1. Visit http://yahoo.com and http://facebook.com as examples of online communities.
a. What is meant by an online community and how is it important for e-commerce?
An online community or virtual community is one that exists online and whose members enable its existence through taking part in the membership rituals (Amy Jo Kim, 2000). Facebook, Bebo, MySpace, Yahoo all share a common factor which is that they provide people a means of facilitation and collaboration in the virtual sense online, through sharing their lives and thought with others.
Given the explosive nature of the internet and e-commerce, these online communities and social networks in regards to e-commerce cannot be overlooked. Yahoo offers e-commerce services such as Shopping, Real Estate, Travel, Cars, Jobs which enables the users of this online community to make commercial transactions on the one site. Facebook, the social networking site is used by more than a 150 million people to share personal information with friends online. E-commerce site owners see the potential with Facebook due to the amount of traffic and the number of members and communities it has, so facebook allows members to either create free business pages or ad campaigns with pay-per-click advertising. This gives e-commerce site owners greater access to potentially more clientele, an example of this was undertaken with a project I was working on for ING Direct whereby they had a new product called "Orange Everyday" which was a Fee Free Everyday Bank account. To get more exposure they used Facebook to gain more market penetration/product awareness, which in turn helped to gain more member sign ups to the group Fee Fighter.
In conclusion, we can see online communities and social networks, give e-commerce businesses greater access to consumers, and potentially more markets without constraints of geographical boundaries because the potential client is part of a virtual community.
b. Is there a common thread and a local community sense in action?
'Community' can be defined as a group of people having common interests.
Yahoo offers a common thread and a sense of community through virtual groups (i.e. not restricted by geographic boundaries). Users can select which groups they're interested in interacting in, and build relationships through online collaboration (i.e. online chatting, and posts) with others who have a common interest of the groups. Some of the examples of the groups with common threads that users can subscribe too include Business & Finance, Religion, Love & Romance, Entertainment & Arts, Music, and Health & Fitness to name a few.
Facebook offers users a way of creating a virtual profile, with whom they can add friends, family, relatives, groups. Can upload pictures, interact with facebook specific applications, and post status updates on their daily lives. This creates a sense of a local community and common thread as these are people with whom you allowed to be friends and interact with you online.
2. Visit the famous online store front at http://www.amazon.com
a. Why has it been a successful site? How does the purchase of a book work?
To give a little background knowledge, Amazon was started in 1994 by Jeff Bezos and started its online presence in 1995. It started out as an online bookstore, but soon diversified to other product lines of DVD's, music, software, video games, electronics, apparel, furniture, and so on.
Why Amazon was so successful is that they penetrated the online market first by offering books online. But this was only one part, they went about marketing there unique product through banner ads on other websites so they could generate brand awareness of this unique way to purchase books online. By keeping there site user friendly with a personal feel for every user based on suggestions this helped create an experience which was pleasant and a good experience in which a customer would not buy once, but multiple times, and become synonymous with books.
Purchasing a Book from Amazon
1. Go to the Amazon Website, and select books
2. Search by book title, ISBN, and many other filtering methods
3. Select the book you wish to purchase
4. Add the book to your Virtual Shopping Cart
5. Go to virtual checkout
6. If a new customer you will need to setup an account, with a username and password, and delivery details.
7. Select from a choice of delivery methods
8. Select payment method (i.e. a user can have creditcard details stored against there particular account)
9. Make payment and receipt is displayed and sent to your designated email for the account
10. Book is processed and dispatched to the delivery address using established logistics businesses.
b. Are there any secure transactions not involving money?
Amazon.com accepts American Express, Diners Club, Discover, JCB, MasterCard, Eurocard, Visa, Visa Check Cards, payment from your bank account, Amazon.com gift cards, Amazon.com Gift Card claim codes, and the Amazon Store Card.
3. What happens with new models emerging such as price comparison sites.
With price comparison services / sites these allow individuals to gain greater access to a number of retailers offering the same product listing the cost and delivery vs other e-commerce sites. The model doesn't make money by charging the client individual searches and locating the cheapest option. Its makes its revenue through e-retailers themselves through either a commission based system on a pay per view/purchase or a flat fee the e-commerce site has to outlay to turn up in the results.
How these new models might affect current and initiating e-commerce sites is that it can bring further competition and squeeze profit margins on certain products e-commerce sites offer.
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