Over the last 30 years electronic commerce has changed in its meaning. The original meaning of electronic commerce was to facilitate transactions through electronic systems and technologies. These technologies include, Electronic Funds Transfer, (EFT) and Electronic Data Interchange (EDI) (Muka para 2). These technologies facilitated commercial documents such as invoice and purchase orders to be sent through electronic systems were introduced in 1970’s (Muka para 3). Electronic commerce also involved telephone banking, Automated Teller Machine (ATM) and credit cards that were introduced in 1980’s. In 1990’s electronic commerce included data warehousing and mining, and Enterprise Resource Planning system (ERP). An example of earliest computer which was used in market places was Boston computer exchange. American information exchange was the first online pre internet system which was introduced in 1991. By 1994 internet was popular world wide however DSL and security protocols which could allow connections had not been introduced until 1999. In year 2000 many companies of America and Europe were offering services through World Wide Web. E- Commerce is a word which was associated with the ability of online electronic payments and purchasing (Muka para 6).
According to Sergiu23 para 1, Electronic commerce also known as e-Commerce, involves the buying and selling of goods/ products and services over the electronic system such as computers networks and other internets. Internet has spread all over the globe and this has facilitated to an extraordinary growth of the amount of trade that is conducted over the electronic systems. Through electronic commerce, commerce of wide variety such as processing online transactions, systems of inventory management, systems that are automated in data collection, Electronic Data Interchange (EDI), marketing through internet et-cetera are conducted. World Wide Web is used in transactions carried out through electronic commerce. However other technologies for example E-mail can also be included during transaction lifecycle.
The transfer of virtual items over the electronic systems constitutes a big percentage of the electronic commerce, for example through the Website you can access premium content. However in some way physical items are transported. Business to Business (B2B) is electronic commerce between businesses. Pre-qualified participants (private electronic markets) can be limited to this service. However B2B services such as commodity exchange are open to all parties. The aspect of sale of e-business is the electronic commerce. E-business involves business transactions through data exchange to facilitate payments and financing. E-tailors also online retailers undertake retail services also known as e-tail. Big e-tailors have this system of electronic commerce on Web site.
Electronic exhibit many advantages for example; cost of fulfillment is relatively low using online marketing. To spread messages through e-mail is relatively low than the cost of ordinary mail which would be incurred in sending letters. Secondly you can update your subscriber instantly through the internet. In each time of visit to your Website customers can get information and if there are sales they can start ordering for the products immediately when they get the information through the e-mail. Through online marketing you can reach customers world wide at any time of the day or the night and your customers can shop or order for the products at any time. Products or information about sensitive business issues like the magazine, news paper, or law firm can be delivered to the customers with a lot of ease not necessarily using a courier (Cotton Graphic Design para 3, 4).
On the other hand online market has its own demerits; firstly there are costs which are incurred in designing the website, maintaining the system, online distribution time and of course the cost of purchasing hardware and software. Secondly there are very few individuals especially in developing countries who are aware and use these services. There is no live interaction between the customer and the seller and therefore customers can be deterred from buying if the business is only in one location. There is also the need to updates the system regularly otherwise you can spread outdated information. The customer services are not replaced and since there are no such programmes like enquiry response and therefore visitors may mark your site as being poor. Poor navigation of some Website makes it difficult for the customers to find what they want. There is also competition and before the customer finds your site they may have checked many links and you may end up losing customers (Cotton Graphic Design para 6, 7).
In conclusion when creating online marketing strategy it is important for you to consider the merits and demerits of online marketing. The demerits which are incurred on the process of online marketing can be overcomed when you consider the requirements of customers. In USA the Federal Trade Commission (FTC) regulates electronic commerce activities. The activities include consumer privacy, online advertising and commercial e-mails. The National Standards are established by CAN ASPAM Act of 2003. These standards allow direct online marketing. The federal Trade Commission Act was established to regulate form of advertising. The Act states that all form of advertisements should be non-deceptive and must be truthful. On the other hand electronic commerce is conducted on World Wide Web at consumer level. Individuals can purchase through online markets for such things like groceries, estates, magazines, books etc. For big corporations or financial institutes use the systems to exchange data in order to facilitate the business. In e-commerce security and data integrity are outermost importance.
Cotton Graphic Design: Internet Marketing – Advantages and Disadvantages (n.d). Retrieved on 17th September 2008 from; http://www.cottongraphicdesign.com/internet-marketing/57839.php.
Muka, Halaman: History of Electronic Commerce (2003). Retrieved on 17th September 2008 from; http://andika10.blogspot.com/2007/12/history-of-electronic-commerce.html.
Sergiu23: Electronic commerce aka e-commerce history (2008). Retrieved on 17th September 2008 from: http://www.ecommerce-journal.com/articles/electronic_commerce_aka_e_commerce_history