Unit-3

E-Commerce (BCA-409)
BBA 4th Sem

by: Vinod Kumar

 UNIT -3 (SYLLABUS)
• Internet – The Backbone for E-Commerce:
• Early Ages of Internet;
• Networking Categories;
• Characteristics of Internet;
• Components of Internet – Internet Services,
• Elements of Internet,
• Uniform Resource Locators,
• Internet Protocol;
• Shopping Cart, Cookies and E-Commerce;
• Web Site Communication;
• Strategic Capabilities of Internet
Internet – The Backbone for E-Commerce
The Internet is a global system of interconnected computer networks
that use the standard Internet protocol suite (TCP/ IP) to serve billions
of users worldwide.
It is a network of networks that consists of millions of private, public,
academic, business, and government networks, of local to global scope,
that are linked by a broad array of electronic, wireless and optical
networking technologies.
The Internet carries a vast range of information resources and services,
such as the interlinked hypertext documents of the World Wide Web
(WWW) and the infrastructure to support electronic mail.
Internet – The Backbone for E-Commerce
• Internet has been the most useful technology of the modern times which helps us not
only in our daily lives, but also our personal and professional lives developments.
The internet helps us achieve this in several different ways.
• For the students and educational purposes the internet is widely used to gather
information so as to do the research or add to the knowledge of various subjects.
• Even the business professionals and the professionals like doctors, access the internet to
filter the necessary information for their use.
• The internet is therefore the largest encyclopedia for everyone, in all age categories.
• The internet has served to be more useful in maintaining contacts with friends and
relatives who live abroad permanently.
Early Ages of Internet
• The Internet is a rapidly growing network of thousands of business, educational and
research networks connecting millions of computers and their users in over 100
countries.
• Internet is very popular in the recent days, though it took birth in the late 1960‘s. The US
Government started the process when they laid the framework for the Internet.
• The Department of Defense (DOD) decided to fund a network of computers that would
all talk the same language. The intention was to connect researchers, government
workers and defense contractors who were providing systems and data to government
agencies.
• Most brands of computers at that time applied different rules for communication
(protocols). DOD decided to develop a vendor-independent suite of protocols.
• The new network was named ARPANET (after the Advanced Research Projects Agency)
within DOD that provided the funding.
Networking Categories

• Computer networking is the

connectivity among computers to
allow communication between
computer systems or devices.
• A computer network is any set of
computers or devices connected to
each other with the ability to
exchange data.
Networking Categories
• Local Area Network (LAN), which is usually a small network, constrained to a small
geographic area like a home, office, or group of buildings e.g. a school.
• Wide Area Network (WAN) is usually a larger network that covers a large geographic
area. WANs are used to connect LANs and other types of networks together, so that
users and computers in one location can communicate with users and computers in
other locations.
• Metropolitan Area Network: A Metropolitan Area Network is a network that connects
two or more Local Area Networks or Campus Area Networks together but does not
extend beyond the boundaries of the immediate town, city, or metropolitan area.
Multiple routers, switches & hubs are connected to create a MAN.
• Wireless LANs and WANs (WLAN & WWAN) is the wireless equivalent of the LAN and
WAN. Wireless telecommunications networks are generally implemented with some type
of remote information transmission system that uses electromagnetic waves, such as
radio waves, for the carrier and this implementation usually takes place at the physical
level or "layer" of the network.
Network Services

• Email service.
• File service - Allows users to use and share file space on a computer with a
lot of file space.
• Print service - Allows printing to printers connected on the network.
• Web surfing - Allowing someone to open web pages and see web sites on
the internet. Filtering out undesired sites on the internet.
• Allowing someone to access the network from the outside (from home).
• Updating virus definitions on workstations.
• Allowing someone to log onto the network.
• Even giving a workstation an address on the network is a service. If your
computer does not have an address, it cannot access the internet or any
other resource on the network.
Characteristics of Internet
There are many characteristics of using the internet such as:
Communication:
The foremost target of internet has always been the communication By the advent of computer‘s
Internet, our earth has reduced and has attained the form of a global village. Now we can
communicate in a fraction of second with a person who is sitting in the other part of the world.
Today, for better communication, we can avail the facilities of e-mail; we can chat for hours with our
loved ones.

Information:
Information is probably the biggest advantage that internet offers. The Internet is a virtual treasure
trove of information. Any kind of information on any topic under the sun is available on the Internet.
The search engines like Google, yahoo is at your service on the Internet.
Characteristics of Internet
Entertainment:
Entertainment is another popular area why many people prefer to surf the
Internet. Downloading games, songs, movies are certain examples.
Services:
Many services are now provided on the internet such as online banking, job
seeking, booking railway tickets, etc.
E-Commerce:
Ecommerce is the concept used for any type of business deals that involves
the transfer of information across the globe via Internet. Eg. Shopping online
for books, household goods etc.
Components of Internet
The Internet components most Internet users are familiar with are e-mail, the web, and web access.
But if you are considering setting up a web site for your business and/or becoming your own web
master there are other Internet components to consider.
Internet Services
• Internet Services allows us to access huge amount of information such as text, graphics, sound
and software over the internet. Following diagram shows the four different categories of Internet
Services.
1. Communication Services
• There are various Communication Services available that offer exchange of information with
individuals or groups. The following table gives a brief introduction to these services:
Service Description
Electronic Mail Used to send electronic message over the internet.

Telnet Used to log on to a remote computer that is attached to internet.

Newsgroup Offers a forum for people to discuss topics of common interests.

Internet Relay Chat Allows the people from all over the world to communicate in real time.
(IRC)
Mailing Lists Used to organize group of internet users to share common information through e-
mail.
Internet Telephony Allows the internet users to talk across internet to any PC equipped to receive the
(VoIP) call.
Instant Offers real time chat between individuals and group of people. Eg. Yahoo
Messaging messenger, MSN messenger.
2.Information Retrieval Services
• There exist several Information retrieval services offering easy access to
information present on the internet. The following table gives a brief introduction
to these services:
S.No Service Description

File Transfer Enable the users to transfer files.

Protocol (FTP)
Archie It‘s updated database of public FTP sites and their content. It helps to search a file by its
name.
Gopher Used to search, retrieve, and display documents on remote sites.

VERONICA Very Easy Rodent Oriented Netwide Index to Computer Achieved (VERONICA) is gopher
based resource. It allows access to the information resource stored on gopher‘s servers.
Other Services
3. Web services
• Web services allow exchange of information between applications on the web. Using
web services, applications can easily interact with each other. The web services are
offered using concept of Utility Computing.

4. World Wide Web (WWW)

• WWW is also known as W3. It offers a way to access documents spread over the several
servers over the internet. These documents may contain texts, graphics, audio, video,
hyperlinks. The hyperlinks allow the users to navigate between the documents.

5. Video Conferencing
• Video conferencing or Video teleconferencing is a method of communicating by two-way
video and audio transmission with help of telecommunication technologies
Elements of Internet
• Modem:
• A modem (modulator-demodulator) is a device that converts digital signals from your computer to analogue to allow
transportation over most media and again to convert back the signals from analogue to digital on the receiving computer.
• Internet Software:
• This is software that is used to establish communication links between computers on the internet and enable one to access
internet resources such as:
• Web browsers which include Google chrome, Internet Explorer or Mozilla Firefox.
• Email software which includes Hotmail, Yahoo or Gmail. These programmes work under set of standards called protocols ( or
protocols can be defined as set of rules and procedures that govern how computers and related devices communicate and
transfer data signals.) For the Internet, the most common protocols are:
• http: (Hypertext Transfer Protocol): Is a language that web clients and servers use to communicate with each other in order to
send and receive data signals.
• IP (Internet Protocol): Determines the addressing on the internet. IP address or network address is a numeric form of address that
identifies every machine on the internet. Therefore every machine has a unique IP address such as 192.168.100.80 which is a 32-
bit binary numbers.
• TCP(Transmission Control Protocol): Governs how data is transferred from one place to another over internet.
Elements of Internet
Computer system:
• A powerful computer system (PC or laptop) is required preferably with a
high speed processor with large amount memory (RAM) capacity.
Telecommunication medium channel:
• In order for you to access and use the internet, telecommunication
facilities like satellite transmission system and telephone lines should be
availed in order for one to communicate globally.
An Internet Service Provider (ISP):
• ISP is a company that connects you to the Internet at a fee. It connects your
home or office computer to the Internet at a fee. Such service providers
include Safaricom.com, Zuku.com and Access Kenya.com
Uniform Resource Locator
• A URL (or uniform resource locator) is the address of an Internet page
on a Web site. Usually it consists of four parts: protocol, server (or
domain), path, and filename. Often, when you go to the very first
page of a Web site, called the home page, there‘s no path or
filename. Here‘s an example:
• http://www.microsoft.com/windows/default.asp
• http is the protocol
• www.microsoft.com is the server
• windows/ is the path
• default.asp is the filename of the page on the site
Uniform Resource Locator
• Communication Protocol
• Protocol is a set of rules created for the process of communication with another computer or with
an operating system
• The first element in the URL is the protocol. This is the service that provides the resource,
followed by a colon. The default taken is http: if you don‘t specify other service. The protocol
specifies the computer language used to transfer information. Specifically, a protocol tells the
browser where the information is located (for example, on a web server, an FTP (file transfer
protocol) server, a local hard drive, and so on). The protocol tells the browser what to expect from
the document retrieval process.

Protocol Use
http:// For HTML documents and
associated files on the web
ftp:// For documents on the FTP
server
Uniform Resource Locator
• Host Name: host name is the server that contains the resource, preceded by two
slashes (either. in the form of a domain name or an IP address). In other words
the hostname is the name of the server that holds HTML documents and related
files.
• Folder name: folder names give document on the servers file system. Folders
perform the same function on a web server that they perform on your PC (i.e.
they organize documents). There‘s virtually no limit to how deep you can nest
folders, and there‘s no limit as to what files the folders can contain.
• File name: file names are the names of specific documents. It identifies the file
(an HTML document, an image, a text file, and so on) to be displayed. In the
above example, the file index.html is displayed. This file is kept in the folder
virtual.
Internet Protocol
• Transmission Control Protocol and Internet Protocol ( TCP/IP ) are most commonly used
protocol in the Internet. They mainly deal with slicing the data into small sized packets
and routing them along the communication channel. These packets are routed to their
destination and passed through from node to node and are assembled in order to form
the data at the destination computer.
• TCP/IP is a very popular protocol used in conjunction with internet. To establish a link
between two computers on the internet, it is required to frame certain rules and
regulations so that the data communication between the computers may take place. A
protocol means a set of rules which is accepted globally. TCP/IP is the protocol which
defines the rules and algorithm for data communication between different computers.
• To establish a link between two or more computers, it is required to define the address
of the computer. This address must be unique. Rules and regulations for secure
transmission of data over the communication channel are also required. TCP/IP is divided
into two set of protocols one is called TCP or Transmission Control Protocol and other is
called IP or Internet Protocol.
Transmission Control Protocol
• This deals with packets over networks. The packets are small pieces of
data meant for effective and safe communication over the network.
• To send a block of data over a communication channel, the data is
divided into various pieces and these pieces of data are
communicated as packets.
• These packets have to follow a long path, traversing from one
computer or node to another computer. This process is called routing.
The size of packets is decided on the basis of network capability.
• The TCP also ensures the safe delivery at the destination and the
assembling of all the packets to get the complete lot of data at the
destination computers.
Hyper Text Transfer Protocol (HTTP)

A web page is transferred to a user‘s computer via the hypertext transfer protocol
(HTTP). HTTP is the method through which hypertext files such as web pages, are
transferred over the internet. HTTP is a client/server based internet protocol.
Web pages generally reside on HTTP servers. A user requests a web page from an
HTTP server through his or her web browser client software. Either by clicking on a
hypertext link or designating a particular URL (uniform resource locator).
The server then sends the requested information to the user‘s computer. The
browser software interprets the HTML codes and presents the information
contained in the web page in a readable format on the user‘s computer.
File Transfer Protocol (FTP)
• FTP is part of the TCP /IP protocol suite. It is a protocol or set of rules,
which enables files to be transferred between computers.
• FTP works on the client/ server principle. A client programme enables
the user to interact with a server in order to access information and
services on the server computer.
• Files that can be transferred are stored on computers called FTP
servers. To access these files, an FTP client programme is used.
• This is an interface that allows the user to locate the file(s) to be
transferred and initiate the transfer process.
Simple Mail Transfer Protocol (SMTP)

• This protocol is used for the delivery of E Mail. When an E mail is to

be sent, then the Mail Transfer Program contacts the remote machine
and forms a TCP connection over which to e-mail is transferred.
• Once the connection is established, then Simple Mail Transfer
Protocol (SMTP) identifies the sender itself, specifies the recipient of
mail and then transfers the E mail message.
• Other features included in the SMTP are that it allows the sender to
ask whether the mailbox to which the mail is directed, does exist on
the remote computer or not. It also enables the sender to keep a
copy of the mail until it removed or deleted.
Post Office Protocol

• If you‘re accessing the Internet using a PC or Macintosh, there are several

different ways you can read and send email. One of the more popular
applications uses the Post Office Protocol (POP).
• In a nutshell, the POP system allows your personal workstation to get its
email from a big computer that serves as a post office, delivering the mail
when you (or your computer) ask for it.
• This eliminates the need for your computer to be on all the time,
constantly available to receive email. In order to use a POP-based email
application, you need Internet access (via dial-up or full-time connectivity)
and a POP mail account on a post office computer (ask your Internet
provider). All of these applications provide intuitive editors.
Point to Point Protocol (PPP)

• This is used when the Internet is accessed using a telephone line.

Normally, in India, the server of the Internet Service provider (ISP) is
accessed from the home or office through the telephone line.
• PPP is the set of rules which specify how the data will be
communicated over telephone line from your computer when the
connection with your ISP has been established.
• This protocol is used in conjunction with Serial Line Internet Protocol
(SLIP).
Shopping cart

• A shopping cart is software used in E-Commerce to assist visitors to

make purchases online. Upon checkout, the software calculates the
total of the order, including shipping and handling, taxes and other
parameters the owner of the site has previously set. The shopping
cart typically provides a means of collecting the shopper's payment
information.
• A shopping cart on an online retailer's site is a piece of software that
facilitates the purchase of a product or service. It accepts the
customer's payment and organizes the distribution of that
information to the merchant, payment processor and other parties.
Why shopping carts are important?
• Shopping carts bridge the gap between shopping and buying, so having the best
shopping cart software is extremely important on your website.
• It's likely that those just starting out in the market may be unfamiliar with the concept.
Most people, especially those in the ecommerce industry, have likely made a purchase
online at some point in their lives. That said, most consumers don't fully realize the need
and capability that shopping carts have (besides leading a customer to checkout). A cart
typically has three common aspects:
• It stores product information
• It's a gateway for order, catalog and customer management
• It renders product data, categories and site information for user display Another way to
look at things is as follows: The online shopping cart
• is similar to the tangible ones we use at the supermarket, but it wears many more hats.
It's also the shelves, the building, the clearance sign, the cash register and often the
credit card machine relaying information back to the bank.
What options are there?
• For those seriously considering the ecommerce platform route, it's important to
know that there are two basic types of carts:
• Hosted shopping carts: A third-party firm "hosts" the solution and is responsible
for server backups, maintenance and upgrades. The beauty of a hosted solution is
that hosting comes free, which means it doesn't cost anything for the third party
to keep your site functional on the Web. The main drawback with hosted
solutions is that customers will be directed to another domain for payment
processing.
• Licensed shopping carts: This type of solution allows business owners to build
their own type of cart and customize it to their specific needs. There is much
greater flexibility in changing features and functionality, as well as in adding third-
party tools if need be. However, the upfront costs are often higher and require
more hands-on expertise for troubleshooting issues and technical support.
Features of a Shopping Cart
• The most common feature of a shopping is to enable customers to select products and then make
a payment. Other features that are often part of shopping cart solutions include:
• A storefront, i.e. the homepage, product pages, category pages, and search pages that customers
use to browse and select items to buy
• Inventory management tools
• Order management tools
• Shipping option tools
• Currency, sales tax, and accounting tools
• Marketing and promotional tools
• Third-party integrations
• In reality, shopping cart features vary from provider to provider. For example, the PayPal shopping
cart has very limited features while Shopify and Magento are packed with features.
COOKIES AND E-COMMERCE
• A file of minute proportions that is saved on a mobile device or a computer that stores important
information relating to the interaction of the user with the site. By accessing the cookies on a computer you
can track what sites have been visited, and the exact pages within that site.
• When sharing a computer, or using a computer in a public building such as a library it is vital that you clear
the cache of cookies before logging out for security reasons. When you fail to clear your cookies, people can
access your personal details, and the professional hacker can steal your identity in just seconds.
• Cookies were created and designed to save user information so that a web server can deliver a web page
tailored to the specific user. It allows form data to be maintained, and can improve the user experience by
maintaining data from one visit to the next.
• Cookies are a very convenient way to maintain information from one session to the next, or even to carry
information from one website to another.
• Cookies (also referred to as HTTP cookies or browser cookies) are small text files stored in a web user's
browser directory or data folder. Ecommerce websites place cookies on visitors' browsers to retain login
credentials, identify customers, and provide a customized shopping experience.
What cookies do?
Secure websites use cookies to validate a user's identity as they browse from page
to page; without cookies, login credentials would have to be entered between
before every product added to cart or wish list. Cookies enable and improve:
• Customer log-in.
• Persistent shopping carts
• Wish lists.
• Product recommendations.
• Custom user interfaces (i.e. "Welcome back, Steve").
• Retaining customer address and payment information.
How do cookies work?
Cookies can be divided into two major categories, with many subsets
of:
• Session cookies stay on a browser and retain your information until it
is closes. When a new browser window is opened, the same user is
treated as a new visitor and must input their login credentials.
• Persistent cookies have a designated lifespan and remain in a
browser until the period elapses or the cookie is manually deleted.
Websites that use persistent cookies will remember users even after
they close a browser. Persistent cookies enable features such as
persistent shopping carts, which retain products added to cart
between sessions.
Cookies in e-commerce

• The single most important job of a cookie is to keep a user logged in as they
browse from page to page. A user's browsing history becomes part of a database
which the website then uses to improve the customer experience.
• Ecommerce sites use a combination of session cookies and persistent cookies to
create a seamless shopping cart experience. As the user adds items to her cart,
session cookies keep track of the items. If the user abandons the cart, persistent
cookies will retrieve her selections from the database the next time she visits, or
allow you to create personalized retargeting campaign that encourage her to
revisit her cart. This is a huge help in encouraging conversions.
• Cookies are an essential part of the Internet. Without them, WebPages would be
a great deal less useful and interactive. Ecommerce would be impossible. They
give websites the ability to remember and improve.
Website Communication
Websites communicate with visitors in a number of different ways. Not all websites take
the same approach, but almost every website will use at least a few common methods of
communication. To get started, let‘s first look at some of the basic ways that websites
communicate with visitors before going into more depth on the subject.
1. Design
Many organizations spend a fortune on the aesthetic design of their websites, a luxury that
is beyond the reach of most E-Commerce projects. If you do have budget to commission a
professional web design company, be aware that many will try to sell you a service that is
unnecessarily complex and expensive. A simple-brochure site may be sufficient for many
E-Commerce.
Alternatively, it is relatively cheap and easy to configure and publish a straightforward
website using inexpensive off-the-shelf software. Most web publishing programmers
include a range of generic website templates that can be personalized easily. Keep the
design minimal and professional, avoiding any sound, movement or clashes of color. Avoid
information overload: leave enough empty space. Clarity, accessibility and ease of use are
vital.
 Website Communication
2. Structure
Good websites have a system of links among the pages that is intuitive,
straightforward, and reflected in a clear navigation facility that makes
it obvious to users where in the site they are, and how to get to
wherever else they want to go. The easier it is to use, the longer users
will stay at the site and the more they will see. Links to all key pages or
sections of the site should be displayed on the front page, and every
page should contain a standard set of links to other key pages or
sections since not all users will arrive at the front page. Make your
structure hierarchical and as shallow as possible: no page should be
more than two clicks away from the home page.
Website Communication
3. Content
Research has shown that people read text very differently on websites
from the way they read on paper. On paper, people read sentences
fairly predictably from left to right, and persist through long sections.
On screen, people‘s eyes scan around unpredictably and settle on
interesting keywords. On paper, people are more likely to read to the
bottom of the page. On screen, people lose interest more quickly and
many people do not bother to scroll down.
Website Communication
4. Hosting
Your website can often be hosted directly by your web design company
or they can suggest another company for you. If your project is part of
a large organization or local authority, there might also be an
opportunity to host your website internally. Look around to find the
best hosting option for your project.
Website Communication
5. Text
Text is, of course, the most obvious form of communication that takes place online.
Whether the text is in the main body content of the page or a headline, most
website visitors rely on text to understand the basic messages of a website.
Depending on the type of the website, text may be extremely critical to
communication, as in the case of blogs.
6. Images
A picture is worth a thousand words‖. Photos and images are excellent resources
not only for creating an attractive and interesting design, but also for
communication purposes. Images can often communicate a message faster, more
clearly and more emphatically than text. The designer needs to be aware of the
messages being communicated via images and ensure they work in harmony with
the rest of the website‘s communication.
Website Communication
6. Audio and Video
While most of the Web is made up of text, audio and video have become
increasingly common over the past few years as more and more Internet users are
on high-speed connections. As audio and video have become increasingly common,
many new opportunities have arisen for effective communication online.
Designers and website owners have plenty of options in how they communicate
with their visitors, and audio and video have some definite strength that make
them a tremendous method of communication.
Strategic Capabilities of Internet
The two key capabilities in the procurement domain emerged:
• A process efficiency capability, namely the ability to reduce costs while
maintaining relationships with external suppliers and internal activities
complementary to the purchasing transaction.
• A process integration capability, namely the ability to effectively incorporate
procurement in the whole supply chain, reducing time-to- market and increasing
the fit with market needs.
• The process efficiency capability has an ―inside‖ dimension, since it specifically refers to
the procurement department and its core activities. For instance, a firm with bargaining
power in relation to suppliers and/or with established routines in managing inventories is
likely to be process efficient. The process integration capability takes into account an
• Outside dimension, since it refers to the role of the procurement department
across the whole supply chain. For instance, a firm with a closer set of relationships
between its marketing department, operations and procurement is likely to have a
process integration capability.
• Process efficiency capability the reduction of purchasing costs has always been
recognized as one of the most significant purposes in procurement, since the average
manufacturing firm spends about half its sales revenue on activities related to the
purchase of materials. Cost reductions in the procurement domain allow the firm to
pursue price competition strategies in downstream markets and sustain growth.
• Purchase prices can be reduced when a firm has a superior capacity to manage the
upstream vertical market relations with both current and potential suppliers. A typical
transaction-cost based explanation suggests that a buyer may increase negotiating
capability by finding new supply sources, reducing the opacity of the market, and
realizing savings in purchase costs.
• The process integration capability is primarily related to a robust exchange of information
with suppliers and with other departments, such as marketing and operations. At the
same time, closer integration with other functions, such as production and marketing,
allows the firm to buy the right materials, and guarantees that the entering flows of
materials are consistent with product specifications. It should be pointed out that
frequent information exchanges, if not correctly managed, may also create phenomena
of information overload, thus downgrading the quality of information shared: hence it
should be noted that information sharing is only a first necessary condition for creating a
superior process integration capability