER SEVEN ………………………………………………………………………………… 61
E-COMMERCE SECURITY …………………………………………………………………………………………………………. 61
7.1 Why it’s Difficult to stop E-Commerce crimes ……………………………………………………………… 61
7.2 Confidentiality, Integrity, and Availability……………………………………………………………………. 62
7.3 Threats and Attacks …………………………………………………………………………………………………. 63
7.4 Securing E-Commerce Communications ……………………………………………………………………… 64
Chapter Review Questions ………………………………………………………………………………………………………. 67
CHAPTER EIGHT …………………………………………………………………………………. 68
ELECTRONIC PAYMENT SYSTEMS ……………………………………………………………………………………………… 68
8.1 The Payment Revolution …………………………………………………………………………………………… 68
8.2 Using Payment Cards Online ……………………………………………………………………………………… 70
Chapter Review Questions ………………………………………………………………………………………………………. 73
CHAPTER NINE ………………………………………………………………………………….. 74
LEGAL, ETHICAL, AND REGULATORY ISSUES ………………………………………………………………………………. 74
9.1 Introduction to Ethics and Privacy ……………………………………………………………………………… 74
9.2 Legal and Ethical Challenges and Guidelines ……………………………………………………………….. 74
Chapter Review Questions ………………………………………………………………………………………………………. 76
SAMPLE EXAM QUESTIONS …………………………………………………………………. 77