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On E-Business - Term Paper Example

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The proliferation of the Internet has brought about a number of social changes which has resulted in the emergence of the Internet as market space (Bonera, 2011). Commercial websites offer products and services for direct purchase online. Globally the number of website offering online purchases has gone up from 23,000 in 1995 to over 55 million in 2005…
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Term Paper on E-Business
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Download file to see previous pages... As far as the marketers are concerned online marketing has increased the reach, reduced planning time, lowered the costs and with the use of technology they are able to reduce the sales points and offer a number of payment options to the customers. The prevalence of the Internet provides efficiency and convenience but as technology has developed, risks and uncertainties too have developed which directly impact online shopping behavior and customer satisfaction. In the case of internet banking, the perceived security risks are high as a third party can easily intercept the system (Mann and Sahni 2011). On the supply side too, the sellers are subject to security and fraud risks. E-business and online purchase subjects the customer to unique risks such as credit card fraud, non-delivery of goods after purchase, private information being shared with other portals, and lack of guarantee of the good and services purchased (Koyuncu and Bhattacharya 2004). Such risks prevent the customers from buying high-priced items online or items that would require visual inspection. Customers also fear delays in delivery or goods damaged in delivery, which poses a challenge for the sellers (Sharma 2011). Lack of face-to-face interactions emphasizes the role of trust in online payments (Ranaweera, McDougall and Bansal 2005). Trust in an online environment takes time to develop and is based on past experience and recommendations by the third party (Mann and Sahni 2011). Fraud and security risks faced by the sellers have limited the growth of e-business. However, as technology has developed secure transactions and encryption have developed too, offering guarantees and security to buyers and sellers. E-business has more risks than retail shopping but in spite of the risks internet business has grown because of the numerous advantages it offers. These advantages include lower transaction cost, lower search cost both in terms of time and money; wider range to select the products from, lower prices and savings on time as shopping is much faster (Koyuncu and Bhattacharya 2011). However, if the delivery time increases, or the risks of payments increases, the customers are likely to engage less in e-business. The theory of reasoned action (TRA) explains that human behavior is based on the beliefs and intentions. Bonera (2011) finds that online purchase intention could be influenced by the construct of playfulness but then perceived security and usefulness influence the purchase intention. Thus, if the perceived security level is low, online purchase is likely to be adversely impacted. Apart from the security concerns, ease of use and website quality can influence consumers’ online purchase behavior. A satisfied customer would have the intention to return to the website and also be willing to recommend the website to friends (Ranaweera, McDougall and Bansal 2005). While the first transaction may stem from curiosity or playfulness, subsequent transactions would depend upon the actual delivery and consumption relating to the first transaction. Acquisition costs are higher than retention costs and hence it is a challenge for the marketers to convert the first-time visitors to actual buyers. There exists a definite relationship between website quality and website satisfaction. At the same time consumer ...Download file to see next pagesRead More
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