Eb Lecturer Guide 1.2

OVERVIEW
eBusiness
Lecturer Guide
eB Lecturer Guide 1.2.docx

Modification History
Version Date Revision Description

1.0 June 2011 L4DB Version
1.1 September 2018 Updated TQT
1.2 July 2022 Replacing the dead link in Exercise 2 in Section 1.5
with case studies in the appendix.
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CONTENTS
1. Module Overview and Objectives......................................................................................... 6
2. Learning Outcomes ............................................................................................................... 6
3. Syllabus .................................................................................................................................. 7
4. Related National Occupational Standards .......................................................................... 9
5. Resources .............................................................................................................................. 9
6. Textbooks ............................................................................................................................... 9
7. Pedagogic Approach ........................................................................................................... 10
7.1 Lectures ..................................................................................................................... 10
7.2 Tutorials ..................................................................................................................... 10
7.3 Private Study.............................................................................................................. 10
8. Assessment.......................................................................................................................... 10
Topic 1: Introduction to eCommerce .................................................................................... 11
1.1 Learning Objectives ................................................................................................... 11
1.2 Pedagogic Approach.................................................................................................. 11
1.3 Timings ...................................................................................................................... 11
1.4 Lecture Notes............................................................................................................. 12
1.4.1 Guidance on the Use of the Slides................................................................. 12
1.5 Private Study.............................................................................................................. 14
1.6 Tutorial Exercises ...................................................................................................... 15
Topic 2: eCommerce Revenue Models ................................................................................. 16
2.3 Timings ...................................................................................................................... 16
2.4 Lecture Notes............................................................................................................. 17
2.5 Private Study.............................................................................................................. 19
Topic 3: eMarketing Strategies.............................................................................................. 21
3.3 Timings ...................................................................................................................... 21
3.4 Lecture Notes............................................................................................................. 22
3.5 Private Study.............................................................................................................. 24
Topic 4: Advertising and Brand Management ..................................................................... 26
4.3 Timings ...................................................................................................................... 26
4.4 Lecture Notes............................................................................................................. 27
4.5 Private Study.............................................................................................................. 29
Topic 5: eCommerce Business to Business Strategies...................................................... 32
5.3 Timings ...................................................................................................................... 32
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5.4 Lecture Notes............................................................................................................. 33
5.5 Private Study.............................................................................................................. 35
Topic 6: Supply Chain Management ..................................................................................... 37
6.3 Timings ...................................................................................................................... 37
6.4 Lecture Notes............................................................................................................. 38
6.5 Private Study.............................................................................................................. 40
Topic 7: Online Auctions ....................................................................................................... 43
7.3 Timings ...................................................................................................................... 43
7.4 Lecture Notes............................................................................................................. 44
7.5 Private Study.............................................................................................................. 46
Topic 8: Online Marketplaces, Communities and Portals................................................... 48
8.3 Timings ...................................................................................................................... 48
8.4 Lecture Notes............................................................................................................. 49
8.5 Private Study.............................................................................................................. 51
Topic 9: Security Threats and Countermeasures for End-Users ....................................... 54
9.3 Timings ...................................................................................................................... 54
9.4 Lecture Notes............................................................................................................. 55
9.5 Private Study.............................................................................................................. 57
Topic 10: Security Threats and Countermeasures for Enterprises ..................................... 59
10.3 Timings ...................................................................................................................... 59
10.4 Lecture Notes............................................................................................................. 60
10.5 Private Study.............................................................................................................. 62
Topic 11: Payment Systems for eCommerce ......................................................................... 65
11.3 Timings ...................................................................................................................... 65
11.4 Lecture Notes............................................................................................................. 66
11.5 Private Study.............................................................................................................. 68
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Topic 12: Planning for eCommerce ........................................................................................ 71
12.3 Timings ...................................................................................................................... 71
12.4 Lecture Notes............................................................................................................. 72
12.5 Private Study.............................................................................................................. 74
Appendix
Case Study 1: Stinkyink ......................................................................................................... 77
Case Study 2: The Gentleman's Shop .................................................................................. 80
Case Study 3: Bagga Menswear ........................................................................................... 83
Case Study 4: KoiCarp4U...................................................................................................... 85
Case Study 5: Colliewobbles ................................................................................................. 87
Case Study 6: Wildlife............................................................................................................ 90
Case Study 7: Classic-leisure ................................................................................................ 92
Case Study 8: Anything Left-Handed .................................................................................... 94
Case Study 9: The Garden Pharmacy ................................................................................... 97
Case Study 10: The Cake Store ............................................................................................ 99
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Overview
1. Module Overview and Objectives

In an increasingly competitive business environment, the adoption of eBusiness technologies is
critical to business survival.
In this module students examine how organisations can use all aspects of eBusiness to create new
products and services, reduce the cost of existing business processes and improve the efficiency
and effectiveness of their operations. The module then explores the typical revenues models that
can be adopted, the key role of eMarketing, the development of business-to-business strategies and
the increasing importance of online auctions and virtual communities. It investigates the various
security threats that can be posed to eCommerce systems and the appropriate countermeasures
that can be adopted. The module also considers various electronic payment systems, and
concludes by reviewing the main components of a business plan for implementing eCommerce
successfully.
2. Learning Outcomes
Learning Outcomes; Assessment Criteria;
The Learner will: The Learner can:
1. Analyse eCommerce business models 1.1 Identify eCommerce business models
1.2 Discuss the advantages and disadvantages of
eCommerce
1.3 Compare and contrast different eCommerce
revenue models
2. Analyse eCommerce business-to- 2.1 Explain various eMarketing strategies
consumer strategies 2.2 Discuss Customer Relationship Management
(CRM)
2.3 Identify the various forms of online advertising
3. Analyse eCommerce business-to- 3.1 Explain the business purchase process using
business strategies eCommerce technologies
3.2 Assess the use of Electronic Data Interchange
(EDI) in eCommerce businesses
3.3 Discuss the importance of supply chain
management in eCommerce businesses
4. Evaluate various forms of online 4.1 Identify different types and relative effectiveness of
marketplace online marketplaces
4.2 Compare and contrast different types of online
auction
4.3 Discuss the advantages and disadvantages of
forms of online payment
5. Examine the security threats posed to 5.1 Describe the security threats posed by the use of
eCommerce users eCommerce technology for end-users and
enterprises
5.2 Discuss the technology available to combat
eCommerce security threats
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6. Understand how to plan eCommerce 6.1 Identify the objectives for an eCommerce strategy
strategies 6.2 Explain the key factors in successfully managing
an eCommerce project
3. Syllabus
Syllabus
Topic Title Proportion Content
No
1. Introduction to 1/12 • Scope of eCommerce
eCommerce 2 hours of • Business models, drivers and
lectures identification of opportunities.
1 hour of
tutorials Learning Outcome: 1
2. eCommerce Revenue 1/12 • A range of eCommerce revenue models,
Models 2 hours of both established and emerging –
lectures Research and provide examples of
1 hour of different type
tutorials
Learning Outcome: 4
3. eMarketing Strategies 1/12 • Develop effective web-based marketing
2 hours of strategies and exploit CRM
lectures • Research a local eMarketing campaign
1 hour of and identify strengths and weaknesses
tutorials
Learning Outcome: 2
4. Advertising and Brand 1/12 • Main options for web-based advertising
Management 2 hours of and importance of effective brand
lectures management
1 hour of • Research successful use of search
tutorials engine positioning and provide examples
Learning Outcome: 2
5. eCommerce Business to 1/12 • Use of eCommerce to enhance
Business Strategies 2 hours of purchasing and logistics activities, and
lectures the role of EDI
1 hour of • Research developments in EDI on the
tutorials Internet
Learning Outcome: 3
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6. Supply Chain 1/12 • Main elements of supply chain

Management 2 hours of management and the potential
lectures efficiencies
1 hour of • Identify key supply chain issues for a
tutorials large local retailer
Learning Outcome: 3
7. Online Auctions 1/12 • Different types of online auctions and
2 hours of applicability in the B2B environment
lectures • Identify a local B2B auction and evaluate
1 hour of strengths and weaknesses
tutorials
Learning Outcome: 4
8. Online Marketplaces, 1/12 • Overview of different approaches to
Communities and Portals 2 hours of developing online communities and
lectures associated revenue models
1 hour of • Research a local web portal and establish
tutorials the services offered
Learning Outcome: 4
9. Security Threats and 1/12 • Overview of main security threats to PC
Countermeasures for End 2 hours of users and the approaches to countering
Users lectures these
1 hour of • Research the major security threats
tutorials posed to by worms and Trojan horses
Learning Outcome: 5
10. Security Threats and 1/12 • Overview of the main security threats
Countermeasures for 2 hours of posed to eCommerce servers and the
Enterprises lectures approaches to countering these
1 hour of • Identify three possible threats to an
tutorials eCommerce server
Learning Outcome: 5
11. Payment Systems for 1/12 • Main options for providing payment
eCommerce 2 hours of systems for eCommerce systems
lectures • Research payment systems used on
1 hour of three eCommerce systems
tutorials
Learning Outcome: 4
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12. Planning for eCommerce 1/12 • Planning eCommerce implementation

2 hours of • Managing the implementation
lectures • Measuring its effectiveness
1 hour of
tutorials
Learning Outcome: 6
4. Related National Occupational Standards

The UK National Occupational Standards describe the skills that professionals are expected to
demonstrate in their jobs in order to carry them out effectively. They are developed by employers
and this information can be helpful in explaining the practical skills that students have covered in this
module.
Related National Occupational Standards (NOS)

Sector Subject Area: Management and Leadership National Occupational Standards 2008
Related NOS: CFAMLE4 - Promote the use of technology within your organisation;
CFABAA111 Respond to change in a business environment;
ESKIITS1, ESKIITS2, ESKIITS3 IT security for users.
CFABAA623 Deliver a presentation
5. Resources
1. Lecturer Guide: This guide contains notes for lecturers on the organisation of each topic, and
suggested use of the resources. It also contains all of the suggested exercises and model
answers.
2. PowerPoint Slides: These are presented for each topic for use in the lectures. They contain
many examples which can be used to explain the key concepts.
3. Student Guide: This contains topic overviews and all of the suggested exercises.
6. Textbooks
Essential Textbook
Schneider (2007), Electronic Commerce, 7th edition, Cengage Learning

ISBN-10: 1418837032
ISBN-13: 978-1418837037
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7. Pedagogic Approach
Suggested Learning Hours
Guided Learning Hours Assessment Private Study: Total:
Lectures: Tutorial: Seminar: Laboratory:
24 12 - - 30 hours 84 150
(3,000-word assignment)
The teacher-led time for this module is comprised of lectures, laboratory sessions, tutorials and
seminars. The breakdown of the hours for each topic is given in the Topic Notes which follow.
7.1 Lectures
The PowerPoint slides are presented for use during this time. Students should also be encouraged
to be active during this time and to practise the concepts covered.
7.2 Tutorials
These are designed to deal with the questions arising from the lectures and private study sessions.
7.3 Private Study

In addition to the taught portion of the module, students will also be expected to undertake private
study. Exercises are provided in the Student Guide for students to complete during this time.
Teachers will need to set deadlines for the completion of this work. These should ideally be before
the tutorial session for each topic, when Private Study Exercises are usually reviewed.
8. Assessment
This module will be assessed by means of an assignment.
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Topic 1
Topic 1: Introduction to eCommerce
1.1 Learning Objectives

This topic provides an overview of eCommerce for business.
On completion of the topic, students will be able to:
• Define eCommerce
• Identify the many areas that eCommerce covers
• Assess the suitability of different products to eCommerce
• Identify the advantages and disadvantages of eCommerce
1.2 Pedagogic Approach

Information will be transmitted to the students during the lecture. They will then complete the private
study exercises which will involve reading sections of the textbook and undertaking a number of
exercises. Some of the questions from these exercises will be discussed further in the tutorial
session.
1.3 Timings
Lectures: 2 hours
Private Study: 7 hours
Tutorials: 1 hour
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1.4 Lecture Notes
The following is an outline of the material to be covered during the lecture time. Please also refer to
the slides.
The structure of this topic is as follows:
• Categories of eCommerce
• Business models
• Advantages and disadvantages
• Identifying eCommerce opportunities
• International issues
1.4.1 Guidance on the Use of the Slides
Slide 1: Identifies the topic.
Slide 2: Provides a summary of the content of the topic.
Slide 3: Gives a definition for eCommerce that will be used as the basis of the coverage
throughout the module.
Slide 4: Figure 1-1 on page 6 in textbook - provides a schematic of the main elements of
eCommerce.
Slide 5: Lists the main categories of eCommerce with a brief description of each.
Slide 6: Gives an indication of the volume of online sales over the past four years.
Importantly it shows that the B2B eCommerce market is almost 30 times larger than
the B2C market, despite common misconceptions by many that eCommerce is
limited to shopping on the web.
Slide 7: An indication of the importance of merchandising in successful eCommerce. It

shows that skills in traditional commerce are equally important in the online world.
Slide 8: Identifies the types of products that are particularly well suited to an eCommerce
environment and those that can benefit from having both traditional and
eCommerce routes to market.
Slide 9: Provides a summary of some of the key advantages provided by eCommerce.
Slide 10: Provides a summary of some of the key disadvantages of eCommerce. It is

important to have this counterbalance to the previous slide and emphasise that
eCommerce is not an ideal vehicle for selling all types of products and services.
Slide 11: A definition of what is meant by the term ‘transaction costs’ which is an important
element in considering the viability of an eCommerce solution.
Slide 12: A summary of how to identify eCommerce opportunities, emphasising the fact that a
focus on business processes followed by an analysis of business activities is key to
success.
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Slide 13: Figure 1-9 on page 27 in textbook - an example of a value chain for a strategic
business unit which clearly shows the types of primary activities that are
undertaken, including identifying customers and designing the product, through to
marketing and selling the product and providing an after-sales service. It also
highlights the way in which support activities such as finance and administration
help to underpin the primary activities.
Slide 14: An overview of the key stages of a SWOT analysis that can be used to help identify
eCommerce opportunities. It is important to emphasise that by considering all of
these issues in a systematic way the business can formulate strategies that will
enable it to take advantage of its opportunities, build on its strengths, avoid any
threats and compensate for any weaknesses.
Slide 15: A list of some of the key challenges facing eCommerce suppliers when operating in
a global market. It should be pointed out that not all eCommerce sites are intended
for a global audience, many have a specific focus on local markets and would not,
therefore, need to address the points in this list.
Slide 16: A summary of the key points covered within the topic.
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1.5 Private Study
The time allocation for private study in this topic is expected to be 7 hours.
Lecturers’ Notes:
Students have copies of the private study exercises in the Student Guide.
Exercise 1:
Read and make notes on Chapter 1 of the required textbook.
Exercise 2:
Refer to the appendix at the end of this document – it has a number of case studies. Find a case
study that particularly interests you. Summarise the main challenges facing the business when it
developed the eCommerce site and the key benefits it is now realising. Provide one major
recommendation that would enable the quality and/or service of the eCommerce site you have
selected to be improved.
Exercise 3:
Complete all the review questions on page 42 of the textbook.
Exercise 4:
These questions will form part of a group discussion during the tutorial:
1. Explain why the brand identity of a product is important in eCommerce.
2. Identify two ways in which your educational institution might be able to use eCommerce to
increase its profitability or enhance the range of services it offers to its students.
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1.6 Tutorial Exercises
The time allowance for tutorials in this topic is 1 hour.
Lecturers’ Notes:
Students have copies of the tutorial activities in the Student Guide. Answers are not provided in their
guide.
Exercise 1:
Start by asking the students whether they have all accessed the case study website and selected a
case study that is of particular interest to them. If you can, provide help to those students who may
be experiencing difficulties in accessing the site.
Exercise 2:
Next you need to see whether students have any questions or queries from their pre- seminar
activities that they would like your help with. Experience would suggest that this is unlikely at this
early stage although it would be useful to check whether they have done any work before coming to
class by asking a couple of the review questions. It would also be useful to get an early indication
from them of the sorts of challenges and benefits they have identified from the case study to ensure
that they are thinking along the correct lines.
Exercise 3:
Students should have prepared answers to the following questions as part of their private study:
1. Explain why the brand identity of a product is important in eCommerce.
2. Identify two ways in which your educational institution might be able to use eCommerce to
increase its profitability or enhance the range of services it offers to its students
Suggested Answers:
1. Brand identity is important in eCommerce for a variety of reasons. These include the fact that it
can help in creating a strong web presence, it is useful in terms of trust and customer
confidence, and it can help in competing against similar products. It can also be used as an
integral element in marketing and promotional activities and for brand leveraging (where a well
established eCommerce provider might wish to move into other markets).
2. The key here is that the students are thinking clearly and logically about the possible
opportunities and that their suggestions are both sensible and achievable.
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Topic 2
Topic 2: eCommerce Revenue Models

This topic provides an overview of eCommerce revenue models and their relative merits.
• Describe and explain the key characteristics of different eCommerce revenue models
• Provide examples of different types of eCommerce revenue models that are in operation
• Describe and explain the changing nature of eCommerce revenue models
• Describe the different business strategies associated with eCommerce revenue generation

session.
2.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
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2.4 Lecture Notes
the slides.
• Different types of revenue models

• Changing revenue models to meet the needs of users
• Revenue strategy issues
• Mobile commerce
Slide 3: Provides a summary of the various eCommerce revenue models that can be
adopted, each of which will be described in more detail in the subsequent slides.
Slide 4: Provides details of the Web Catalogue revenue model. You should point out that
this is an extension of the mail order catalogue which will be familiar to many
students.
Slide 5: Lists the main categories of business that adopt the Web Catalogue revenue
model. You should briefly explain why this particular model is so well suited to these
types of businesses.
Slide 6: Provides the key characteristics of the Digital Content revenue model. The key
point to make here is that it is used by owners of content who are seeking to exploit
the value of their information.
Slide 7: Lists the main categories of business that adopt the Digital Content revenue model.
Slide 8: Provides the key characteristics of the Advertising-Supported revenue model. You
should discuss the problems associated with measuring and charging per site
visitor, and the difficulties of adopting this model in harsh economic times where
advertising budgets are likely to be cut.
Slide 9: Lists some of the main types of business that rely upon the Advertising-Supported
revenue model.
Slide 10: Provides the key characteristics of the Advertising-Subscription mixed revenue
model. The key point to make is that this model is analogous to that used by the
newspaper industry, which all of the students will be familiar with.
Slide 11: Examples of the types of business using the Advertising-Subscription mixed
revenue model.
Slide 12: Lists the key characteristics of the Fee-for-Transaction revenue model. You should
point out that a key element of this type of model is the ability to provide a personal
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service to the customer by obtaining details of their requirements and criteria, and
providing them with a bespoke response to these needs.
Slide 13: Examples of the types of business using the Fee-for-Transaction revenue model.
Slide 14: Provides the key characteristics of the Fee-for-Service revenue model. You should
note that whilst this model was developed primarily in the games and home
entertainment industry, it is becoming of interest to a wider range of businesses
offering professional services.
Slide 15: Examples of the types of business using the Fee-for-Service revenue model.
Slide 16: Describes the importance of businesses realising that they may need to change
their revenue model from time to time in order to reflect the changing behaviour of
web customers. Failure to do so may result in them losing market share and could
actually lead to them going out of business.
Slide 17: Provides an example of how the Encyclopaedia Britannica has gone through
multiple changes in its revenue model in order to exploit new opportunities
presented by the web and to react to customers’ changing requirements.
Slide 18: Describes the issue of channel conflict that can arise when a business has multiple
routes to market. You should point out that it is vital that all of the various channels
are co-ordinated so that the customer is not potentially confused and the activities
of one channel do not adversely affect the activities (and revenue generation) of
another.
Slide 19: Describes some of the potential benefits of establishing strategic alliances with
other well established businesses or experts in order to increase the speed to
market of a venture and the likelihood of subsequent success.
Slide 20: Lists some of the potential revenue generation opportunities offered by mobile
commerce. You should point out that whilst many industry observers believe there
is major potential in this area, to date few of the businesses involved have actually
managed to generate significant revenues.
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2.5 Private Study
Lecturers’ Notes:
Exercise 1:
Read and make notes on Chapter 3 of the required textbook.
Exercise 2:
Select the website of a leading newspaper in your region. Go through the site and identify the
revenue model(s) that it has adopted. Recommend an alternative revenue model for the site and
explain why you think that this model might be appropriate.
Exercise 3:
Complete review questions RQ1 and RQ2 on page 156 of the textbook.
Exercise 4:
1. Explain what the appropriate revenue model might be for a company that specialises in selling
tickets for music and sporting events.
2. Identify a company in your region which has a retail presence on the high street and an online
eCommerce site. List two possible areas where the potential for channel conflict might exist and
explain how the company has addressed these.
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Lecturers’ Notes:
guide.
Exercise 1:
Start by asking if the students if they have accessed the website of a leading newspaper. Discuss
with them the various revenue models that have been identified and encourage them to consider
how successful these models are likely to be currently, and in the next 12 months. After this you
should ask them to briefly describe the alternative revenue models that they have selected. Once
again, you should discuss with them how successful these models are likely to be in both the current
period and in 12 months time.
Exercise 2:
Next you need to see whether students have any questions or queries from the review questions
that they have undertaken.
Exercise 3:
1. Explain what the appropriate revenue model might be for a company that specialises in selling
tickets for music and sporting events.
2. Identify a company in your region which has a retail presence on the high street and an online
eCommerce site. List two possible areas where the potential for channel conflict might exist and
explain how the company has addressed these.
Suggested Answers:
1. The likely solution to this question is a Fee-for-Transaction revenue model, since this can enable
the company to charge a fee for each individual ticket purchased, and perhaps some form of
fulfilment fee for dispatching the ticket(s) to the customer.
2. The key here is that the students understand the potential problems caused by channel conflict
and are able to identify a type of company that is likely to suffer from this if its revenue strategy is
not clear.
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Topic 3
Topic 3: eMarketing Strategies

This topic provides an overview of the eMarketing strategies used in business.
• Describe the different types of marketing strategy that may be employed

• Assess the different approaches to segmentation available to an eCommerce provider
• Identify the issues involved in acquiring and maintaining customers when using eMarketing
strategies

session.
3.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
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3.4 Lecture Notes
the slides.
• Product-based marketing strategies

• Customer-based marketing strategies
• Market segmentation
• Customer behaviour
• Acquisition, conversion and retention of customers
• Customer relationship management (CRM)
Slide 3: Provides an overview of key marketing terminology. You should emphasise that
these are as relevant to eMarketing plans and activities as they are to traditional
marketing activities.
Slide 4: Provides a description of what is meant by product-based marketing strategies.
Slide 5: Provides a description of what is meant by customer-based marketing strategies. It

is important that you clearly explain the differences between the two strategies and
show how eCommerce is able to adopt the customer-based approach successfully
because of the flexibility offered by the web.
Slide 6: Explains the requirement to communicate with different market segments as part of
an eMarketing initiative. A key element here is the selection of the communication
media that will be used to carry the marketing message. You should also
emphasise that creating trust is an integral element of an eMarketing campaign
because of the lack of a physical presence for many online companies.
Slide 7: Figure 4.4 on page 172 of textbook – shows levels of trust in three different
dissemination models.
Slide 8: Lists the three categories of variables used by marketers to identify market
segments and explains how they can be used to target specific groups of
customers with advertising messages that are particularly relevant to them.
Slide 9: Explains the concept of one-to-one marketing – a highly customised approach

made possible by the web which enables the company to establish a close
relationship with the customer.
Slide 10: Outlines the characteristics of usage-based market segmentation, including the
categories that are commonly used by marketers.
Slide 11: Explains the concept of customer relationship intensity. You should explain that this
is concerned with creating strong relationships between a company and its
customers, thereby generating a sense of loyalty amongst the customers.
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Slide 12: Figure 4.6 on page 180 of textbook – shows the five stages of customer loyalty.
You should point out that an important part of any marketing strategy is to move the
customer into the commitment stage as quickly as possible and keep them there as
long as possible.
Slide 13: Highlights the costs associated with acquiring and retaining new customers.
Slide 14: Figure 4.7 on page 184 of textbook – shows the funnel model of customer
acquisition, conversion and retention. You should point out that the wider the
bottom of the funnel, the better the strategy.
Slide 15: Outlines the main characteristics of customer relationship management (CRM) in
gathering data about customer behaviour.
Slide 16: Lists some of the main benefits of CRM. In particular you should highlight the role of
CRM in enabling eCommerce providers to provide recommendations to customers
based on previous purchases and offer a range of customised services.
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3.5 Private Study
Lecturers’ Notes:
Students have copies of the private study exercises in the Student Guide. Answers are not provided
in their guide.
Exercise 1:
Read and make notes on Chapter 4 (pages 167-184) of the required textbook.
Exercise 2:
Select two promotional e-mails that you have received recently. List the reasons why you think the
senders have selected you to receive them and evaluate how effective their marketing messages
are in terms of persuading you to consider purchasing the goods or services in question.
Exercise 3:
Exercise 4:
1. Explain why psychographic segmentation might suggest that someone who has recently
purchased skiing equipment should be sent a promotional e-mail advertising membership of a
health and fitness club.
2. The trust levels associated with personal contact are generally much higher than those
associated with an e-mail sent from an online eCommerce provider. Explain why this is the case
and give two ways in which the eCommerce provider could seek to raise these levels of trust.
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Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have selected two recent promotional emails as requested in the
Student Guide. Discuss with them why they think they have been sent these emails – are they the
result of a previous purchase from the company, or have they bought something similar from a
related company in the past. Alternatively, have they expressed an interest in this particular product
or service in an online questionnaire or whilst visiting a website. You should encourage them to
review how effective the marketing messages contained within these emails were and, if you have
the time, consider how they could be improved.
Exercise 2:
Exercise 3:
1. Explain why psychographic segmentation might suggest that someone who has recently
purchased skiing equipment should be sent a promotional e-mail advertising membership of a
health and fitness club.
2. The trust levels associated with personal contact are generally much higher than those
associated with an e-mail sent from an online eCommerce provider. Explain why this is the case
and give two ways in which the eCommerce provider could seek to raise these levels of trust.
Suggested Answers:
1. Psychographic segmentation focuses upon grouping customers by social class or approach to

life. So, somebody who has recently bought skiing equipment is probably interested in sport and
keeping fit and has a reasonable level of disposable income. These are the same attributes that
would make them attractive prospective members to a health and fitness club.
2. Personal contacts will usually give the highest levels of trust since it is possible to strike up a
personal relationship and also get a good indication of the character and integrity of the person
concerned. This is not so easily possible in an online environment. Ways in which trust levels
could be improved by the eCommerce provider are to ensure that high levels of service are
maintained in any dealings with a customer and to develop an understanding of their needs and
requirements, perhaps by asking them to provide information or feedback via an online form or
tracking their purchasing habits.
Page 25 of 100
Topic 4
Topic 4: Advertising and Brand Management

This topic provides an overview of the different types of online advertising.
• Identify a number of methods of advertising online

• Assess the cost effectiveness of different types of online advertising
• Evaluate the value of brands
• Assess the importance of domain names and search engine placement to online advertising

session.
4.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 26 of 100
Title Here
4.4 Lecture Notes
the slides.
• Banner adverts
• Other forms of web advertising
• Email marketing
• Creating and maintaining brands
• Search engine positioning and domain names
Slide 3: Highlights the fact that when advertising on the web, different messages should be
sent to different classifications of customers (current, former and potential). It is
important to also emphasise that online advertising should be integrated closely
with traditional advertising so that, for example, the URL of the eCommerce site is
included on all corporate literature.
Slide 4: Provides an overview of what is meant by banner advertising.
Slide 5: Lists the ways in which arrangements can be made to place a banner advert for
one company on the websites of other companies.
Slide 6: A review of the effectives of banner adverts compared with other advertising media
(TV, newspaper, radio and email). You should point out the vast potential audience
for a banner advert on the web, but also stress that these figures do not give any
indication of the respective ‘conversion rates’ of the various approaches.
Slide 7: A list of the other forms of web advertising that can be employed.
Slide 8: Provides a list of the key issues to consider when utilising email marketing. You
should stress that conversion rates for unsolicited email marketing are extremely
low, and that a major reason for this is the rate at which spam email is increasing,
which means that a great many emails go unopened for fear of infection by viruses.
Slide 9: Investigates the issue of unsolicited email marketing in more detail and lists some
of the main considerations. You should highlight the fact that companies can now
face legal action as a result of sending spam email and that, very importantly, the
conversion rate of emails that have received permission from the recipient to be
sent are significantly higher than for unsolicited email.
Slide 10: Explains the value of a strong brand in any eMarketing initiative and the benefits it
can deliver in terms of differentiation and perceived value.
Slide 11: Lists the key characteristics of ‘brand leveraging strategies’ and ‘brand
consolidation strategies’.
Page 27 of 100
Title Here
Slide 12: Explains the concept of affiliate marketing. You should highlight that such an
approach is usually commission based, whereby the affiliate earns an agreed fee
every time a visitor clicks through to the seller’s site and/or every time the visitor
makes a purchase. However, there are also certain affiliate marketing programmes
where the payment is made to a charitable organisation (commonly referred to as
‘cause marketing’)
Slide 13: Outlines the main characteristics of a viral marketing strategy.
Slide 14: Lists the main considerations of search engine positioning.
Slide 15: Explains how search engine positioning can be enhanced by search engine
placement which is a paid-for service.
Slide 16: Lists some of the main considerations in relation to domain names. You should
emphasise the fact that a memorable domain name (ideally with between two to
seven characters) or one that clearly reflects the name or reputation of the
company is an integral part of any successful eMarketing campaign.
Slide 17: Illustrates the high prices commanded by premium domain names. You should
point out that their value is high because not only are they memorable names, but
also that many potential customers may well key in such a domain name as the first
stage in commencing a search for a particular product or service, so they are likely
to attract particularly high visitor traffic.
Page 28 of 100
Title Here
4.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Select three websites in an area of interest to you. Go through each in detail and make a note of the
various types of advertising carried by each site. Then explain why type of advertising you found
most effective, together with the main reasons for this. Similarly which types of advertising did you
find least effective and why.
Exercise 3:
Complete review questions RQ3, RQ4 and RQ6 on page 209 of the textbook.
Exercise 4:
1. List six different ways in which the URL of an eCommerce site could be promoted as part of a
marketing campaign.
2. Select a product or service that you might purchase on occasional basis and enter this as a
search term in a search engine. Investigate the first three sites listed in response to your search
term and evaluate how closely they meet your requirement in terms of offering the appropriate
product or service. Do they meet your requirements more closely than any paid-for placement
that might also appear? Which do you find most useful and why?
Page 29 of 100
Title Here
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking if the students if they have reviewed the advertising approaches on the three
websites they selected. Encourage them to discuss the approaches that they felt worked particularly
well and those that were less successful. Bring the results of the group together and categorise
these. Then ask the students to draw any conclusions from the results that are shown. You should
prompt them to come to a consensus decision, if possible, on what are likely to be the most
successful categories of advertising if they were the target group of an eMarketing campaign and
then consider why this is the case.
Exercise 2:
Exercise 3:
1. List six different ways in which the URL of an eCommerce site could be promoted as part of a
marketing campaign.
2. Select a product or service that you might purchase on occasional basis and enter this as a
search term in a search engine. Investigate the first three sites listed in response to your search
term and evaluate how closely they meet your requirement in terms of offering the appropriate
product or service. Do they meet your requirements more closely than any paid-for placement
that might also appear? Which do you find most useful and why?
Suggested Answer:
1. The question states that the URL is to be promoted by a marketing campaign (not an eMarketing
campaign) so traditional media and channels can also be exploited in addition to the online
options. So, for example, the URL could be included as part of an advert inserted in a magazine
or newspaper, or added to the end of an article written by a member of staff. It could also be
included on all corporate documentation. It could also feature as part of a radio advert campaign.
In addition, there are numerous online opportunities such as on banner adverts, marketing
messages sent via email etc. The key is to understand that a successful marketing campaign
can exploit both traditional and online channels.
2. There is no model answer for this question. The intention is to get the student thinking about the
relevance of sites that are ranked in response to a search engine query, and also to consider the
Page 30 of 100
Title Here
value of paid-for placement adverts. Therefore, you should encourage a discussion along these
lines.
Page 31 of 100
Topic 5
Topic 5: eCommerce Business to Business Strategies

This topic provides an overview of business to business strategies within eCommerce.
• Assess the use of eCommerce in improving logistics

• Evaluate the use of Electronic Data Interchange (EDI) in eCommerce

session.
5.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 32 of 100
Unit 7
5.4 Lecture Notes
the slides.
• Purchasing activities
• Logistics activities
• Support activities
• eGovernment
• Electronic data interchange (EDI)
• Value-added networks (VANS)
Slide 3: Provides an overview of the benefits that can be gained through the application of
business-to-business eCommerce. It is important to point out that the application
areas are not just in the purchasing and logistics areas – there are also significant
benefits to be gained in the support departments such as finance and
administration.
Slide 4: Lists the major activities undertaken as part of the traditional purchasing process. At
this point you should encourage the students to start to think about the ways in B2B
eCommerce can help to streamline some of these processes.
Slide 5: Explains how eSourcing and eProcurement can help to enhance the procurement
process.
Slide 6: Figure 5.1 on page 221 of textbook – shows the complexity of a typical business
purchase process. This complexity should be emphasised to the student since it
highlights the benefits of being able to automate some or all of the activities
included within the process, in addition to clearly indicating that the challenges
associated with such automation are considerable.
Slide 7: Explains what is meant by the term ‘MRO supplies’. The key point is the final one –
processing an MRO order online can save up to 90% of the cost of processing the
same order over the telephone.
Slide 8: Provides a definition for logistics and lists the main activities this encompasses.
Slide 9: Describes some of the main ways in which web technologies can automate or
enhance logistics activities. You should point out that many of the benefits are
centred on providing the customer with enhanced information about the status of
their order.
Slide 10: Provides examples of how web technologies can enhance some of the main
support activities and business processes undertaken by a company.
Page 33 of 100
Unit 7
Slide 11: Lists the key characteristics of eGovernment. It should be pointed out that this
facilitates the flow of information in two ways, both between the citizen and their
government but also, importantly for businesses, between Government and
potential vendors who the Government may wish to purchase from.
Slide 12: Provides a definition for Electronic Data Interchange (EDI) and lists the business
forms that it seeks to automate the flow of. You should point out that EDI is well
established and was, in effect, the first form of eCommerce, though it was initially
used some 20 years before the term eCommerce was coined. Despite the fact that
it has been around a long time, it is also worth mentioning that the five business
forms listed on this slide still account for more than 75% of the information typically
exchanged between trading partners, so it is still performing a very valuable
business function.
Slide 13: Lists the two main EDI standards – ASC X12 and UN/EDIFACT.
Slide 14: Figure 5.6 on page 234 of textbook – shows the information flows in a traditional
paper-based purchasing process.
Slide 15: Figure 5.7 on page 235 of textbook – shows the information flows in an EDI
purchasing process. You should ensure that the students are aware of the key
differences – namely that the mail service has been replaced by the EDI network
and the flows of paper in the buyer’s and vendor’s organisations have been
replaced by computers running EDI software. You should encourage the students
to think through and discuss the specific benefits that the EDI purchasing process
brings to both the buyer and vendor.
Slide 16: Lists the main characteristics of a Value Added Network (VAN). You should point
out that this enables indirect connection EDI, since trading partners are able to pass
their messages through the VAN instead of connecting their computers directly to
each other. The potential benefits that this offers are shown in the next two slides.
Slide 17: Figure 5.8 on page 238 of textbook – a schematic showing the potential complexity
of direct connection EDI as different trading partners communicate directly with
each other.
Slide 18: Figure 5.9 on page 238 of textbook – a schematic showing how indirect connection
EDI through a VAN can simplify the communication processes.
Slide 19: Describes some of the main elements of using EDI over the Internet. You should
emphasise the importance of the XML specification in this area, and the major
development effort that has gone into the ebXML standard (see ebXML.org for
more information).
Page 34 of 100
Unit 7
5.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Locate the website of a Value Added Network (VAN) company in your region. By looking through the
site, identify the three major benefits that this company claims to provide to its customers. Be
prepared to describe these benefits to your fellow students.
Exercise 3:
Complete review questions RQ1, RQ2 and RQ3 on page 255 of the textbook.
Exercise 4:
1. List four potential benefits to the customer of a vendor organisation enhancing its logistics
activities through the use of web technologies.
2. Explain why ‘nonrepudiation’ is an important issue in any B2B eCommerce transaction.
Page 35 of 100
Unit 7
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking if the students if they have identified a suitable website of a Value Added Network
(VAN) company. If they have, then ask them in turn to briefly describe the three main customer
benefits they have identified on the site. You should look to summarise the findings of the various
students and see if there is a reasonable level of consistency in their findings. Discuss any benefits
which appear to be out of line with the general consensus. Finally draw up a list of the three most
common benefits that VANs are able to provide to their customers.
Exercise 2:
Exercise 3:
1. List four potential benefits to the customer of a vendor organisation enhancing its logistics
activities through the use of web technologies.
2. Explain why ‘nonrepudiation’ is an important issue in any B2B eCommerce transaction
Suggested Answers:
1. There are a number of benefits that a customer can gain through a vendor enhancing its logistics
operations. The more obvious relate to the information that the vendor is able to supply in terms
of the status of the order e.g. has it left the warehouse and, if so, when is it likely to be delivered.
However, the enhancements may also result in other benefits such as quicker delivery (because
the transport fleet is run more efficiently), an improved service (because warehouse automation
means that the vendor is less likely to run out of stock). There may also be cost benefits, since
the costs associated with logistics may be reduced and some of these savings could be passed
on to the customer.
2. Nonrepudiation is the ability to establish that a particular transaction actually occurred. It

prevents either party from denying the validity or existence of a transaction. It would therefore
prevent, for example, a customer from denying that they placed an order, or a vendor denying
that they received an electronic funds transfer.
Page 36 of 100
Topic 6
Topic 6: Supply Chain Management

This topic provides an overview of supply chain management in the context of eCommerce
enterprises.
• Identify the key factors in successful supply chain management

• Evaluate the benefits of a range of eCommerce technologies to the supply chain
• Assess the importance of trust in building and maintaining successful supply chain alliances

session.
6.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 37 of 100
6.4 Lecture Notes
the slides.
• Creating value via the supply chain

• Benefits of using web technologies in supply chain management
• Materials tracking technologies
• Ultimate consumer orientation
• Building and maintaining trust
Slide 3: Provides a definition of what is meant by the term ‘supply chain’.
Slide 4: Provides a definition of what is meant by the term ‘supply chain management’.
Slide 5: Schematic illustrating the concept of supply alliances. You should explain that
businesses which engage in supply chain management seek to establish long-term
relationships with a small number of very capable suppliers (known as tier one
suppliers). These in turn develop similar relationships with suppliers who provide
components and raw materials (known as tier two suppliers). This then flows down
to the next level of suppliers (tier three suppliers).
Slide 6: Lists the main factors in successful supply chain management. You should point out
that communications are vitally important and that Internet technologies are very
effective communication enhancers.
Slide 7: Describes the main benefits of incorporating web technologies within supply chain
management. The main points to emphasise are that such technologies increase
speed and reduce costs and errors.
Slide 8: Lists the main technologies that can be used for tracking materials moving through
the supply chain.
Slide 9: Describes the integration of EDI and barcodes. This was an important development
as it enabled the flow of stock and materials to be tracked and managed.
Slide 10: Brief description of how RFID (radio frequency identification device) works. You
should emphasise how this development has revolutionised materials tracking and
how new developments are likely to extend its use.
Slide 11: Comparison of the strengths and weaknesses of RFID technology compared with
bar codes. Whilst it is evident that RFID is a more impressive and flexible solution,
the fact that barcodes are so well established and have such a huge user base
should not be overlooked.
Slide 12: Description of the concept of ‘ultimate consumer orientation’.
Page 38 of 100
Slide 13: List of points illustrating the fact that trust is essential to establishing successful
supply chain alliances. If companies are to share information about their customers
and their internal business processes, then trust is a prerequisite. Web technologies
provide powerful ways of communicating and sharing information and are,
therefore, an excellent means of building such levels of trust.
Page 39 of 100
6.5 Private Study
Lecturers’ Notes:
Exercise 1:
Read and make notes on Chapter 5 (pages 242-248) of the required textbook
Exercise 2:
Use the web to research the development and use of RFID technology. From your research list eight
different industry sectors where the use of RFID might be applicable and briefly describe four
business benefits that can result from the use of RFID.
Exercise 3:
Complete review question RQ4 on page 255 of the textbook.
Exercise 4:
This question will form part of a group discussion during the tutorial:
Explain why building and maintaining trust between supply chain partners is so important.
Page 40 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have identified appropriate web resources to enable them to gain
a deeper understanding of the way in which RFID works and the potential benefits that can accrue
from its deployment.
Ask them to then provide their list of eight different industry sectors where the use of RFID might be
applicable:
Retail
Clothing and apparel
Food and drink manufacturing
Leisure industry and service sector
Logistics and transportation
Health and pharmaceuticals
Building and construction
IT, electrical and electronics
Defence
Automotive
Livestock
Discuss their answers as a group, including establishing why they think particular sectors are
especially appropriate.
Then move on to discuss the business benefits that they have identified. Once again, these could
include:
Improved productivity
Cost avoidance or reduction
Decreased cycle time
Reduced rework
Reduced business risk
Better control of assets
Improved security
Improved service
Improved utilisation of resources
Ask them to explain their choices. Gather together all of the responses and rank them to produce
the group’s top three business benefits for RFID.
Page 41 of 100
Exercise 2:
Next you need to see whether students have any questions or queries from the review question that
they have undertaken.
Exercise 3:
Students should have prepared answers to the following question as part of their private study:
Explain why building and maintaining trust between supply chain partners is so important.
Suggested Answer:
In order for supply chains to function successfully, the companies involved must be prepared to
share a range of confidential internal information with their partners (e.g. the exact status of a
manufacturing process and when the finished product is likely to be shipped out, unit costs etc)
together with a variety of customer details. If they are willing to share such commercially sensitive
data then a high degree of trust must exist. And since successful supply chain relationships exist
over lengthy time periods, it is essential to not only create this level of trust but also maintain it.
Page 42 of 100
Topic 7
Topic 7: Online Auctions

This topic provides an overview of online auctions.
• Compare and contrast the key characteristics of different types of online auction
• Identify the key models for business-to-business auctions
• Assess the importance of auction-related services in the eCommerce marketplace

session.
7.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 43 of 100
7.4 Lecture Notes
the slides.
• Different types of auctions

• General consumer auctions
• Specialist consumer auctions
• Business to business auctions
• Auction related services
Slide 3: Explains that the online auction model is ideally suited to the web – there is a wide
range of revenue generating opportunities, and participants can be easily catered
for irrespective of their geographical location.
Slide 4: Provides a summary of the seven main types of auction. It is worth mentioning to
the students that although all seven will be covered, in practice some (particularly
the English auction) are much more widely used than others.
Slide 5: Lists the key characteristics of the English auction. You should point out that
probably the best known online auction website, eBay, uses this model and this will
be discussed in more detail later in the topic.
Slide 6: Lists the key characteristics of the Dutch auction. You should mention that this is
particularly useful where a seller has a number of similar items for sale (e.g. in
Holland it is used by farmers’ cooperatives) but that it is not well suited for online
retailers.
Slide 7: Lists the key characteristics of the First-Price Sealed-Bid auction, which is used on
occasions for specialist sales.
Slide 8: Lists the key characteristics of the Second-Price Sealed-Bid auction. In order to
avoid possible confusion you should clearly explain that this is similar to the auction
described on the above slide, except that the highest bidder is awarded the item at
the price bid by the second-highest bidder. Again, it tends to only be used for
specialist sales.
Slide 9: Lists the key characteristics of the Open-Outcry Double auction. This has a very
niche usage as it tends to be conducted when auctioning commodities or stock
options.
Slide 10: Lists the key characteristics of the Sealed-Bid Double auction. This also has very
specialist use, for example with stocks and bonds.
Page 44 of 100
Slide 11: Lists the key characteristics of the Reverse auction. Typically used by businesses
that are both buyers and sellers.
Slide 12: Description of consumer auctions – in particular eBay. If the students have
experience of using eBay then look to gather their opinions on it and, in particular,
how the potential threats to buyers and sellers can be minimised.
Slide 13: Explains the growth of specialist consumer auctions that can exploit niche markets
by offering specialist services and building up a successful brand and image.
Slide 14: Lists the three types of emerging business-to-business auction models. These have
evolved to meet specific existing needs.
Slide 15: Lists the characteristics that either support or discourage the use of business-to-
business reverse auctions.
Slide 16: Lists the range of related services that have grown up as online auctions have
increased in their popularity. You should point out that these services have been
developed in response to the specific needs of auction participants.
Slide 17: Describes the main characteristics of auction escrow services. You should explain
that these services have been developed because of the concerns that auction
participants have over the reliability of the sellers.
Slide 18: Describes the main characteristics of auction directory and information services.
The intention is to provide both buyers and sellers with guidance and market
information to enable them to be more successful in their respective auction
activities.
Slide 19: Describes the main characteristics of auction software. It is important to note that
software has been developed for both buyers and sellers, and in both cases it is
intended to make them more successful. In the case of buyers the software
automates last second bidding to increase their chances of securing the item they
are bidding for, whilst the software for sellers is intended to help them automate and
manage the auction processes, enabling them to potentially manage hundreds of
auctions and thereby increase their profits.
Slide 20: Describes the main characteristics of auction consignment services. You should
explain that these services have been developed in response to the needs of
people or small businesses that want to use an online auction but do not have the
skill or time to become a seller. So, the auction consignment service creates and
manages the auction on their behalf.
Page 45 of 100
7.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Visit eBay and select a particular category that is of interest to you. Within the category search for a
specific product that currently has at least five items listed for auction. Go through the sellers’
descriptions for each of the first five items listed and make notes of the strengths and weaknesses of
each description. If you were intending to bid for one of these items, which would you select and
why? Be prepared to discuss your findings with your fellow students.
Exercise 3:
Complete review questions RQ1, RQ2, RQ3 and RQ4 on page 301 of the textbook.
Exercise 4:
1. Describe one potential drawback to a bidder of an English auction.
2. Using the Internet, locate a specialist consumer online auction site. Briefly explain why you think
this auction site has been set up rather than the sellers simply opting to use eBay to sell their
products.
Page 46 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking if the students if they have visited eBay and undertaken their research on the five
products listed for auction. Encourage them to discuss their findings, in particular the approaches
taken by sellers to describing their products that were particularly impressive and those that were
less impressive. Compile a list of five do’s and don’ts that would act as guidance for anybody
planning to put together a description of a product to sell on eBay.
Exercise 2:
Exercise 3:
1. Describe one potential drawback to a bidder of an English auction.
2. Using the Internet, locate a specialist consumer online auction site. Briefly explain why you think
this auction site has been set up rather than the sellers simply opting to use eBay to sell their
products.
Suggested Answer:
1. The major potential drawback for a bidder in an English auction is what is commonly referred to
as ‘auction fever’ or the ‘winner’s curse’. The bidders get caught up in the excitement of the
auction and become embroiled in a bidding war with other bidders. The result is that they may
win the item but end up paying far more than their original valuation of it.
2. There is no model answer for this question. The important point is that the student is able to
locate such a site. It is likely that it services a specialist market and has created a niche business
for itself. It may seek to generate loyalty within its customer base by offering things such as
special membership benefits. Equally it may have established a strong reputation in a related
area to the auction business and is able to attract both buyers and sellers on the strength of this
reputation.
Page 47 of 100
Topic 8
Topic 8: Online Marketplaces, Communities and Portals

This topic provides an overview of online marketplaces, communities and portals.
• Identify the different types of online marketplace and their characteristics

• Identify the different types of virtual community and their characteristics
• Analyse the success of different websites in terms of income generated and user 'stickiness'

session.
8.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 48 of 100
8.4 Lecture Notes
the slides.
The structure of this u topic nit is as follows:
• B2B marketplace models

• Online marketplaces serving mobile business
• Virtual communities
• Revenue models for web portals and virtual communities
Slide 3: Lists the main categories of B2B marketplaces, each of which is subsequently
covered in more detail.
Slide 4: Provides brief descriptions of private stores and customer portals. It should be
mentioned that these are frequently set up by established companies who are
concerned that new marketplaces set up by independent operators might dilute
their power and influence within a specific industry sector.
Slide 5: Lists the main characteristics of a private company marketplace. Generally these
are set up by large companies who have the power to force suppliers to deal with
them through such an arrangement.
Slide 6: Lists the key characteristics of industry consortia-sponsored marketplaces. You

should explain that this type of marketplace is typically established by several large
buyers in a particular industry.
Slide 7: Figure 5-14 from page 253 of textbook – summarises the main characteristics of the
different B2B marketplaces described in the previous slides.
Slide 8: Outlines the move towards online marketplaces that will provide services for the
growing number of mobile users. You should emphasise that although there is
major potential in this area, we are currently only seeing the start of the exploitation
of mobile business.
Slide 9: Provides a definition for virtual communities and lists some of the most common
examples. The key points to make are the explosive growth of social networking
sites, together with the fact the blogs and networking communities that were once
the preserve of young individual Internet users are increasingly being exploited
within the business environment.
Slide 10: Lists the most common types of revenue models for virtual communities. Each of
these types will be discussed further in subsequent slides.
Slide 11: Lists the key characteristics of virtual communities that are wholly supported by
advertising. You should point out that although there were high hopes for such
Page 49 of 100
models a few years ago, the reality is that there has been mixed results. In addition
you should discuss briefly why the issue of “stickiness” is key to obtaining
advertising revenue. This relates to how long a visitor remains on a particular site –
many communities have attempted to enhance their stickiness by adding features
such as chat rooms and calendar functions.
Slide 12: Figure 6-15 on page 297 of textbook - provides an indication of the stickiness of
some of the most popular websites when accessed from home computers.
Slide 13: Figure 6-16 on page 297 of textbook - provides an indication of the stickiness of the
same sites listed in slide 12 when accessed from work computers. You should
spend a little time contrasting and comparing the two sets of figures and asking the
students to think through what conclusions can be drawn from these.
Slide 14: Lists the main characteristics of mixed-revenue virtual communities. This model
reflects the fact that many advertising-only models have failed, so there is an
increasing move to attempt to persuade members of such communities to pay for
certain services – a strategy referred to as monetizing.
Slide 15: Describes the development of internal portals and web communities by large (and
increasingly medium sized) organisations. You should point out that this reflects a
trend mentioned earlier where many web developments start out as tools and
services used by individuals on the Internet and then migrate into business
applications within the corporate world.
Page 50 of 100
8.5 Private Study
Lecturers’ Notes:
Exercise 1:
Read and make notes on Chapter 5 (pages 248-253) and chapter 6 (pages 288-299) of the required
textbook
Exercise 2:
Use the Internet to locate an industry consortia-sponsored marketplace. List the main characteristics
of such a marketplace. In addition, identify the main ways in which the owners of the marketplace
seek to convince potential suppliers that they should deal with large companies via this type of
website.
Exercise 3:
Complete review question RQ5 on page 255 of the textbook and review question RQ6 on page 301
of the textbook.
Exercise 4:
1. Briefly explain why a business might consider incorporating a blog as part of their website in
order to establish closer relationships with its customers. What might be the commercial
problems associated with adopting this approach?
2. List the main reasons why a potential advertiser would want to know the ‘stickiness’ of a virtual
community before agreeing whether or not to place an advert on it.
Page 51 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have located an industry consortia-sponsored marketplace on
the Internet. If they have been unable to do so, provide them with guidance on a suitable URL.
Discuss with them the main characteristics they have identified for such a marketplace and ascertain
if there is any consistency in the findings of the individual students.
In addition, encourage them to list the main ways in which such marketplaces are encouraging
suppliers to do business via them. These should include the marketing messages contained within
the site, the industry standing and influence of the companies that are participating, and likely ways
in which the marketplaces will open up new routes to market for the suppliers.
Exercise 2:
Exercise 3:
1. Briefly explain why a business might consider incorporating a blog as part of their website in
order to establish closer relationships with its customers. What might be the commercial
problems associated with adopting this approach?
2. List the main reasons why a potential advertiser would want to know the ‘stickiness’ of a virtual
community before agreeing whether or not to place an advert on it.
Suggested Answer:
1. Businesses might consider incorporating a blog as part of their website for a number of
customer-related reasons. These could include:
• Encouraging them to visit the site on a more regular basis to view industry-specific news
updates and opinions
• Enhancing the stickiness of their site by encouraging them to spend longer there when they
are viewing the blog
• Promoting specific products or services by providing links from blog entries through to other
relevant parts of the site
• Enhancing the close relationship with the customer by encouraging them to provide feedback
on products and services and, perhaps, communicating with other users
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A potential problem could arise if one or more customers start to use the blog as a means of
expressing their dissatisfaction with the company and its products or level of customer service.
Such comments could be viewed by other customers and could have undesirable commercial
consequences.
2. The ‘stickiness’ of a website or virtual community refers to how long visitors spend there before
moving onto other locations on the web. Obviously the stickier the site is (i.e. the longer visitors
stay) the more likely they are to reading the marketing and advertising messages and
consequently the more attractive this is to potential advertisers.
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Topic 9
Topic 9: Security Threats and Countermeasures for End-Users

This topic provides an overview of the various security threats posed to users of eCommerce
websites and applications.
• Identify the security concerns of internet users

• Assess the technology that is open to potential attack
• Evaluate the different types of protection devices available and their relative success

session.
9.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 54 of 100
9.4 Lecture Notes
the slides.
• Online security issues

• Cookies
• Active content
• Viruses and worms
• Anti-virus software
• Digital certificates
Slide 3: Provides a summary of some of the major online security concerns. You should
emphasise that addressing these concerns is of paramount importance to
eCommerce providers, since many online shoppers are becoming increasingly
concerned about the threats these pose to their finances. Furthermore, any security
breaches on the eCommerce provider’s site can have devastating effects in terms
of the reputation of the company and the trust (or lack of it) that customers place in
them.
Slide 4: Lists the main types of physical security devices. It should be made clear that
physical security should form an integral part of any corporate security policy.
Slide 5: Lists the main categories of logical security devices. You should ensure that the
students fully understand the difference between physical and logical security
before going any further.
Slide 6: Figure 10-1 on page 441 of textbook – shows the risk management model. You
should explain how risk management can be used to identify the probability of
security incidents occurring and the likely impact they will have if they do so. The
top left of the model highlights the high probability/high impact incidents and so
focuses the organisation on the main areas that they need to address.
Slide 7: Defines what is meant by the term ‘countermeasures’, and explains the role of risk
management in identifying the most appropriate countermeasures for an identified
threat.
Slide 8: Lists the main components of a security policy. The students should understand
that a well defined security policy that is effectively communicated to all members of
staff is a vital tool in addressing online security threats.
Slide 9: Figure 10-2 on page 443 of textbook – summarises the main requirements for
secure eCommerce.
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Slide 10: Lists the main end user security threats. Each of these will be described in further
detail in subsequent slides.
Slide 11: Provides details of the main characteristics of cookies. You should explain that
there are two types of cookies – those that are very useful in an eCommerce
transaction and those that pose a malicious threat. Unfortunately blocking or
disabling the malicious variant also has the same effect on the useful cookies.
Slide 12: Defines what is meant by ‘active content’ and explains some of the threats posed
when it is misused.
Slide 13: Explains the key differences between Java applets and JavaScript. You should
reinforce the key difference, namely that unlike Java applets, a JavaScript program
cannot commence execution on its own and that to run an ill-intentioned JavaScript
program a user must actually start the program.
Slide 14: Provides definitions for viruses and worms. They can spread at a rapid rate and
also generate lots of bad publicity for computer security, and so represent a real
threat for eCommerce providers.
Slide 15: Overview of anti-virus software. You should stress that because of the rate at which
new viruses emerge, the key to such software is to ensure that it is updated on a
regular basis.
Slide 16: Description of the features of a digital certificate – used to validate online
transactions. Can verify an eCommerce site to a shopper and, optionally, identify a
shopper to an eCommerce site.
Slide 17: Figure 10-8 on page 457 of textbook – shows the digital certificate owned by
Amazon.com.
Slide 18: Definition of biometric security together with examples of the human features that
the technology can identify as part of a security process. You should explain that
this technology has had a numerous press mentions recently in relation to being
introduced at airports and other high security installations, but that the focus of a lot
of development is to introduce aspects of biometrics into the office environment.
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9.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Use the Internet to locate the major findings of a recent survey on online security threats. This may
have been undertaken by a security consultancy, a research organisation, on behalf of an IT
security software supplier, or by a government department. Make a note of top three security threats
currently posed to Internet users that have been identified by the survey. If possible, try to establish
if this survey also makes any predictions about the ways in which these online security threats are
likely to develop over the coming 12 months.
Exercise 3:
Exercise 4:
1. Briefly explain why it is important to carry out a risk management exercise as part of developing
an eCommerce security plan.
2. List three ways in which computer viruses can be transmitted between Internet users.
Page 57 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have located a recent survey of online security threats. They may
have had some difficulty in locating the full results of such a survey, but there are numerous press
releases and articles which summarise the results of such surveys. Encourage them to share their
findings with the rest of the group and pull together all of the results in order to establish a concerted
view on what the current major threats are.
In addition, ask if anybody has managed to locate a survey that makes any predictions about how
security threats will develop over the coming year. If so, compare these to the current threats and
identify any trends.
Exercise 2:
Exercise 3:
1. Briefly explain why it is important to carry out a risk management exercise as part of developing
an eCommerce security plan.
2. List three ways in which computer viruses can be transmitted between Internet users.
Suggested Answer:
1. It is important to carry out a risk management exercise prior to developing an eCommerce

security plan for a number of reasons, such as:
It is vital to understand not only the nature of the security threats but also the likely impact if they
were to become incidents
By undertaking a risk management exercise you can begin to prioritise the potential security
threats. It will also enable you to prioritise spending on security countermeasures in an
appropriate way. For example there is little sense in spending $100,000 protecting your systems
against a threat that would only result in $5,000 of lost business should it occur
2. Ways in which computer viruses can be transmitted include via email attachments, via
removable media, and through visiting infected websites.
Page 58 of 100
Topic 10
Topic 10: Security Threats and Countermeasures for

Enterprises

This topic provides an overview of the various security threats posed to the owners of eCommerce
websites and technologies.
• Identify the different security problems facing the internet as a communications channel
• Assess the different methods of protection against security threats
• Identify the security threats posed to IT hardware

session.
10.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 59 of 100
10.4 Lecture Notes
the slides.
• Communication channel security

• Encryption and Secure Sockets Layer (SSL)
• Web server threats
• Database threats
• Access control and authentication
• Firewalls
Slide 3: Lists the main categories of security threats that arise out of using the Internet as a
communications channel. All of these points will be described further in subsequent
slides.
Slide 4: Defines ‘secrecy’ and ‘privacy’. You should mention that a significant threat to
eCommerce in relation to these is the theft of sensitive or personal information such
as credit card details, names and addresses, all of which receive considerable
media attention.
Slide 5: Defines ‘integrity’ threat, which for example, unprotected banking transactions
transmitted over the Internet, are susceptible to. You should explain that the major
growth in this type of threat is phishing, where an attacker attempts to fool the user
of an online banking or payment system into divulging their account details by
sending emails which are designed to look as though they have come from their
bank of financial institution.
Slide 6: Describes Denial-of-Service (DoS) attacks.
Slide 7: Summarises the main threats posed to users of wireless devices.
Slide 8: Defines what is meant by encryption and lists the three functions. You should stress
the importance of encryption to secure eCommerce by pointing out that a number of
the standards and frameworks for security are based upon encryption techniques.
Slide 9: Figure 10-10 on page 468 of textbook – compares the three encryption systems.
Slide 10: Defines the Secure Sockets Layer (SSL) protocol and provides a brief overview of
how it works. You should point out that SSL can secure many different types of
communication between computers and that the protocol that implements SSL is
HTTPS. It should also be mentioned that SSL uses private-key encryption for nearly
all of its secure communications.
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Slide 11: Figure 10.11 on page 470 in textbook – illustrates the SSL handshake that occurs
before a client and server exchange private-key encoded business information.
Slide 12: Provides an overview of Secure HTTP (S-HTTP). You should point out that this is
an extension to HTTP which provides a number of important security features,
including client and server authentication, spontaneous encryption, and
request/response non-repudiation.
Slide 13: Describes how hash functions and digital signatures work together to address the
possible threat of an eCommerce message being altered in transit.
Slide 14: Figure 10-12 on page 473 in textbook – schematic showing the sending and
receiving of a digitally signed message.
Slide 15: Lists some of the major threats to eCommerce servers, together with possible
methods of countering these threats. Each of the points will be described further in
subsequent slides.
Slide 16: Describes some of the main security concerns associated with web servers. You
should point out that the more complex the software on a web server, the greater
the chance of it containing coding errors or security weaknesses.
Slide 17: Lists some of the main security concerns associated with databases.
Slide 18: Provides examples of physical security threats to eCommerce servers. You should
emphasise that eCommerce providers are ever-more reliant on their systems and
servers, so any form of attack, natural or man-made, that threatens these also
poses a significant threat to the viability of their overall business. Therefore a
disaster recovery plan should be seen as an absolute essential for such a
company, to ensure that their systems are restored and running in the shortest
possible time in the event of a disaster, thereby minimising any effects to their
customers and to their own business.
Slide 19: Provides an overview of the key elements of access control, an important area
given the increasing attempts by hackers to access systems holding customer data,
and steal this data for fraudulent purposes.
Slide 20: Overview of the features of firewalls.
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10.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Use the Internet to locate a supplier of encryption services in your region. From the information on
their website identify four capabilities of the encryption services that would be of importance to any
eCommerce initiative. In addition, list four benefits of encryption that the supplier mentions on their
site.
Exercise 3:
Exercise 4:
1. Briefly explain why a firewall is an essential component of a security strategy for any
eCommerce provider.
2. Why is privacy an increasingly important issue for Commerce customers?
Page 62 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have located a supplier that offers encryption services in their
region. Ask them to specify the four capabilities of encryption listed by the supplier that would be of
benefit to an eCommerce initiative and explain why this is the case for each capability. Then ask the
students to list the various benefits of encryption they have identified during their research and come
up with an agreed “top three” benefits of encryption.
Exercise 2:
There are two other questions for consideration in the seminar this week. Here are the suggested
answers.
Exercise 3:
1. Briefly explain why a firewall is an essential component of a security strategy for any
eCommerce provider.
2. Why is privacy an increasingly important issue for eCommerce customers?
Suggested Answer:
1. A firewall provides a defence between an eCommerce provider’s network and systems and the
Internet. This is designed to prevent any hackers or fraudsters from gaining access to the
internal systems by allowing only authorised users through. It is particularly important to
eCommerce providers as their business relies upon monitoring and managing Internet traffic and
providing a high level of service for their customers. They need to ensure therefore that their
systems are not compromised by hackers and liable to infect customers with malware as a
consequence. Equally they need to ensure that they retain customer details such as credit card
numbers and personal information in a secure environment in order to combat the threat of
identity theft.
2. Privacy relates to the protection of individual rights, which can be threatened by the theft of
personal information. eCommerce providers hold a range of personal and sensitive information
about their customers which they are under an obligation to protect. However, recent data
breaches and identity thefts have been highlighted by the media and, as a consequence, many
eCommerce customers are increasingly wary about using sites that do not have strong security
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policies in place. Similarly, customers are likely to steer clear of eCommerce sites that have
suffered data breaches because of similar concerns.
Page 64 of 100
Topic 11
Topic 11: Payment Systems for eCommerce

This topic provides an overview of the different payment systems available to eCommerce
businesses.
• Define the importance of a payment system to an eCommerce business

• Identify the different methods of payment available to web-based businesses
• Assess the threats posed to different payment systems

session.
11.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 65 of 100
11.4 Lecture Notes
the slides.
• Basics of online payment

• Payment cards
• Electronic cash
• Electronic wallets
• Smart cards
• Threats to payment systems
Slide 3: Provides an introduction to the basics of online payment. The important point here
is that despite the emergence of a range of different payment technologies, the
credit card is still the major means by which eCommerce shoppers pay for their
goods, accounting for around 85% of purchases.
Slide 4: Definition of what is covered by the term ‘payment card’.
Slide 5: Summary of the advantages and disadvantages of payment cards. You should
emphasise that the third of the disadvantages listed is by far the most significant,
since the fraudulent use of payment cards online is growing at an alarming rate.
Slide 6: Figure 11-3 on page 502 in textbook – shows how a typical payment card
transaction is processed.
Slide 7: Summarises the main characteristics of electronic cash. You should point out that
although this form of payment has great potential, it has been held back to date by
the lack of standards between the various private entities that issue electronic cash.
Slide 8: Explains the differences between micro-payments and small payments. Again the
success of these types of payments has been limited to date.
Slide 9: Lists the potential problems faced by both users and issuers of electronic cash. As
with other types of payment, fraud is a concern, particularly in relation to double
spending where a piece of electronic cash is spent twice by submitting the same
electronic currency to two vendors.
Slide 10: Figure 11-4 on page 508 in textbook – schematic showing how technology solutions
are being developed to address the problem of fraudulent double spending
mentioned in the previous slide.
Page 66 of 100
Slide 11: Provides an overview of PayPal, an electronic cash system which is used
particularly successfully in conjunction with eBay (and was purchased by eBay in
2002).
Slide 12: Provides an overview of the concept of electronic wallets.
Slide 13: Provides an overview of the concept of smart cards, together with an indication of
the types of information that can be stored on such cards.
Slide 14: Summary of the main threats posed to payment systems, each of which will be
described further in subsequent slides.
Slide 15: Description of phishing, together with the more targeted version of this type of
attack that has emerged recently, known a spear phishing.
Slide 16: Overview of identity theft and the threats is poses. You should emphasise that this
represents one of the most serious threats to eCommerce providers, particularly as
it is increasingly carried out by gangs of organised criminals.
Slide 17: Lists the types of information that are particularly useful to identity thieves.
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11.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Use the Internet to research incidents of phishing attacks. You should seek to establish the
following:
• The rate at which phishing attacks are rising

• How such attacks are becoming more sophisticated
• Who typically are the victims of phishing attacks
• What advice can be given to counter such attacks
Exercise 3:
Complete review questions RQ2, RQ3, RQ4, RQ5 and RQ6 on page 527 of the textbook.
Exercise 4:
1. Briefly explain why you think that, despite the well documented security threats, the majority of
eCommerce transactions are still paid for by credit card.
2. List four reasons why PayPal has been so successfully adopted as a means of payment by eBay
customers.
Page 68 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking the students if they have undertaken their research on phishing attacks. If they have,
then ask them to quickly go through their results on an individual basis. Compare the different rates
at which they believe such attacks are rising and explain that any variances are partly due to
different ways of reporting such attacks and partly due to the different views of industry observers
and experts.
Next ask them to identify how such attacks are becoming more sophisticated. Once again the
results are likely to vary, but you should seek to pull these together and offer some general
observations e.g. they are becoming much more targeted, they are becoming increasingly well
designed (and hence believable) in their look and feel, they are exploiting new opportunities ever
more quickly etc.
You should then encourage them to discuss the typical victims of such attacks. Are there any
general characteristics and conclusions that can be drawn from their findings?
And finally you should discuss their findings in relation to advice that can be given to counter such
attacks. Ideally you should look to pull together the various recommendations and produce a
composite list which could, for example, be handed out to members of staff within an office
environment to provide good sound practical guidance on how to avoid becoming a victim of a
phishing attack.
Exercise 2:
Exercise 3:
customers.
Page 69 of 100
Suggested Answer:
1. There are a number of possible answers to this question. Suggested points include:
• Credit cards are well established, with a worldwide acceptance

• Generally eCommerce providers encourage payment via credit card
• Customers do not require specific hardware to use them
• There is a level of fraud protection offered by many credit card providers
• There has been a lack of a serious challenge to their use by other payment methods because of
lack of standards, lack of acceptance etc
2. Again there are a number of possible answers here. Suggested points include:
• It avoids having to provide credit card details over the Internet

• It avoids having to send personal cheques through the post
• It provides a means of instant payment which is particularly attractive to the seller (and
potentially also to the buyer as it means the goods can be dispatched quicker)
• It is a payment method generally accepted by most sellers on eBay
• It is able to handle situations where the buyer and seller live in different geographical areas
• It provides a relatively straightforward means of handling different currencies
Page 70 of 100
Topic 12
Topic 12: Planning for eCommerce

This topic provides an overview of the planning of a successful eCommerce enterprise from
identifying the initial objectives to carrying out a post implementation audit.
• Identify the key objectives for eCommerce

• Assess the benefits of eCommerce
• Evaluate the different methods available of producing an eCommerce site

session.
12.3 Timings
Lectures: 2 hours
Tutorials: 1 hour
Page 71 of 100
12.4 Lecture Notes
the slides.
• Identifying eCommerce objectives

• Measuring benefits
• Managing costs
• Strategies for developing eCommerce sites
• Managing the eCommerce implementation
• Post implementation audit
Slide 3: Lists the potential objectives of undertaking eCommerce initiatives. You should
explain that it is vital that any eCommerce project must have clear objectives from
the outset, which may vary depending upon the nature of the project and the size of
the organisation. Linked to these objectives should be a consideration of any
inherent risks.
Slide 4: Figure 12-1 on page 540 in textbook – shows how the benefits of eCommerce
initiatives might be measured. The key point to note is that an eCommerce initiative
can enable a company to address a wide range of objectives which are capable of
either adding value for the business or reducing costs by working closely with
suppliers.
Slide 5: Highlights the fact that the costs associated with an eCommerce project can be
difficult to manage, often due to the rapid changes in web technology. An indication
of the types of costs likely to be incurred is listed.
Slide 6: Figure 12-2 on page 542 in textbook – shows the industry estimates for creating a
web business at three different levels. You should point out that it is, of course,
possible to launch a new web business at the entry level for far less than the figure
shown here but the figures indicated tend to be the norm.
Slide 7: Figure 12-5 on page 546 in textbook – shows the cost/benefit evaluation of
eCommerce strategy elements. You should explain that a key part of creating a
business plan for eCommerce is identifying the costs required to generate the
planned-for benefits and evaluating whether the costs are likely to exceed the
benefits. Companies should, therefore, evaluate each element of their eCommerce
strategy using a cost/benefit approach similar to the one shown in this slide.
Slide 8: Lists the main considerations when developing a strategy for eCommerce. Each of
the points will be discussed further in subsequent slides.
Page 72 of 100
Slide 9: Figure 12-6 on page 549 in textbook – schematic showing the increasing
complexity of website and eCommerce functionality. The level of functionality
required should be a part of the eCommerce strategy so it is important to
understand the advances taking place and, indeed, those that are likely to emerge
over the coming 12 to 18 months.
Slide 10: Describes the requirement to create an internal team who will be responsible for the
eCommerce project. The team should have complete control of the eCommerce
initiative, from setting objectives through to final implementation and operation of
the site. The size of the team will vary, depending upon the nature of the project
and the degree to which elements of the project are to be outsourced.
Slide 11: Provides details of the more common outsourcing approaches for an eCommerce
project.
Slide 12: Lists the most important factors to consider when selecting an eCommerce hosting
service.
Slide 13: Describes two approaches to adopting a partial outsourcing strategy.
Slide 14: Provides an overview of the main characteristics of eCommerce project

management. You should explain that because of the complex nature of
eCommerce projects it is advisable to use a tried and tested formal project
management technique.
Slide 15: Lists the range of staff and skills typically involved in an eCommerce project. Of
course in a smaller project some of the roles may be combined in a single person.
Nevertheless it indicates the potential complexity of an eCommerce project and
also the need to involve a range of staff from across the business – it should be
stressed that it is not simply a technology project.
Slide 16: Provides an overview of a post implementation audit. You should emphasise that it
is vital such an audit takes place at a defined time after the eCommerce site has
been launched. It enables a view to be taken on how successful the launch has
been and, equally importantly, it provides lessons on what has worked well and
what hasn’t, which can be reapplied to future projects.
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12.5 Private Study
Lecturers’ Notes:
Exercise 1:
Exercise 2:
Use the Internet to research incidents of phishing attacks. You should seek to establish the
following:
• The rate at which phishing attacks are rising

• How such attacks are becoming more sophisticated
• Who typically are the victims of phishing attacks
• What advice can be given to counter such attacks
Exercise 3:
Complete review questions RQ2, RQ3, RQ4, RQ5 and RQ6 on page 527 of the textbook.
Exercise 4:
customers.
Page 74 of 100
Lecturers’ Notes:
guide.
Exercise 1:
Start by asking if the students if they have located a company that offers eCommerce hosting
services. Ask them to then go through the main strengths and unique selling points of the
companies, and compare and contrast these strengths and USPs. Do any of the companies stand
out in terms of the services they offer or are they all reasonably similar?
Then move on to the area of security – what security policies do the companies have in place and
how robust do they appear? Do the findings from the security review differ in any way from the
general strengths in terms of ranking the companies that appear to be the most competent? And
finally discuss the students’ finding on the disaster recovery plans. At the end of the exercise ask the
students to identify the hosting service they would select if they were just about to launch their own
eCommerce service and give reasons why.
Exercise 2:
Exercise 3:
customers.
Suggested Answer:
1. An Account Manager should be part of an eCommerce project team to ensure that the project
has a strong customer focus. The Account Manager is in regular contact with customers and will,
therefore, have a good idea what their main requirements are and what is likely to be of interest
and attractive as far as a new eCommerce service is concerned. This information should be fed
back into the project to ensure that the focus is always on delivering services that will be of value
to the customer.
2. ROI stands for Return on Investment. This describes the amount of income that will be provided
by a specific level of expenditure. It is important for eCommerce projects to have a clear view on
what level of return they are expecting and, because of the rapidly changing eCommerce
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environment, the time within which the company can expect to receive payback on its investment
and move into a profit situation.
Page 76 of 100
Appendix
Case Study 1: Stinkyink
Stinky Ink Comes Up Smelling of Roses – Defrauded, burgled but not beaten.
Most people who are swindled out of £32,000 and have had their stock worth £50,000 stolen in a raid
might decide to give up and go back to PAYE employment. But John Sollars is one of life’s optimists and
made of sterner stuff. His may be one of the unluckiest online startups ever, but he decided to persevere,
putting his experience to good use, and quickly learned how to protect his web business from scamsters.
Now with a turnover of £800,000 and projected target of £1.2 million for next year, it would seem he
made a good choice.
Back in early 2002, John decided on a life changing move when he was in his late forties. He gave up a
well-paid salary as a sales director of an independent electronic components company, sold the family
caravan, and put all his savings and energy into his own online business - www.stinkyink.co.uk. This sells
every known make and model of printer cartridge – both recycled and originals.
Emerging after weeks of brainstorming, the domain name was designed to make people smile and be
memorable, given that customers may only need to return once a year. He chose printer consumables
after having huge difficulty tracking down the right cartridge for his son’s old printer. To power the web
shop John picked Actinic software and has upgraded with each new release – “Actinic is the bedrock of
my business and will be for the foreseeable future,” he declares.
But the road to riches has been stony. Only weeks after launching in June 2002, the fraudsters homed in.
Initially the site started getting small orders to different addresses all around the country with larger
repeat orders each week. Before he realised his error, he was servicing 7-8 orders a day and over six
weeks had shipped £32,000-worth of goods that he never saw a penny for. Worse, the local police were
uninterested in the crime because under our present system a crime is only judged to have happened at
the source of the point of sale, i.e., at the fraudster’s location. As the sales had come from a ring of
criminals all over the UK, it was too big a task to file reports at every local police authority and nothing
would have happened anyway as the transactions were of low value.
Furthermore, the stolen products had all been paid for on John’s own credit cards as he had no track
record with his suppliers and therefore couldn’t open an account with them. In fact, he couldn’t even get a
business bank account till he’d been trading a while. And because the sales were Cardholder Not
Present (CNP), he as the merchant was 100% liable so could get no redress that way (unlike the
customer who can get a full refund if he claims the goods did not arrive – another popular fraud tactic).
So, on the verge of bankruptcy, John remembers that, “Early in September 2002 I was sitting with my
dog in the office at home when the full enormity of what had happened sunk in. I had to make a decision
whether to bother going on, or to get out and go back to a ‘proper’ job. But I picked myself up, dusted
myself down, resolved not to trust anything or anyone in future and got on with it.”
He fought back by focussing on the business, using email marketing and search engine optimisation to
generate extra traffic and within two years (2004) the debts were cleared and Stinky Ink was in profit. He
even avoided another fraud scam that fooled his bank manager. A week before Christmas 2002 he had
an enquiry from a London company to ship a £12,000 order to Nigeria. The company checked out and a
courier turned up with the cheque. But John heard alarm bells and asked his bank to verify the cheque.
They thought it looked kosher as the company existed, so it went in for clearing. Meantime John was
Page 77 of 100
receiving emails from an increasingly demanding customer but wisely he replied that the cartridges would
be sent once the cheque had been processed. On New Year’s Eve he heard that it had bounced……..
Actinic’s software incorporates several features to help protect against fraud. For example, payment
methods can be restricted by geographic region, enabling merchants to refuse credit card payments from
high-risk areas. And shoppers can be required to accept the site’s terms and conditions before ordering.
When processing web sales, John looks out for:
• Orders for three HP original inkjet cartridges as these are easily sold in the pub or a car boot.
• The customer is using a free email address, often from Yahoo.
• The delivery and card addresses are not even close geographically.
Now he always checks dubious card details with his payment provider (Protx) to see if the address,
security code (on the back of the card) and postcode match. If not, he emails to cancel the order and
refunds the amount immediately.
The run of misfortune didn’t stop, however. In March 2005 the alarmed and barred warehouse he’d just
moved to was burgled and his whole stock removed overnight. As a ‘commercial’ incident the police were
again not interested despite the value of the products totalling £50,000, and it was fortunate that
everything was fully insured.
In comparison, the website built on Actinic Developer (which allows you to create multiple stores from
one licence) has always worked smoothly and delivers the orders from all parts of Europe, every day of
the year – up to 100 per day in fact with an average value of £60 and a visitor: customer conversion rate
at an impressive 8%.
The StinkyInk catalogue holds nearly 800 different lines with about 5,000 options yet cost only £1,250 to
set up in 2002. The site, designed by John’s teenage son, has been geared to make it incredibly easy for
visitors to find what they need, as quickly as possible. “Customer service is the crux of our business and
having ISO9001:2001 we make sure that whenever we can, we will implement any customer feedback to
improve the site or our processes,” says John.
“Having implemented various Actinic add-ons from Mole End Software to improve our efficiency we are
now able to pick, pack and despatch an order in a minute. I want to provide, or exceed the sort of service
that I expect when I shop online and believe that we provide an exceptional service, so if an order is
hanging around after 24 hours, I get really cross.”
As for the next step, John has launched www.mega-office.co.uk to appeal to a more corporate audience,
and plans several other new sites over the next year.
Finally, John has this to say to anyone thinking of setting up online:
• You have to go for it, but you need patience, commitment and hard work. Running an
ecommerce business is the same as any other business, to be successful you have to give it
100% commitment and dedication.
• If it seems to good to be true, then it is and don’t believe all the rubbish about being able to make
millions without doing any work – it doesn’t happen in any other business and it certainly doesn’t
happen within ecommerce.
• Always value your stock every month and ensure your insurance policy has sufficient cover.
Useful URLS
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www.stinkyink.co.uk
www.actinic.co.uk
www.actinicplugins.co.uk
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Case Study 2: The Gentleman's Shop
A Close Shave for The Gentleman’s Shop – The trials and tribulations of one company’s experience
with three ecommerce approaches.
Having a close shave is an everyday experience for Robert Johnston and his customers. He has run a
successful barber's shop in the Berkshire market town of Hungerford since 1988 and prides himself on
the closeness of the shave he and his six barbers offer with their traditional open blade razors.
In 1997, the shop moved to larger premises which allowed Robert’s wife, Charlotte, to set up The
Gentleman's Shop as both a physical shop, and two years later a web store. Both sell luxury shaving and
grooming products as well as accessories and gifts for men from top London brands like Geo. F
Trumper, Truefitt & Hill, Simpsons, GB Kent and many, many more. Prices go from a few pounds for a jar
of facial scrub to £600 for a Dovo open razor set. Many customers (20%) come from North America who
see Britain as the home of the finest shaving brands, while the remainder of the trade is split 60% UK
and 20% to the rest of the world. Online trade now accounts for 40-50% of the rapidly growing total
turnover.
To get this far, the couple have learnt many hard lessons and had more experiences with different
approaches to ecommerce than most small businesses.
Selling online started with what proved an expensive mistake using a web-based shopping mall. "It was
costing us a monthly charge of £50 in 1999 and a further £15 a month for every additional fifty items we
listed,” says Charlotte. “We could see ourselves easily spending up to £2,000 a year while being tied to
the site and having to start again from scratch if we moved. What's more, prices could go up at any time.
As we were getting more and more locked in, there would be little we could do about it.
"We also found we couldn't update the site as we wanted. We had to use the mall company who weren't
very responsive. It all came to a head when the programmer went on holiday in December 1999. Our site
simply disappeared on Christmas Day and didn't return properly until the third week in January."
Luckily one of Robert’s customers came to the rescue with a copy of the desktop ecommerce package,
Actinic Catalog. Despite being a novice with computers, in the four-week downtime Charlotte was able to
put together a site that paid for itself within a fortnight. She says, “The software is very logical and
straightforward to use – not just for me, but for visitors placing orders. And another strong point in
Catalog's favour is we had the flexibility to move between hosting companies without losing any time or
money or interrupting our internet sales.”
This ecommerce solution worked really well for The Gentleman’s Shop for several years, and following
the relocation to the thatched, Grade II listed premises of Charnham House in May 2002 they had their
best twelve-month trading period ever with 50% growth in web sales.
Robert Johnston takes up the story: “Then in the summer of 2003 we were approached by a new media
company promising to build us a bespoke website on its Polaris platform. The company was behind
Thorntons’ website and had a great track record of helping small businesses reach their ecommerce
aspirations. We agreed to pay a figure of about £45,000 over two years, for a bespoke website, with the
aim of increasing the number of visitors and the order value. We were on course to be the “ Boden” of the
male grooming world.”
They were pleased with the design of the new site and when it became New Media Age magazine’s “Site
of the Week” on launch. It was also well received by customers, but unfortunately sales results were
disappointing and it took less money so the Johnstons were not impressed by this poor return on their
heavy investment.
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Their troubles deepened when the web design company was bought out by a well-known ecommerce
services and solutions company. “Initially we were excited as they had a reputation for making very
successful ecommerce websites and we hoped they may have some ideas on how to improve our sales
but they didn’t!” comments Robert. “In fact, things went from bad to worse. Although we had at least
20,000 unique visitors a month and our sales reaching the levels of our Actinic days, our hosting alone
was costing £700 per month. And every time we wanted a change to the site functionality, such as
moving the payment provider, we had quotes of several thousands as the site was based on Polaris
which required hiring a specialist programmer. All because the new company did not use the same
platform.”
Finally in April 2005 the couple were told that the website would no longer be supported. Worse they
could not find anyone willing to take on their hosting and support. “Most companies just wanted us to
take out their own solution, which would have been jumping from the frying pan into the fire,” adds
Robert.
“Luckily, we were approached by Actinic who had heard of our plight and offered us their most recent
solution, Business Multi User, so we gave them our wish list of features and design requirements. The
completed site was handed over within one month and cost a fraction of our custom-made store -- both
to create and operate. And even better hosting is now just £300 a year. Happy days are here again,”
Robert says with relief.
Robert and Charlotte made the significant investment in the multi-user product because they wanted to
be able to maintain the site and process orders from two separate, but networked machines. This way
they now have more flexibility to work simultaneously on different tasks, or even, as orders grow, use the
option to have two people processing orders.
The new site has the following features:
• No customer log in, just click and buy

• Products displayed on one page for ease of browsing, not over multiple pages
• “More about this brand” pages
• “View larger image” pop up
• Customer address finder from postcode
• Coupons and discounts to encourage repeat ordering
• Links to related items on product pages
• Expanding/collapsing menus at side for quick navigation
• Complete control over content, e.g., the front page’s lifestyle image is altered weekly.
To help boost sales, existing customers were emailed a discount voucher the day after launch and
straight away it brought in orders to the value of 20% of the new site costs. In fact, the first two weeks’
online sales beat the previous performance by 40% – “It’s just like Christmas,” says Charlotte. “And
although we can’t now alter our website from a beach in Miami, we do have complete control over the
site and all its functionality from either one of two PCs. Instead, we have our order details copied to an
email address that we could access from a far flung place, or home.”
As for future marketing, Robert will be doing his own online marketing and Actinic’s search engine-
friendly format of static HTML pages will certainly help in maximising organic rankings. As a trained
barber, he is also a participant in many male grooming forums both here and in the USA which certainly
attracts loyal new customers. The affiliate scheme, Affiliate Future, is a regular source of customers too,
accounting for 35% of sales per month.
Having tried web-based, bespoke and boxed ecommerce solutions, Robert and Charlotte are now
confident that their present approach has the right balance of cost, flexibility and functionality. So what
lessons have they learnt? Here are Robert’s top tips:
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• When looking at a new ecommerce platform, consider how easily it can be upgraded to the new
version of the software? The goal posts move every twelve months.
• How many other companies use the same platform. If the company you are using disappears,
how easy would it be to transfer to another company?
• How difficult is the platform to use? If it requires specialist training don’t consider it!
• How well are sites using your intended platform performing on Google? One company I
approached asked for an additional £3000 per year for website submission and search
engineering with no guarantee of success. My Actinic website had page one rankings on Google
within six days of launch and I did all the work myself.
• Start an affiliate scheme. The monthly fee is modest and a couple of well-placed affiliates will
bring lots of sales for which you only pay commission on fulfilled orders.
URLs
www.gentlemans-shop.com
www.actinic.co.uk
Published: September 2005
To interview Charlotte & Robert Johnston or for more information, contact:

PR: Jane Lee, Dexterity, +44 (0)1273 470199, mailto:[email protected]
Page 82 of 100
Case Study 3: Bagga Menswear
Going backwards to move forward – Bagga’s online story.
Sometimes you have to take a step back in order to move forward and this is exactly what Dave Lomax
did with his designer fashion business. Bagga Menswear focuses on the top labels like Armani, Diesel
and G-Star. In March 2004, he sold off his premier shop in Bexley Heath, Kent, just retaining a smaller
high street presence in Chislehurst. This freed him to put his energy into building up the web
business, www.baggamenswear.co.uk. In 2005 Bagga is expected to turnover £500,000 in total. This is
20% up on the pure high street sales model, and immensely more profitable due to the lower overheads
of the web store (down by £130,000 p.a.).
Dave (39) came into fashion retailing from a technical background, after a successful career as a
manager with two major telecoms companies and a spell working for himself in Australia. Earlier
psychometric tests had indicated that he should do well in the fashion industry. So after returning
homesick to Kent in 1993, he decided to follow his heart. Dave saw a gap in the market for a designer
menswear store in Bexleyheath, where rents were low following the ravages of the recession. Thus
Bagga was born in April 1994 . By 1998 it had doubled in size, and continued to grow despite the
Bluewater Shopping Centre opening only six miles away. “By 2000 I was able to open a second shop in
Chislehurst, and in 2002 Bagga won the accolade of FHM Small Retailer of the Year. We are respected
in the industry and known for an eclectic mix of household names plus some virtually unknown brands
whose profile we work hard to enhance.” So far, so good.
Never a man to rest on his laurels, Dave decided to test out the potential of the internet as a sales
channel. In 2002 he commissioned an ecommerce site under a ‘rental’ agreement with the web
designers that avoided upfront development costs. He explains, “For two years the site generated a good
additional income, but had limitations in design and functionality. With the proven success of the ‘test’
site we decided to commission a totally new web store using Actinic Business. It has a host of features
that are invaluable, particularly the discount pricing and coupon facilities. The order processing is easy
and clear while the reports, invoicing and email facilities are very helpful in the day-to-day operation of
the e-store.” Another key attraction for Dave was the scope the software had to grow with the business.
The stylish new site launched in May 2004 following an investment of £14,000. It is maintained and
updated by Dave himself, including the photography. By Christmas it was the most profitable side of the
business and now contributes 60% of total turnover.
Like the high street shop, the site sells around 500 lines and specialises in clothing and footwear from
Armani, Diesel and G-Star. Prices go from £10 for a pair of socks to £700 for a leather jacket and orders
are shipped worldwide. Online sales are up to 70 per week with an average value of £95.
Dave recognises the importance of differentiating Bagga. “Unlike most sites selling similar products on
the web, we are bona fide stockists of all products, with no end-of-line or grey market imports. We also
instil confidence in our customers with our long term high street presence,” he says, and adds, “The
manufacturers are still very wary of online sales, because of issues about protecting their brand. That’s
why I have worked hard to create a site that represents each label authentically.”
As ever, marketing is also key, and Dave has shunned the affiliate approach as too costly, but is getting
impressive results with direct marketing company PDV and its data collection service. “You pay to pose a
question that helps to qualify the leads coming through,” Dave explains. “Entrants go into a prize draw for
an Armani bag or something supplied by Bagga. In the first trial we got 5,500 leads in only two weeks for
a grand. The subsequent mailing we did increased traffic by 100% for a short period, and has
substantially increased the database for future mailings.”
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Japan is the next target market because of their love for designer labels. Dave is researching how to
market there. So far pay-per-click advertising, which works well here, is not working on the Japanese
search engines, so the next step is to find the equivalent to FHM magazine to try traditional advertising to
drive young men to the Bagga site.
Dave feels that ecommerce has certainly benefited his business by “generating a new income stream
and enhancing the turnover of our high street shop. The products we sell are in high demand but tightly
distributed, and it is relatively easy to capitalise on this demand through our site. And overall life is much
easier now with fewer staff and less overheads.”
And finally, here are a few tips from Dave Lomax to encourage other novice retailers:
• Choose your developer very carefully. Before going ahead, talk to lots of existing clients whose
businesses and/or goals are similar to your own.
• Test the market as inexpensively as possible.
• Take the time to learn your chosen ecommerce package so you needn’t be reliant on others.
• Keep control of the site maintenance.
URLs
www.baggamenswear.co.uk
www.actinic.co.uk
Published: August 2005
To interview Dave Lomax, contact: Jane Lee, PR for Actinic, 01273470199, [email protected]
Page 84 of 100
Case Study 4: KoiCarp4U
Fish farm scales up sales online.
Alex Bosch is just 21, and he expects to turn over in excess of a quarter of a million pounds this year
selling pond fish online through his dedicated web store, KoiCarp4U.co.uk
Even before he launched his own ecommerce site, Alex managed to achieve a turnover of £60,000 in his
first four months in business in 2004, purely through online auctions of fish to pond and aquarium owners
in the UK. Now with a dedicated internet shop window built using Actinic ecommerce software, his stock
is seen by up to 30,000 visitors a month. Alex has become an extremely successful entrepreneur in a
very short period of time indeed, but how did it all begin?
“Before I started out in business online, I was studying business at Nottingham Trent University,” Alex
explains. “After I had completed my first two years, I had to find a job for a one year placement but
couldn’t find anything suitable commanding a reasonable salary. At that point I pretty much resigned
myself to some time spent travelling. Fortunately, during Autumn 2004 I had some unexpected success
selling live fish and other related products on eBay. Then I made the decision to drop out of university to
build on that success, and the business as it is today just grew from that point.”
From these uncertain beginnings, Alex has created a business which he regards as the easiest, most
reliable way to purchase healthy aquatic life in the UK. Thanks to some generous family support, he can
boast over 14 years’ experience in the industry. This pedigree gives him the confidence to offer a unique
5-day live arrival guarantee for fish delivered direct to customers’ doorsteps. But the question must be
asked, why an online fish business in the first instance?
“Selling fish wasn’t a random choice,” he laughs. “My parents have an existing fish farm and wholesale
live fish business in Kent, and I just wanted to see whether the internet could be a profitable new sales
channel. For my part this meant very little outlay because I could lay my hands on quality stock readily
and cheaply. Keeping fish isn’t a personal hobby of mine – for me fish are of purely professional
interest!”
Slowly migrating to a dedicated ecommerce store is certainly making Alex a lot of savings over selling
purely on eBay. His auction costs are actually surprisingly high at around £1500 per month. For each
auction he usually pays £1, plus there’s a 3 per cent charge on each sale. In contrast his own site allows
him to provide quality pictures and information for each product, as well as background about the
business itself. Not only does he feel this improves sales, it builds confidence in his buyers, and the shop
front adds credibility to his business.
The fish themselves are sent by courier in a double-skinned plastic bag full of oxygenated water
supported in a polystyrene container and are marked 'Live fish - handle with care'. Despite this, delivery
and customer satisfaction remain the biggest challenge.
“By far the hardest part of this venture is customer fulfilment – that is to say, getting the right goods to the
right places, at the right time,” Alex admits. “We have to organise an exact delivery date and time with
our clients. Many online businesses simply promise next day delivery, in ten working days, in 1 to 2
weeks or whatever – obviously we can’t do that with livestock. Our shipments have a limit of 24hrs
maximum between leaving our end and getting to the customer’s pond. If not, the courier has to bring
them back and another has to be arranged – we can’t just leave our packages in a depot for collection!”
Unfortunately, there are rare instances when aquatic life does not survive during transit or within the 5
day guarantee period despite every effort to ensure its well-being. Thoughtfully, Alex has ensured that
the website features a special ‘ Returning Deceased Specimens’ page for information on what to do
should customers experience a loss.
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Luckily these instances are rare, as Alex is keen to point out: “We’ve experienced relatively few
problems. With live fish, the profit margins are excellent, but you need to look carefully at the difficulties
in fulfilment and all the other hard work perishable shipments involve. Courier companies can be very
busy over holiday periods, so we’re extra careful promising deliveries before midday at those times. Our
couriers do have an online tracking system, but it isn’t perfectly up-to-date, so we can’t just rely on that
for live shipments.”
Alex’s site certainly racks up counter hits and individual visits, but how successfully does the store turn
visitors into customers, orders, and ultimately hard cash?
“Right now, we’re coming up to our busy period, and so we’re looking at around 175 individual orders a
week,” he estimates. “Selling fish is a seasonal business though, and April to September is admittedly
our busiest time of all. We can expect about a thousand individual visitors to the website a day.”
A lot of those people still use the online store as a shop window though, and due to nature of product
they often just want some reassurance about the quality of the business before buying over the phone.
However, the site currently conducts around one hundred transactions a month, which isn’t bad at all, as
the finances prove.
Alex predicts: “The turnover for KoiCarp4U this year will be in the region of £250,000 and I hope to see
that grow to around £300,000 next year. We’re targeting steady growth, so you’re perhaps looking at
£350,000 the following year. Certainly, there’s no competition worth worrying about in the UK now, just a
few individuals that aren’t affecting business, but we don’t know about the future and cannot be
complacent.”
The future appears full of opportunities. As well as the KoiCarp4u, Alex also owns the holding URL
‘TropicalFish4U.co.uk’. The next major step planned will be into the tropical market which will help even
up the business’s seasonality. He’d also like to grow the web site side of business further, moving away
from auctions towards traditional ecommerce. Other possibilities include offering customers the ability to
nominate delivery dates and times online, and Alex is working with Actinic to see if this can be brought
about sometime soon. He’d also like to build-in an effective online tracking facility that both staff and
customers can really rely on.
“Most of the time I really enjoy it,” says Alex. “It can be very hard work though from the moment I wake to
shutting up at the end of each day, but it’s really satisfying working for myself. The biggest factor
affecting predictions for the future will be market saturation – when will we reach the limit? Time will tell.”
URLs
www.koicarp4u.co.uk
www.koicarp4u.com
www.actinic.co.uk
Published: June 2005
To interview Alex Bosch, contact: Jane Lee, PR for Actinic, 01273470199, [email protected]
Page 86 of 100
Case Study 5: Colliewobbles
Every Cloud Has a Silver Lining – From Foot & Mouth Disaster to Online Success.
Marcus and Mandy Bainbridge are proof that every cloud has a silver lining. From the devastation of foot
and mouth in 2001, this couple were able to use the web to fight back and establish a profitable business
based on their second passion – their Border Collie sheepdogs. The following interview with Mandy
Bainbridge tells the story.
Q: Why did you start an online business?
Mandy: We have a sheep farm 1200 feet up in the Northern Pennines near Barnard Castle and lost our
entire income in the foot & mouth outbreak in 2001. It was a family business stretching over four
generations. During that summer we were still able to attend agricultural shows and our Border Collie
sheep dogs, Jet, Pip, Tim and Tess, took part in competitions. Looking round we saw a gap amongst the
exhibitors for a business specialising in good quality gifts and leisure clothing relating to Border Collies,
so we launched a business called Colliewobbles in June 2001.
To begin with we just took stands at shows. However, customers wanted to continue purchasing from us
and so a web site was the best way of keeping their interest and allowing secure, instant purchasing.
Ecommerce also made sense as the farm is too isolated to attract passing trade and it had the flexibility
to fit with our outdoor lifestyle.
Q: How did you fund the business?
M: We initially had a bank loan, but following on from our success exhibiting at the shows we applied for
a Foot & Mouth Rural Recovery Grant from DEFRA. Having proved there was a market we put this
money towards the cost of setting up the first web site, www.colliewobbles.com.
Later we also joined the Passport to Export Success scheme run by the DTI’s UK Trade & Investment
(UKTI) department. This is for small companies who want to sell abroad but don’t know how to get
started, or need specific advice. Our adviser was excellent and after 12 months of exporting suggested
we enter for the New Exporter Individual Achievement Award. It was part of a competition jointly
organised by the North East Chamber of Commerce & UKTI. By proving a 500% rise in export sales
within 12 months Colliewobbles won the award in July 2004 with a prize of £500.
Q: Tell us more about this dramatic growth.
M: In the financial year ending June 2003 our export turnover was £5,000 but in 12 months it went to
£25,000. This was down to physically attending major shows abroad, which were very successful at the
time sales-wise, meeting like-minded people who own Border Collies (who because we had a website
put us on as links), and on the website appearing professional and knowledgeable thus inspiring
confidence from overseas customers.
Q: How did you go about creating the web business?
M: The budget was tight and we wanted to develop the web shop ourselves, but didn’t have much IT
knowledge beyond word processing and surfing the internet, so it was important that the ecommerce
software was easy to learn and affordable. I chose Actinic Catalog which was very easy for me as a ‘lay
person’ to pick up. I particularly like useful features such as being able to temporarily ‘hide’ a page or
item, the quick and simple updating, and the copy/paste facility which we use a lot where one product
appears in different sections. As we sell internationally the dual currency display is great too, while the
ready-made invoices and packing lists really help to give a professional impression -- something we
wouldn’t have had time to develop ourselves.
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The whole site cost about £1,500 to create, including the Actinic software and this was recouped in less
than a year.
Q: What exactly do you sell?
M: It’s quite a range now – over 100 different Border Collie/sheep dog-related products -- clothing, books,
training videos, calendars, stationery, sheepdog whistles, metal signs, soft toys and ornaments. We’re
also offering fun educational days on the farm for owners to learn about Collies or just see how their dog
reacts with sheep. These have proved very popular.
Prices range from £2 for a plastic whistle to £70 for a fleece jacket and £65 for the farm days.
Q: What are the most popular items?
M: It seems to depend on where the customer lives as clothing is the best seller with Americans, while
sheepdog training aids go well in Europe, and the Brits buy a mixture of both.
Q: Why the two web sites?
M: Colliewobbles is our ‘domestic’ website, i.e., it is for people who love Border Collies as pets, or
perhaps compete in some of the dog sports dominated by Border Collies – agility, obedience flyball, etc.
The scope of the site is broad spectrum -- people may be looking to take up a hobby with their Border
Collie but want to find out more about specific activities, or maybe they just want a nice present for their
neighbour next door who has a Border Collie.
‘Sheepdog Shop’ is exactly that – it specialises in training aids for working sheep dogs (like One Man &
His Dog) and also features videos of international trials, etc. Whilst some of the items cross over,
Sheepdog Shop is definitely more ‘agricultural’ with veterinary books, specialist sheep dog whistles,
history of the working sheepdogs pre 1900s and the like. Having said that it does very well with exports
as the UK is the ‘sheepdog kennel’ of the world, where the breed originated and with all the history. Thus
in Europe and the USA where sheepdog trialling is becoming a popular hobby they look to us for
guidance and advice.
Q: How has your business grown since 2002?
M: Unique hits have grown four-fold since 2002 with a conversion rate of up to 2% at peak times. Orders
go between 25 and 85 a month with an average value of £40. This gives us a total annual turnover of
£65,000. About 50% of this revenue comes from selling stock at around eight dog sport and national
sheepdog trials over the year, including Crufts and three events in Europe.
Q: What countries have you sold to?
M: The UK makes up over half of the web sales but exports continue to grow in Europe, including
Poland, Czechoslovakia and Yugoslavia. Plus we’ve also shipped successfully to Russia, Japan,
Australia, New Zealand, America and Canada. But we won’t accept all overseas orders - we restrict the
regions we supply by splitting the web site into four separate catalogues based on geography, product
availability and local pricing.
Q: What plans are there for developing the ecommerce side of the business in the next 12 months?
M: Well, I’m due to have a baby shortly, but the main jobs will be keeping the site up-to-date with new
products and letting customers know we are still here! However, during the year I would like to introduce
monthly competitions and reviews of new products.
Q: How will ecommerce help balance making money and bringing up a baby?
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M: The beauty of ecommerce is the fact the business ticks over and receives orders even when we are
working on the farm or tied up with family commitments.
Our part of Co. Durham is very rural so jobs for working mums that can be revolved around childcare are
highly sought after. An online shop allows me to work around the baby with hours to suit each specific
day. And in the April lambing season Marcus is busy 24/7 so this means he cannot help with the baby or
the web business, but ecommerce lets us have it all -- to run the farm, work on the websites and bring
our children up without outside childcare.
Q: What advice would you give anyone embarking on ecommerce?
M:
· Don’t go for the cheapest software option or you’ll end up having to change later. Use software like
Actinic – it’s easy-to-use and very clever, yet has the scope to grow with your business.
· Do your homework regarding credit card processing, security, legislation, VAT and web marketing.
· Put as much information as possible on the web site but avoid cluttering the page -- most people only
read the first two lines!
· Strive to make a professional impression from Day One. Have your systems and procedures worked
out.
Q: Is there anything else you'd like to tell us about your business?
M: Setting up and running a small business is very hard work, especially when you start from a minus like
we had to because of the foot & mouth outbreak. You need all the help you can get and we feel we have
got it with Actinic.
We have worked very hard, especially with overseas sales at shows. However, without the web site they
would be ‘one off’ sales only, until the next year’s show. The site allows us to be in touch with people
constantly, and fulfil orders for Christmas and birthdays as well. We also get new customers and find
ourselves as links on many people’s web sites.
There are lows though, like receiving a one-hour phone call from a customer over Christmas lunch – I
guess this is called being a victim of your own success!
URLs
www.colliewobbles.com
www.sheepdogshop.co.uk
www.actinic.co.uk
Published: May 2005
To interview Mandy Bainbridge or for more information, contact:

PR: Jane Lee, Dexterity, 01273 470199, mailto:[email protected]
Actinic: Bruce Townsend, 0845 129 4800, mailto:[email protected]
Page 89 of 100
Case Study 6: Wildlife
Running Wild Online.
Not content with a flourishing chain of six fashionable lifestyle clothing shops in the top tourist towns of
Cornwall, the Chadwick brothers - David, Neil and Leigh, decided they could extend their clientele and
profits yet further by moving on to the internet. So in early 2003 www.wildlifeonline.com launched with an
initial range of 150 items of clothing and footwear on sale. In the last 12 months the site has contributed
7.5% growth to the total turnover of the business, or a cool £300,000. Plus, in 2004 wildlife won Orange
Best Family Business Award and was runner up in the Sage/Daily Telegraph Best Website. In addition,
their growth and innovation made the brothers Institute of Directors’ Directors of the Month in April 2004.
So, what is the secret of their success? Unusually, wildlife is a family concern (founded by father Don
Chadwick in 1981 as an army surplus shop in Penzance) where the brothers each have an equal say in
its management and operations. As Leigh explains, “We share the same vision and optimism for the
business, but we also share the same values as a family and believe that a business that isn’t innovating
is dying. We feel really passionate about making this move online a real success.”
Even when there were only two shops, in the late 90s, the brothers invested heavily in automating the
stock control and accounting. Their foresight has paid off because the expansion, by a shop a year plus
the web store, has been smoothly incorporated into these back office systems. It also helped that an
operations manual was written early on, detailing all offline and online procedures and defining the
unique wildlife style for every one of its 54 staff.
And again, in 2002, the Chadwicks’ alertness meant they picked up on frequent requests and comments
from people on holiday, saying they could not buy the labels stocked by wildlife back home. These
include a mix of niche and well known upmarket, outdoor clothing and footwear brands like Seasalt,
Camper, Merrell, Joules, Musto, Birkenstock, Kikoy, and many more, plus Buff head gear, and CDs of
music played in the shops. Having listened to their customers, a web site was commissioned from The
Original Sin. They chose an off-the-shelf package called Actinic Business to create a stunning
ecommerce store with a look and feel that is totally wildlife. “It may be boxed software, but it still has the
flexibility to give us exactly what we want,” says Leigh. And for an investment of £5,000, the decision to
trade online has paid off handsomely. From a 2003 starting turnover of £75,000, the web sales
contributed £300,000 to the £3.5m total revenue in 2004.
There are now nearly 3,000 registered customers who love the site with its ever-changing collection that
currently stands at 400 lines. They spend an average of £65 per order and often come back – the record
to date is six repeat purchases. All of these sales are to UK addresses as the brothers are wary of
international fraud and the US reputation for suing vendors, not to mention import regulations and
charges.
Marketing of the web site is straight forward, using pay-per-click advertising, search engine optimisation,
an affiliate scheme of over 600 participants and PR. Undoubtedly the awards that wildlife has won have
helped to promote the whole business, but they are of special value in reassuring new internet visitors --
every little helps with such an impersonal selling situation. Other ways in which wildlife strives to reassure
and provide excellent customer service are by having a promptly answered telephone enquiry line;
actively seeking customer feedback through the web site, email confirmations, delivery notes, etc.; doing
monthly mystery shopper audits; and by ensuring the web site is simple to navigate, and making a
purchase is easy. Security is covered both by the ecommerce software’s bank-approved encryption and
by using a reputable third party to process payments. As a result, there have been no fraudulent
transactions.
Opening a web store has proved a win-win experience, since it has not only increased revenue for little
overhead and extended the geographical awareness of the business, but it has given customers who
Page 90 of 100
‘discover’ wildlife while on holiday, access to clothing that isn’t available in every town and high street.
Innovative as ever, there are now plans afoot to create their own clothing range.
However, Leigh feels the real benefit of wildlifeonline has been that “we've been able to fulfil internet
sales from our Penzance store rather than carrying separate stock. It also means we can utilise our staff
more effectively as certain times are quieter than others.” He adds, “Savings we would otherwise have
made on rent and rates etc have been utilised to market the site as our internet marketing costs are
higher. Thus, overall, the net profit from our online store is similar to that of our high street stores.”
All in all, David, Neil and Leigh are undoubtedly shining examples of how to run a profitable and fast-
growing small business that is built to hand on to a third generation. Perhaps it’s not surprising when we
learn that Leigh Chadwick is also a consultant specialising in advising family firms on their own unique
issues.
URLs
www.wildlifeonline.com
www.theoriginalsin.co.uk
www.actinic.co.uk
Published: March 2005
To interview Leigh Chadwick or for more information, contact:

PR: Jane Lee, Dexterity, 01273 470199, mailto:[email protected]
Actinic: Bruce Townsend, 0845 129 4800, mailto:[email protected]
Page 91 of 100
Case Study 7: Classic-leisure
The Mulcocks’ Gardening eStores - Getting the Right Balance.
Many people dream of quitting the so-called rat race and moving to, say, the South of France and
earning a living from there. Some people even do it – but it doesn’t always work out as smoothly as the
migrators had hoped. For Peter Mulcock and his family, the idea was appealing and had a happy ending,
but because of red tape and changes in circumstance, they have retained a base in the UK as well.
Peter owns three websites to do with gardens: Classic-lawns, Classic-leisure and Trampolines4fun.
Classic-lawns was the first, and the others operate under its umbrella rather than as entirely separate
concerns. “Classic-lawns and Classic-leisure were distinctly different markets, and what I didn’t want to
do was mix markets because I think that can be very confusing,” explains Peter. “Then we had some
success last year with trampolines. We had explored this mini-site option and thought we’d get better
optimisation if we did a site specifically for trampolines, and that’s why we took it separately.”
So far, so standard – until you bear in mind that the trampoline site’s designer is actually Peter’s 15-year-
old son, Oliver. “He’s been interested since we started this business two and a half years ago,” confirms
his father. “We started with a very small web design company in Cirencester, and Oliver came with us
when we went to meet them and showed incredible interest. It was fantastic, he really drove the whole
thing.”
Oliver explains that, “The designers suggested using Actinic’s software, although they had never really
had any experience with it, so I began doing some research. Then I discovered how much we could do
with it.” The Mulcocks liked Actinic Developer because it was flexible and would allow them to develop
further sites under the same licence.
The original designers were honest enough to say that the likely finished site would be beyond their
capacity, so the Mulcocks went to another web developer, called Smart Decisions. “They brought lots of
ideas to the table and spent quite a lot of time talking to Oliver because he was the one with the software
skills, even though he was only 13 and a half.” The initial outlay on the site was around £4000, funded
from the directors’ own reserves, which included the ecommerce software and Dreamweaver MX. “Now
that the sites are fully live and functioning, I look after all of the technical side of the business when I am
not working at school - making the odd change and constantly keeping the sites up to date,” explains
Oliver. The company also has a plug-in to the Sage accounting system which allows the shopping cart
activity to feed directly into the accounts, saving a lot of re-typing.
The first diversification came shortly afterwards, when the seasonal nature of people buying from
Classic-lawns started to bite – everything went understandably quiet from September to February, when
people leave their lawns alone. Classic-leisure for garden games followed, although Peter freely admits
this has the same quiet periods as the initial site.
The products and prices are diverse. Classic-lawns offers 260 items of garden machinery, while Classic-
leisure has 150 items of outdoor games and toys. The trampoline site offers a further 50 products. When
it started the first site attracted 450 unique visits per month and the sites now get 3000 per month, most
of whom find it through web searches. To measure the success, you need only to look at the fact that
Trampolines4fun sold 100 trampolines in two months when it opened in October 2004 – this is far in
advance of what they expected from a site selling outdoor equipment at that time of year. In contrast it
took Classic-leisure the whole summer to sell 100 trampolines. So creating a niche product store seems
to have worked. The total business turns over around £800,000 per year and pulled into profit within six
months – Peter expects to top £1 million in the next year.
Page 92 of 100
The beauty of a website, of course, is that there’s no reason to live on the developer’s doorstep. Peter
Mulcock and wife Judith gave up their well-paid jobs to go to France, envisaging a total change of
lifestyle. Oliver did well at a French school and all looked fine. “The difficulty is, though, that it’s a UK-
registered business and we pay our taxes in the UK. If you’re staying out of the country for more than
183 days of the tax year, you’re considered not to be resident in the UK and you have to pay your taxes
in the country in which you’re seen to be administering or generating the income in.” This would have
meant registering the business to pay taxes in France. “For some businesses that’s OK, but for our size
of business French taxes are very heavy.” The costs would have been prohibitive as far as Peter was
concerned, although he stresses that this has as much to do with unfamiliarity with the system as with
any features of the system itself.
Other practicalities militated against basing the business overseas. Customers often phone to get
information, even on trampolines, and if they aren’t expecting a foreign ringtone they assume they’re
getting number unobtainable or engaged when they hear the European version. There was no way
around this, particularly since the company prides itself on being accessible and never, ever, using a call
centre.
Oliver’s circumstances were also changing. “Oliver decided he wanted to study medicine. He wanted to
take the International Baccalaureate, because he didn’t necessarily want to be confined to any particular
country to do his university education.” This wasn’t as straightforward in France as it would have been
elsewhere. “We looked at schools from France and found Oakham School in Rutland, and they accepted
him and that’s where he’s going to do his IB. Oakham has also recognised his IT skills and decided that
an ICT GCSE would be totally inappropriate – Oliver is now studying for the Microsoft Certified
Professional exams, and takes the first of these exams this summer, making him one of the youngest in
the county.”
But the good life hasn’t been abandoned -- the family have retained the French house and, whilst Oliver
completes his IB, will only spend about three to four months of the year there. There will be further
developments as well; Peter Mulcock is still keen to address the seasonality of all of his websites, and
wants to develop something to plug the gap in the winter months. If he knows what his next move will be,
he’s keeping tight-lipped; you could guess, though, that Oliver Mulcock will have a hand in its
development. It’s a typical family business except that one of them is still at school and they run the thing
from wherever they feel like – getting the best of both worlds.
You get the feeling it suits them rather well.
URLs
www.trampolines4fun.co.uk
www.classic-leisure.co.uk
www.classic-lawns.co.uk
www.actinic.co.uk
www.smartdecisiondotnet.ltd.uk
Page 93 of 100
Case Study 8: Anything Left-Handed
Anything Left-Handed case study: The benefits to online business of a flexible boxed ecommerce
software package over handing control to a third-party developer – migrating from a bespoke
developer to Actinic Developer.
First established in 1968, Anything Left-Handed, is a family business offering products, services and
advice that make life easier, safer and more enjoyable for left-handed people living in a right-handed
world. Directors Keith Milsom and his wife Lauren are ‘very left-handed’, as is their son. And so,
amazingly, is every member of their growing team based in London and Surrey. In fact, being part of the
13%* of our population that is left-handed is a pre-requisite of working at the most successful and
dynamic venture of its type in the world. They’ll sell you anything from a boomerang to a bass guitar as
long as it’s left-handed, but only if they’ve tried it first and think it’s any good. It wasn’t until a recent
overhaul of their ecommerce website, however, that they discovered just how vital this personal insight
and involvement really was to this unique business.
The company was originally run out of a shop in Soho by a right-handed hobbyist spurred by the
inconveniences of left-handed friends. Keith and his father took over 20 years ago and retain a real-world
shop in London. In a reversal of traditional roles though, this real-world shop serves as a showcase
window to support the core business now conducted online at www.anythingLeft-Handed.co.uk: “Our
shop turns over around £100k per annum, but more importantly it adds ‘bricks and mortar’ credibility to
our online business.” says Keith. “We’ve cut back on less profitable wholesale and mail-order business
as a direct result of the strength of our website. For 2004 the website has been responsible for 60% of
total business turnover, next year we forecast web sales accounting for 70% of all sales, and by 2007
that figure should reach 86%. While all other business is predicted to stay constant, internet business will
grow.”
No surprise then that the quality, stability and security of Anything Left-Handed’s website is of paramount
concern, and anything jeopardising its success causes Keith more than a few sleepless nights. Imagine
then his despair over the last year when an apparently sound decision to outsource website development
backfired. Keith lost all control of the company’s key marketing channel before fighting back with a
superb relaunch site built in-house with the latest version of ecommerce package Actinic Developer.
Business is now growing again, but other ecommerce businesses facing a similar crossroads could learn
valuable lessons from the experiences of Anything Left-Handed.
Keith explains how he came to make the decisions he did over the past year: “The site we had developed
as a marketing test from 2000 onwards worked okay, but demands on my time for marketing and
managing the business made it difficult for me to add all the functionality I really wanted. So we made the
strategic decision to outsource site development to a third-party which would create a bespoke online
store and information site for us. As it turned out, this change in direction was disastrous, setting us back
a year in business development and leaving us horrified at the results.”
After lengthy delays, the developer did produce a site, but not one that worked anywhere close to the
standards Keith had expected, and crucially also failed to alleviate time-consuming technical overheads.
Fortunately, Anything Left-Handed was far from inexperienced online and could see obvious technical
flaws, including access to the site, incomplete navigation, slow load speeds, difficult site maintenance
processes, very poor activity reporting and more. “We couldn’t afford to wait and see if things got better,”
says Keith. “That site should have been operating at higher levels than the old homespun site, but we
could see our sales going through the floor.”
Internet turnover had doubled each year to reach £200k in 2003 until the setback caused by the bespoke
development. The disparity between the cost of outsourcing and the price of in-house site development
with boxed software rang alarm bells: “We’d planned a site operating as you see it now, only with less
functionality, and had budgeted around £30,000 to get those results,” says Keith. He now owns the site
Page 94 of 100
he envisioned and what’s more he created it himself tailoring it to his precise requirements and marketing
plans, and all for around £4,000 including software and consultancy outlay.
“By early July, we had had enough. I gave myself a week’s preparation, made sure we had access to as
much of the site content we had prepared as possible, then put our own original site back up as an
interim measure, dealt with the fallout with the developer and set about developing the site you see today
using Actinic’s software,” Keith explains. “I redeveloped the whole site myself in just two months, using
some of the design work we had paid for, but restructuring the whole thing around the boxed software.
On 13 September 2004 we were back up and running with a fully-functioning site, and saw an immediate
increase in site visitors, page views and orders.”
Understandably, Keith now believes the benefits of a flexible boxed ecommerce package over bespoke
third-party developers are incalculable. “I just felt my business was completely out of my control,” he
admits. “The service we received was poor, and there was little I could do about it. A third-party had our
whole site sitting on its own servers, with us entirely at its mercy. If that company went bust one night,
then we would have been left with no web site and no way of recreating it. I could have woken up one
day with no online presence at all, faced with starting again from scratch with months of hard work on my
hands and virtually no business in the meantime. I simply couldn’t sleep at night with that risk.”
Anything Left-Handed’s latest online incarnation perfectly illustrates the fact that for forward-thinking
online businesses, ecommerce is far more than just selling stock. To build a loyal customer base and
gain repeat orders in an ever-crowded marketplace, you need a store that offers visitors more. For a high
street book shop this might mean a few sofas and a cappuccino machine. For the directors of Anything
Left-Handed this meant an active membership club, pages tailored for children, a database of famous
lefties, personal left-handedness tests, quizzes, jokes, FAQs and a vault of information on all things left-
handed so comprehensive many of the pages warrant top search engine rankings independent of the
core business. The site now stocks over 250 product lines, receives around 1500 unique visitors per day,
and gains around 50 orders per day with an average value of £28.
The new site is already taking almost twice the level of orders of the failed bespoke development and
they have only just started to unleash their marketing plans. The web sales forecast of £220,000 for 2004
is only 10% on the previous year, reflecting the very poor performance from the bespoke site. With full
functionality plus marketing and development potential returning, online sales are predicted to get back
on the previous growth pattern, increasing 80% year-on-year for both 2005 and 2006, with Keith’s more
conservative forecast for the third-year expected to see a 60% growth in 2007 yielding Web revenues of
£1.1m. Overheads are expected to stay fairly fixed, and of course that means that as turnover increases,
profits are expected to rise rapidly over time.
One particularly helpful and unforeseen aspect to redeveloping the site ‘out-of-the-box’ was discovering
how open and flexible the software really was. Keith explains: “I have recently integrated an in-site
search engine (Search Engine Studio), affiliate program and outgoing links directory using different low-
cost, third-party software. With the bespoke site, this would have taken months and cost many
thousands, if we could have done it at all! We have a long list of improvements we might choose to
deploy in the future, which we now know we can do inexpensively when I have a little spare time. It’s
satisfying, creative work and means the design and development process is completely integrated with
our creative and marketing plans.”
Keith, Lauren and the rest of the team at Anything Left-Handed experienced enormous frustration by
following a website development path that took control of the business out of their capable hands, but
now it’s a very different story, and the whole company is extremely proud of the latest results: “The
successful store you see today didn’t come about as a result of paying for somebody else’s expertise, but
from our own vision, hard work and determination, using some pretty clever software on the way.”
explains Keith.
Thousands of visitors buying products at the company’s shop over the last 36 years have had their lives
made easier, safer and more enjoyable, but perhaps it’s only since the launch of their latest online store
Page 95 of 100
that the proud owners themselves have finally achieved the goal they aim to reach for their customers, to
create “a haven in an otherwise back-to-front world.”
www.anythingleft-handed.co.uk
www.actinic.co.uk
Page 96 of 100
Case Study 9: The Garden Pharmacy
Online Pharmacy Comes Up Smelling of Roses.
Selling online isn't just the territory of pure play startups; well-established high-street businesses, like The
Garden Pharmacy, have also benefited from adding an ecommerce sales channel. It's combined bricks
and clicks turnover is now £3.5 million with almost 40% coming from the web.
Back in1985 Harry Ganz opened The Garden Pharmacy in London's Covent Garden where it still has a
presence today. Specialising in top of the range cosmetics and perfumes as well as everyday pharmacy
products, the store has been very successful. However with rents soaring (the shop is currently paying
25 times the original rent), the business needed to look at other ways of increasing turnover and profit
beyond passing footfall trade.
Early days
"In 1995 we were introduced to the internet by a company who set up a few basic pages for us. In spite
of this, it was not long before we were receiving emails and enquiries followed by orders," Harry recalls.
"About a year later, we added PGP (Pretty Good Privacy) security to the site so that people could order
online with credit cards, but by early 1999 we decided to set up a full ecommerce site. After considerable
investigation, we settled on Actinic's Catalog software as it offered all the functions we required; could be
easily set-up by ourselves; integrated with our in-store EPOS and stock control systems; and was very
inexpensive." The www.garden.co.uk site was totally redesigned by web designers Smart Decision, and
re-launched in January 2001 for an investment of only £5000.
Harry comments, "Since the first ecommerce site was established in 1999, the volume of orders has
increased dramatically, and continues to do so. 2000 saw an increase of 90% over 1999. Our internet
revenue has now become more than a sideline to the bricks and mortar business -- it accounts for 38%
of total turnover and of our 28 staff, three are full-time on mail and web order processing."
Overcoming obstacles
In fact, Harry says that Garden Pharmacy is now the UK's largest online pharmacy and perfumery with
3500 lines ranging from £5 to £95. The site offers cosmetics and perfumes from the likes of Clarins,
Clinique, Elizabeth Arden, Chanel, Lancome, Vichy, Revlon, Estee Lauder and many more. "But it hasn't
been straight forward to get these brands online," he adds. "This was because of problems of prestige,
and a feeling that ecommerce did not suit luxury cosmetics. However, with the introduction of web
syndication (this ensures consistency of the branding across the web as the e-stockist's site has an
embedded link to the manufacturer's content, e.g.,
http://www.garden.co.uk/chanel/chanel_container.php), some of the companies are now more ready for
ecommerce. For instance, after three years of negotiations in December 2003 we launched Chanel on
the website, to be followed soon by Clinique, Lauder and Lancome -- all using web syndication."
But it's not just the glamorous items that are sold online, the site also has a pharmacy section selling
mundane items like hair loss treatments, problem skin ointments, anti-smoking products, family planning
aids, plus a section for healthy living (e.g. vitamins, homeopathy, supplements and slimming aids). As to
best sellers, Harry has found, "Generally, the more 'niche' or hard-to-find, the more successful the
internet sales."
The customer is king
But whatever you sell online Harry points out that, "There are two ways of handling ecommerce: price
cutting or top-level service. We have always concentrated on the latter." Examples of good service
include responding to emailed queries within two hours, acknowledging and remedying any problems
Page 97 of 100
immediately, and sending free samples of other beauty items with every order. This has lead to plenty of
positive feedback and even sales on the sample products. And the proof that customers value such
service is in the high level of repeat orders – over 20%.
Marketing
Harry Ganz has strong views on marketing that have served his business well:
· No print advertising
· No paying for space (e.g., banners, pop-ups) on other sites except on a pay-per-click or commission
basis.
One of his secrets to attracting visitors, who now can top 90,000 per month, is affiliations. The site
currently has a network of 900 affiliates through AffiliateWindow.com that generate 12-14% of traffic. And
Harry has now introduced a direct feed between his online catalogue and the affiliate shopping portals,
so a visitor at one of these sites searching for a specific perfume, for instance, gets a list of stockists with
a link to buy at Garden Pharmacy at the top.
Of course, affiliates are paid commission and Harry has opted for a generous 10% double that of the
majority of beauty sites, but he is more than pleased with the results.
The other key marketing tools are the more well-known search engine optimisation and pay-per-click on
Google and Overture which generate another 20% of all visitors.
Finally
So, beyond the reticence of some manufacturers, introducing ecommerce has brought few negatives and
far more benefits. Issues like customers giving addresses where there is no-one available to accept the
delivery are not insurmountable and a rapid response to rectify the problem means the consumer always
ends up satisfied.
And as a final word, Harry Ganz has some advice to offer anyone venturing into e-tailing. "Don’t spend
more than you expect to be able to generate from the site. Increase spending as turnover increases."
Garden.co.uk Facts and Figures
· Unique visits: 25,000 per month in Jan 2001; in 2004 it's 70,000- 90,000 per month.
· Online orders: 1000 orders per month in January 2001; 3000 – 3500 per month in 2004. Sales up 50%
for Christmas.
· Average order online: £42
· Current annual turnover: £3.5 million
www.garden.co.uk
www.smartdecisiondotnet.ltd.uk
www.affiliatewindow.com
Page 98 of 100
Case Study 10: The Cake Store
Selling Like Hot Cakes Online.
What do you do when local supermarkets are squeezing the life out of your family business? One option
is to refocus on an area where these giants can't compete. This happened to Tim and Kevin Slatter and
their team who fought back with an ecommerce business called The Cake Store selling imaginatively
decorated, mouth-watering celebration and wedding cakes together with creations for corporate events.
In early 2001, Tim was co-running a struggling bakery business with a 70-year history and four shops in
south London, but local superstores were undercutting his bread prices. "We found an ace up our sleeve
with a dynamic cake decorator called Steven Howard on our payroll, whose skills were totally
unexploited. With Steve making a spectacular range of cakes and my brother Kevin running the
business, I began developing our website www.thecakestore.com which we launched in October 2001,"
he says.
Now the high street side of the business has slipped into insignificance. "We closed and let two of our
shops to concentrate more on web sales, freephone orders, production and deliveries. Running a shop is
extremely expensive. Why bother when our customers are either prepared to travel to collect cakes or
pay for delivery?"
There are 450 different types of cake on offer from simply decorated, themed birthday cakes at £22, up
to ornate wedding towers costing £900. The total bricks plus clicks turnover is now £900,000 per annum
with around 160 sales per month coming from the web store at an average of £55 each. This is a major
turn round for the business that had £300,000 less revenue and higher overheads when it was a high
street only set up.
To power his ecommerce site Tim went with Actinic Business from the start and has never regretted the
decision: "The software is easy to use - great for me as I trained as a chef and am not a techie. Plus it
suits any product and is really flexible. With my brother doing the photography and me maintaining the
site there are few ongoing costs and we are highly profitable." He adds, "There's no doubt that
ecommerce saved us."
Getting started only required a £3,000 investment in software, digital photography equipment, hosting
and search engine placement. An unnerving time was the first six months before the promotional efforts
took effect and orders began materialising. But their low budget marketing approach proved effective. By
getting press coverage in the nationals, using word of mouth - one major set of customers is mothers
buying birthday cakes - and getting good search engine rankings, Cakestore.com now receives over
80,000 visitors each month. Of these, enquiries for bespoke cakes run into hundreds but because many
are from overseas, Tim has to turn them away: "We don't sell abroad, but we do get quite a few orders
from abroad ordering cakes to be delivered to relatives in London."
One recent introduction that is proving a big help in integrating the offline and online sides of the
business is the installation of two terminals in the newly refurbished main shop in Sydenham, South East
London. "They are brilliant at showing the customers how easy it is to order cakes online and a great way
to display our huge range of cakes. There's no paper catalogue to get dog-eared and out-of-date - when I
add a new design it's on the terminal at the same time as the web site," explains Kevin.
Development of the online business has gone very smoothly and The Cake Store now employs 25 staff,
including seven cake decorators. Tim, who now works from his home in Ayr, Scotland, says the only real
issues he faces are, "keeping up with demand and having to sort through junk mail and answer silly
questions." Even working remotely from the rest of the team has proved a win-win. It means Tim can live
where his wife is happiest and he can play a very active role in bringing up his young children, while
Kevin has someone he trusts looking after the finances and the web site. Tim explains, "Each week
Page 99 of 100
Kevin sends me a blue pouch with photos of the latest cake designs and all the paperwork, and then I go
south every few weeks to catch up face-to-face - it's a great example of how the internet can enable a
better quality of life."
So, what advice do Tim and Kevin give anyone thinking of opening a web store: "Do your research. Make
sure you have a unique product that customers will want, and above all ensure that orders can be fulfilled
promptly."
www.actinic.co.uk
Page 100 of 100


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OVERVIEW

eB Lecturer Guide 1.2.docx

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© NCC Education Limited, 2022

1. Module Overview and Objectives

6. Supply Chain 1/12 • Main elements of supply chain

12. Planning for eCommerce 1/12 • Planning eCommerce implementation

4. Related National Occupational Standards

Related National Occupational Standards (NOS)

Schneider (2007), Electronic Commerce, 7th edition, Cengage Learning

7.3 Private Study

Topic 1: Introduction to eCommerce

1.1 Learning Objectives

On completion of the topic, students will be able to:

1.2 Pedagogic Approach

Private Study: 7 hours

The structure of this topic is as follows:

1.4.1 Guidance on the Use of the Slides

Slide 1: Identifies the topic.

Slide 2: Provides a summary of the content of the topic.

Slide 7: An indication of the importance of merchandising in successful eCommerce. It

Slide 9: Provides a summary of some of the key advantages provided by eCommerce.

Slide 10: Provides a summary of some of the key disadvantages of eCommerce. It is

Read and make notes on Chapter 1 of the required textbook.

Complete all the review questions on page 42 of the textbook.

1. Explain why the brand identity of a product is important in eCommerce.

1. Explain why the brand identity of a product is important in eCommerce.

Topic 2: eCommerce Revenue Models

2.1 Learning Objectives

On completion of the topic, students will be able to:

2.2 Pedagogic Approach

Private Study: 7 hours

The structure of this topic is as follows:

• Different types of revenue models

2.4.1 Guidance on the Use of the Slides

Slide 1: Identifies the topic.

Slide 2: Provides a summary of the content of the topic.

Read and make notes on Chapter 3 of the required textbook.

Topic 3: eMarketing Strategies

3.1 Learning Objectives

On completion of the topic, students will be able to:

• Describe the different types of marketing strategy that may be employed

3.2 Pedagogic Approach

Private Study: 7 hours

• Product-based marketing strategies

3.4.1 Guidance on the Use of the Slides

Slide 1: Identifies the topic.

Slide 2: Provides a summary of the content of the topic.

Slide 4: Provides a description of what is meant by product-based marketing strategies.

Slide 5: Provides a description of what is meant by customer-based marketing strategies. It

Slide 9: Explains the concept of one-to-one marketing – a highly customised approach

1. Psychographic segmentation focuses upon grouping customers by social class or approach to

Topic 4: Advertising and Brand Management

4.1 Learning Objectives

On completion of the topic, students will be able to:

• Identify a number of methods of advertising online

4.2 Pedagogic Approach

Private Study: 7 hours

The structure of this topic is as follows:

4.4.1 Guidance on the Use of the Slides

Slide 1: Identifies the topic.

Slide 2: Provides a summary of the content of the topic.