2 MARKS QUESTIONS

1. i) Explain the meaning of ‘E-Commerce’.

Ans. Ecommerce, also known as electronic commerce, electronic marketing or internet
commerce, refers to the buying and selling of goods or services using the internet,
and the transfer of money and data to execute these transactions.
Ecommerce is often used to refer to the sale of physical products online, but it can
also describe any kind of commercial transaction that is facilitated through the
internet.
Eg: A manufacturing plant orders electronic components from another plant
within the company using the company's intranet.

(ii) What is electronic fund transfer?

Ans.EFT is used for transferring money from one bank account directly toanother without
any paper money changing hands, either within a singlefinancial institution or across
multiple institutions, via computer-basedsystems, without the direct intervention of bank
staff.It can be Direct debit payments or Electronic bill payment in online
banking.

(iii) What is business to business e-commerce (B2B)?

Ans.In B2B e-commerce, the companies sell their productsor services online to other
business entities. Even thesharing of information among the organizations takeplace
through Electronic Data Interchange (EDI).
E.g. Wholesalers can contact prospective buyer firms tosell bulk goods on the website
Indiamart.com.

(iv) Define E-security.

Ans.Security is an essential part of any transaction that takes place over the internet.
Customers will lose his/her faith in e-business if its security is compromised. Electronic
security system refers to any electronic equipment that could perform security operations
like surveillance, access control, alarming or an intrusion control to a facility or an area
which uses a power from mains and also a power backup like battery etc.
(v) What is E-CRM?

Ans.The E- CRM or electronic customer relationship management encompasses all

standard CRM functions with the use of the net environment i.e., intranet, extranet and
internet. Electronic CRM concerns all forms of managing relationships with customers
through the use of information technology (IT). E - CRM processes include data
collection,data aggregation, and customer interaction. Compared to traditional CRM, the
integrated information for E - CRM intraorganizational collaboration can be more
efficient to communicate with customers.

(vi) What do you understand by e-Government?

Ans.E-government (short for electronic government) is the use of technological
communications devices, such as computers and the Internet to provide public services to
citizens and other persons in a country or region. E-government offers new opportunities
for more direct and convenient citizen access to government, and for government
provision of services directly to citizens. [1] The term consists of the digital interactions
between a citizen and their government (C2G), between governments and other
government agencies (G2G), between government and citizens (G2C), between
government and employees (G2E), and between government and businesses/commerce’s
(G2B). 

(vii) What do you mean by digital signature?

Ans.A digital signature is an e-signature authenticated through encryption and password.
Digital signature ensures the authenticity of the information.A digital signature is a
mathematical technique used to validate the authenticity and integrity of a message,
software or digital document. As the digital equivalent of a handwritten signature or
stamped seal, a digital signature offers far more inherent security, and it is intended to
solve the problem of tampering and impersonation in digital communications.
8 marks Questions:
2. What do you mean by E-commerce? Discuss its importance in modern era of
business.
Ans. Ecommerce, also known as electronic commerce, electronic marketing or internet
commerce, refers to the buying and selling of goods or services using the internet,
and the transfer of money and data to execute these transactions.
Ecommerce is often used to refer to the sale of physical products online, but it can
also describe any kind of commercial transaction that is facilitated through the
internet.
Eg: A manufacturing plant orders electronic components from another plant
within the company using the company's intranet.
The major opportunities that e-commerce can bring to thecompanies /suppliers are:
 It minimizes inventory cost - One of the most important aspects of eCommerce is that
its available at a low cost. These low-cost items are provided to the customers at
discounted prices.
 Attract new customers -E-commerce attracts new customers for the business. It
generates traffic for the business through search engines. Many customers search for
their desired product on the search engine which generates a lot of results for the
customer.
 It helps business globalize – It helps the company to overcome geographical limits.
Through e-commerce, a person can provide his goods or services over a wide area and
is not limited to a specific area. If anybody has a store he is limited to certain areas
and cannot go out of a certain range but through e-commerce, one can provide his
services worldwide.
 Eliminate Travel time and cost - Through e-commerce, one can purchase his products
from home and he has no need to travel to the store or market for purchasing. He just
has to place the order on the website and get the delivery to home. There is a huge
saving of time and save the cost of traveling by using the eCommerce service.
 Availability - purchase anything online 24*7 - Physical store is not available every
time in the day and night,but eCommerce stores are available at any time. A customer
can visit the eCommerce website anytime and place the order and get the desired
product at any time.
 Provides with variety of goods for selection - It provides a person with the facility of
comparison before purchasing a product. There are several stores online which are
providing goods and services. A person who is willing to avail of the services
 cancompare the price and quality of goods of many different stores and choose the
store according to his will which is most beneficial for him.
 Provide abundant information – Ecommerce provides a lot of information to clients
about different products that are available worldwide. In physical stores, the workers
of the store just provide the required information to the clients that they are allowed
by the management. But in eCommerce stores are allowed to provide full and
complete information to clients so that they can be satisfied before purchasing the
product.
 The market for niche products - In the physical store, it is difficult to locate or find
niche products for buyers. But eCommerce has made it very easy and comfortable for
the customers to search for the product in the search engine and many products will
be made available to you through different eCommerce websites and clients if free to
choose his desired product.
 Quickly find the product – Through eCommerce, somebody could find the desired
product quickly. A person just has to visit an eCommerce website and search for the
desired product in the search box and then finalize the purchase online and it will be
delivered to the home of the client. In market sometimes it’s difficult to find a product
but through e-commerce one can find his desired result immediately
 It can improve customer services.
 User friendly - buying options - quick convenient and userfriendly - ability to transfer
funds online.
3. Briefly explain the behaviour of online consumers.
Ans. With the evolution of online communication through internet, customers now see
online advertisements of various brands. It is fast catching up with the buying behaviour
of consumers and is a major source of publicity for niche segments and also for
established brands. This is the new way of digital revolution and businesses worldwide
have realized their worth.
The FFF model takes into consideration internal and external factors affecting consumer
buying behaviour. It then proceeds to discuss various filtering elements customers will
apply to make a selection of a store to purchase from and revised filtered buying
behaviour based on their final selection.
Graphically the model representing customer journey to purchase looks like this:

1. Factors
Starting from left, the first element Kimar and Dange identified are factors that motivate
customers to buy products or services online. They divided them into two categories:
external and internal.

The external factors are the ones beyond the control of the customers. They can divide
into five sectors: Demographics, socio-economics, technology and public policy; culture;
sub- culture; reference groups; and marketing.
Internal factors are personal traits or behaviours and include attitudes, learning,
perception, motivation, self image, and semiotics.
Based on such factors customer develops what Jagdish Sheth, a professor of marketing
at Emory University defined as two distinct types of buying motives: functional and non-
functional.
The functional motives relate to consumer needs and could include things like time,
convenience of shopping online, price, the environment of shopping place (i.e. couch
buying), selection of products etc.
The non-functional motives relate more to the culture or social values like the brand of
the store or product for instance.

The Customers use that knowledge now to filter their purchase options by 3 factors:
a)Security
b)Privacy
c)Trust and trustworthiness.
4. What are the different opportunities and challenges of e-business in India?
Discuss.
Ans. E-commerce has been on the rise over the past few years of time in India.
There has been an increasing number of instances where different e-commerce
businesses are popping up. The rise of e-commerce is mainly due to the ease of
availability of the internet.

Challenges Faced by the Marketers or the Business Owners

The developing countries like India have to face a number of challenges for the
purpose of utilizing the benefits of increasing incomes as well as the trade
flows in e-commerce business. The reasons behind the fact are a wide range of
legal, technical and international governance considerations need to be taken
care of.

1.  Personalisation

It is certainly one of the most important challenges for the suppliers when it
comes to e-commerce business in the country and its stiff competition with the
retail stores. In a developing country like India, there are a lot of people who
still prefer retail stores where they can physically check out the products before
buying. The retail stores, on the other hand, provide a personal touch which is
quite difficult to be replaced with online selling.

2. Challenges of Shipping

Even though you have a great e-commerce website design and a good number of
customers, the challenges of shipping remains a concern. There are a lot of
issues related to the lack of supply chain integration, delay in delivery along
with a lack of proper courier services, especially in the rural areas. This results
in the frustration of the customers and hence a major challenge.

3. Currency

Currency challenge is another major area of challenge that is faced by e-

commerce businesses. Different countries have different export as well as
import specifications. Thus, issues related to credit card limits and currency
exchange rates play a negative role in eCommerce business thereby hindering
the smoothness in the overall e-commerce shopping.

Nowadays, e-commerce site development is done in such a way that it is able to

accept different payment options which makes it easier for the customers.

4. Challenges Faced by Consumers or Buyers

In India, there are a number of challenges faced by the customers as well in the
eCommerce business which are as follows.
 5. Refund

The refund issue is one of the major hindrances in the e-commerce businesses in
India. If the product acquired does not match with the specification or the
product is a faulty one or any other issue, there arises a situation of return but
the refund in these cases takes a lot of time which pushes the customers in the
backfoot.

6. Trust

Trust is another issue that affects the e-commerce businesses in India such as
assurance of the quality product, guaranteed refund & return in case of faulty
goods and trust in the privacy of the personal data.

Opportunities for the Marketers or the Business Owners

Apart from the challenges faced by the marketers in e-commerce business in
India, there are some opportunities as well which needs to be capitalized at its
best.

 First of all, it minimizes the inventory cost to a great extent as in the

case of expensive retail showrooms.
 It can play a vital role in the improvement of customer service.
  It provides a great scope for the globalization of the business by making
the products and services available to customers worldwide.

Opportunities for the Consumers or Buyers

Some of the major opportunities that e-commerce brings to the customers are as
follows.

 The buying options in eCommerce are quick, convenient and user-

friendly which is necessarily the best part.
 It helps in the elimination of the travel cost for the customers.
 The e-commerce stores are available 24*7*365 which allows the
customers to shop at their own convenient time.

So, at any point in time, you wish to engage in an e-commerce business, opt for
a good e-commerce site development  along with a great e-commerce website
design and appropriately analyze the challenges & opportunities in the business
for achieving successful results.
5. Briefly explain the role of CRM in digital world.
Ans. CRM stands for Customer Relationship Management. CRM refers to the
tools and the technical system that is used to perform optimal customer
relationship management.

 Extensive Customer Data

A CRM system will have the whole history of customer trends and habits, even of
those you had acquired before installing the systems. This information is crucial
for the analysis of the wishes and tendencies of each customer. Once you know
this, you will know what to offer them.

 Customer Oriented Products

The CRM system will not only have the basic purchase history but all the details
of the customers so you can even track the purchase details and resources of the
customers.
When you analyze the data and know what price category, what brands, what
products, and what time of the year or day the target customers like to shop, you
will be able to present the right thing at the right time to the right people and
you can never go wrong with that.
 To Help you get Service-Ready
The CRM systems group customers according to their price group preferences,
product preferences, and location. With this information you can smartly
allocate customer managers or account managers to different areas and equip
them with the required products and teams. This will help you promptly serve
every location.

 Optimize Conversion Probability

You will also be able to track down the time of the day each customer is more
likely to visit a site to make a purchase. You will know the festive season or any
time of the year that is most likely to raise demands of a particular product in a
particular area.
Since you know the details of the customer preferences now, you will not waste
time researching and collecting data about what they are looking for. This way,
by the time your rivals figure out what the target audience is looking for, you
will have already presented it to them.

 Retention Of Customers

With CRM, you can gather information from numerous sources including social
media and keep it composed in one spot, so you can utilize it when the need be.
By giving mindful client assistance, reacting to demands auspicious and taking
into account the client needs consistently, a business can improve levels of
consumer loyalty.
 Easy Access Of Data Anywhere
The data on an integrated CRM system is centralized so that it is available at any
time and to any authorized person on any authorized device whenever needed.
You don’t waste valuable time or a great opportunity waiting for the system to
upload or the data to be extracted.
This increases productivity which not only directly translates into increased
sales, but also creates a reputation for your business.
 Growing Business Reputation
Talking about reputation, a CRM system helps you with everything so that you
can perform with perfection and promptly, without any delay at all. The brand
image will be brilliant. Customers will look at your company as one of the most
efficient ones in the market. Your team will be the best.
6. Differentiate between ‘E-Commerce and E-Business’
Ans.
7. “Consumers’ trust is an essential element of e-commerce”. Discuss
Ans. Lack of trust is a fundamental reason why many users won’t purchase goods or
services from e-commerce Web sites. Evidence suggests that the principal reasons why
people do not purchase via the internet are related to online security and policy,
reliabilities of companies (Gefen, 2000), and web site technology. Online trust is an
important determinant for web sites to succeed in marketplace, and for retaining long-
term relationships with consumers .

The importance of trust is elevated in e-commerce because of the high degree of

uncertainty and risk present in most on-line transactions. Empirically showed the
favourable effect of trust on consumer purchase intentions . Thus, the role of trust is of
fundamental importance for adequately capturing consumer behaviour in e-commerce.
Perceived risk is also an important element of B2C e-commerce that is likely to affect
consumer behavior.

Consumers and businesses must feel confident that their transactions will not be
intercepted or modified, that both sellers and buyers own the identity they claim, and that
the transaction mechanisms that are available are secure and legal. “There is a growing
body of research literature dealing with online trust, in which e-commerce is one
prominent application. Several studies contend that e-commerce cannot fulfill its potential
without trust (Kuttainen, 2005.)”.

“In research on business-to-consumer (B2C) e-commerce, trust is regarded as a mental

short-cut to a buying decision, where the buyer is faced with the uncertainties of product
quality and vendor reputation (Grabner-Kräuter, 2002). Some suggest that trust can turn a
potential online consumer from a curious “window shopper” to an actual buyer

“The Internet has become an essential business marketing paradigm related to the
development of platform for trading, distributing and selling products this B2C e-
commerce is trust.

Trust is a crucial factor on the Internet since an e-vendor is considered a business entity
with which consumers are economically engaged in online transactions.  Vulnerability for
consumers stem from the fact that they should provide their personal and financial
information to e-vendors in order to complete their online transactions. This puts
consumers at risk because the online environment exposes them to the threat of possible
opportunistic behaviours by e-vendors such as masquerading, misuse of personal
information, and even credit card fraud . Pavlou and Jarvenppa et. al state that for this,
perceived risk negatively influences consumer’s intention to transact online and decreases
the likelihood of such transactions. 

8. What are the advantage of B2C e-commerce to individual?

Ans. The ecommerce brings the shopping experience to the consumer’s home. By
launching a B2C ecommerce website, the manufacturers’ bring the convenience and
comfort of shopping to the consumers thereby increasing their prospective customers.
When the manufacturer owns the retailing operations also, it can create brand awareness
more prominently. By reaching out to new markets the manufacturers can increase their
business’s brand name and about their product line. The e-shopping is accessible from
anywhere anytime, thus it proves to be a quick and easy mode of providing information.
Manufacturers can provide extensive updated information of their product range through
their customized ecommerce website design.
1. Single Catalogue:-
Having a unified site will allow you control all your products in a single catalogue. It will
eliminate the complications that result from managing several catalogues at a time. A
custom e-commerce website can make the things easier for you.

2. Make marketing easier

If you have a single site and brand, then the customers won’t have any difficulty
recognising you. You have to promote only a single brand that eliminates all the
confusions from their mind. We have often seen people get confused with the brand
names and end up buying the wrong product. Furthermore, your marketing and
promotional work will also become easier.

3. Demand less technical headache

If you have hired a reputed organisation for e-commerce development solutions, then the
things will become easier for you. There would only be a single theme and code base that
you need to operate that is less complicated than managing two sites. It demands much
less time than maintaining and changing two different sites.

4. Lower operational costs

Having a single website will result in reducing the operational costs to a significant level
as one will need less physical infrastructure and staffing. Furthermore, it will give
maximum return on investment by selling products to both consumers as well as
businesses.

5. Easier operations
There is a lot of technical expertise needed to build a site that can control both B2B and
B2C operations. A company developing a highly skilled custom e-commerce website can
do this work easily. Once that completed, the things become very easier as you have to
integrate systems like CRM, ERP, & related systems in a single place. You don’t need
separate integration for multiple sites in this case.

6. Business customers appreciation

Nowadays, the businesses prefer to buy a product quickly at an affordable price. Time has
become one of the crucial things for them & that’s why they don’t want to waste their
precious time on buying things. So, giving them an experience of custom e-commerce
website will receive huge appreciation.

7. Enhanced Customer Experience

Making a unified strategy will allow you offer a true Omni channel experience to the
buyers, whether they are consumers or businesses. Finding products and delivering
products become easier that allow you provide better customer experience.
9. What are the different legal aspects of IT security? How do this influence business
inthe present scenario?
Ans.

10. How the advertising is done on the internet? Explain

Ans.Online advertising / Internet advertising, uses the Internet to deliverpromotional
marketing messages to consumers.It includes Email Marketing, Search EngineMarketing,
Social mediamarketing, many types of display advertising including Web
banneradvertising and mobile advertising.
Like other advertising media, online advertising frequently involves both apublisher, who
integrates advertisements into its online content, and anadvertiser, who provides the
advertisements to be displayed on thepublisher’s content.
Methods of online advertising:
 Digital advertising- Display advertising conveys its advertising message visually
using text, logos, animations, videos, photographs, or other graphics.
Types:Banner ads, Pop up ads, Floating ads, Interstitial ads
 Text Ads - A text ad displays text-based hyperlinks. Text-based ads may display
separatelyfrom a web page’s primary content, or they can be embedded by
hyperlinkingindividual words or phrases to advertiser’s websites.
 Search Engine Marketing (SEM) - Search Engine Marketing or SEM, is designed to
increase a website’s visibilityin search engine results pages (SERPs). Search engines
provide sponsoredresults and organic (non- sponsored) results based on a web
searcher’s query.Search engines often employ visual cues to differentiate sponsored
resultsfrom organic results.
 Sponsored Search / Paid Ads - Sponsored search (also called sponsored links or
search ads) allows advertisersto be included in the sponsored results of a search for
selected keywords.Search ads are often sold via real-time auctions, where advertisers
bid onkeywords.
 Social media marketing - Social media marketing is commercial promotion
conducted through social mediawebsites like Facebook, Orkut, LinkedIn,
Myspace.Many companies promote their products by posting frequent updates and
providingspecial offers through their social media profiles.
 Mobile Advertising - Mobile advertising is ad copy delivered through wireless
mobile devices such assmart phones, feature phones , or tablet computers. Mobile
advertising may takethe form of static or rich media display ads, SMS (Short Message
Service) or MMS (Multimedia Messaging Service) ads, mobile search ads.
 Email Advertising - Email advertising is ad copy comprising an entire email or
aportion of an email message.Email marketing may be unsolicited, in which case the
sendermay give the recipient an option to opt-out of future emails, orit may be sent
with the recipient’s prior consent.
 Online classified advertising - Online classified advertising is advertising posted
online in a categorical listing ofspecific products or services.Examples include online
job boards, online real estate listings, automotive listings,online yellow pages, and
online auction- based listings.OLX and eBay are two prominent providers of online
classified listings
 ADWARE - Adware is software that, once installed, automatically displays
advertisementson a user’s computer. The ads may appear in the software itself,
integrated intoweb pages visited by the user, or in pop-ups/pop-unders.