KYAMBOGO

UNIVERSITY

FACULTY OF SCIENCE DEPARTMENT OF COMPUTER SCIENCE

COURSE: BACHELOR OF INFORMATION TECHNOLOGY AND COMPUTING. COURSE UNIT: IT225 INTERNET TECHNOLOGIES. COURSE WORK: TWO. SEMESTER: TWO. YEAR: 2012
NAME: KAYEMBA ISMAEL REG/NO: 10/U/3259/ITD/PD SIGN:

LECTURER: MR.NKALUBO. L. Qn. Write a research paper that discusses the merits and demerits through
differentiating E-Commerce and Traditional Commerce.

Introduction. Commerce. Commerce is a branch of business which is concerned with the exchange of goods and services. It includes all those activities, which directly or indirectly facilitate the exchange and distribution of goods & services more efficiently. E-Commerce. E-Commerce is the purchasing, selling and exchanging of goods and services over computer networks (such as the Internet) through which transactions or terms of sale are performed electronically. Electronic commerce draws on such technologies as electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, Online Shopping, Electronic Payments, Internet Banking, mobile devices and telephones as well. Ecommerce can be classified based on the type of participants in the transaction:
Business Business

to Business (B2B). to Consumer (B2C). to Consumer (C2C). (C2B).

Consumer

Consumer-to-Business

Background of E-Commerce. E-Commerce applications began in the early 1970s with such innovation as electronic transfer of founds (EFT). However, the applications were limited to large corporations and a few daring small business. Then came electronic data interchange (EDI), which automated routine transaction processing and extended E-Commerce to all industries. In the early 1990s, E-Commerce applications expanded rapidly, following the commercialization of the internet and the introduction of the web. A major shakeout in E-

Commerce activities began in 2000 and lasted about three years; hundreds of dot-com companies went out of business. Since 2003, E-Commerce has continued to show steady progress. Today, most organizations are now practicing some types of E-Commerce transaction. Traditional Commerce. Traditional Commerce is the process of buying, selling or exchanging products, services or information is physical probably with the existence of a physical store. It also involves buying and selling goods and services physically face-to-face. The earliest form of Traditional Commerce is the barter system. There are different Kinds of Traditional Commerce Models, that is to say; Retail store, Retail special order, Catalogue store, Phone order from a catalogue and Bargaining. Background of Traditional Commerce. Traditional Commerce perhaps started before recorded history when our ancestors first decided to specialize their everyday activities. Instead of each family unit having to grow crops, search for food, and make tools, families developed skills in one of these areas and traded some of their production for other needs. It started with bartering, which eventually gave way to the use of currency, making transactions easier to settle. However, the basic mechanisms of trade were the same. Some body created a product or provided a service, which somebody else found valuable, and therefore was willing to 'pay' for it in exchange. Thus, commerce, or doing business, is a negotiated exchange of valuable products or services between at least two parties and includes all activities that each of the parties undertakes to complete the commercial transaction.

The following are the merits of E-Commerce over Traditional Commerce. Business Hours: 24/7 In E-commerce, online store opens 24/7. Even though the seller is away or sleeping, the customers can visit the store, browse the products of their desire and place their orders. Where as in Traditional Commerce, business transactions are mostly carried out during day time, there fore some consumers can visit only a few traditional outlets per day hence being limited from purchasing their products. Global Location. In E-commerce, the store for products is online located. This means everyone with internet connection from worldwide, can visit the store without the seller or company having retailers delivering products to different places of the world. While in Traditional Commerce, a buyer himself has to move to the market so that he can purchase products he wanted. Lower Transaction Costs. With a well-implemented online store in E-Commerce, many things can be automated. By automatization the buyer can cut the costs on areas like documents preparation, error detection and correction, mail order catalogs, phone calls and labor costs. If the products or services are downloadable, the distribution costs will be completely cut off. Where as with Traditional Commerce, things can not be automated; there fore it becomes difficult for a buyer to cut the costs on areas like labour, long distances, transports and many others. Increases Brand or Product Awareness: In E-Commerce, millions of consumers looking for what you sell anywhere in the world can be reached. By reaching out to new markets and displaying the site prominently in front of the consumers, the brand name of the company will be increased and also increase awareness about the available product online. Where as in Traditional Commerce, traditional outlets will be known by few consumers since some of the outlets are located in remote areas hence no awareness of customers about the available products. Locate the Product Quicker.

With E-Commerce, it is no longer about pushing a shopping cart to the correct aisle, or scouting for the desired product. On an E-Commerce website, customers can click through intuitive navigation or use a search box to immediately narrow down their product search. Some websites remember customer preferences and shopping lists to facilitate repeat purchase. Where as with Traditional Commerce, some times it becomes difficult and cumbersome for customers to search for products of their desire most especially when the product name is not really known by the customers. Expands Geographical or Customer Reach. Owning an E-Commerce business typically means no limits as to whom and where you can sell your products. Generally you will not be limited on the customers you can reach out to since online businesses are not limited unless you put geographical limits in place. Where as in Traditional Commerce businesses some times are limited to specific geographical areas. This makes it difficult for consumers to access specific products from the market. Speed. Carrying out transactions electronically (E-Commerce) provides vast competitive advantages. When implemented properly, E-Commerce is often faster, cheaper and more convenient because it allows messages to traverse the world instantly. Where as with Traditional Commerce, since the system involves the traditional methods like barter trade, this will result into slowness in transactions since both sides have to first reach on a final agreement on whether goods that are to be exchanged are worth valued equally.

However Traditional Commerce may be advantageous than E-Commerce due to the following; Perishable goods. Since perishable goods like tomatoes, ice cream go bad very first, with Traditional Commerce, consumers can purchase those goods efficiently within a shortest period of time. While E-Commerce is not suitable for perishable goods since people prefer to shop in the conventional way than to use E-Commerce for purchasing food products and objects that need to be felt and touched before actually making the purchase.

Time for delivery of products. In Traditional Commerce, it is possible for a person to visit a local music store and walk out with a compact disc, or a bookstore and leave with a book since he knows what he wants to purchase hence saving time. While E-Commerce is often used to buy goods that are not available locally from businesses all over the world, meaning that physical goods need to be delivered, which takes time and costs money. Returning goods. In Traditional Commerce, once goods have been bought, it is quite easy to return them back for exchange in case a consumer made a wrong choice, provided that you agreed with the seller on terms and conditions during purchasing. While with E-Commerce, returning goods online can be an area of difficulty. The uncertainties surrounding the initial payment and delivery of goods can be exacerbated in this process. Security. In Traditional Commerce, since transactions are usually made face to face, security is guaranteed in that a customer is only required to pay for the purchases he has made, no further details or information. Where as in E-Commerce, when making an online purchase, you have to provide at least your credit card information and mailing address. In many cases, E-Commerce websites are able to harvest other information about your online behavior and preferences. This could lead to credit card fraud, or worse, identity theft. Doubts and Fears. With Traditional Commerce, consumers are confident and have no fear when purchasing products since they can see, touch and feel on a certain product to be purchased. Where as in E-Commerce, many people do not understand the awesomeness of shopping online. They are too afraid to buy something on the web because they doubt if the store is reliable, curious if the product is as good as it looks like on the site, afraid that you would steal their money.

RECOMMENDATION.

Due to the increased popularity and availability of Internet access many traditional small business are considering E-Commerce as a valid and profitable sales channel. However, E-Commerce and Traditional Commerce are very different, and it's important to weight carefully the differences between E-Commerce and Traditional Commerce in order to decide if it would be a good fit for your business or just a costly mistake. From all the above advantages of E-Commerce, that shows that E-Commerce is better than Traditional Commerce since the whole world these days is so dependant on it, thats why its like a playground to all customers, meaning that if you have a physical store, you are only limited by the geographical area where you can service customers. There fore with E-Commerce, customers can shop in their own time, and an online store doesn't require live salespeople.

CONCLUSION :

E-Commerce related to food purchases is a relatively new concept and one that has yet to be fully embraced. The benefits of E-Commerce in B2C food transactions must be carefully weighed against the costs. While the potential for successful online food vendors does exist, E-Commerce startup costs may be high and losses even higher, especially in terms of perishable food, so it is important for each firm to evaluate its short-term and long-term goals. Incorporating E-Commerce into a traditional operation is not for everyone. Retailers must consider each of the aforementioned factors before starting an online food business. All successful E-Commerce depends on solid, trustworthy partnerships and timely operations and online retailing of food is no exception. As online shopping continues to grow, it is likely that an increasing number of buyers will use food industry E-Commerce services. Online food purchases must be shown to be as safe and of the same quality as in-store transactions. The success of E-Commerce relies upon two things: buyer preference and perceived safety of purchases. Until these aspects of online food transactions are effectively addressed, traditional buying formats will continue to dominate both the marketplace and market space.

REFERENCES.

http://jcizzo.com/the-traditional-commerce.html 09/03/2012 11:04AM http://www.manjeetss.com/articles/advantagesdisadvantagesecommerce.html 09/03/2012 11:12AM http://www.esalestrack.com/blog/2008/09/advantages-and-disadvantages-of.html 09/03/2012 11:00AM http://www.ecommerceoptimization.com/ecommerce-introduction/ 09/03/2012 12:05PM http://wiki.answers.com/Q/Disadvantages_of_using_e-commerce 09/03/2012 10:55AM 10:32AM