Table of Contents

Fundamentals of E-Commerce ...................................... 3

E-Commerce Business Models .................................... 20
Digital Payment Systems (E-Payment Systems) ............. 31
New Trends in E-Commerce ......................................... 54
Unit 1: Introduction to Communication......................... 66
Unit 2: Types of Communication ................................... 74
Unit 3: Tools of Communication ................................... 81
Drafting....................................................................... 85
1.1 Notices and Agendas ........................................... 85
1.2 Board Meeting Minutes......................................... 86
1.3 Circulars ............................................................. 87
2. Report Writing ..................................................... 88
3. Business Letters .................................................. 91
4. Curriculum Vitae (CV) Writing ............................. 105

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 Fundamentals of E-Commerce
1.1 Introduction
The assimilation of information and communications technology (ICT) in business
has transformed relationships within organisations and those between and among
organisations and individuals. Specifically, the use of ICT in business has
enhanced productivity, encouraged greater collaboration, and led to profound
changes in various business processes. One of the most dramatic changes
currently transpiring in the world of business is the introduction of Electronic
Commerce. The impact of electronic commerce (E-Commerce or EC) on
procurement, shopping, business collaboration, and customer services, as well as
on the delivery of various services, is so significant that almost every organisation
is affected. E-Commerce is changing all business functional areas and their
important tasks, ranging from advertising to paying bills. The nature of
competition is also drastically changing due to new online companies, new
business models, and the diversity of EC-related products and services. EC
provides unparalleled opportunities for companies to expand worldwide at a small
cost, to increase market share, and to reduce costs.
1.2 Meaning of E-Commerce
E-Commerce, in simple terms, is the buying and selling of goods over the internet.
However, it refers to a wide range of online business activities for products and
services. It also includes various network-based technologies such as:
• Electronic Data Exchange (EDI)
• Electronic Mail (E-mail)
• Electronic Bulletin Boards
• Electronic Fund Transfer (EFT)
E-Commerce facilitates business transactions more efficiently than by physical
exchanges or direct physical contact.

1.2.1 Examples of E-Commerce

• An individual purchases a shirt on the internet.
• A corporate employee reserves a hotel room over the internet.
• A business calls a toll-free number and orders a computer using the seller's
interactive telephone system.
• A business buys office supplies online or through an electronic auction.
• A retailer in Kolkata orders commodities using an EDI network or a
supplier's extranet.
• A manufacturing unit in Jamshedpur orders electronic components from
another unit within the company using the company's intranet.
• Mr. Basu withdraws funds from an automatic teller machine (ATM) of SBI.

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 • Accepting credit or debit cards for commercial online sales.
• Driving information through a company via its intranet.
• Driving manufacturing and distribution through a value chain with partners
on an extranet.
• Selling to consumers on a pay-per-download basis, through a website, etc.

1.2.2 E-Commerce Definition

There are several definitions of E-Commerce. Some of the notable ones are:
• Correspondence Centre (Belgrade, Serbia): E-Commerce is the sharing of
business information, maintaining business relationships, and conducting
business transactions by means of telecommunications networks.
• Zwass: E-Commerce is the use of technology in business transactions to
create, transform, and redefine relationships for value creation between or
among organisations and between organisations and individuals.
• Emmanuel Lallana, Rudy Quimbo, Zorayda Ruth Andam: E-Commerce
can be defined as the technology-mediated exchange of business
information based on intra or inter-organisational activities which facilitate
such exchanges over network channels.
1.3 Scope of E-Commerce
The scope of e-commerce can be stated as follows:
1. Carrying on planning jobs electronically through the internet, irrespective
of whether it is marketing, production, or financial planning.
2. Carrying on organising the company's business through electronic
methods.
3. Carrying on production and marketing activities through electronic devices.
4. Carrying on all other business activities, including e-payment, through the
internet.
1.4 Major Players in E-Commerce
Understanding the major players within the e-commerce landscape requires a
careful examination of both the broader market forces and the specific operational
environment. The principal actors are:
1. Vendors: These are the companies that manufacture and supply the
underlying technology and elements of e-commerce systems.
2. Commerce Service Providers (CSPs): These organizations are vital in
providing the expertise and infrastructure for merchants to establish and
operate online businesses. They commonly exist as service operator CSPs,
portal CSPs, and professional services CSPs.
3. E-merchants: This category encompasses businesses, merchants, and
distribution networks that leverage electronic media to sell products to a
substantial customer base and often have well-established brand identities.

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 4. End Users: These are the consumers who make purchases through e-
commerce platforms. A deep understanding of their requirements is
paramount, driving the trend towards e-commerce solutions that address
the needs of various user segments and individual customers.

1.5 Forces Fuelling E-Commerce

There are three major forces fuelling e-commerce:
1. Economic Forces: The most evident benefits of e-commerce include
economic efficiency arising from the reduction in communication costs,
low-cost technological infrastructure, speedier and more economic
electronic transactions with suppliers, lower global information sharing
and advertising costs, and cheaper customer service alternatives. Another
force is economic integration, which may be both external and internal.
2. Marketing Forces: Companies today use e-commerce to promote and
market their products and services to gain a foothold in the international
market. The internet is used as a medium for enhanced customer service
and support, enabling companies to provide detailed product and service
information to their target customers.
3. Technology Forces: The development of Information and Communication
Technology (ICT) is key to the growth of e-commerce. This has made
communication more efficient, faster, easier, and more economical by
eliminating the need for separate networks for telephone services,
television broadcast, cable television, and Internet access.
1.6 Components of E-Commerce
E-commerce transcends the simple act of establishing an online storefront. To
achieve competitiveness and maximize profitability, a robust e-commerce
ecosystem necessitates addressing several critical enabling factors. These
fundamental components include:
(i) E-commerce Vendors: Successful online sellers must possess a professional
corporate website, ensure reliable internet connectivity, and employ IT-literate
personnel capable of managing the digital aspects of their operations.
(ii) Transaction Partners: The integrity and security of e-commerce transactions
rely on the involvement of trusted transaction partners. These encompass
financial institutions (banks), national and international freight and logistics
companies, and authentication authorities that collectively ensure secure and
efficient exchange.
(iii) Consumers in Business-to-Consumer (B2C) Transactions: The end
consumers form a crucial component of the e-commerce landscape in B2C
models. Their participation and trust are vital for the success of online retail.
(iv) Companies/Businesses in Business-to-Business (B2B) Transactions: In B2B
e-commerce, a critical mass of interconnected businesses with reliable internet
access facilitates efficient supply chain management, procurement, and
collaborative activities.

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 (v) Government and Regulatory Framework: The establishment of a clear legal
framework governing e-commerce transactions and the presence of effective
regulatory bodies are essential. These entities protect both consumers and
businesses from fraudulent activities and ensure fair practices within the digital
marketplace.
(vi) Robust and Reliable Internet Infrastructure: A fundamental prerequisite for a
thriving e-commerce environment is a dependable internet infrastructure. This
includes consistent connectivity and a fair pricing structure that does not unduly
burden consumers engaging in online activities and purchases.
1.7 Benefits of E-Commerce
E-commerce offers a multitude of benefits that contribute to its widespread
adoption and significant impact on modern business practices. These key
advantages include:
1. Global Presence: E-commerce transcends geographical limitations,
enabling even small businesses to access a global market. This expanded
reach presents significant growth opportunities and diversifies market
potential.
2. Enhanced Quality of Service: By fostering closer connections with
customers through digital channels, e-commerce facilitates improved
service quality. Businesses can readily gather feedback, personalize
interactions, and respond efficiently to customer needs.
3. Mass Customization of Products and Services: E-commerce platforms
enable businesses to offer tailored products and services to individual
customer preferences. This capability aligns with the trends of
liberalization, privatization, and globalization, fostering greater customer
satisfaction.
4. Network Production: E-commerce facilitates "network production," where
geographically dispersed contractors collaborate on various stages of
production through interconnected computer networks. This model offers
two primary benefits: reduced operational costs and more strategic
targeting of specific markets.
5. Expanded Selling and Buying Opportunities: The internet provides
individuals with access to a significantly wider array of goods and services,
regardless of their physical location. This increased choice empowers
consumers and expands market reach for sellers.
6. Minimization of Transportation Barriers: E-commerce enables businesses
to streamline their supply chains, often bypassing traditional transport
obstacles and leading to reduced delivery costs and faster transit times.
7. Enhanced Availability of Services: Through online platforms, individuals
can access a diverse range of services – including financial, legal, and
medical – from various providers, expanding accessibility and convenience.
8. Reduction in Costs: E-commerce significantly lowers operational costs by
enabling businesses to reach a global audience with minimal physical
infrastructure. Automation of order processing reduces the need for manual
data entry, further contributing to cost efficiency.

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 9. Time Savings: E-commerce accelerates transaction processes. Online fund
transfers and reduced reliance on manual exchanges lead to significant
time savings for both buyers and sellers, enhancing overall efficiency.
10. Fast Inter-connection: E-commerce facilitates rapid and efficient
communication between a large number of potential business enterprises
and customers through electronic mail and other digital communication
channels, fostering immediate business relationships.
11. Minimization of Cost of Operation: E-commerce enables businesses to
streamline operations and reduce overhead costs. The automation of tasks
and the ability to manage transactions with fewer employees contribute to
significant staff expense reductions.
12. Elimination of the Middlemen: Direct interaction between businesses and
consumers through e-commerce platforms often eliminates intermediaries,
potentially leading to lower prices for consumers and higher profit margins
for businesses.
13. Tailoring Products to Customers' Needs: The ability to collect and analyze
customer data online allows businesses to understand individual needs and
preferences, enabling them to tailor products and services more effectively.
14. Easy Distribution Process: Digital information and services can be
distributed to customers seamlessly and efficiently through computer
networks and online platforms, simplifying the delivery process.
15. Convenience to Customers: Online storefronts are accessible 24 hours a
day, seven days a week, allowing customers to place orders and access
information at their convenience, significantly enhancing the shopping
experience.
16. Reduction in Inventory Size: E-commerce models, particularly just-in-time
inventory management facilitated by online systems, can lead to reduced
inventory levels and associated storage costs.
17. Better Display: Digital platforms allow for more dynamic and visually
appealing product displays through the use of three-dimensional
technology and engaging graphic effects, enhancing product presentation
and attracting customer attention.
1.8 Limitations of E-Commerce
1. Restricted availability of internet access: Internet access is not widely
available, and transaction security may be compromised.
2. Expensive communication infrastructure: The communication
infrastructure required for e-commerce is expensive.
3. De-personalisation of transactions: E-commerce de-personalises
transactions, which may not appeal to customers who prefer physical
interaction.
4. Loss of customer privacy: Customer privacy may be lost when their buying
habits are tracked in the e-commerce process.

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 5. Attacks by hackers: Shopping portals may be attacked by hackers and other
forms of electronic vandalism and espionage.
6. Difficulty in EDI standards: Small business units may face difficulties in
complying with Electronic Data Interchange (EDI) standards.
7. Brand dilution: Established brands may face dilution of their goodwill due
to the proliferation of online competitors.
8. Dishonest trading: Dishonest businessmen may create fake websites to
defraud customers.
9. Attack from virus : E-Commerce system suffers from the danger of virus.
Some of such viruses are too harmful to clean up or damage all information
which was stored in the computer.
10. Limited to sensory information : It does not allow the customers any scope
to see or smell or feel the goods or products.
1.9 Importance of E-Commerce
With the proliferation of the internet and interconnected computer networks, e-
commerce has become a pivotal force in the business landscape, facilitating
paperless exchange of business information through technologies like Electronic
Data Interchange (EDI). The importance of e-commerce can be categorized as
follows:
1. Wide Application: E-commerce is extensively utilized across diverse
sectors for everyday activities. This includes communication via email and
instant messaging, online shopping, order tracking, online banking,
domestic and international payment processing, teleconferencing, and
even electronic ticket or air ticket procurement.
2. Facilitation of Online Transactions: E-commerce plays a fundamental role
in enabling online purchasing of a vast array of goods, from everyday items
like books and groceries to more significant acquisitions. It also underpins
essential online financial activities such as bill payments, stock trading,
transferring funds between accounts, and initiating wire transfers across
international borders.
3. Exchange of Financial Data: Major corporations and financial institutions
leverage e-commerce systems to securely exchange critical financial data.
This facilitates the growth of both domestic and international business
operations while ensuring data integrity and security in financial
transactions.
4. Introduction of Diverse Business Models and Websites: E-commerce has
spurred the development and implementation of various innovative
business models. It enables businesses to construct sophisticated e-
commerce-enabled storefront websites, creating effective online sales
channels.
5. Consideration of Technical Issues: The implementation of e-commerce
necessitates careful consideration of various technical complexities. These
include ensuring robust security measures, seamless system integration,
high availability, scalability to handle growing demand, optimal

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 performance, effective globalization strategies, adherence to operational
requirements, appropriate tools for development and operation, and
accurate measurement of system performance.
6. E-tailing: Electronic retailing, or e-tailing, represents a significant and
common application of e-commerce, particularly in the business-to-
consumer (B2C) sector, where goods are directly sold to consumers over the
internet.
7. Market Research: E-commerce has revolutionized market research. The
interactive nature of the internet allows enterprises to gather extensive
data about prospects and customers through various online methods such
as site registration, questionnaires, and direct customer interactions,
providing unprecedented insights into consumer behavior.
8. Access to Global Marketplace: E-commerce provides businesses with
seamless access to a global marketplace, transcending national boundaries.
This significantly expands the scope of potential business activities,
allowing companies to engage with customers both within and outside
their domestic market instantaneously.
9. High Speed of Operations: Electronic communication inherent in e-
commerce enables the rapid dissemination of business messages. This high
speed contributes to increased revenue generation by facilitating quicker
transactions and improved operational efficiency.
10. Increase in Income: By expanding market reach and optimizing operational
processes, e-commerce contributes to a significant increase in business
income. Furthermore, it helps in the reduction of various costs, ultimately
resulting in higher overall profits.
1.10 Point of Distinction
E-Commerce vs. E-Business
Table
Copy

Feature E-Commerce E-Business

E-Business is the
transformation of an
organisation's processes
to deliver additional
E-Commerce is the customer value through
commercial transactions the application of
through the use of electronic technologies,
communications and digital philosophies, and
information processing computing paradigms of
Concept/Definition technology. the new economy.

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 Feature E-Commerce E-Business

ICT is used in inter-business

Information and or inter-organisational
Communication transactions and consumer ICT is used to enhance
Technology (ICT) transactions. one's business.

It is a process of sharing
business information,
maintaining business
relationships, and It is a process that a
conducting business business organisation
transactions using conducts over a
telecommunication computer-mediated
Nature of Activities networks. network.

There are three

There are three major forces processes in e-business:
fuelling e-commerce: production processes,
economic forces, market customer-focused
forces, and technology processes, and internal
Processes/Forces forces. management processes.

E-Commerce may be of
different types: Business to
Business (B2B), Business to
Customers (B2C), Business
to Government (B2G),
Consumer to Consumer
(C2C), Consumers to E-Business may be of
Business (C2B), and M- different types: top-
Types Commerce. down and bottom-up.

1.11 Electronic Customer Relationship Management (ECRM)

1.11.1 Concept and Definition of Electronic CRM (ECRM)
ECRM is the process of managing customer relationships using electronic means
to meet the specific needs of customers.

1.11.2 Scope of ECRM

In defining the scope of ECRM, three different levels can be distinguished:
1. Foundational services: This includes the minimum necessary services,
such as website effectiveness and responsiveness, as well as order
fulfillment.
2. Customer-centred services: These services include order tracking, product
configuration and customisation, as well as security and/or trust.

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 3. Value-added services: These are extra services, such as online auction and
online training and education.

1.11.3 Features of ECRM

The important features of ECRM are as follows:
• It is an integrated customer information architecture.
• It is highly interactive in character.
• It is directly responsive to customer requests or problems, helping
enterprises establish and sustain long-term customer relationships.
• The existence of personalised web pages is of great help.
• Products or services are customised.
• It ensures the delivery of the right message through the right medium.

1.11.4 ECRM Strategy Components

The key components of an ECRM strategy include:
• Developing customer-centric strategies.
• Redesigning workflow management systems.
• Re-engineering work processes.
• Supporting with the right technologies.

1.11.5 Steps to ECRM Success

There are four suggested implementation steps that affect the viability of a
project:
1. Developing customer-centric strategies.
2. Redesigning workflow management systems.
3. Re-engineering work processes.
4. Supporting with the right technologies.
1.12 Enterprise Resource Planning (ERP)
1.12.1 Concept and Need for ERP
ERP stands for Enterprise Resource Planning. The most important constituent of
the ERP solution is the "enterprise," which is an entity of a group of people with a
common goal to achieve. ERP ensures the efficient planning of all resources for
effective utilisation in an enterprise. ERP packages are integrated software
packages that support the ERP concept. The ERP software is designed to model
and automate many of the basic processes of an enterprise from finance to the
shop floor with the objective of integrating information across the organisation.

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 1.12.2 Importance of ERP
Importance of ERP
Enterprise Resource Planning (ERP) has emerged as a cornerstone of modern
business operations, offering a comprehensive and integrated solution to manage
various aspects of an organization's processes. The importance of ERP in the
modern business world cannot be overstated, as it provides numerous benefits
that enhance efficiency, improve decision-making, and drive overall business
success. Here are the key aspects that highlight the importance of ERP:
1. Comprehensive Management
ERP systems integrate all aspects of an organization's operations into a single,
unified platform. This includes functions such as finance, human resources,
supply chain management, customer relationship management, and more. By
centralizing data and processes, ERP ensures that all departments have access to
consistent and up-to-date information, leading to more effective and coordinated
decision-making.
2. Improved Efficiency
One of the primary benefits of ERP is the significant improvement in operational
efficiency. Automation of routine tasks, such as order processing, inventory
management, and financial reporting, reduces the need for manual intervention
and minimizes the risk of errors. This not only saves time but also allows
employees to focus on more strategic activities that drive business growth.
3. Enhanced Decision-Making
ERP systems provide real-time data and advanced analytics tools that enable
managers to make informed decisions quickly. Access to accurate and timely
information helps in identifying trends, forecasting demand, and optimizing
resource allocation. This leads to better strategic planning and more effective
execution of business strategies.
4. Cost Reduction
By streamlining processes and eliminating redundancies, ERP systems help
reduce operational costs. Automation reduces the need for additional staff, and
improved efficiency in supply chain management and inventory control can lead
to significant cost savings. Additionally, ERP systems can help identify areas
where costs can be further optimized, contributing to overall cost reduction.
5. Better Customer Service
ERP systems enhance customer service by providing a centralized view of
customer data. This allows businesses to better understand customer needs,
personalize interactions, and respond quickly to customer inquiries and issues.
Improved customer satisfaction and loyalty can lead to increased customer
retention and higher lifetime value.
6. Scalability and Flexibility
ERP systems are designed to grow with the business. They can be easily scaled up
or down to meet changing business needs, making them suitable for organizations
of all sizes. The flexibility of ERP systems also allows businesses to adapt quickly
to market changes and new opportunities, ensuring long-term sustainability.

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7. Compliance and Security
ERP systems come with robust security features that protect sensitive business
data from unauthorized access and cyber threats. They also help organizations
comply with various regulatory requirements by providing tools for audit trails,
data validation, and reporting. This ensures that businesses operate within legal
and ethical boundaries, reducing the risk of non-compliance penalties.
8. Enhanced Collaboration
ERP systems facilitate better collaboration between different departments within
an organization. By providing a single source of truth, ERP ensures that all
stakeholders have access to the same data, leading to more effective
communication and collaboration. This can lead to improved project
management, better coordination of tasks, and more efficient workflows.
9. Innovation and Competitive Advantage
By providing a solid foundation for business operations, ERP systems free up
resources and time for innovation. Businesses can focus on developing new
products, services, and business models that differentiate them from competitors.
This can lead to a competitive advantage in the market and drive long-term
success.
10. Integration with Other Systems
ERP systems are designed to integrate seamlessly with other business applications
and technologies, such as Customer Relationship Management (CRM), Supply
Chain Management (SCM), and Business Intelligence (BI) tools. This integration
ensures that all aspects of the business are aligned and working together
efficiently, leading to a more cohesive and effective organization.

1.12.4 Features of ERP

Enterprise Resource Planning (ERP) software for e-commerce facilitates
businesses in administering their core processes. ERP systems for e-commerce
consist of many characteristics, including:
1. Customer Relationship Management (CRM): Provides a centralised view of
customer data, including interactions, preferences, and purchase history.
This helps businesses segment customers, personalise product
recommendations, and develop customer service.
2. Inventory Management: Assists businesses in controlling their inventory
levels and related costs.
3. Financial Management: Aids businesses in supervising their finances,
including accounting, invoicing, and cash flow.
4. Reporting and Analytics: Offers real-time information and reporting tools
to help businesses analyse their performance.
5. Supply Chain Management: Helps businesses manage their supply chains
and achieve better efficiency.
6. Order Processing: Facilitates businesses in processing orders and
managing order fulfillment.

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 7. Automation: Assists businesses in automating processes such as filling out
purchase orders and generating reminders.
8. Artificial Intelligence (AI): Helps businesses analyse data and make
informed decisions.

1.12.5 Advantages of ERP

Using ERP systems provides many important advantages for businesses, both
directly and indirectly. The direct benefits include things like better efficiency,
faster response times to customer questions, and improved information flow
throughout the company. The indirect benefits help build a better company image,
improve customer trust, make customers happier, and increase customer loyalty.
Here are some of the main ways ERP systems benefit businesses:
1. Bringing the Business Together (Business Integration): The most
important benefit of ERP is that it helps connect all the different parts of a
business. ERP software is designed to automatically update information
across all related business areas whenever a transaction happens. For
example, if a sale is made, the inventory levels, accounting records, and
sales figures are all updated automatically at the same time. This means
everyone in the company has up-to-date information, which helps
managers make better decisions quickly.
2. Being Flexible (Flexibility): ERP systems are very adaptable. They can
handle different languages, currencies, and accounting rules. If a company
has offices in different locations, ERP can manage their operations in a
coordinated way. This flexibility is really important for companies that want
to grow globally and have consistent systems worldwide.
3. Better Analysis and Planning: When a company uses ERP, all its
information is stored in one central place. This makes it easier to get a
complete picture of how the business is doing. By looking at data from
different angles, decision-makers can find the information they need and
make smarter, more accurate plans for the future.
4. Using Modern Technology: ERP systems use the latest technology to help
businesses adapt to changes quickly. This flexibility allows companies to
customize their systems, keep them running smoothly, and expand their
operations easily. By using up-to-date technology, ERP combines all the
different computer systems and information within a company into one
unified system, which can lead to big improvements and advantages.

1.12.6 Levels of ERP

There are three basic levels of ERP implementation:
1. Planning or System Configuration Level: Includes supply chain planning,
manufacturing planning, sales planning, and budget preparation, etc.
2. Modelling and Logistical Support Level: Involves system modelling and
logistical support.
3. Statement and Data Analysis Level: Includes financial statement analysis
and data analysis.

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1.13 E-Governance
1.13.1 Definitions
E-Governance refers to the use of Information and Communication Technologies
(ICT) to enhance the efficiency and transparency of governance. It aims to
support and simplify governance for governments, citizens, and businesses. E-
Governance is a key component in the development towards a knowledge society,
where the creation, distribution, and treatment of information are the most
significant economic and cultural activities.

1.13.2 E-Governance Compared with E-Commerce

E-Commerce and E-Governance are two landmarks in the development towards a
knowledge society. E-Commerce involves any transaction completed over a
computer-mediated network, which includes the transfer of ownership or rights
to use goods and services. E-Governance, on the other hand, implies technology-
driven government processes aimed at improving efficiency, accountability,
transparency, and effectiveness. Both concepts are complementary, with E-
Governance focusing on the public sector's use of ICT to enhance access to and
delivery of government information and services to citizens, businesses, and other
government entities.

1.13.3 Objectives of E-Governance

The primary objectives of E-Governance are to improve the delivery of
government services to citizens, enhance the business environment, and increase
efficiency in government operations. This includes reducing delays and
corruption, providing services through rural kiosks, and implementing single-
window systems for various licenses and approvals.

1.13.4 Prerequisites for E-Governance

The questions facing the countries that intend implementing e-governance are
many. Implementation of e-governance depends on an enabling environment that
includes: 1
(i) Mature technical infrastructure in various government departments.
(ii) A bureaucracy willing to reengineer, share information and treat citizens as
customers.
(iii) Deep internet penetration.
(iv) Social and political commitment from the government.
(v) Legal framework that ensures security of information.
(vi) Citizens who are aware of their rights, duties and responsibilities.

1.13.5 Features of E-Governance

E-Governance in e-commerce can aid to develop the efficiency and transparency
of government services and to trim down red tape and bureaucracy.
Features of e-governance in e-commerce are enumerated below:
1. Enhanced service delivery: E-Governance can help to streamline
processes, reduce paperwork and improve the quality of services.
2. Improved communication: E-Governance can help to improve
communication between government agencies and the public.

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 3. Augmented transparency: E-Governance can help to increase
transparency in decision-making processes.
4. Better business environment: E-Governance can help to improve the
business environment by streamlining interactions with companies.
5. Reduced costs: E-Governance can help to reduce operational costs, such as
office space and paperwork.
6. Enhanced citizen involvement: E-Governance can help to promote greater
citizen involvement in decision-making.
7. Improved data security: E-Governance can help to shield sensitive
information using advanced cyber security measures.
8. Greater digital literacy: E-Governance can help to encourage citizens to
advance their digital skills.

1.13.6 E-Governance Models

There are several models of E-Governance, each focusing on different activities
and objectives:
1. The Citizen-Centric Model: Focuses on enabling citizens to exercise their
rights and responsibilities more effectively.
2. The Critical Flow Model: Disseminates critical information to targeted
audiences or the wider public domain using ICT and convergent media.
3. The E-Advocacy/Mobilisation and Lobbying Model: Builds momentum for
real-world processes by incorporating the opinions and concerns of virtual
communities.
4. The Interactive-Service Model: Opens avenues for direct participation of
individuals in governance processes, bringing greater objectivity and
transparency to decision-making.

1.13.7 Benefits of E-Governance

E-Governance offers numerous benefits to both government and society. It
facilitates better delivery of government services to citizens, improved
interactions with businesses, and increased efficiency in government operations.
Other benefits include:
1. Better Access to Information: All stakeholders have better access to
information.
2. Increased Focus on Services: There is a greater emphasis on providing
better services to citizens.
3. Increased Citizen Satisfaction: Citizens are more satisfied with
government services.
4. Enhanced Faith in Government Services: Citizens have more trust in
government services.

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1.14 Mobile Commerce (M-Commerce)
1.14.1 Concept and Definition
Mobile Commerce, or M-Commerce, refers to any electronic commerce activity
conducted over wireless networks through mobile devices. It leverages the
widespread use of mobile phones and other handheld devices to facilitate
commercial transactions. Japan is seen as a global leader in M-Commerce. The
areas of operation largely affected by M-Commerce technologies include financial
services, telecommunications, service/retail, and information services.

1.14.2 Benefits of Mobile Commerce

(i) Since mobile commerce is the integration of wireless technologies, most of the
benefits offered by internet and electronic commerce are also offered by mobile
commerce.
(ii) The 24 hours round the clock availability of internet is also available to mobile
commerce users who can conduct their business and access information at their
convenience, irrespective of whether they are confined to home or office or any
other place, provided it has internet connectivity.
(iii) Mobile commerce offers a great deal of flexibility in accessing information
through a personalized mobile environment. For example, timely information
regarding flight availability and flight schedules can be obtained even at the last
moment. As users stay connected and keep their mobile phones with them at all
times, mobile phones become very useful devices for receiving and delivering
time-critical and emergency information.
(iv) Because the nature of wireless infrastructure assists in identifying mobile
users in a geographic-specific region, region-specific promotions or information
dissemination can be easily accomplished in the mobile commerce environment.
(v) Mobile commerce offers a better opportunity for personalization of information
and delivery of content relevant to mobile users.
(vi) Instead of the third-party mechanism of credit cards required in electronic
commerce payment models, mobile commerce can utilize the mobile device itself
for payment of bills, such as phone bills, electric bills, petrol purchases, etc.
Sources and related content

1.14.3 Drawbacks of Mobile Commerce

Despite its benefits, M-Commerce also faces several challenges:
1. Limitations of Mobile Devices: Small screen size, limited computing power,
and memory and storage capacity can hinder user experience.
2. Incompatible Networks: Multiple competing protocol standards can create
challenges for application developers.
3. Regulatory Issues: Limited spectrum and regulatory control can impact the
growth of M-Commerce.

17
 1.14.4 Features of Mobile Commerce
Features of Mobile commerce are given below:
1. Personalisation: Tailored experiences can save users time and make them
feel valued.
2. Omni channel integration: M-commerce can be integrated with other
channels, such as physical stores and desktop e-commerce, to create an
online-to-offline shopping experience.
3. Improved customer experience: A well-designed mobile app can enhance
the buying process and increase conversion rates.
4. Flash sales and discounts: Sales and promotions can be just as effective in
mobile shopping apps as they are in physical stores.
5. Personalised customer experience: Loyalty and reward programs can
engage shoppers.
6. Targeted timing: Mobile commerce applications can help brands reach their
customers with the right message at the right time.
7. Retail integration: M-commerce apps can complement physical stores to
enhance the customer experience.
8. Mobile payments: Users can make payments using their mobile devices.
9. User-friendly interfaces: Mobile apps should be easy to use.
10. Push notifications: Users can receive notifications about upcoming events
or other offers.
11. Location-based services: M-commerce apps can use location data to
provide services to users.
12. In-app chat support: Users can contact customer support through the app.
13. Security measures: M-commerce apps should have security measures in
place.
14. Offline access and synchronisation: Users should be able to access their
accounts and synchronise their data offline.remove

Exercise
Short Type Questions (Marks 5)
1. Explain the concept of e-commerce with few examples.
2. Define e-commerce. State its scope.
3. Discuss about major players in e-commerce.
4. What are the forces fuelling e-commerce?
5. Briefly mention various components of e-commerce.
6. State the scope and features of ECRM.

18
7. Explain the concept and need of ERP.
8. State the objectives and prerequisites for e-governance.
9. Briefly mention various e-governance models.
10. State the benefits of mobile commerce.

Essay Type Questions (Marks 10)

1. State the benefits of e-commerce.
2. Discuss the limitations of e-commerce.
3. Discuss the importance of e-commerce.
4. Distinguish between e-commerce and e-business.
5. State the importance of ERP in modern business world.
6. Discuss the features and advantages of ERP.
7. State the benefits of e-governance.
8. State the drawbacks and benefits of mobile commerce.
9. Explain various features of mobile commerce in modern days.
10. Explain the concept of m-commerce and mention the areas of operation
largely affected by it.

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 UNIT 2

E-Commerce Business Models

2.1 Introduction
The advent of the internet has revolutionized the way businesses operate,
breaking down geographical barriers and enabling the seamless flow of
information across platforms. This technological advancement has given rise to
various e-commerce business models that leverage the internet's potential to
enhance efficiency, streamline operations, and create new revenue streams.
Understanding these models is crucial for businesses looking to thrive in the
digital age.

2.1.1 Internet and Intranet as a Prelude to E-Commerce Business Models

The growth of the internet has been instrumental in facilitating the free flow of
information across geographical boundaries and platforms. This has led to the
adoption of intranet technology by corporate companies to improve efficiency
within their corporate boundaries. Intranets are essentially corporate networks
that utilize internet technology but restrict access to internal members of an
organization. These intranets play a pivotal role in managing internal corporate
information, which may be interconnected with the company's e-commerce
transactions. By integrating internal information flow with external e-commerce
transactions, intranets ensure that vital information is processed and matched
efficiently, leading to a more coherent and organized corporate function. This
integration enhances decision-making processes and optimizes e-commerce
activities, making intranets an essential component of modern business
operations.
2.2 Types of E-Commerce Business Models
2.2.1 E-Commerce Business Model Based on the Relationship of Transaction
Partners
E-commerce business models can be categorized based on the relationship
between transaction partners. The primary models include:
1. Business to Business (B2B)
2. Business to Consumer (B2C)
3. Consumer to Consumer (C2C)
4. Consumer to Business (C2B)

Business to Business (B2B)

The Business-to-Business (B2B) model involves one business conducting trade
and commercial activities with other businesses online. Essentially, it's
businesses trading with each other via the internet.

20
The B2B operation typically involves:
• Online catalogues: Vendors offer goods and information on their websites.
• Electronic purchase orders: Customers create and send purchase orders
digitally (often via email).
• Agreement and EDI: Both parties agree to the order, and Electronic Data
Interchange (EDI) may follow.
• Electronic acknowledgement: The vendor confirms the order
electronically.
• Goods dispatch and delivery note: The vendor sends the goods with a
delivery note.
• Verification: The customer's receiving office compares the delivery note
with the purchase order.
• Electronic payment: Payment is usually done through Electronic Fund
Transfer (EFT).

Features of B2B E-Commerce

• Electronic Data Interchange (EDI): B2B e-commerce often involves the
interchange of electronic documents between business partners through
EDI, ensuring efficient and error-free communication.
• E-mail Communication: Purchase orders are processed and sent by e-mail
to the vendor, facilitating quick and reliable communication.
• Database Storage: Vendors store purchase orders in a database and
acknowledge them electronically, ensuring a record of transactions and
enabling easy tracking.
• Physical Dispatch: The vendor dispatches the ordered items either
physically or through transportation services like rail or truck. A delivery
note is sent to the customer via e-mail, keeping them informed of the
shipment status.
• Inspection and Verification: Upon arrival, goods are inspected and verified
against the delivery note to ensure accuracy and compliance with the order.
• Electronic Fund Transfer (EFT): Payments are managed through electronic
payment systems, ensuring secure and efficient financial transactions.

Applications of B2B E-Commerce

Most B2B applications are in the areas of:
(i) Suppliers management, especially purchase order processing.
(ii) Inventory management, i.e., managing order-ship-bill cycles.
(iii) Distribution management, especially in the transmission of shipping
documents.
(iv) Channel management, i.e., information dissemination on changes in
operational conditions.
(v) Payment management, e.g., electronic payment systems or EPS.

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 Benefits of B2B E-Commerce
The impact of B2B e-commerce is significant, primarily reducing costs through:
1. Lower Transaction Costs:
o Reduced search costs for buyers due to readily available online
information.
o Lower processing costs through automation of transactions.
o Improved inventory management and logistics with online
processing.
2. Elimination of Intermediaries: B2B e-markets enable direct interaction
between suppliers and buyers, potentially removing traditional
intermediaries and streamlining the supply chain.
3. Enhanced Price Transparency: The internet facilitates easy comparison of
prices, empowering buyers to make informed decisions.
4. Economies of Scale and Network Effects: Rapid growth of B2B e-markets
creates cost advantages and increases the value for all participants.
5. Direct Interaction with Customers: Businesses can directly engage with
other businesses (their customers), bypassing traditional channels and
fostering stronger relationships.
6. Focused Sales Promotion: Direct interaction allows for tailored marketing
based on customer data, likes, and preferences, leading to more effective
promotions.
7. Building Customer Loyalty: Online interactions can foster greater loyalty
by making customers feel valued, recognizing their identity, and
safeguarding their data. Positive experiences can lead to stronger, longer-
term relationships.
8. Scalability: E-business websites operate 24/7, providing access to
customers across different geographical locations and time zones. This
enables businesses to serve a larger customer base across a wider area.

2.2.1.2 Business to Consumer (B2C) Model

The B2C model involves businesses selling products and services directly to
consumers over the internet. This model has become increasingly popular due to
its ability to reach a global audience and provide a personalized shopping
experience.

Features of B2C E-Commerce

• Online Shopping: Businesses set up online stores where consumers can
browse and purchase products. These stores often feature user-friendly
interfaces and a wide range of products.
• Payment Processing: Secure payment processing systems handle
transactions, ensuring that financial information is protected.

22
 • Customer Support: Businesses provide customer support through various
channels, including e-mail, chat, and phone, to assist consumers with their
purchases.
• Marketing and Promotion: Businesses use digital marketing strategies,
such as social media marketing, search engine optimization (SEO), and
email marketing, to attract and retain customers.

Applications of B2C E-Commerce

• Online Retail: Businesses sell physical and digital products directly to
consumers, bypassing traditional brick-and-mortar stores.
• Subscription Services: Businesses offer subscription-based services for
recurring revenue, such as monthly deliveries of products or access to
premium content.
• E-Marketing: Businesses use targeted marketing campaigns to reach a
broader audience, leveraging data analytics to understand consumer
preferences and tailor marketing efforts accordingly.

Benefits of B2C E-Commerce

• Wider Reach: Businesses can reach a global audience, expanding their
market reach beyond geographical limitations.
• Lower Costs: Reduced overhead costs compared to traditional brick-and-
mortar stores, leading to increased profitability.
• Personalized Experience: Businesses can offer personalized shopping
experiences, enhancing customer satisfaction and loyalty.
• Increased Sales: Enhanced customer engagement and targeted marketing
efforts lead to increased sales and revenue.
2.2.1.3 Consumer to Consumer (C2C) Model
The C2C model involves consumers selling products and services to other
consumers through online platforms. This model has gained popularity due to its
ability to connect individuals directly, facilitating the exchange of goods and
services without the need for traditional intermediaries.

Features of C2C E-Commerce

• Individuals sell their goods or services using an intermediary's online
platform.
• Auction websites facilitate buying and selling between consumers.
• Individuals can electronically publish their scholarly work or creative
writing.
• The internet serves as the primary communication and transaction
medium.

Common Forms of C2C E-Commerce:

• Online Auctions: Platforms like eBay enable real-time bidding for items.

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 • Peer-to-Peer (P2P) Systems: Models such as Napster (for file sharing) and
similar protocols in chat forums facilitate direct exchange between users.
• Online Classifieds: Portal sites host classified advertisements for individual
sellers.

Applications of C2C E-Commerce

• Online Auctions: Consumers can bid on and purchase items from other
consumers, creating a dynamic marketplace.
• File Sharing: Users can share digital files through peer-to-peer networks,
facilitating the exchange of content.
• Community Marketplaces: Platforms provide spaces for community-based
trading, fostering a sense of community and trust among users.

Benefits of C2C E-Commerce

• Direct Trading: Consumers can trade directly with each other, bypassing
intermediaries and reducing costs.
• Global Reach: Consumers can access a global market, expanding their
potential buyer base.
• Convenience: Trading can occur at any time, offering continuous updates
and flexibility.
• Community Building: Strong sense of community through direct
communication and shared interests.

Consumer-to-Business (C2B) Model:

In the C2B model, individual consumers offer goods or services to businesses.
Unlike the Business-to-Consumer (B2C) model, the consumer typically initiates
the transaction by outlining their needs and often setting the price. The business
then decides whether to fulfil those requirements. This model includes individuals
selling products or services to organizations. For example, a freelancer might post
their skills and desired rate on a platform, and interested companies can then
contact and hire them.
2.2.2 E-Commerce Business Model Based on the Relationship of
Transaction Pattern
E-commerce models can also be categorized based on the transaction pattern,
which is governed by two parameters: value addition and control. These
parameters influence how transactions are conducted and how value is created
within the e-commerce ecosystem.
10 Patterns of Transactions

1. Brokerage Model

2. Advertising Model

3. Subscription Model

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 4. Affiliates Model

5. Digital Product Merchant Model

6. Manufacturer Model

7. Information Exchange Model

8. Information Content Model

9. Community Model

10. Storefront Sites Model

1. Brokerage Model:
Acting as market-makers, brokers facilitate transactions by connecting buyers and
sellers. Traditionally, they play a crucial role in commerce. Brokers earn revenue
by charging a fee or commission on each completed transaction. This established
brokerage model has been successfully adapted to e-commerce and is utilized in
various online business models, including B2B, B2C, C2C, and C2B.

Characteristics of the Brokerage Model:

• Price Discovery: Its core function involves mechanisms like auctions,
reverse auctions, and market exchanges to determine prices.
• Meeting Point: It creates a platform where buyers and sellers can connect.
• Transaction Modes: Transactions primarily occur through auctions and
exchanges.
• Price Mechanism Variety: It supports three main price-setting methods:
auction, reverse auction, and market exchange.
• Open Access: It typically offers free registration for both buyers and sellers.
• Global Reach: It establishes a worldwide network of buyers and sellers.
• Virtual Marketplace: It operates as an online marketplace facilitated by the
internet.
• Broad Adoption: It is adaptable and used by various types of organizations.

Advantages of the Brokerage Model:

• Facilitates Direct C2C Trading: It primarily supports consumer-to-
consumer transactions, enabling direct trade and potentially reducing costs
for both parties by bypassing some intermediaries.
• Global Accessibility: It allows for trading across geographical boundaries.
• Convenient and Continuous Trading: It offers trading convenience at any
time, along with constantly updated information.

25
 • Community Building: It fosters a sense of community through direct
communication channels between buyers and sellers.
• Efficient Information Access: It provides easy access to relevant
information for participants.
• Reduced Risk of Anonymous Trading: It can mitigate the risks associated
with anonymous transactions.
2. Advertising Model:
This model, common for commercial television, radio, print publications, and
periodicals, generates revenue by displaying advertisements. Websites offering
free content often utilize this model, displaying ads to visitors. The advertiser pays
the website operator when a user clicks on their banner ad. The cost of advertising
typically varies based on factors like the number of impressions or clicks.
Advertising-driven sites have become a significant source of online information,
often providing detailed content alongside advertisements.

Pattern of Advertisement on the Internet:

• 1. Portals: These are websites offering a broad range of consumer services,
such as news, email, and other content. They attract significant user traffic,
creating valuable advertising opportunities and allowing for the
diversification of revenue streams through various services.
• 2. Classifieds: These are online listings for items or services being offered
for sale. While basic listings might be free, there's usually an option for paid
premium listings with enhanced visibility.
• 3. User-Based Registration: Content-focused sites may offer free access
but require users to register, providing valuable demographic information
that can be used for targeted advertising.
• 4. Query-Based Paid Placement: This involves sponsored or advertised
links that appear prominently in search engine results based on specific
keywords entered by the user. Google is a prime example of this.
• 5. Contextual Advertising: This method displays ads that are directly
relevant to the content the user is currently viewing. E-Zula is an example
of a platform that utilizes contextual advertising.
• 6. Subscription Model: This model offers digital content, such as scholarly
publications, news magazines, and other subscription-based services,
directly to users for a recurring fee (daily, weekly, monthly, or annual). The
content creators and publishers have increasingly adopted this model as
traditional print subscriptions decline. Many current newspapers and news
services, along with valuable audio and video content, stock market data,
and economic indicators, are available in digital format through
subscriptions, providing users with access to a wealth of information for a
set period. Subscription fees are usually charged regularly, and advertising
subscription fees are often distinct models. Common forms of such models
include:
o (a) Content Services: Providing text, audio, or video content to users
who pay a fee to access the service.

26
 o (b) Person-to-Person Networking Services: Facilitating direct
connections between users seeking specific information, such as
individuals searching for former classmates (e.g., Classmates.com).
o (c) Trust Services: These are membership-based associations that
operate under a specific code of conduct. Members typically pay a
subscription fee to belong (e.g., Truste.com).
o (d) Internet Service Providers (ISPs): ISPs offer network connectivity
and related services to users for a recurring monthly subscription
fee.
4. Affiliate Model:
Unlike general portals aiming for high traffic volume, the affiliate model focuses
on providing targeted purchase opportunities. Affiliate sites attract traffic, but
their primary goal is to pass potential customers on to other businesses or e-
retailers, thereby minimizing their own risk related to inventory. Affiliate
companies offer product listings or services for sale on their websites. When a
visitor clicks on a link for an item or service and makes a purchase on the partner
or sponsoring e-retailer's site, the affiliate site receives a referral fee or
commission for the completed transaction. This is a pay-for-performance model;
if the affiliate site doesn't generate a sale, there's no cost to the merchant. The
affiliate essentially handles the marketing and promotion, driving relevant traffic
to the seller's website. Many affiliate sites focus on a specific niche, hobby, or area
of interest.
5. Digital Product Merchant Model:
This model involves selling digital goods such as music, video recordings, software
products, books, documents, and databases online. These products can be easily
distributed in digital formats via the World Wide Web. Merchants in this model
often operate a virtual storefront, where they list and sell their digital items,
sometimes using auction formats. Sales are typically based on established price
lists or through auction bidding. These merchants can act as either wholesalers or
retailers of digital products.
6. Manufacturer Model:
In this model, the product distribution involves multiple layers of intermediaries,
including wholesalers, distributors, regional sellers, and local stores, before
reaching the end-users. Each intermediary adds a layer of cost and profit margin,
thus increasing the final price for consumers and potentially reducing the
manufacturer's profit margin. However, this model can leverage the efficiency,
improved customer service, and better understanding of customer preferences
offered by these intermediaries.
The power of disintermediation (removing intermediaries) reduces market
friction, leading to cost savings that can be passed on to consumers or enhance
the manufacturer's profit margin.
Manufacturers operating as direct sellers through their own websites gain several
advantages, including improved customer support, greater product marketing
control, and the ability to offer guarantees directly. They also develop a better
understanding of customer needs, opinions, and suggestions regarding existing
and new products by interacting directly with their customer base through their

27
 online presence. In this direct sales model, the manufacturer sells its products
through its website in the form of:
(a) Purchase: The direct sale of a product in which the ownership is transferred to
the buyer.
(b) Lease: The buyer obtains the right to use the product for a specified period
under a 'term of use' agreement, typically involving a rental fee. Ownership of the
product remains with the seller even after the lease period expires.
(c) Licence: Similar to a lease, a product licence grants the buyer the right to use
the product under specific 'term of use' agreements. However, unlike a sale, the
ownership of the product remains with the manufacturer or licensor, particularly
common in software licensing.
(d) Brand Integrated Content: The brand itself creates content that is integrated
with the product's placement. This approach contrasts with traditional sponsored-
content advertising models.
7. Information Exchange Model:
This model is built on the exchange and interaction of information between
individuals and organizations via the internet. Information volunteered by
individuals during online interactions is used to build profiles. These profiles can
then be leveraged for targeted marketing and advertising campaigns, creating
mailing lists, for instance. Users often provide information willingly as part of a
registration process, as seen on platforms like Amazon.com and Yahoo.com. Users
may also interact by providing information directly.
8. Information Content Model:
The information content model focuses on generating revenue by offering
valuable information to consumers. The seller gathers, manages, and presents
information that caters to consumer preferences, particularly useful when this
information is analyzed for targeted marketing campaigns. This model often
provides users with free internet access in exchange for the valuable information
they provide, allowing the website to effectively compete in the market segment.
By skillfully capturing and adding value to user data, especially in critical
purchase phases, this model offers substantial assistance to buyers in making
informed decisions. More broadly, this analysis helps buyers expand, organize,
and optimize their search spaces within information and information technology.
The internet is the largest source of readily available information, much of it free,
created by individuals and organizations covering scientific, country, culture, and
tourism-related topics. Many other websites, resembling online libraries, attract
visitors by offering comprehensive information content designed to facilitate
search and discovery.
9. Community Model:
In the community model, electronic communities (e-communities) form online
around shared needs, such as personal interests, relationships, entertainment,
and other business transactions. These e-communities extend beyond mere
individuals to include businesses. Broadly, e-communities cater to groups of
people who connect online to serve their common interests and needs, exchange
information, share interests, trade goods and services, and also seek support. The
viability of the community model heavily relies on user loyalty. High traffic

28
volume is often secondary to creating a loyal user base. Therefore, building
successful e-communities typically involves encouraging initial visitors to become
regular participants who actively contribute to the website by offering
suggestions to improve the services of the community.

Functions of Communities on the Web:

• (i) Social Acceptance and Belonging: People generally desire to be
accepted and liked by others. Online communities fulfill this need by
offering spaces where individuals with shared interests can connect and
feel a sense of belonging.
• (ii) Information and Shared Interests: Online communities provide a
platform for individuals to explore particular interests or hobbies, serving
as a valuable source of information and connection with like-minded
people.
• (iii) Building Loyalty and Ownership: Communities foster customer loyalty
by encouraging repeat visits and engagement. By developing a sense of
ownership among members, users are more likely to return to the site and
feel connected to the community.
• (iv) Facilitating Business and Repeat Purchases: For businesses, online
communities can cultivate a comfortable and dependable environment,
encouraging repeat purchases from familiar members rather than seeking
out unknown sources.
Community Structures:
Internet communities are typically structured in several ways:
• 1. Newsletters: Newsletters are a form of one-way communication. Using
listserver software, a single message is sent to a list of subscribers. This
software often provides the technical infrastructure for email discussion
lists.
• 2. Discussion Lists: These are a common method for building community
through email discussions. Listserver software allows a member to send a
message to a central email address, and the software then forwards that
message to all members of the list within a short timeframe.
• 3. Bulletin Boards: Bulletin boards address the challenge of managing
numerous email threads by keeping different topics separate. This web-
based system allows users to post messages ('threads') on specific topics.
The system keeps these threads distinct, enabling participants to read,
search, and research past contributions, even if they weren't part of the
original conversation.
• 4. Chat Rooms: Chat rooms offer another significant way to build
community online. They are a valuable source of immediate knowledge and
information for any user. For business professionals, chat rooms can be
highly useful for public relations, sometimes generating overwhelming
interest and fruitful results for business ventures. Interviews and chats can
produce substantial business leads.

29
 • 10. Storefront Sites Model: A storefront site is a basic e-commerce website
that presents product offerings for sale through an online catalog. These
storefronts are designed to showcase products with pictures and text
descriptions, offer promotions, provide a shopping cart, and streamline the
purchase process. The primary capability of the site is to enable a one-time
purchase with no future obligations. Once a product is bought, the cyber
entity handles transaction fulfillment, including shipping and handling.

Exercise
Short Type Questions
Marks 5
1. Discuss the concept of E-Commerce Business Model.
2. State the features of B2B E-Commerce Model.
3. State applications of B2B E-Commerce Model.
4. Explain the features of B2C E-Commerce Model.
5. State the features and form of C2C E-Commerce Model.
6. Write a short note on: (a) Business to Business Model. (b) Business to
Consumer Model. (c) Commerce to Consumer Model. (d) Commerce to
Business Model.

Essay Type Questions

Marks 10
1. Explain the impact of intranet and internet on E-Commerce Business
Models.
2. Briefly explain various E-Commerce Business Model based on relationship
of transaction parties.
3. Briefly explain various E-Commerce Business Model based on relationship
of transaction pattern.
4. State the benefits of B2B E-Commerce Model.
5. State the benefit and features of B2C E-Commerce Model.

30
 UNIT 3

Digital Payment Systems (E-

Payment Systems)
3.1 Concept and Forms of Digital Payment System
3.1.1 Introduction
The rapid growth of e-commerce and the increasing complexity of e-commerce
transactions have necessitated the development of various digital payment
methods. These methods include digital cash, electronic cheques, and credit card
mechanisms. Digital cash, in particular, is the electronic equivalent of physical
cash, inheriting all the inherent properties of cash. Digital payment mechanisms
must exhibit certain characteristics to be a viable alternative to traditional
payment mechanisms, such as acceptability, interoperability, security,
robustness, anonymity, non-repudiation, and traceability.

Key Features of a Digital Payment System:

1. Acceptability: The payment infrastructure needs to be widely accepted,
available, and easily accessible to a diverse range of buyers and sellers of
goods and services.
2. Convertibility: Digital currencies should be interoperable and easily
exchangeable with other forms of electronic money, physical currency,
bank deposits, and similar financial instruments when making purchases.
3. Anonymity: Ideally, the system should allow buyers to conceal their
identity, ensuring that no single buyer's payments can be linked, thus
preventing the monitoring of their spending habits or the origin of their
funds.
4. Untraceability: This implies that connections between different payments
made by a single buyer should be non-existent, further safeguarding the
buyer's financial privacy. Consequently, it should be impossible to track an
individual's spending patterns or the sources of their funds.
5. Flexibility: A robust system should offer multiple payment methods, rather
than being restricted to a single type of currency.
6. Reliability: The payment system must inspire user confidence by
guaranteeing protection against systemic failures and ensuring consistent
operation.
7. Efficiency: In this context, efficiency refers to minimizing the overhead
costs associated with processing digital payments. Ideally, the cost per
transaction should be minimal, approaching zero.
8. Security: Digital currency must be stored in a format that is resilient against
duplication, double-spending, tampering, and other fraudulent activities.

31
 9. Usability: The payment process should be intuitive and as easy for users to
navigate as using physical currency.
10. Scalability: A payment system's scalability should accommodate a wide
range of transaction sizes, from micro-payments to substantial business-
to-business transactions, as well as the volume differences between
consumer and business payments (as previously discussed under "size of
electronic payment").

3.1.2 Methods of Digital Payment System

1. Electronic Cash Form of Payment System
Electronic cash, or e-cash, represents a modern approach to online payments. It
merges the computerized accessibility and convenience of digital transactions
with security and privacy features that surpass traditional paper cash. Its
versatility unlocks new markets and expands existing ones, presenting an
appealing alternative for internet-based payments.
Essentially, a user's e-cash resides in a merchant's digital wallet address. The
payment network verifies and processes the transaction, and funds are
transferred electronically. In the case of in-store e-cash payments, a barcode is
typically generated during an online transaction, which can then be scanned for
offline payment at a physical store.

Properties of E-Cash:
E-cash should possess four key properties:
(a) Monetary Value: Its value must be backed by a recognized currency, an
authorized credit institution, or a banker's cheque.
(b) Interoperability: It should be easily exchangeable as payment for other forms
of currency.
(c) Storeability and Retrievability: Users should be able to securely store and
retrieve their e-cash.
(d) Security: The system should be designed to prevent easy copying or tampering
during the exchange process. While robust, it's important to note that e-cash
systems are not entirely immune to cyber attacks and hacking attempts.
(e) Convenience: E-cash should be freely transferable between two parties in all
types of e-commerce transactions. It should also facilitate quick and secure
international payments without the complexities of currency conversion.
Examples of e-cash: Google Pay, Apple Pay, Cash App, Samsung Wallet, PayPal,
etc.

2. Electronic Cheque Form of Payment System

The electronic cheque represents another method for online payments, designed
to accommodate individuals and entities who prefer to pay on credit or through
mechanisms other than direct cash. However, the process involved tends to be
lengthy. For easier understanding, the procedure can be broken down into the
following steps:
(a) Step 1: Purchaser Initiates Payment: The purchaser completes a purchase
order form, attaches payment instructions in the form of an electronic cheque,

32
digitally signs it using their private key, includes their public key certificate,
encrypts the entire package using their private key, and sends it to the vendor.
(b) Step 2: Vendor Verifies and Forwards to Bank: The vendor decrypts the
information using the purchaser's public key, verifies the purchaser's certificates,
signature, and cheque details, attaches their deposit slip, and digitally endorses
the cheque. This package, along with the vendor's public key certificate, is then
encrypted and sent to the vendor's bank.
(c) Step 3: Vendor's Bank Seeks Clearance: The vendor's bank checks the
signatures and certificates and then forwards the electronic cheque to the
clearing house for clearance. Banks and clearing houses typically utilize a private
secure data network for this communication.
(d) Step 4: Funds Credited and Advice Sent: Once the cheque is cleared, the
specified amount is credited to the vendor's account, and a credit advice is sent to
the vendor.
(e) Step 5: Purchaser Receives Debit Advice: The purchaser periodically receives a
consolidated debit advice summarizing their electronic cheque transactions.
All the aforementioned steps are executed in three distinct and optionally separate
phases:
• Phase 1: Purchase: The consumer initiates the transaction by making a
purchase.
• Phase 2: Merchant Redemption: The merchant submits the received
electronic cheque to their bank for payment.
• Phase 3: Bank Clearing: The merchant's bank interacts with the clearing
house or the consumer's bank to process and clear the electronic cheque.

Advantages of the Electronic Cheque System:

(i) Reduced Information Sharing: Customers are not required to disclose their
account information directly to other individuals when conducting a transaction.
(ii) Limited Transmission of Sensitive Data: Customers do not need to repeatedly
send sensitive financial details over the internet for each transaction.
(iii) Cost-Effective: Electronic cheques are generally less expensive to process
compared to credit card transactions.
(iv) Faster than Traditional Paper Cheques: Electronic cheques offer a
significantly faster processing time compared to traditional paper-based cheques.

3. Automated Teller Machine (ATM) Form of Payment System

The ATM performs a crucial function for banks by acting as a plastic card-based
alternative to cheques, eliminating the need for customers to visit the bank in
person, adhering to banking hours, and dealing with paper-based verification.
Functioning as an electronic fund transfer terminal, ATMs enable various
transactions, including cash deposits, account transfers, balance inquiries, cash
withdrawals, and bill payments.

33
 ATMs can operate both online and offline. Online ATMs allow customers to access
banking services from any location at any time. Offline ATMs facilitate internet
banking or e-banking, enabling users with a personal computer and a web
browser to connect to their bank's website and perform various virtual banking
functions. In an internet banking system, the bank maintains a centralized web-
enabled database. All permissible banking services are displayed in a menu for
user selection, and further interaction is guided by the specific service chosen.

4. Banking Cards (Debit Card & Credit Card) Form of Payment System:
A Credit Card is a post-paid card, allowing the cardholder to spend money and
repay the borrowed amount within a set credit limit determined by the issuing
bank. Credit cards are a widely popular form of online purchase payment.
Typically made of plastic, a credit card holds the cardholder's name, account
number, and other crucial information encoded on a magnetic stripe. It's a
prevalent payment method accepted by numerous merchants and consumers
globally, potentially surpassing traditional payment methods in online retail. Key
advantages include privacy, integrity, convertibility, transaction efficiency,
accessibility, mobility, low financial risk, and anonymity. Credit cards address the
complexities associated with digital cash or electronic cheques, and vendors often
consider them a reliable alternative for time-sensitive transactions. However,
credit cards also have limitations for merchants, such as the risk of chargebacks,
repudiation of charges, and credit card fraud.

Limitations of Credit Cards:

Despite their popularity, online credit card payment systems face several
drawbacks, including:
(a) Lack of Security: The existing system often presents security vulnerabilities,
leaving both the merchant and the consumer inadequately protected.
(b) Fraud: Merchants face the risk of criminal organizations using stolen or
fraudulent credit card numbers, potentially leading to financial losses.
(c) Merchant Risk: Merchants bear a significant risk, as consumers can repudiate
charges even after goods have been shipped or digital products downloaded.
(d) High Costs: Transaction costs for merchants can be substantial, often
involving a percentage of the purchase price plus a transaction fee, potentially
ranging from 2% to 30% depending on the product's low value and high setup
costs. Such high costs can make credit cards unsuitable for selling very low-value
items, as exemplified by products priced at ₹ 500.
(e) Lack of Affordability: Not everyone has access to credit cards. Millions of
people, particularly those between 10 and 25 years old, lack the financial capacity
to have credit cards. This is especially true in America.

From the sellers' side, credit cards also present some disadvantages, such as:
(i) Credit cards attract percentage fees, which generally erode the profit margin
on sales.
(ii) Sometimes, buyers may refuse to pay such charges to the issuer, in which
event the seller will pass on the charges to the buyer.

34
(iii) Above all, Credit Cards have the highest possibility of frauds.
The basic process of an Online Credit Card Payment System is quite
straightforward. In cases where consumers want to purchase a product or service,
they simply provide their credit card details to the service provider involved, and
the Credit Card organization will handle the payment process like any other.
On the other hand, a Debit Card is a pre-paid card with a stored value limit. Each
time a person uses the card, the internet banking house directly debits money
transferred to its account from the buyer's account. The buyer's account is debited
with the exact amount of purchases. In this system, the customer cannot
overspend because the system rejects any transaction exceeding the balance
standing in the account. Again, the bank never faces a default because the amount
spent is debited immediately from the customer's account.

5. Smart Card Based Electronic Form of Payment System

Smart Cards are gaining increasing prominence as a method for online payments.
These are essentially plastic cards, similar in size to credit cards, but equipped
with memory chips and, in some cases, embedded microprocessors. This allows
them to serve as storage devices for significantly more information and even
possess built-in transaction processing capabilities, surpassing traditional credit
cards.
It's important to note that while credit cards typically store a single charge
account number on a magnetic stripe, smart cards can hold up to 100 times more
data. This includes multiple credit card numbers, as well as information related to
health insurance, transportation, personal identification, bank accounts, and
loyalty programs like frequent flyer accounts. This enhanced capacity makes them
an appealing alternative to carrying numerous credit and identification cards in a
physical wallet.
Smart cards also incorporate some form of encrypted key, which is compared to a
secret key stored within the user's processor, adding a layer of security.
Furthermore, some smart cards allow users to enter a Personal Identification
Number (PIN) to authenticate access to a system, particularly for financial
transactions such as ATM withdrawals or online payments. With the growth of e-
commerce, these devices are increasingly viewed as a more secure method for
executing online payment systems compared to traditional credit cards.

6. Mobile Banking Form of Payment System

Commerce is increasingly becoming mobile and global. By 2025, smartphones
had become the dominant tool for internet access worldwide, surpassing desktop
and laptop computers. Projections indicated that by 2028, there would be 7.7
billion connected smartphones globally. In today's fast-paced corporate world,
managing finances and banking can be challenging. Mobile Banking now enables
individuals to access their bank accounts and conduct transactions conveniently
through their mobile devices.

35
 7. Forms of Online Payment System:
To serve customers with greater speed and lower costs, electronic payment
systems are central to the online business process. Prompt payment for settled
accounts is a crucial aspect of any mercantile process, making payment an
integral dimension of e-payment systems, which are deeply intertwined with e-
commerce as a whole. Various methods are employed for online payments,
including digital cash, electronic cheques, and credit cards. Among these, digital
cash warrants further explanation as it represents the electronic equivalent of
physical cash, embodying all the inherent properties of physical currency.
Mode of Online Payment:
Currently, most online payments are facilitated by Credit Cards. Different
methods of Credit Card payment are commonly used:
(i) Customer Provides Card Details Directly: The customer responds to an online
marketing presentation by either sending a cheque or calling and verbally
communicating their Credit Card number directly to the merchant's telephone.
This represents a largely traditional approach that predates secure online financial
transactions.
(ii) Customer Authorizes Merchant via Intermediary: (a) The customer opens an
account with a merchant or a third-party organization. (b) The customer securely
provides their credit card number through the internet or other means. (c) The
customer grants the merchant authorization to bill their account whenever the
customer chooses to make a purchase.
(iii) Customer Submits Card Details on an Unsecured Form: The customer enters
their Credit Card number on an unsecured online order form. This payment
method carries a risk of the consumer's credit card number being compromised.
(iv) Customer Uses Encryption Software: The customer employs secure
encrypting client software programs to transmit their encrypted Credit Card
number to a secure decrypting merchant server, enhancing transaction security.
(v) Customer Converts to Digital Currency: The customer converts traditional
currency, such as cash or cheques, and their Credit Card authorization into a form
of digital currency. They then spend that currency whenever and wherever the
consumer wishes to make a payment. In this scenario, some form of 'electronic
wallet' is necessary to hold the digital currency. For this process, an account setup
is required to facilitate the exchange between the traditional currency and the
participating merchants' preferred digital currency, all conducted via the internet.

8. Payment System in Government Sector

The Government Office has adopted the internet mechanism for disbursing salary
to its employees, as well as for making other public payments, to ensure
transparency and avoid delays in Government Transactions.
State Bank of India and all other public sector banks, including PNB, UCO Bank,
UBI, CBI, etc., and the leading private banks, such as ICICI, HDFC, IDBI, Axis Bank,
etc., have been authorized by RBI to undertake Government businesses, and these
banks are offering the following electronic mode services for the transfer of
funds:

36
(a) National Electronic Fund Transfer (NEFT): In this system, the Vendor's account
can be directly credited across the country whose accounts are with any CBS
branch having a unique IFSC code. There is typically no upper or lower limit on
transaction value through this mode. The amount is credited to the beneficiary's
Account through a batch processing system.
(b) Real Time Gross Settlement (RTGS): It is generally used for electronic transfer
of high-value transactions across the country on a real-time and gross settlement
basis. The main advantage of this system is that funds are transferred to the
beneficiary's Account online and in real-time. Unlike NEFT where transactions are
batched together and processed periodically, in the RTGS system, transactions are
credited almost immediately to the beneficiary's Account. At present, the
minimum amount that could be transferred through RTGS is ₹ 2 lakh.
(c) Electronic Clearance Scheme (ECS): It is a mode of electronic funds transfer
from one bank account to numerous other bank accounts using the services of a
Clearing House. This is normally used for bulk transfers from one account to many
accounts or from many accounts to one account. This can be used both for making
payments like distribution of dividend, interest, salary, pension, etc., by
institutions or for the collection of amounts for the purposes, such as payments to
utility companies like telephone, electricity, or charges, such as house tax, water
tax, etc., or for loan installments of financial institutions/banks.
(d) Core Banking Solutions (CBS): Core Banking Solutions is a new jargon
frequently used in banking circles. The advancement in technology, especially
internet and information technology, has led to new ways of doing business in
banking. This technology has cut down time, offered facilities for working
simultaneously on different issues, and increased efficiency. The platform where
communication technology and information technology are merged to suit the
core needs of banking is known as Core Banking Solutions. Here, computer
software is developed to perform core operations of banking like recording of
transactions, pass-book maintenance, interest calculations on loans and deposits,
customers' records, balance of payments, and withdrawals are done. This
software is installed at different branches of banks, and their inter-connected
Sources and related content
(e) Aadhaar Enabled Payment System (AEPS): This is a bank-led model that
empowers customers to perform primary banking transactions using their
Aadhaar numbers. Customers can utilize their Aadhaar, which is a 12-digit unique
identification number issued to Indian residents by the Unique Identification
Authority of India (UIDAI), 1 as their identity to access their bank accounts.
Customers are not required to carry their debit or credit cards to perform
transactions. Authentication is done using a fingerprint scan. NPCI (National
Payments Corporation of India) has set a maximum withdrawal limit of ₹ 10,000
per transaction. Through AEPS, any customer can avail the following services:
Cash withdrawal, Cash deposit, Balance enquiry, Fund transfer, Mini statement,
and remittances.
Key Steps for AEPS (Aadhaar Enabled Payment System)
Transaction:
The diagram illustrates the typical steps involved in an AEPS transaction:

37
 1. Choose Which Transaction To Do: The customer selects the type of
transaction they wish to perform (e.g., withdrawal, deposit, balance
enquiry).
2. Provide Finger Print On Scanner: The customer places their finger on a
biometric scanner for authentication.
3. Provide Your Bank Name And Aadhaar: The customer provides the name of
their bank and their Aadhaar number.
4. Go To A Micro ATM Or Banking Correspondent: The transaction is typically
facilitated through a Micro ATM or a Banking Correspondent.
5. On Successful Transaction, Take The Print Slip: Upon successful
authentication and transaction processing, the customer receives a
transaction receipt.
6. Process Completed: The transaction is finalized.

3.1.3 Requirements of E-Payment Systems:

From the perspective of the payment mechanism adopted, digital payment
mechanisms must fulfill certain basic requirements, which are important to
discuss here:
1. Fungibility or Acceptability: An electronic payment instrument is considered
fungible if it can be used comprehensively, meaning it's acceptable in as many
payment situations as possible and enjoys widespread use. This implies that:
(a) The electronic payment should be available over a wide area and must be
broadly accepted, irrespective of the chosen distribution channels (such as the
internet, mobile phones, etc.), the point of payment, product paid for, currency
utilized, and the price (for micro or macro payments).
(b) No user should be excluded from the utilization of electronic payment,
regardless of age, social status, nationality, etc. In other words, it must be widely
fungible and accessible to a wide range of customers and sellers of goods and
services.
2. Convertibility: Digital money should be convertible to any type of currency,
and it should be exchangeable with any other forms of electronic cash, paper
currencies, deposits in a bank, bank notes, etc.
3. Flexibility: The payment systems should be flexible enough to accept several
forms of currency, rather than limiting the users to a single form of currency.
4. Reliability: The payment system should ensure and infuse confidence in users
who should be completely protected from systemic or any point of failure.
5. Efficiency: Electronic payment is required to be efficient when the best possible
performance is obtained at the lowest cost in every phase of the payment process.
The efficiency performance in this connection relates to drastic reduction of
overhead costs involved in the operation of digital payment. Ideally, the cost per
transaction should be close to zero.

38
6. Security: The question of security is an essential requirement for electronic
payment systems. Such security regarding electronic payment can be broken
down into three areas – systems, transaction security, and legal framework:
(a) The system security takes into account the technical and organizational
Information Technology (IT) infrastructure security for customers and merchants
during the electronic payment process.
(b) The transaction security means the secure and reliable payment in the
handling of electronic media according to the defined rules.
(c) Legal security is maintained within a legal frame for electronic payment.
7. Confidentiality (Trust): Electronic payment information must be confidential in
all phases of the procedure and are designed to satisfy the participants and their
security expectations. Therefore, procedure are designed to satisfy the
participants and their security expectations. Therefore, credibility and
authenticity are essentially important and the initial pre-requisite is that all
participants should have absolute trust in the system. This question of trust is
essential for the acceptance of electronic payment and it should be given adequate
consideration for a longer time to come. In order to build up trust in the electronic
payment system, three areas to take into consideration are – Data Identity and
Role Behaviour.
• Data identity should include the protection of personal and business related
data in each phase of electronic payment procedure, especially – contract
data, systems and configuration data, billing data and also archival data.
• Identity deals with the participant and the information brought by the
participant to the system. For this purpose, a differentiated reflection with
regard to the roles and the situation of the participants is required. As for
instance, the user may wish to hide his identity by paying anonymously.
• Within the context of role behaviour the dynamic aspect of trust is
captured. With every role, there exist certain activity sequences connected
during the payment process. The execution of these activities relies on the
responsibility of each of the role participants.
8. User Friendliness: The handling of the electronic payment should be simple
enough and so simple that even the children, older and disabled people are able to
operate a payment transaction easily and without any difficulty arising thereof.

3.1.4 General Risk Involved in Electronic Payment Systems

Risk management is a critical aspect of e-commerce. Major risks involved in
electronic payment systems include fraud or mistake, privacy of information, and
credit risk. These risks can be mitigated through robust security measures,
encryption, and secure protocols.
3.1.5 Comparison of Electronic Payment Systems
Electronic payment systems are a fundamental component of e-commerce and
essential infrastructure for various e-commerce models. The widespread adoption
of e-commerce is significantly driven by the rapid development and growth of

39
 diverse electronic payment systems. Four key categories have emerged as
particularly important:
(i) Online Credit Card Payment System
(ii) Online Electronic Cash System
(iii) Electronic Cheque System
(iv) Smart Cards based Electronic Payment System
All these payment systems must meet several requirements, including security,
acceptability, convenience, cost-effectiveness, anonymity, control, and
traceability. To evaluate how well these systems address these requirements and
to assess the suitability of each system, we will now undertake a comparison of
these Electronic Payment Systems.

Features Online Credit Electronic Cash Electronic Smart Cards

Card Payment Cheque
Actual
Payment/Pai Paid later Prepaid Paid later Prepaid
d Later
Electronic
The store and
Transaction Free transfer. No checks or The smart
bank check
need to leave the payment card of both
Information the status of
name of parties indication 1 parties makes
Transfer the Credit
involved. parties must the transfer.
Card.
be endorsed.
Online and Offline Offline
Online Online
Offline transfers are transfers are
transactions transactions
Transactions allowed allowed

Credit card The bank The smart

Bank Account account account card account
No involvement
Involvement makes the makes the makes the
payment. payment. payment.
Any legitimate Anyone with Anyone with a
Anyone with a
Users credit card
bank account.
a bank bank or credit
users. account. card account.
Party to
which Distributing
Store Store Store
Payment is Bank
made out
Most of the Consumer Consumer is
risk is borne Consumer is at bears most
Consumer's at risk of the
by the risk of the of the risk, smart card
Transaction distributing electronic cash but the getting stolen,
Risk bank; getting stolen, consumer lost, or
consumers lost, or misused. can stop misused.
only have to cheque 2

40
 bear part of payments at
the risk. any time.
Credit card
Credit card
Unable to meet organizations
organizations
financial Cannot meet check for
check for
internet internationa certification;
Current certification;
standards in the l standards; therefore, it
therefore, it
Degree of can be used
areas of therefore, its can be used
Popularity expansion popularity is internationall
internationall
potential and not very y and is
y and is the
internationalism popular. becoming
most popular
. more widely
payment type.
used.
Entirely
anonymous,
but if needed,
the central
Partially or processing
Entirely No
Anonymity entirely agency can
anonymous. anonymity
anonymous. ask stores to
provide
information
about a
consumer.
Suitable for Well-suited
small due to
payments; typically low
Not well-
allows transaction
suited due to Well-suited due
merchants costs; allows
Small potentially to typically low
to stores to
Payments high transaction
accumulate accumulate
transaction costs.
debits up to debits up to a
costs.
a limit limit before it
before reaches a
paying for it. limit.
Needs to
safeguard a
Safeguards Safeguards Safeguards
large database &
Database regular credit regular regular
maintain records
Safeguarding card account
of the serial
account account
information. information. information.
numbers of used
electronic cash.
Can be signed Can be Value can be
Transaction and issued Face value is signed and deducted
freely in often set and issued freely
Information compliance cannot be
freely, in
Face Value in compliance
with the credit changed. compliance with the limit.
limit. with the

41
 available
limit.
Limited to
the virtual
world for
Can be the Can be used in
Can only be used
Real/Virtual partially used transaction both the real
in the virtual
World Usage in the real
world.
itself, but and virtual
world. linked to a worlds.
real-world
checking
account.
Depends on
Depends on Generally no
Limit on Depends on how how much
the limit of the inherent
Transfer credit card.
much is prepaid.
limit.
money is
saved.
Mobility Yes No No Yes

3.1.6 Other Digitised Forms of Disbursement and their Related

Aspects
3.1.6.1 Core Banking
Core banking is the standard business conducted by a banking institution with its
retail and small business customers. Many banks treat retail customers as their
core banking clientele and maintain a separate line of business to manage small
businesses. Larger businesses are typically managed via the corporate banking
division of the institution. Core banking fundamentally involves accepting
deposits and lending money. Nowadays, most banks utilize core banking
applications to support their operations, where "CORE" stands for "Centralized
Online Real-time Environment." This essentially means that all the bank's
branches access applications from centralized data centers. Consequently, the
deposits made are reflected immediately on the bank's servers, and customers can
withdraw their deposited money from any of the bank's branches across the
network. These applications also provide the capability to address the needs of
corporate customers, offering a comprehensive banking solution.
A few decades ago, it used to take at least a day for a transaction to reflect in the
account because each branch had its local servers, and the data from the server in
each branch was sent in a batch to the data center only at the end of the day
(EOD).
Normal core banking functions include deposit accounts, loans, mortgages, and
payments. Banks make these services available across multiple channels like
ATMs, Internet banking, and branches.

Core Banking Solutions

Core banking solutions are banking applications offered on a platform enabling a
phased, strategic approach that is intended to allow banks to improve operations,

42
reduce costs, and be prepared for growth. Implementing a modular, component-
based enterprise solution facilitates integration with a bank's existing
technologies. An overall service-oriented architecture (SOA) helps banks reduce
the risk that can result from manual data entry and out-of-date information,
increases management information and review, and avoids the potential
disruption to business caused by replacing entire systems.
Core banking solutions are a relatively new term frequently used in banking
circles. The advancements in technology, especially the internet and information
technology, have led to new ways of conducting business in banking. These
technologies have reduced turnaround time, offered facilities for working
simultaneously on different issues, and increased overall efficiency. The platform
where communication technology and information technology converge to meet
the fundamental needs of banking is known as core banking solutions. Here,
computer software is developed to handle essential banking operations such as
recording transactions, maintaining passbooks, calculating interest on loans and
deposits, managing customer records, processing balance of payments, and
handling withdrawals. This software is installed across different branches of a
bank, and these branches are interconnected by means of communication lines
like telephones, satellite internet, etc. It allows the users (customers) to operate
accounts from any branch if the bank has installed 'core banking solutions'. This
new platform has fundamentally changed the way banks operate.
Gartner defines a core banking system as a back-end system that processes daily
banking transactions and posts updates to accounts and other financial records.
Core banking systems typically include deposit, loan, and credit-processing
capabilities, with interfaces to general ledger systems and reporting tools.
Strategic spending on these systems is based on a combination of service-
oriented architecture and supporting technologies that create extensible, agile
architectures.

3.1.6.2 Mobile Banking

Banking services can now reach a much larger segment of society through the
medium of mobile phones. Mobile banking empowers the common man to
conduct his payment transactions any time and from anywhere. The transactions
using mobile are far less expensive than traditional alternatives. There are three
strategic areas of opportunity and actions for banks to use the mobile phone:
1. Mobile banking: Using a mobile phone to access bank accounts and make
payments.
2. Mobile commerce: Using a mobile phone to buy products.
3. Mobile money transfers: Using a mobile phone to send money to someone.
Technology has the potential to address the issues of outreach and credit delivery
in rural and remote areas. One of the basic assumptions for the viability of
Banking Correspondent (BC) models is intensive and extensive use of Information
and Communications Technology (ICT). By making use of ICT, it is possible to
provide doorstep banking services where the accounts can be operated by even
illiterate customers by using biometric mobile telephones.

43
 Mobile banking is using mobile phones to access bank accounts, receive
debit/credit alerts and statements via SMS, and may check balances and recent
transactions by browsing a simple mobile-enabled website. Mobile can
fundamentally change the retail banking experience and strengthen customer-
bank relationships.

3.1.6.3 Online Banking: Benefits and Related Issues

Introduction
The World Wide Web has permeated virtually every aspect of modern life. If you
have access to a computer with an internet connection, an almost limitless
amount of goods, services, and entertainment choices are at your fingertips.
Online banking is an electronic payment system that enables customers of a
financial institution to conduct financial transactions on a website operated by the
institution, such as a retail bank, virtual bank, credit union, or building society.
Online banking is also referred to as internet banking, e-banking, virtual banking,
and by other terms.
To access a financial institution's online banking facility, a customer with internet
access will need to register with the institution for the service and set up a
password (under various names) for customer verification. The password for
online banking is normally not the same as for telephone banking. Financial
institutions now routinely allocate customers numbers (also under various
names), whether or not customers have indicated an intention to access their
online banking facility. Customer account numbers are normally not the same as
account numbers, because a number of customer accounts can be linked to the
one customer number. The customer can link to the customer number any
account which the customer controls, which may be a cheque, savings, loan,
credit card, and other accounts. Customer numbers will also not be the same as
any debit or credit card issued by the financial institution to the customer. E-
banking includes the systems that enable financial institution customers,
individuals or businesses, to access accounts, transact business, or obtain
information on financial products and services through a public or private
network, including the internet. Customers access e-banking services using an
intelligent electronic device, such as a personal computer (PC), personal digital
assistant (PDA), automated teller machine (ATM), kiosk, or Touch Tone telephone.
While the risks and controls are similar for the various e-banking access channels,
this write-up focuses specifically on internet-based services due to its internet's
widely accessible public network. To access online banking, a customer would go
to the financial institution's secured website and enter the online banking facility
using the customer number and password previously set up. Some financial
institutions have set up additional security steps for access to online banking, but
there is no consistency to the approach adopted.
Features of Online Banking:
(i) A bank customer can perform non-transactional tasks through online
banking, including:
(a) Viewing account balances. (b) Viewing recent transactions. (c) Downloading
bank statements, for example in PDF format. (d) Viewing images of paid cheques.
(e) Ordering cheque books. (f) Downloading periodic account statements. (g)
Downloading applications for m-banking, e-banking, etc.

44
(ii) Bank customers can transact banking tasks through online banking,
including:
(a) Funds transfers between the customer's linked accounts.
(b) Paying third parties, including bill payments (see, e.g., BPAY) and third-party
fund transfers (see, e.g., FAST).
(c) Investment purchase or sale.
(d) Loan applications and transactions, such as repayments of enrollments.
(e) Credit card applications.
(f) Register utility billers and make bill payments.
(iii) Financial institution administration.
(iv) Management of multiple users having varying levels of authority.
(v) Transaction approval process.
(vi) The process of banking has become much faster.
Advantages of Online Banking:
(i) Convenience for Routine Transactions: Most plans allow customers to perform
all routine transactions, such as account transfers, balance inquiries, bill
payments, and stop-payment requests – essentially everything but withdrawing
cash (at least for now). Some even let you apply for a loan or a credit card online.
(ii) Ease of Account Setup: It's very easy to set up an account. With most plans, it
can be done totally online, avoiding all paperwork.
(iii) 24/7 Account Access: We can access our account information anytime, day or
night, and we can do it from anywhere with internet access. A few online banks
update information in real-time, while others do it daily.
(iv) Streamlined Future Payments: Once information has been entered, it doesn't
need to be re-entered for similar subsequent checks, and you can even schedule
future payments to occur automatically.
(v) Software Integration: Many banks allow for file transfer between their
programs and popular accounting software packages, making record-keeping a
breeze.
(vi) Potentially Lower Fees: The fees tend to be about the same as with a typical
checking account, but it works out to be cheaper since you don't have to pay for
stamps. As online banking continues to gain in popularity, the fees should
diminish as banks pass on the savings from reduced real estate and teller costs to
their customers.

3.1.6.4 Digital Wallet

A digital wallet is a software application that allows users to store payment
information and passwords for multiple payment methods and websites. Digital
wallets can be used to make purchases online and in physical stores. Using a
digital wallet involves linking a bank account, e-money account, virtual currency,
or any other store of value to the wallet. Funding the wallet can come from a debit
or credit card, prepaid card, or other payment methods. Digital wallets often have

45
 transaction limits, such as a limit of 20,000 per month for all transactions, and 1
lakh per month with KYC (Know Your Customer) verification. Popular digital
wallets include Paytm, JioMoney, SBI Banking, and M-Pesa.

3.1.6.4 Digital Wallet

A digital wallet is the electronic equivalent of a physical wallet, primarily stored on
smartphones or other mobile devices. It securely stores payment information,
often linked to a user's payment cards. Initially emerging with the launch of Apple
Pay in 2014, digital wallets have rapidly evolved to offer various functions,
including storing loyalty cards, tickets, and identification documents. Modern
digital wallets provide a secure and convenient way to conduct transactions,
including online payments, in-store purchases, and other mobile-based financial
interactions.
Key features and functionalities of digital wallets typically include:
(i) Secure Storage of Payment Credentials: A digital wallet securely stores
sensitive payment information, such as credit card and debit card details, often
utilizing encryption to protect this data.
(ii) Contactless Payment Capabilities: Many digital wallets support contactless
payment technologies, allowing users to make in-store purchases by simply
holding their mobile device near a payment terminal.
(iii) Online Payment Integration: Digital wallets can be integrated with online
shopping platforms, streamlining the checkout process by eliminating the need to
manually enter card details for each purchase.
(iv) Management of Loyalty Programs and Other Digital Assets: Beyond payment
cards, digital wallets can often store loyalty cards, membership information,
tickets, and even digital identification documents, consolidating various essential
items in one accessible location.
(v) Transaction History and Management: Digital wallets usually provide a record
of past transactions, allowing users to track their spending and manage their
finances more effectively.
(vi) Security Features: Digital wallets incorporate various security measures, such
as biometric authentication (fingerprint or facial recognition) and tokenization, to
protect user data and prevent unauthorized access.
A Secure Way to Authenticate a Signature
The United States, along with many industrialized nations (including the European
Union, Saudi Arabia, and Singapore), has enacted legislation recognizing digital
signatures as legally binding, provided that the message has not been altered
since it was originally signed and that the signatory can be reliably authenticated.
This legal recognition provides a secure and verifiable method for confirming the
authenticity and integrity of electronic documents and transactions, even in the
absence of a traditional handwritten signature. Digital signatures offer significant
benefits for e-commerce, regulatory filings, and other business and government-
related transactions, as they enable secure and legally valid electronic agreements
and communications, reducing the need for paper-based processes.

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3.1.6.5 Digital Signature
Concept
A digital signature is essentially an electronic stamp that can be attached to an
electronic document, small message, or other computer data to verify its
authenticity and integrity. It serves a similar purpose to a handwritten signature
in traditional paper-based documents. Ensuring that only the intended recipient
can decipher the information being sent is a crucial aspect of data security.
Authentication is the process of confirming that the computer receiving the
information is indeed the one it's supposed to be. Cryptography, the art of writing
or solving codes, plays a vital role in digital signatures. There are several ways to
authenticate information, but two prominent methods in information technology
are public key cryptography and private key cryptography.
In the realm of digital signatures, what distinguishes them is their ability to prove
the origin of the data and confirm that the data has not been altered since it was
signed. This provides a high level of trust and security for electronic
communications and transactions.

What It Does (The Three Key Functions)

There are typically three essential functions involved in a digital signature process:
(i) Authentication of the Signer: The digital signature process must reliably verify
the identity of the person or entity that signed the electronic document or
message. This ensures that the recipient can be confident about the origin of the
data.
(ii) Data Integrity: The digital signature must provide assurance that the data has
not been tampered with or altered in any way since it was signed. If any changes
are made to the document after it has been digitally signed, the signature will
become invalid, alerting the recipient to potential tampering.
(iii) Non-Repudiation: A valid digital signature provides strong evidence that the
signer cannot later deny having signed the document or message. This is a crucial
aspect for legally binding electronic agreements and transactions.

The Process of Digital Signing

There are typically several algorithms involved in the digital signature process,
with a private key along with its corresponding public key being essential
components.
Key Generations: The process begins with the creation of a unique pair of keys for
the signer: a private key, which is kept secret by the signer, and a public key,
which can be widely distributed. These keys are mathematically linked but
distinct.
Signing: This process uses a private key to generate a unique digital signature for a
given message.
Verification: This process uses the corresponding public key and the signature to
confirm the message's authenticity and integrity.
Digital signing relies on cryptographic algorithms where a valid signature,
generated using a specific private key and message, can only be authenticated by

47
 its matching public key. This asymmetric cryptography prevents signature
forgery, even against common attack methods:
• Key-only attack: The attacker only possesses the public key.
• Known message attack: The attacker has valid signatures for some
messages but not the chosen one.
• Adaptive chosen message attack: The attacker can obtain signatures for
messages they select.

Reasons to Implement Digital Signatures:

Beyond streamlining workflows and preventing document forgery, digital
signatures offer key validation advantages. They provide assurance that a
message or document remains unaltered during transmission; any tampering
invalidates the signature, immediately alerting sender and receiver due to the
cryptographic link.
Furthermore, digital signatures enable non-repudiation. The sender cannot later
deny signing the message, and unauthorized parties cannot create a valid
signature. Many non-repudiation methods include tamper-proof timestamps,
providing irrefutable evidence of the signature's validity, even if the private key is
compromised or revoked.

3.1.6.6 NPCI Unified Payments Interface (UPI) To Ease Mobile Banking

Introduction: The National Payments Corporation of India (NPCI) is an umbrella
organization for all retail payments in India. The Unified Payments Interface (UPI)
aims to empower users to perform instant push and pull transactions seamlessly.
UPI is designed to facilitate easy, secure, and instant money transfers between
bank accounts using a smartphone.

UPI Registration Process:

The UPI registration process begins with the user downloading any bank's UPI-
enabled application or a third-party UPI application.
Once the app is downloaded, the user is prompted to Select Your Bank.
For the first-time setup, the user needs to Give Account Details.
Next, the user is required to Choose Your Unique ID (Aadhaar, Mobile No.) As
Virtual Payment Address (VPA).
Following this, the user needs to Set M-pin For Validating Transactions.
Upon completing these steps, the Registration is Completed.
UPI Link Specification and Parameters:
UPI Deep Linking URL specifications must adhere to the following guidelines for all
PSP applications intending to initiate "UPI intent linking" within their mobile
applications for QR, intent, NFC, and UPI Deep Link scenarios:
(i) Developers not developing merchant applications (mobile apps wanting to
initiate payments from the URL within their application and where no other of
the following is true) should ensure that the application and the PSP UPI

48
application (if the same mobile has it) are both installed before linking using the
URL.
(ii) Create a QR code within the application and allow customers to scan it and
invoke the UPI application.
(iii) Use standard data transfer protocol (such as BT, Wi-Fi Direct, NFC, Sound,
etc.) to transfer the URL data to another mobile phone when it gets deep-linked
to their PSP application.
(iv) Create the URL and allow standard 'share' options for UPI payment intents
to be sent via chat or email. The Receiver will click on the link to then invoke
their PSP application or a UPI online message.
(v) While reading a QR, intent, NFC, BLE, UHF, etc., all parameters must be read
and passed as a URL online message.
(vi) If any tag is not present, it can be dropped or passed as null.
Using a standard data format and URL scheme allows the actual protocol of data
transfer to be separated out, thus allowing any transfer protocol to be used to
transfer this final result to another device.
Response Parameters: As a standard practice, the merchant app must check the
final result with their server/PSP server.

Implementation Samples:
For Hyperlinking: The user goes to an e-commerce website (My Star Store) on his
mobile phone and places an order. The website generates a link, which the user
can click on to complete the payment.
To pass the specification, the link contains the payee details, the transaction
reference (order ID), and the amount to be paid.
When the user clicks on the link on his mobile browser, it invokes the local PSP
application where the user can confirm the details and complete the payment.
Because of the design simplicity, user familiarity with hyperlinks, and the ease of
sharing, intent links can be supported and shared across multiple communication
channels, such as chat, email, and social networks.
QR Code: QR code consists of black modules arranged in a square pattern on a
white background. The information encoded can be made up of four standardized
kinds ('modes') of data (numeric, alphanumeric, byte/binary, Kanji) or by
supported extensions virtually any kind of data.
QR codes can be used for proximity payments within UPI. Developers who are
developing merchant applications must generate a URL fully compliant to
specifications in previous sections and then create a QR code for that URL.
Another UPI linking is protocol agnostic and hence allows innovative mechanisms
between merchant proximity devices to send a UPI intent to customer phones.

Sending Money on UPI:

1. Enter Amount

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 2. Write Remarks For Transaction
3. Enter Payee's Virtual Payment Address
4. Confirm Details
5. Hit "Send"
Collecting Money (Raise a Demand) on UPI:
1. Enter Amount
2. Enter When Do You Want To Collect
3. Enter Payer's Virtual Payment Address
4. Write Remarks For Transaction
5. Hit "Confirm"

Advantages of UPI:
• Instant Transactions: UPI allows for instant money transfers, making it one
of the fastest payment methods available.
• Ease of Use: Users can perform transactions using their mobile devices,
making it convenient and accessible.
• Security: UPI uses secure protocols to ensure the safety of transactions. The
use of M-Pin and VPA adds an extra layer of security.
• Interoperability: UPI is interoperable across different banks and payment
apps, allowing users to send and receive money from any UPI-enabled app.
• Low Cost: UPI transactions are generally free or have very low fees, making
it cost-effective for users.

3.1.6.7 Overview of the ACH System

Introduction: The Automated Clearing House (ACH) is a batch processing system
used for electronic fund transfers (EFT) between banks. ACH is widely used for
direct deposits, payroll, vendor payments, and other types of electronic
transactions. It is a secure, reliable, and cost-effective method for processing large
volumes of transactions.
Basic of the Automated Clearing House: The ACH system allows payment
information to be transmitted over telephone lines. For example, a customer of an
electric company can relay her account number and the electric company's
deposit account number to her bank. Each month, the customer can phone the
bank and initiate an ACH credit transaction to transfer the amount of her bill to the
electric company. In the case of a set billing amount, the customer can arrange for
that amount to be sent automatically every month. Alternatively, a debit
transaction is pre-authorized by the payer but initiated by the payee. In this case,
the customer signs a form authorizing the utility to debit her account each month.
The utility sends her a bill and then initiates payment for the bill at some agreed-
upon date.

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ACH Service Options:
• ACH Credits: These include customer-initiated transactions, such as bill
payments.
• ACH Debits: These include consumer-initiated debits for premiums,
installment payments, membership dues, or other recurring obligations.
E-cheque (Cheque Conversion): This involves converting a paper cheque into an
electronic transaction. The cheque is scanned and its details are entered into an
electronic system, which then processes the transaction as an ACH debit or credit.
ACH Transaction Costs: Including the costs of accounting, mailing, processing,
and transportation, an ACH transaction is estimated to be roughly half the cost of
a cheque transaction. This makes ACH a cost-effective alternative for businesses
and individuals.
ACH Payment Risk Diagram: The risk associated with different payment methods
can be illustrated as follows:
• Most Secure: Letters of Credit
• Exporter: Open Account
• Importer: Cash-in-Advance
• Least Secure: Documentary Collections
Key Points:
1. Cash-in-Advance: The importer pays the exporter before the goods are
sent. This method is secure for the exporter but may put the importer at a
disadvantage.
2. Letters of Credit (LC): An LC is useful when reliable credit information
about a foreign buyer is difficult to obtain. It provides assurance that the
exporter will receive payment if the terms of the LC are met.
3. Documentary Collections: This involves the exporter entrusting the
collection of payment to the remitting bank (exporter's bank), which sends
documents to a collecting bank (importer's bank) along with instructions
for payment. Funds are received from the importer and remitted to the
exporter through the banks involved in the collection in exchange for those
documents.
4. Open Account: The exporter ships the goods and provides documents to the
importer on credit terms. The importer pays at a later date. This method is
least secure for the exporter.

3.1.7 Risks Involved in Electronic Banking and Electronic Money Activities

Introduction: Electronic banking and electronic money activities offer significant
benefits in terms of convenience, speed, and efficiency. However, these systems
also introduce various risks that need to be managed effectively to ensure security
and reliability.
Identification of Risks: Operational risks in electronic banking and electronic
money systems may arise from deficiencies in system reliability or integrity.

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 Security considerations are paramount because banks may be subject to external
or internal attacks on their systems and products. Operational risk may also arise
from customer misuse and from inadequately designed or implemented electronic
banking and electronic money systems.
Types of Risks:
1.Security Risks:
• Operational risk arises with respect to the controls over access to the
bank's critical accounting and risk management systems. A breach
of security could result in fraudulently created liabilities of the bank.
• Unauthorized access could lead to direct losses and add liabilities to
customers.
2.Systems Design, Implementation, and Maintenance:
• Banks face risks that the systems they choose are not well designed
or implemented and are not compatible with user requirements.
• The rapid pace of change in information technology presents banks
with the risk of system obsolescence.
3.Reputational Risk:
• Negative public reaction can affect a bank's reputation if customers
are unable to access their accounts or if transactions are not
processed correctly.
• Widespread negative public reaction can lead to a loss of confidence
in the bank's services.
4.Credit Risk:
• Sometimes, banks engaged in electronic banking activities may
extend credit via non-traditional channels and expand their market
beyond traditional geographic boundaries without adequately
determining the credit-worthiness of the borrowers applying for
credit.
• This could heighten credit risk for banks.
5.Liquidity Risk:
• Liquidity risk arises from a bank's inability to meet its obligations
when they fall due without incurring unacceptable losses.
• Such liquidity risk may be significant for banks specializing in
electronic money activities if they are unable to ensure that funds are
adequate to cover redemption and settlement demands at any
particular time.
• Failure to meet redemption demands in time could invite legal action.
6.Market Risk:
• Market risk arises from fluctuations in interest rates.

• Banks specializing in the provision of electronic money may face

increased market risk due to the nature of their operations.

52
Mitigating Risks: To mitigate these risks, banks and financial institutions must
implement robust security measures, ensure proper system design and
implementation, and comply with regulatory requirements. Regular audits and
updates to security protocols are essential to protect against emerging threats.
Additionally, customer education and awareness programs can help reduce the
risk of misuse and fraud.

Exercise
Short Type Questions
Marks 5
1. What is E-Cash? State its advantages.
2. What is Credit Card? State its limitations.
3. Define Digital Wallet. State its functions.
4. State the Process of Digital Signing.
5. Briefly explain reasons to consider for implementation of the digital
Signature Process.
6. Write a short note on: (a) NPCI (b) UPI (c) ACH (d) ATM (e) Debit Card (f)
Smart Card (g) Mobile Banking (h) AEPS (i) CBS (j) RTGS

Essay Type Questions

Marks 10
1. What is digital payment system? State its features.
2. State briefly various methods of digital payment system.
3. Explain various digital payment system available in Government Sector.
4. Mention various features and advantages of Online Banking.
5. Discuss various risks involved in Electronic Banking and Electronic money
activities.

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 UNIT 4

New Trends in E-Commerce

4.1 Social Commerce
4.1.1 Introduction
Social commerce has emerged as a significant phenomenon in the world of e-
commerce, driven by the increasing popularity of social media applications such
as blogs, forums, and social networks. It represents a shift from individual
decision-making to collaborative decision-making among customers. Social
commerce leverages the discussion platforms provided by the social web to
influence and facilitate purchasing decisions. This collaborative approach allows
companies to engage with customers more effectively, leading to increased sales
and brand loyalty.

4.1.2 Definition of Social Commerce

Social commerce is largely driven by practice rather than by concept and
research. It involves customers collaborating online, exchanging information
about products and services, and getting advice from peers. This interaction
changes the traditional relationship between sellers and buyers, indicating the
advent of social commerce. According to celebrated professionals, social
commerce can be defined as:
• Integration of online and offline environments: Social commerce
integrates online interactions with offline experiences to create a seamless
shopping experience.
• Advice and recommendations: Customers rely on advice and
recommendations from other customers, making the purchasing process
more informed and collaborative.

4.1.3 Characteristics of Social Commerce

Social commerce is characterized by three main attributes:
1. Social media technology: The use of social media platforms to facilitate
interactions and discussions.
2. Community interaction: The involvement of a community of users who
share information and experiences.
3. Commerce activity: The actual buying and selling of products and services.
These characteristics highlight how social commerce leverages technology and
user-generated content to influence customer decision-making and foster a sense
of community among users.

4.1.4 Categories of Social Commerce Platform

Social commerce platforms can be categorized into four main types:

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 1. E-Commerce-oriented social commerce: Platforms that focus on
integrating social features into traditional e-commerce websites.
2. Interest-oriented social commerce: Platforms that cater to specific
interests or niches, allowing users to share and discover products related to
their passions.
3. Social network-oriented social commerce: Platforms that leverage
existing social networks to facilitate commerce activities.
4. Group buying-oriented social commerce: Platforms that offer group
buying deals, often with significant discounts, to incentivize collective
purchases.

4.1.5 Conclusions
Web 2.0 technologies have given rise to a new e-commerce stream called social
commerce, which is an innovation in business models. With more customers using
social media, businesses have developed various tools to reach a broader
audience, increase sales, and enhance brand awareness. Community interaction is
the foundation that can influence business activities. The model guides people to
understand the social commerce platform from four aspects: taxonomy, value
proposition, revenue source, and sustainability.
4.2 Digital Marketing
4.2.1 Introduction
Digital marketing refers to the promotion of products or brands through one or
more forms of electronic media. It has evolved significantly with the advent of the
internet and digital technologies, offering new opportunities for businesses to
reach and engage with their target audience. Digital marketing strategies are
designed to be user-centric, measurable, ubiquitous, and interactive, leveraging
the power of the internet to achieve marketing goals.

4.2.2 Definition of Digital Marketing

Digital marketing is the extension of traditional marketing practices into the
digital realm. It involves the use of digital channels and technologies to promote
products and services. This includes strategies that are unthinkable in offline
environments, such as search engine optimization (SEO), content marketing, and
social media marketing. Digital marketing brings together customization and
mass distribution to achieve marketing goals, leveraging technological
convergence and the multiplicity of devices.

4.2.3 Objective of Digital Marketing

The primary objectives of digital marketing include:
Situation Analysis
A crucial element of any strategic document is establishing the baseline of an
organization and its environment. This foundational step involves defining the
institution's mission, vision, and core values. The mission articulates the
company's purpose and essence. The vision outlines its future aspirations, setting
ambitious yet attainable goals to inspire stakeholders. Finally, the values represent
the guiding principles that shape the organizational culture and dictate how the

55
 organization conducts its activities. Following this, a vital next step is to conduct a
thorough internal and external analysis.
Goal Setting
Goal setting is a key phase in marketing planning. It provides a clear
understanding of the organization's current position and informs necessary
adjustments to the marketing strategy. Effective goal setting adheres to the
following SMART criteria:
• (S) Specific: Goals should be simple and easily understood.
• (M) Measurable: Progress should be quantifiable or qualitatively assessed.
• (A) Assignable: Responsibility for achieving each goal can be clearly
allocated to a company member for implementation.
• (R) Realistic: Goals must be achievable within a practical framework.
• (T) Time-related: Each goal should have a defined timeframe for
completion.
Planning a Strategy
To realize the established goals, a specific strategy must be defined. A strategy
serves as the implemented scheme to achieve those goals.
Action and Control
Developing a strategy involves outlining numerous actions and identifying
relevant themes or keywords. In digital marketing strategy, a critical aspect is
scheduling tasks with clear timelines for each. This includes assigning
responsibility for each action. All actions should be monitored and adjusted based
on the individual output of each team member.

4.2.4 Methods or Forms of Digital Marketing

4.2.4.1 Social Media Marketing as a Form of Digital Marketing
Social media marketing is essentially word-of-mouth amplified in the digital age.
Establishing a strong online presence on social platforms is vital for any business
to broaden awareness of its offerings and engage its target audience.
Search Engine Optimization (SEO) and Social Media
While some teams handle SEO and social media separately, this distinction is
increasingly blurred. SEO strategists need to understand how social signals
impact search rankings, requiring closer collaboration with social media
marketers who gather valuable insights into audience behavior and preferences.
Start Social Media Marketing
Here are six fundamental steps to initiate social media marketing:

• Step 1: Choose the social networks relevant to your target audience.

• Step 2: Fully populate your profiles with comprehensive and keyword-
rich information.

• Step 3: Define your voice and tone to maintain brand consistency.

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 • Step 4: Select your posting strategy detailing frequency, content types,
and themes.

• Step 5: Analyze and test different approaches to optimize performance.

• Step 6: Automate and engage to streamline processes and foster
community interaction.
Social media fosters significant relationships and generates organic engagement
through dynamic interactions between users.
A well-defined Social Media Marketing Plan is a crucial document that guides an
organization's online presence. It encompasses setting up, maintaining, and
integrating social networks into the overall digital marketing strategy. Therefore,
any social media plan must align with the broader marketing objectives.
Advertisement in Social Media
Social media advertising is an emerging digital marketing avenue for businesses
seeking to reach a targeted audience and drive sales. Through paid promotions on
these platforms, marketers can precisely target specific demographics, interests,
and behaviors. This allows for the creation of tailored advertisement formats that
resonate with the intended audience across various social media platforms like
Facebook, Instagram, X (formerly Twitter), and LinkedIn.
Most social networks operate on data-driven business models, providing access to
vast amounts of qualitative data from their user base. This wealth of information
allows for granular segmentation of advertising actions.
Facebook, in particular, excels in segmentation. Its advertising platform enables
precise targeting based on location, age, gender, languages, education, interests,
and behaviors, drawing from the detailed information users voluntarily provide
during registration. This includes email addresses and the user's self-reported
gender and age.
Facebook advertising formats are often integrated into the user's feed on both
desktop and mobile interfaces, as well as appearing on the sidebar.
Advertisements should be easily identifiable as sponsored content, yet their
objective is to encourage user interaction similar to organic posts. Consequently,
successful advertisements often prioritize genuine engagement and offer value to
the targeted audience.
In contrast, X (formerly Twitter) possesses less user data, resulting in a lower
segmentation capacity. However, their advertising platform, Twitter Ads, has
introduced effective publicity formats, including promoted accounts featured in
the profile recommendation section.

4.2.4.2 Content Marketing

Content marketing, a cornerstone of digital marketing strategy, revolves around
the art of creating and distributing valuable, relevant, and consistent content.
Think of it as a strategic umbrella encompassing various techniques and tactics,
all aimed at attracting and retaining a clearly defined audience. The ultimate goal?
To drive profitable customer action.

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 At its heart, content marketing is about serving, attracting, converting, retaining,
and engaging customers by consistently delivering the most relevant content. This
content takes many forms, from blog posts and videos to podcasts and social
media updates, acting as the vehicle for building meaningful connections.
While content plays a vital role across virtually all marketing techniques, it's
crucial to understand that content marketing itself isn't a standalone goal.
Instead, it serves as a powerful engine to achieve key marketing objectives, such
as:
• (i) Brand awareness: Elevating your brand's visibility and recognition.
• (ii) Lead generation: Attracting potential customers and capturing their
interest.
• (iii) Engagement: Fostering meaningful interactions and building
relationships with your audience.
• (iv) Sales: Ultimately driving conversions and revenue.
• (v) Lead nurturing: Guiding potential customers through the buyer's
journey.
• (vi) Customer retention and loyalty: Keeping existing customers satisfied
and encouraging repeat business.
• (vii) Customer evangelism: Turning happy customers into enthusiastic
advocates for your brand.
• (viii) Up-selling and cross-selling: Encouraging customers to purchase
more or related products/services.
Content marketing tactics are essentially actions taken to create and share
relevant and useful content. The beauty of this approach lies in its ability to pique
audience interest and attract them organically, rather than relying on disruptive
advertising methods to push products and services.
Furthermore, content marketing aims to transform users into "sneezers" –
individuals who are so impressed by your content that they naturally share it
within their own networks, expanding your brand's reach far beyond its initial
channels.
The formats for implementing a content marketing strategy are diverse, ranging
from traditional formats like white papers, e-books, and specialized magazines to
digital-native formats with higher viral potential, such as infographics, memes,
and short-form videos.
Content Curation: Adding Value Through Filtering
Content curation is a related but distinct practice. It involves the process of
collecting, selecting, organizing, and adapting relevant information on certain
topics or trends from the vast expanse of the web. The goal is to present this
information in an attractive and significant way to your audience. Content
curation proves invaluable for keeping your audience informed about new web
features and industry developments, ultimately saving them time in their own
content discovery process.

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4.2.4.3 E-mail Marketing
E-mail marketing proves invaluable for fostering customer loyalty, building trust
in a product or company, and enhancing brand recognition. Its effectiveness
stems from its ability to maintain consistent communication with clients while
promoting business. Furthermore, e-mail marketing efficiently reaches target
markets quickly and economically, especially when compared to traditional print,
television, or radio campaigns that often incur higher production costs and longer
lead times.
While e-mail and the internet have evolved significantly since their early days,
with e-mail's origins tracing back to 1969 and its widespread adoption beginning
in 1971, e-mail has consistently adapted to the changing digital landscape. It
remains one of the core tools that has shaped both internet communication and
the broader digital strategy.
Presently, e-mail stands as the premier internet service in terms of social media
reach. In 2025, it's estimated that the total number of active e-mail accounts
worldwide reached 7.9 billion, with a staggering 4.26 billion e-mails being sent.
The most prevalent form of e-mail marketing is the newsletter, a regularly
distributed publication centered around a specific topic of interest for its
subscribed recipients. The complexity and visual appeal of a newsletter can vary
greatly depending on its goals and content. It can range from simple plain text
formats to richly designed layouts incorporating images, graphs, advertisements,
and hyperlinks.
The objectives of e-mail marketing are multifaceted and adaptable, generally
falling under four primary goals:
• (i) Diverting traffic to other websites: Using e-mails to drive recipients to
specific online destinations.
• (ii) Promoting a special action: Encouraging immediate engagement
through targeted offers or calls to action.
• (iii) Cost savings: Leveraging the cost-effectiveness of e-mail compared to
traditional marketing channels.
• (iv) Brand popularity and image: Strengthening brand awareness and
shaping positive perceptions.

4.2.4.4 Mobile Marketing as a Form of Digital Marketing

Mobile marketing encompasses marketing efforts directed at or through mobile
devices, such as smartphones and tablets. It offers the unique advantage of
providing customers with time-sensitive and location-sensitive, personalized
information promoting goods, services, and ideas. Mobile marketing shares
similarities with other electronic channels but distinguishes itself by leveraging
mobile devices to reach and engage target audiences through various digital
channels like SMS, social media apps, and mobile-optimized websites, often
tailored for personalized and interactive experiences.
• SMS messaging currently stands as the most common direct delivery
channel for mobile marketing.

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 • Social media apps represent the second most common channel, often
executed through display-based campaigns on platforms like Snapchat,
LinkedIn, X (formerly Twitter), and Facebook, etc.
• Mobile-optimized websites ensure a user-friendly and efficient experience
for visitors accessing particular site information from mobile devices,
adapting to smaller screens and touch interactions.

4.2.4.5 Online Marketing as a Form of Digital Marketing

Online marketing encompasses the strategies and tactics used to reach marketing
objectives through the medium of online networks, computer communications,
and digital interactive media. It represents a modern iteration of marketing that
significantly expands beyond the limitations of traditional marketing by virtue of
its virtual and interactive nature, forming a crucial component of the overall
marketing mix. Unlike brick-and-mortar establishments, online marketing
opportunities allow businesses to reach a global customer base, enabling
purchases from virtually anywhere.
Beyond geographical boundaries and time constraints, online marketing offers
significant advantages. It presents customers with a broader array of choices and
more competitive pricing, facilitating easier price comparisons. In essence, it
introduces an "information-value" dimension to products and services, enriching
the overall market experience. Furthermore, online marketing typically reduces
costs and streamlines market dependence on manpower, paper, and physical
infrastructure.
The realm of online marketing can be broadly segmented into three key target
audiences:
1. Cyberbuyers: These are professional outfits that allocate considerable time
online for their business needs and are adept at navigating complex
purchasing decisions within tight deadlines. For a cyberbuyer, seamless
online functionality is paramount.
2. Cyber consumers: Representing the most substantial segment of online
users, cyber consumers primarily utilize online services and the internet for
their personal needs. Marketers targeting this group often emphasize
convenience and strive to make online purchasing as appealing as a viable
alternative to traditional brick-and-mortar shopping.
3. Cyber surfers: This segment primarily employs online technology to
broaden their horizons and for leisure activities. Characterized by shorter
attention spans, they often present a unique challenge for marketers.
4.2.5 Advantages of Digital Marketing
Digital marketing presents a compelling array of advantages that contribute to its
increasing prominence:
(i) Cost-Effectiveness: Digital marketing can significantly reduce costs and thus
conserve money, enabling businesses to stretch their marketing budgets further.
The need for printing physical catalogues, brochures, and specification sheets is
eliminated. Instead, companies can provide electronic versions of this
information, incurring minimal additional cost. Furthermore, publicizing

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marketing materials online can often be achieved without incurring recurring
costs, saving substantial amounts of money.
(ii) Time and Effort Savings: Digital marketing streamlines key steps in the
marketing process, leading to considerable time savings. Marketers are no longer
solely reliant on their sales teams to gather customer information. They can
readily obtain potential buyer information quickly online. E-mail also facilitates
swift information exchange with potential buyers, enabling businesses to
promptly send out targeted messages, online brochures, catalogues, and other
relevant materials.
(iii) Enhanced Customer Convenience and Information Access: Digital marketing
provides customers with an alternative and convenient avenue for making
purchases. Customers today expect comprehensive information about products
and the after-sales service they can anticipate. The interactive nature of online
communications empowers customers to actively engage in the decision-making
process. They can explore product features, select preferred options, and even
customize their orders online. This heightened customer involvement in the
customization and purchasing process increases the likelihood of a successful
sale, as the seller is more attuned to the customer's specific needs.
(iv) Removal of Geographical Barriers and Instant Global Reach: Digital
marketing effectively dismantles the time and distance barriers inherent in
traditional marketing. It provides an instant international reach, allowing
businesses to connect with potential customers globally by essentially
demolishing geographical limitations. Online networks facilitate immediate global
communication and interaction.
(v) Rich Information and Interactivity: Digital marketing excels at delivering
information-rich and interactive content. Such active engagement creates
valuable opportunities for businesses to connect deeply with their target audience.
The interactive nature of digital platforms helps to overcome a significant barrier
in traditional marketing – the lack of real-time engagement.
(vi) Round-the-Clock Accessibility: Digital marketing operates continuously, 24
hours a day, seven days a week, 365 days a year. This constant availability proves
immensely beneficial for businesses because customers can access information
and make purchases at their convenience, regardless of time zones or physical
location.
4.2.6 E-Commerce to Foster Transaction Relationship in Digital
Marketing
E-commerce signifies the conduct of transactions over the internet or other
computer networks. It encompasses a wide array of online activities, including
buying and selling goods, purchasing services, making instant payments, and
engaging in online shopping cart services.
The increasing internet penetration and the widespread adoption of internet-
enabled devices, smartphones in particular, have propelled the mobile commerce
phenomenon. This has, in fact, brought e-commerce directly into the hands of
consumers, making online transactions more accessible and commonplace.
E-commerce is rapidly evolving into an increasingly vital and direct channel for
fostering business relationships. It bridges the gap between companies and their

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 end consumers, streamlining interactions and often leading to stronger, more
direct connections. Some key relationship models facilitated by e-commerce
include:
1. Business-to-Consumer (B2C): This is the most prevalent and widely
understood model, where a company directly sells its products or services
to individual consumers via the internet.
2. Business-to-Business (B2B): In this model, transactions occur between two
or more businesses. The internet serves as a crucial platform for companies
to procure products or services from other businesses, streamlining supply
chains and operational processes.
3. Business-to-Employee (B2E): This model focuses on internal business
operations, where a company utilizes online platforms to provide products
or services to its own employees. This can range from offering attractive
purchase options to facilitating internal communications and
administrative tasks.
4. Government-to-Consumer (G2C): This category involves the online
provision of services and information by government bodies to individual
citizens. The aim is to enhance public service delivery and improve citizen
interaction with governmental processes through online administration.
5. Consumer-to-Consumer (C2C): This sector involves online transactions
directly between consumers, often facilitated by third-party platforms. This
model is gaining significant traction with the rise of shared economies and
online marketplaces where individuals buy and sell goods or services
directly from each other.
4.3 Application of E-Commerce in Various Sectors
E-commerce has fundamentally reshaped numerous sectors by enhancing
efficiency, expanding reach, and improving customer experiences. Here are some
key applications across different industries:

New Trends in E-Commerce

1. Retail Sector:

Online Stores: E-commerce empowers retailers to sell directly to consumers

through their own websites, expanding their market reach beyond physical
locations. Order tracking, secure payment gateways, and personalized online
shopping experiences further enhance customer satisfaction.

Warehouse and Distribution Sector: B2B e-commerce platforms and inventory

management systems optimize the supply chain and improve efficiency in
tracking inventory, streamlining procurement processes, and reducing costs for
businesses.
2. Travel and Hospitality Sector:

Online Booking Platforms: Websites and apps like MakeMyTrip, Yatra, and
Booking.com have revolutionized how individuals book flights, hotels, and other

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travel-related services. Sophisticated search algorithms and dynamic pricing
models cater to on-demand, comparison-driven, and travel-savvy consumers.
3. Financial Services Related Sector:

Online Banking and Investment Platforms: E-commerce has led to the rise of
convenient online banking platforms and digital wallets. Furthermore, online
trading platforms allow individuals to trade stocks, manage investments, and
access insurance products remotely.
4. Education Sector:

E-learning Platforms and Virtual Classrooms: Websites like Udemy, Topper, and
Simplilearn offer a wide array of online courses, making education accessible to a
broader audience. Institutions utilize e-commerce tools to facilitate online
admissions, deliver engaging educational resources, and prepare students for
working in digitally competitive environments.
5. Healthcare Sector:

Telemedicine and Online Pharmacies: Platforms connecting patients with

healthcare providers online, improving access to medical advice and
consultations, are becoming increasingly common. E-commerce enables online
pharmacies to sell medicines, further enhancing convenience for consumers.
Examples include PharmEasy, Netmeds, 1mg, Apollo Pharmacy, and Health kart
etc.
6. Entertainment Sector:

Streaming Services and Online Gaming: Platforms like Netflix, Amazon Prime
Video, and Spotify have transformed how consumers access movies, TV shows,
music, e-books, software, and gaming products. Streaming services provide
instant digital downloads and subscription-based access, dominating the
entertainment industry. Examples include Amazon Prime, Book My Show.
8. Real Estate Sector:

Property Listings and Virtual Tours: Real estate websites furnish users with tools
to browse, buy, or rent properties online, thereby simplifying the entire process. E-
commerce capabilities enable virtual property tours, significantly enhancing the
buyer's experience. Online listings, virtual tours, and secure online transactions
streamline traditionally complex real estate procedures.
Examples: magicbricks, propertywala, indiaproperty etc.
9. Food and Grocery Sector:

Online Ordering: Restaurants and grocery stores increasingly offer online

ordering and delivery services, providing enhanced convenience for customers.
Meal kit and beverage subscription services ensure regular deliveries of food and
drinks directly to consumers. Online grocery shopping and food delivery services
offer unparalleled convenience to consumers.
Examples: BigBasket, Grofers, JioMart, Reliance Retail etc.

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 10. Manufacturing Sector:
B2B E-commerce: Facilitates critical business processes such as procurement,
supply chain management, and efficient order processing within the
manufacturing industry.
11. Automotive Sector:

Online Services: E-commerce platforms streamline online car sales, spare parts
procurement, vehicle service bookings, and even car insurance processes, offering
greater convenience and accessibility to vehicle owners.
Examples: ACKO, CarWale, CarTrade, Droom, Quikr Cars etc.
12. Fashion Sector:

E-commerce Platforms: Revolutionize the fashion industry by enabling online

clothing and accessory sales, catering to a wide and diverse customer base. *
Examples: Flipkart, Myntra, Limeroad, Meesho etc.
13. Government Service related Sector:

E-Government Services: Streamline citizen interactions, facilitate online

payments, and simplify document processing through dedicated online platforms.
* Example: Government e Marketplace (GEM).

Short Questions with Answers

2 Marks Each
1. Define Social Commerce.
Ans: "Social commerce can be defined as the application of word-of-mouth marketing to
e-commerce and online product reviews, specifically within the digital context of social
media platforms and the interaction of shoppers with content."
2. State three attributes of Social Commerce.
Ans: Three attributes of social commerce are: (i) Social media technology; (ii) Community
interaction; and (iii) E-commerce activity.
3. Mention four basic categories of Social Commerce.
Ans: Four basic categories of social commerce business models are identified as follows:
(i) Peer-to-peer sales; (ii) E-commerce-oriented social commerce; (iii) Interest-oriented
social commerce; (iv) Social network-oriented social commerce; (v) Group buying-oriented
social commerce.
4. Define Digital Marketing.
Ans: Digital marketing is a projection of conventional marketing, utilizing its tools and
strategies through electronic devices. A key differentiating feature is the development of
channels, formats, and languages that have directly led to tools and strategies which are
unthinkable in offline marketing.

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5. What is Digital Marketing Plan?
Ans: A digital marketing plan is an essential tool to achieve the objectives of digital
marketing.
6. What is Content Marketing?
Ans: Content marketing, a kind of digital marketing, is a strategic marketing approach
focused on creating and distributing valuable, relevant, and consistent content to attract
and retain a clearly defined audience.
7. What is E-mail Marketing?
Ans: As a form of digital marketing, e-mail marketing is an online marketing technique
which uses e-mail to send advertisements or commercial information. This is a
communication tool used to attract new customers and make loyal to the brand.
8. State the objectives of E-mail Marketing.
Ans: The objectives of e-mail marketing are: (i) Diverting traffic to other websites; (ii)
Promoting a special action; (iii) Cost savings; (iv) Brand popularity and image.
9. What is Mobile Marketing?
Ans: Mobile marketing is marketing on or with a mobile device, such as a smartphone.
Mobile marketing can provide the customers with time and location sensitive,
personalized information which promotes goods, services and ideas.
10. What do you mean by Online Marketing?
Ans: Online marketing means reaching the marketing objectives through the medium of
online networks, computer communications and digital interactive media.

Exercise
Short Type Questions
Marks 5
1. Briefly explain various categories of social commerce platforms.
2. State the objectives of digital marketing.
3. State the role of advertisement in social media.
4. State the advantages of digital marketing.
5. Write a short note on— (a) Content Marketing (b) E-mail Marketing (c)
Mobile Marketing (d) Online Marketing

Essay Type Questions

Marks 10
1. What is social commerce? State its features and types.
2. Define digital marketing. Mention any 2 methods of digital marketing.
3. Write down the various applications of e-commerce in various sectors.
4. Define digital marketing. State its various benefits.

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 Unit 1: Introduction to
Communication
1. Definition of Communication
Communication is an intricate and fundamental human process that forms the bedrock of
all social and professional interactions. Derived from the Latin word "communicare",
meaning "to share", it encompasses far more than just the exchange of words. At its core,
communication involves the transmission and reception of information, ideas, thoughts,
emotions, and intentions between individuals or groups through various mediums. These
mediums can range from traditional speech and writing to more contemporary forms like
digital messaging and visual representations.

Speaker A

Response B Receiver B

However, true communication goes beyond mere transmission; it requires that the
intended meaning is accurately received, interpreted, and understood by the recipient.
This two-way process is what distinguishes effective communication from simple
information transfer. In both personal and professional contexts, the ability to
communicate clearly and effectively is paramount. It serves as the bridge that connects
people, enabling them to share knowledge, express needs, build relationships, and
collaborate towards common goals. Without effective communication,
misunderstandings proliferate, relationships suffer, and organizational efficiency
declines.
2. Scope of Communication
The scope of communication is vast and multidimensional, permeating every facet of
human existence and organizational functioning. Its influence can be observed across
multiple domains:
• Personal Communication: This encompasses all forms of interaction within
one's private life, including conversations with family members, friends, and social
acquaintances. In these settings, communication tends to be more emotional,
informal, and relationship-oriented. The tone is often casual, and the content may
include personal experiences, feelings, and day-to-day matters. Effective personal
communication strengthens bonds, resolves conflicts, and fosters emotional well-
being.

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 • Professional Communication: In the workplace, communication takes on a
more structured and purposeful form. It includes formal exchanges such as
business emails, reports, presentations, meetings, and performance reviews.
Professional communication requires clarity, precision, and often adherence to
organizational protocols. The stakes are higher here, as miscommunication can
lead to operational errors, decreased productivity, and damaged professional
relationships.
• Mass Communication: This refers to the dissemination of information to large
audiences through media channels such as television, radio, newspapers, and
digital platforms. Mass communication plays a crucial role in shaping public
opinion, disseminating news, and promoting products or services. It requires
careful crafting of messages to ensure they resonate with diverse audiences.
• Digital Communication: The advent of technology has revolutionized how
people connect and share information. Digital communication includes emails,
instant messaging apps, social media platforms, video conferencing tools, and
collaborative software. These tools have made communication faster, more
accessible, and borderless, enabling real-time interactions across the globe.
However, they also present challenges such as information overload and the need
for digital etiquette.
3. Importance of Communication
Communication is the lifeblood of human relationships and organizational success. Its
importance cannot be overstated, as it underpins virtually every aspect of personal and
professional life. Below, we explore the multifaceted significance of communication in
greater depth:
• Enhancing Relationships: At its heart, communication is about connection.
Whether in personal relationships or professional collaborations, clear and open
communication fosters trust, mutual understanding, and emotional intimacy. It
allows individuals to express their needs, share their perspectives, and resolve
conflicts amicably. In the absence of effective communication, relationships can
become strained, leading to misunderstandings and resentment.
• Resolving Conflicts: Disagreements and conflicts are inevitable in any social or
organizational setting. However, the manner in which these conflicts are
addressed makes all the difference. Effective communication provides the tools to
navigate disagreements constructively. Through active listening, empathetic
responses, and clear articulation of viewpoints, parties can find common ground
and work towards mutually beneficial solutions.
• Facilitating Decision-Making: In business environments, decision-making
relies heavily on the quality of information available. Clear communication
ensures that all relevant data, opinions, and perspectives are shared among
stakeholders. This comprehensive exchange of information enables informed
decisions that consider multiple facets of a situation. Poor communication, on the
other hand, can lead to decisions based on incomplete or inaccurate information,
with potentially detrimental consequences.
• Boosting Productivity: Organizations thrive when their employees work
cohesively towards shared objectives. Clear communication of goals,
expectations, and feedback is essential for aligning individual efforts with
organizational priorities. When employees understand their roles and
responsibilities clearly, they can perform their tasks more efficiently. Conversely,
ambiguous instructions or lack of communication can result in duplicated efforts,
missed deadlines, and frustration.

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 • Strengthening Public Image: For businesses, communication extends beyond
internal operations to how they interact with customers, investors, and the general
public. A company's reputation is shaped by its communication strategies—how it
handles customer inquiries, addresses complaints, and shares information about
its products or services. Transparent and timely communication builds trust and
loyalty among stakeholders, while poor communication can damage a brand's
credibility.
• Supporting Globalization: In today's interconnected world, businesses often
operate across cultural and geographical boundaries. Effective cross-cultural
communication is vital for navigating these diverse environments. It involves
understanding cultural nuances, adapting communication styles, and being
mindful of language differences. Organizations that master cross-cultural
communication gain a competitive edge in the global marketplace.
Elements of business communication are:
i) Sender: The process communication is started with the sender who knows what
audience he wants to reach and what response he wants from them. For effective
communication the sender must consider the field of experience about his target
audience.
ii) Clarity: Clarity is perhaps is the most important element of communication that
makes the communication system good and efficient. If your customers are unable to
hear clearly then there is bound to be a communication gap, which later would create
problems. Use of the common vernacular, instead of industry, acronyms known only to a
few, makes the communication more effective to the listener or the reader and is easily
understood.
iii) Receiver: A receiver is the person who is receiving the message send by someone.
The receiver received the message through some channels of communication and
understood the meaning by decoding it.
iv) Message: Message is the set of symbols that the sender sent to the receiver through
some specific channels or media. The good and effective messages are those that are free
from ambiguity and consist of such words and symbols that are easily understood by the
receiver.
v) Channels: Information is transmitted from the sender to the receiver through some
specific channels such as Radio, Television, e-mail, telephone, newspaper, letter etc... The
sender should select such channel that reaches target audience or receivers.
vi) Symbols: Symbols are the words, actions and signs which are passed on by the
sender while communicating with the receiver. The receivers assign meaning to the
symbols encoded by the sender. This is known decoding.
4. Elements of Communication Process
The communication process is a two-way exchange of information between two or more
people. It involves a sender encoding a message, transmitting it through a channel, a
receiver decoding the message, and the receiver providing feedback to the sender.
1. Sender (Source): The sender is the originator of the communication process. This
individual or entity has a message to convey and initiates the communication. The
sender's role involves not only formulating the message but also considering the
receiver's perspective to ensure the message is appropriately tailored. Factors such
as the sender's credibility, knowledge, and communication skills significantly
influence how the message is received.

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 2. Encoding: Encoding is the process of converting thoughts or ideas into a
communicable form. This could involve selecting words, constructing sentences,
choosing visual aids, or deciding on non-verbal cues like gestures or tone of voice.
Effective encoding requires the sender to consider the receiver's background,
language proficiency, and cultural context to minimize misinterpretation.
3. Message: The message is the actual content being communicated. It can be verbal
(spoken or written words) or non-verbal (body language, symbols, images). The
clarity, structure, and relevance of the message determine its effectiveness. A
well-crafted message is concise yet complete, logically organized, and free from
ambiguity.
4. Channel/Medium: The channel refers to the medium through which the
message is transmitted. Choosing the appropriate channel is crucial, as different
situations call for different mediums. For instance, urgent matters may require a
phone call or face-to-face conversation, while detailed instructions might be
better conveyed through written documents or emails. The channel can also
influence the message's impact—for example, face-to-face communication allows
for immediate feedback and non-verbal cues, whereas written communication
provides a permanent record.
5. Receiver: The receiver is the intended audience for the message. Their role is to
receive and interpret the message accurately. However, interpretation is
influenced by the receiver's perceptions, biases, knowledge level, and relationship
with the sender. Active listening or attentive reading is essential for the receiver to
grasp the message's intended meaning fully.
6. Decoding: Decoding is the process by which the receiver interprets the message.
This involves understanding the words, analyzing non-verbal cues, and
contextualizing the information based on prior knowledge. Misdecoding occurs
when the receiver's interpretation differs from the sender's intent, often due to
ambiguous language, cultural differences, or lack of context.
7. Feedback: Feedback is the receiver's response to the message, indicating whether
the communication was successful. It completes the communication loop by
allowing the sender to assess whether the message was understood as intended.
Feedback can be verbal (e.g., a reply email or spoken response) or non-verbal (e.g.,
nodding, facial expressions). Constructive feedback helps in clarifying
misunderstandings and refining future communication.
5. Process of Communication
The communication process is a dynamic and cyclical sequence of steps that ensures the
effective exchange of information. Understanding this process is essential for diagnosing
communication issues and improving overall effectiveness. Below is a detailed breakdown
of each stage:
1. Understanding the Purpose: Every communication act begins with a clear
purpose. The sender must identify why the communication is necessary—is it to
inform, persuade, request, or build rapport? A well-defined purpose guides the
content and tone of the message. For example, a manager communicating a policy
change to employees would aim for clarity and transparency, while a marketing
email would focus on persuasion and engagement.
2. Message Preparation: Once the purpose is established, the sender prepares the
message. This involves organizing thoughts, selecting appropriate language, and
structuring the content logically. Key considerations include the receiver's
knowledge level (avoiding jargon if the audience is unfamiliar with it) and the

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 desired outcome. For complex information, breaking it into bullet points or using
visual aids can enhance comprehension.
3. Choosing the Medium: The choice of medium depends on factors such as
urgency, formality, and the nature of the message. Urgent or sensitive matters
may require real-time communication like phone calls or face-to-face meetings,
while non-urgent, detailed information might be better suited for emails or
reports. The medium also affects the message's tone—for instance, instant
messaging is often informal, whereas official letters are formal.
4. Transmission: This is the physical delivery of the message through the chosen
channel. During transmission, external factors like noise (literal or metaphorical)
can interfere. Literal noise includes background sounds in a phone call, while
metaphorical noise encompasses distractions like multitasking or preconceived
biases. The sender must ensure the transmission environment is conducive to clear
communication.
5. Reception: The receiver must be attentive and free from distractions to accurately
receive the message. In oral communication, this means active listening—focusing
on the speaker, avoiding interruptions, and observing non-verbal cues. In written
communication, it involves careful reading and interpretation.
6. Decoding & Interpretation: The receiver deciphers the message based on their
knowledge, experiences, and cultural background. This stage is prone to
misinterpretation if the sender's encoding does not align with the receiver's
decoding framework. For example, a sarcastic remark in an email may be taken
literally without vocal tone to provide context.
7. Feedback Loop: Feedback confirms whether the message was understood
correctly. It allows the sender to clarify any ambiguities and adjust future
communication. Ineffective feedback (e.g., vague responses or none at all) can
lead to persistent misunderstandings. Encouraging open feedback channels, such
as Q&A sessions after presentations or follow-up emails, enhances communication
efficacy.
Forms of communication are explained below:
i) Internal Communication: Internal communication is a process of transmission of
information between organizational members i.e., between superior and subordinate or
between peer persons or parts of the organization. It may be formal or informal, verbal or
written. It may also flow downward, upward or horizontal as per requirement.
ii) External Communication: External communication is the transmission of
information between an organization and another person or entity in the company's
outside environment. Examples of these people and entities include customers, potential
customers, suppliers, investors, shareholders, and society at large.
iii) Personal Communication: Personal communication may be in the form of e-mails,
WhatsApp, memos, private letters, personal interviews or telephone conversations.
Although you are required to cite personal communications whenever you are referencing
information from that source but personal communications should never be included in
your references list.
6. Forms of Communication
Communication manifests in various forms, each suited to different contexts and
purposes. Understanding these forms helps in selecting the most effective method for a
given situation.

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• Verbal Communication: This involves the use of words, either spoken or
written, to convey messages.
o Oral Communication: Face-to-face conversations, phone calls,
speeches, and meetings fall under this category. Oral communication is
immediate and allows for real-time feedback, making it ideal for
discussions, negotiations, and relationship-building. However, it lacks
permanence and can be prone to misunderstandings if not articulated
clearly.

o Written Communication: Emails, reports, letters, and memos are

examples. Written communication provides a permanent record and is
useful for detailed, formal, or asynchronous exchanges. However, it lacks
the nuance of tone and body language, which can sometimes lead to
misinterpretation.

• Non-Verbal Communication: Often underestimated, non-verbal cues play a

significant role in conveying messages.
o Body Language: Posture, gestures, and eye contact can reinforce or
contradict verbal messages. For example, crossed arms may indicate
defensiveness, while maintaining eye contact signals engagement.
o Facial Expressions: Smiles, frowns, and raised eyebrows convey
emotions and attitudes, adding depth to spoken words.
o Paralanguage: This includes vocal elements like tone, pitch, volume, and
speech rate. A cheerful tone can make a message sound friendly, while a
monotone voice may seem disinterested.

• Visual Communication: In an increasingly digital world, visual aids enhance

understanding and retention.
o Charts & Graphs: These simplify complex data, making it accessible at a
glance.
o Infographics: Combine images and text to present information
engagingly.

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 o Symbols & Icons: Universal symbols (like traffic signs) convey messages
quickly across language barriers.

7. Principles of Effective Communication

Effective communication adheres to certain principles that ensure clarity, coherence, and
impact. These principles serve as guidelines for crafting and delivering messages
successfully.
1. Clarity: The message should be unambiguous and easily understood. Avoid
convoluted sentences, jargon (unless the audience is familiar with it), and vague
terms. For example, instead of saying, "We need to optimize our operational
efficiencies," a clearer version would be, "We need to reduce production costs by
10%."
2. Conciseness: Brevity is key in professional communication. Eliminate redundant
words and get to the point quickly. For instance, instead of writing, "I am writing
to inform you that the meeting has been rescheduled," say, "The meeting has been
rescheduled."
3. Concreteness: Use specific facts, figures, and examples to substantiate your
message. Abstract statements can be misinterpreted. For example, "Sales have
improved" is less concrete than "Sales increased by 15% last quarter."
4. Coherence: The message should follow a logical sequence, with each point
flowing naturally into the next. Use transitional phrases like "furthermore,"
"however," or "as a result" to guide the reader or listener.
5. Completeness: Provide all necessary information to avoid leaving the receiver
with unanswered questions. A complete message includes the who, what, when,
where, why, and how. For example, a meeting announcement should specify the
date, time, location, agenda, and attendees.
6. Courtesy: Politeness and respect foster positive interactions. Even in difficult
conversations, maintaining a courteous tone prevents defensiveness. Phrases like
"Thank you for your patience" or "I appreciate your input" go a long way.
7. Correctness: Ensure grammatical accuracy, factual correctness, and appropriate
tone. Errors undermine credibility. Proofreading emails and double-checking data
before sharing are simple yet crucial practices.
8. Barriers to Communication & Remedial Measures
Despite best efforts, communication often faces obstacles that hinder its effectiveness.
Recognizing these barriers is the first step toward mitigating them.

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Barrier Description Remedial Measures
Noise Physical (e.g., background Choose quiet environments for
chatter) or technical (e.g., poor important conversations; use high-
audio quality) disturbances that quality communication tools;
disrupt message transmission. repeat or rephrase messages if
necessary.

Semantic Misinterpretation due to language Use simple, clear language; define

differences, jargon, or ambiguous technical terms; encourage
Barriers phrasing. questions for clarification.

Cultural Varied interpretations of gestures, Research cultural norms; avoid

tones, or customs across cultures. ethnocentric assumptions; seek
Differences feedback to ensure understanding.

Emotional Strong emotions like anger, stress, Practice emotional regulation;

or bias that cloud judgment and pause before responding in heated
Barriers distort messages. situations; use "I" statements to
express feelings without blame.

Information Bombarding the receiver with Prioritize key points; use bullet
excessive information, leading to points or summaries; allow time for
Overload confusion or disengagement. processing.

Poor Receiver not fully attending to the Practice active listening: maintain
message due to distractions or eye contact, nod, paraphrase to
Listening preconceptions. confirm understanding, and avoid
Skills interrupting.

Technology Inadequate familiarity with digital Provide training sessions; use

tools, hindering virtual intuitive platforms; offer technical
Gaps communication. support for less tech-savvy
individuals.

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 Unit 2: Types of Communication
1. Formal Communication
Formal communication refers to the official exchange of information within an
organization's established hierarchy. It follows predefined channels and protocols,
ensuring consistency and accountability.
Features of Formal Communication
• Hierarchical Flow: Information travels through established levels of authority,
either downward (from superiors to subordinates), upward (from subordinates to
superiors), or horizontally (between peers of the same rank).
• Documentation: Formal communication is often recorded in written formats
such as emails, memos, reports, and official letters, providing a permanent
reference for future use.
• Standardized Language: The tone is professional, with clear and concise
language to avoid ambiguity.
• Slow but Reliable: Due to its structured nature, formal communication can be
time-consuming but ensures accuracy and consistency.

Types:
o Downward Communication: Flows from higher to lower levels, such as
managers instructing employees. This type is directive, often involving policies,
procedures, or feedback.
o Upward Communication: Moves from subordinates to superiors, like
employees submitting reports or voicing concerns. It provides management with
insights into ground-level operations.

o Horizontal Communication: Occurs between peers of the same rank, e.g.,

interdepartmental coordination. It fosters teamwork and problem-solving.
o Diagonal Communication: Cuts across hierarchical and departmental lines,
such as a finance officer liaising with a marketing team. It enhances flexibility but
can blur authority lines.

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Advantages:
i) Increase overall efficiency: This type of communication generally follows well defined
rules and regulation and chain of command. So, it can increase the overall efficiency of
the organization.
ii) Easy Communication System: The top level generally communicates with their
employees for conveying their direction and order by using formal downward
communication system. Again the employees communicate with their higher authority to
use this system. It is very much easy to communicate with each other.
iii) Less Chance of Misunderstanding: Since formal communication is always written, so
there is less possibility of ambiguity and misunderstanding.
iv) Develop Relationship: It helps develop intimate relationship between the immediate
boss and his subordinates.
v) Permanent Record: The copy of this type of communication is always preserved in the
file and it is used as reference. As a result, it is easy to seek the copy of it if necessary.
vi) Ease of delegation of Authority: Authority is delegated by the superiors to the
subordinates by the help of formal communication.

Disadvantages:
i) Time Consuming and Expensive: It is a time consuming and expensive method of
communication because the message has to travel various level before it reach to the
receivers.
ii) More Workload: It increases the workload of every manager because all the
communication has to pass through them.
iii) Lack of Initiative: Under this communication system everybody does their duty by
following specific predetermined system. So it makes the obstacle to develop the
creativity of the employee.
iv) Lack of Cordiality: In this communication system the subordinate staff strictly follow
the order of superior authority. So the implementer of the order does not obey duty
properly.
v) Less Effective: It is less effective where personal guidance and counselling is needed.

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 vi) Not suitable in case of emergency: It is not suitable at the time of emergency, because
it hinders the normal flow of information.
2. Informal Communication
Informal communication refers to the casual, unstructured exchange of information that
occurs naturally among individuals within an organization, outside of official channels.
Unlike formal communication, which follows a predefined hierarchy and protocol,
informal communication is spontaneous, relationship-driven, and often arises from social
interactions. It plays a crucial role in fostering workplace camaraderie, sharing unofficial
updates, and building interpersonal trust.

Characteristics of Informal Communication

1. Spontaneity: It occurs naturally during breaks, lunch conversations, or casual
office chats without premeditation.
2. Flexibility: There are no rigid rules—tone, language, and content adapt to the
participants’ comfort levels.
3. Speed: Information spreads quickly, often faster than formal announcements, due
to personal connections.
4. Multidirectional Flow: Unlike formal top-down or bottom-up communication,
informal exchanges can happen between peers, across departments, or even
between different hierarchical levels in a relaxed setting.
5. Emotional and Social Bonding: Strengthens relationships by allowing
employees to discuss non-work topics, personal experiences, or shared interests.

Advantages of Informal Communication

• Enhances Team Cohesion: Builds trust and camaraderie among colleagues.
• Quick Problem-Solving: Employees often resolve minor issues informally
without bureaucratic delays.
• Feedback Mechanism: Provides management with unfiltered insights into
employee morale and concerns.
• Supplements Formal Channels: Fills gaps where formal communication may
be too slow or rigid.

Disadvantages of Informal Communication

• Risk of Misinformation: Lack of verification can lead to rumors or distorted
facts.
• Lack of Accountability: Since it’s unofficial, misinformation is hard to trace or
correct.
• Potential for Conflict: Casual remarks may be misinterpreted, leading to
misunderstandings.
• Exclusionary: Cliques may form, leaving some employees out of the loop.

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3. Grapevine Communication
Grapevine communication is a subset of informal communication, characterized by its
rapid, unstructured, and often secretive spread of information through unofficial
networks. The term "grapevine" originates from the way rumors twist and turn like a
grapevine, making the original message difficult to trace. It thrives in workplaces due to
human curiosity, social bonds, and the need for information that formal channels may
not provide.

Features of Grapevine Communication

1. Unofficial and Uncontrolled: Operates outside formal hierarchies, making it
difficult for management to regulate.
2. Fast and Widespread: Information travels quickly, sometimes reaching all
corners of an organization before official announcements.
3. Distortion-Prone: Messages often get exaggerated, altered, or simplified as they
pass from person to person.
4. Emotionally Charged: Often carries gossip, speculation, or sensitive topics that
formal channels avoid.
5. Trust-Based: Relies heavily on personal relationships—employees share
information with those they trust.

Types of Grapevine Chains

1. Single Strand Chain: Information passes linearly from one person to another
(A→B→C→D). Accuracy declines with each link.
2. Gossip Chain: One person spreads information to many others, often leading to
rumors (e.g., office gossip about layoffs).
3. Probability Chain: Random sharing where information reaches some but not all
individuals (common in large organizations).
4. Cluster Chain: The most common type, where information circulates within
close-knit groups before spreading further (e.g., team members sharing news with
their inner circle).

Why the Grapevine Exists

• Human Nature: People crave information, especially about changes, promotions,
or controversies.
• Lack of Transparency: If formal communication is slow or vague, employees
turn to the grapevine for answers.
• Social Bonding: Sharing "inside information" strengthens group identity and
alliances.

Impact of Grapevine Communication

Positive Aspects:
• Acts as an early warning system for management about employee concerns.
• Helps employees vent frustrations or share unofficial feedback.
• Can spread positive news (e.g., recognition of a colleague’s achievements).

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 Negative Aspects:
• Rumors and Misinformation: False claims (e.g., layoffs, salary cuts) can create
panic.
• Damages Morale: Negative gossip can harm reputations and workplace culture.
• Undermines Authority: If the grapevine contradicts official messages, employees
may distrust leadership.
Managing the Grapevine
• Increase Transparency: Provide timely, accurate information through formal
channels to reduce speculation.
• Encourage Open Communication: Foster a culture where employees feel
comfortable asking questions directly.
• Monitor Informal Networks: Leaders should stay aware of grapevine trends to
address concerns proactively.
• Address Rumors Quickly: Correct false information before it spreads widely.

Key Differences Between Informal and Grapevine Communication

Aspect Informal Communication Grapevine Communication
Definition Casual, unofficial exchanges in A rumor-driven, secretive subset of
the workplace. informal communication.

Purpose Social bonding, quick updates, Spreads unverified information, often

problem-solving. sensational.

Tone Neutral or positive (e.g., Can be negative or speculative (e.g.,

lunchtime chats). gossip).

Control Can be encouraged (e.g., team- Difficult to control; often viewed as a

building activities). threat.

Reliability Generally accurate if based on High risk of distortion.

personal knowledge.

Corporate Communication
Corporate communication encompasses all structured messaging used by an
organization to interact with internal and external stakeholders, including employees,
investors, customers, and the media. It ensures consistency in branding, crisis
management, and public relations.

Features of Corporate Communication

i) Formal Communication: Most of the corporate communication is formal in nature.
Orders, instructions, decisions, suggestions etc. are transmitted by following rules and
regulations of the organization structure and the chain of command.
ii) Accuracy: The information conveyed must be accurate otherwise it lost its credibility.
Sender of the information is also lost its credibility. It is to be remembered that the
content of the information conveyed must be accurate and simple to understand.

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iii) Written and Verbal Communication: The internal communication may be made
verbally either face to face or over phone. But written communication is must for order,
instruction, suggestions etc. While in case of external communication with the suppliers,
customers, government, branches etc. should be by way of written communication.
iv) Informal Communication: The size and structure of the corporate organization is
large and complex. As such informal communication or grapevine is also moved side by
side with formal communication at all levels of activities of corporate organization.
v) Timely Information: Employees at different levels of activity of corporate
organization have to know what is going on inside the organization and at external
environment that impact them. Today technology-driven environment makes it more
challenging than ever before for businesses to communicate with employees in a timely
manner, but it is critical for effectiveness business communication.
vi) Means of Communication: Phones, mobiles, face to face conversation, e-mail, fax,
telegram, memo, website, video conference, internet etc. are used as the medium or
means or channel of communication.

IMPORTANCE:

i) Internal Co-ordination: To fulfill the objectives of the organization, co-ordination

among the employees is essential and to co-ordinate various activities is necessary.
Corporate organization being large in size, division of work and specialization in activities
are the features of such organization. Communication helps to co-ordinate such activities
and to develop co-operation.
ii) Connecting links with the External World: In a corporate organization, external
communication with the customers, vendors, investors, competitors, government
departments, etc. are essential.
Even connecting links with the foreign counterparts and centers are necessary for proper
functioning of the organization.
iii) Motivation: Communications helps to motive the workers to obey the orders,
instructions and the directives of the management authority. The feedback from the
employees inspires the managers. The interaction between the employees and the
management authority improves their relations and inspires all to work together for the
purpose of fulfilment of organizational objectives.
iv) Continuous Flow of Information: It ensures continuous flow of information at all
activities level of the corporate organization.
v) Decision Making and Implementation: It has a meaningful role in decision making
and its implementation. It helps in corporate decision making by supplying correct
information at the correct moment and evaluate the performance of the employees.
vi) Leadership: The management authority creates orders and instructions to the
subordinates, who, in turn, carry out the instructions and may sometimes send feedback
in the form of suggestions, grievances and complaints. The manager tries to remove the
inconvenience and problems if any, as far as possible. The entire process establishes the
basis of leadership.

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 4. Oral vs. Written Communication
Choosing between oral and written communication depends on context, urgency, and the
need for permanence.

Aspect Oral Communication Written Communication

Speed Immediate delivery and feedback. Slower due to drafting and
distribution.
Feedback Real-time, allowing instant Delayed, requiring follow-up.
clarification.
Record Ephemeral unless recorded. Permanent and retrievable.
Formality Flexible tone, adaptable to More structured and formal.
audience.
Nuance Tone and body language add depth. Lacks non-verbal cues, risking
misinterpretation.
Best For Discussions, brainstorming, Detailed instructions, legal
rapport-building. documents, records.

5. Communication Networks
Communication networks define how information flows within groups or organizations.
Each structure has unique implications for efficiency and dynamics.
• Vertical Network: Follows the chain of command, either top-down (directives) or
bottom-up (feedback). Ensures alignment but can be slow.
• Circuit Network: A two-way dialogue between individuals, fostering deep
understanding. Common in mentoring or coaching.
• Chain Network: Sequential passing of information, akin to an assembly line.
Efficient for linear tasks but prone to distortion.
• Wheel Network: Centralized around a leader who disseminates information to all
members. Quick for small teams but overburdens the leader.
• Star Network: All members communicate freely with each other, promoting
collaboration. Ideal for creative teams but may lack focus.

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 Unit 3: Tools of Communication
1. Emergence of Communication Technology
The evolution of communication technology has revolutionized how individuals and
organizations exchange information, transitioning from primitive methods to
sophisticated digital platforms. Historically, communication was limited to face-to-face
interactions, written letters, and telegrams, which were slow and geographically
constrained. The invention of the telephone by Alexander Graham Bell in 1876 marked a
significant leap, enabling real-time voice communication across distances. The 20th
century introduced mass media—radio and television—which expanded the reach of
information to global audiences.
The digital era, beginning in the late 20th century, brought transformative advancements:
• Email (1971): Enabled instant written communication, reducing reliance on postal
services.
• Internet (1990s): Facilitated global connectivity, giving rise to websites and
online forums.
• Mobile Technology (2000s): Smartphones integrated calls, texts, and internet
access, making communication portable.
• Social Media (2004 onwards): Platforms like Facebook, Twitter, and LinkedIn
redefined interpersonal and corporate communication through instant messaging
and public engagement.

Today, technologies like 5G networks, artificial intelligence (AI)-powered

chatbots, and cloud-based collaboration tools (e.g., Slack, Microsoft
Teams) further enhance speed, efficiency, and accessibility. These innovations have
compressed time and space, enabling seamless interactions across borders and time
zones, which is critical for modern businesses operating in a globalized economy.

2. Modern Forms of Communication

A. Email
Email remains a cornerstone of professional communication due to its versatility,
formality, and documentation capabilities.

Features of Email
• Asynchronous Nature: Allows recipients to respond at their convenience.
• Attachment Support: Enables sharing of documents, images, and multimedia.
• CC/BCC Functions: Facilitates group communication while maintaining privacy
(BCC).
• Searchable Archives: Provides a permanent record for future reference.

Importance in Business
• Formal Communication: Used for official announcements, contracts, and client
correspondence.

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 • Global Reach: Instant delivery to recipients worldwide, overcoming geographical
barriers.
• Cost-Effective: Eliminates expenses associated with printing and postage.

Best Practices for Effective Emails

1. Subject Line: Clearly summarize the email’s purpose (e.g., "Project Deadline
Extension Request").
2. Concise Body: Use short paragraphs and bullet points for readability.
3. Professional Tone: Avoid slang; use formal salutations (e.g., "Dear Mr. Smith").
4. Call to Action: Specify required actions (e.g., "Please confirm by Friday").

B. Video Conferencing
Video conferencing has become indispensable for remote collaboration, combining audio
and visual elements to simulate face-to-face meetings.

Features of Video Conferencing

• Real-Time Interaction: Enables live discussions with participants globally.
• Screen Sharing: Allows presentations, document reviews, and software
demonstrations.
• Recording Option: Meetings can be archived for absent attendees.
• Virtual Backgrounds: Maintains professionalism in home-office settings.

Importance in Business
• Remote Work Support: Essential for hybrid teams, ensuring continuity.
• Cost Savings: Reduces travel expenses for international meetings.
• Enhanced Engagement: Non-verbal cues (facial expressions, gestures) improve
understanding.

Best Practices for Video Calls

1. Technical Setup: Test internet connectivity, microphone, and camera
beforehand.
2. Professional Appearance: Dress appropriately; ensure proper lighting.
3. Minimize Distractions: Mute when not speaking; use a neutral background.
4. Agenda Preparation: Share meeting objectives in advance to keep discussions
focused.

C. WhatsApp and Instant Messaging

Instant messaging platforms like WhatsApp, Telegram, and Slack offer rapid, informal
communication, particularly for quick updates and team coordination.

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Features of WhatsApp
• Instant Delivery: Messages are transmitted in real-time.
• Group Chats: Facilitates team discussions and project updates.
• Multimedia Sharing: Supports images, videos, and voice notes.
• End-to-End Encryption: Enhances privacy and security.

Importance in Business
• Quick Decision-Making: Enables immediate responses to urgent queries.
• Customer Service: Businesses use WhatsApp for client support and notifications.
• Informal Collaboration: Teams share ideas and feedback casually.

Best Practices for Professional Use

1. Separate Personal and Work Chats: Avoid mixing private and professional
conversations.
2. Respect Boundaries: Limit messages outside work hours unless critical.
3. Clear Language: Avoid ambiguous abbreviations (e.g., "ASAP" without context).

D. Oral Presentations
Oral presentations are structured verbal deliveries, often supported by visual aids, used to
inform, persuade, or train audiences.

Features of Effective Presentations

• Visual Aids: Slides (PowerPoint), charts, and videos enhance engagement.
• Audience Interaction: Q&A sessions and polls maintain interest.
• Structured Flow: Introduction → Main Points → Conclusion.

Importance in Business
• Persuasion: Critical for sales pitches and investor meetings.
• Training: Onboards employees or educates clients about products.
• Reputation Building: Strong presentations reflect professionalism and expertise.

Best Practices for Presentations

1. Know Your Audience: Tailor content to their knowledge level and interests.
2. Practice: Rehearse to refine timing and delivery.
3. Engage Storytelling: Use anecdotes or case studies to illustrate points.
4. Non-Verbal Cues: Maintain eye contact and confident body language.

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 3. Principles of Effective Communication Tools
A. Clarity and Simplicity
• Avoid jargon; use straightforward language.
• Example: Replace "utilize" with "use."

B. Appropriate Channel Selection

• Urgent Matters: Use calls or instant messaging.
• Detailed Information: Emails or reports.

C. Feedback Mechanisms
• Encourage responses (e.g., "Let me know your thoughts").
• Use polls in virtual meetings to gauge understanding.

D. Security and Privacy

• Encrypt sensitive emails; verify recipients before sending.
• Avoid discussing confidential data on unsecured platforms.

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 Drafting
1. Drafting Business Documents
1.1 Notices and Agendas
Annual General Meeting Notice
• Purpose: To inform members of the date, time, and agenda of the meeting.
• Format:
o Date, reference number.
o Addressed to members.
o Agenda items listed clearly.
o Signature of the Secretary.
Example:
NOTICE OF ANNUAL GENERAL MEETING WITH AGENDA
SWAPNANIR COMPANY LIMITED
121, B.T. ROAD, KOLKATA: 700108
Date: 31.03.2017
Ref No. 22/AGM/2017

Respected members,
With due respect, this is to inform you that the 22nd annual general meeting of the
shareholders of the company will be held on Friday, 21st April, 2017 at the
registered office of the company at 4 p.m. to transact the business mentioned in
the agenda annexed herewith. Your presence is highly solicited. A proxy form has
also been annexed along with this notice to enable the members to appoint proxy
in case of their absenteeism, if any.
The registrar of members and Share Transfer Books of the company will remain
closed from 14th December, 2017 to 21st December, 2017, both days inclusive
Agenda:
1. The secretary read the notice convening the meeting.
2. Read apologies for absence, if any.
3. Confirmation of the minutes of the last Annual General Meeting.
4. Presentation of audited Accounts for the year ended 31st March, 2017.
5. Review the progress of the company and indicate the possibilities of future
expansion.

85
 6. Confirmation of the Director's Report.
7. Declaration of dividend for the financial year 2016-2017.
8. Reappointment of Mr. S.K. Suri for the next term who retired by rotation on
31.03.2017.
9. Appointment of M.K. Bagchi as director in place of A.K. Jalan who retired on
31.03.2017 by rotation.
10. Appointment of Sen & Associates as an Auditor of the company for the
financial year 2017-2018 and fixing up their remuneration.
11. Miscellaneous, if any.
12. Vote of thanks to the chair.

Thanking you,
By Order of the Board
(Secretary)
1.2 Board Meeting Minutes
Format:
• Date, time, and place of the meeting.
• List of directors and other attendees.
• Items discussed and resolutions passed.
• Signature of the chairperson.
Example:
MINUTES OF THE 23rd BOARD MEETING OF THE COMPANY
BIPASA & CO.
GANDHI NAGAR, GUJRAT
Date: 20.12.2017
Minutes of the 23rd Board Meeting of Bipasa & Co. held on Saturday, 10th January,
2018 at 4 PM at the registered office of the company.
Item Description
01. Directors Present at a) Mr. S.K. Puri
the Meeting b) Mr. Sohan Gandhi
c) Mr. Mohan Modi
d) Mrs. R. Kour
e) Mrs. Kusum Gupta
f ) Mr. Tomes Robinson

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02. Confirmation of the Mr. Amar Singh, the secretary of the company, read
Minutes of the Last out the minutes of the proceedings of the last board
Board Meeting meeting which was held on 11th October, 2017. The
minutes were thereafter confirmed.
03. Payment of Interim Resolved that an interim dividend of 10% be paid on
Dividend the paid value of equity shares.
04. Forfeiture and Re- Resolved that the shares of those shareholders who
issue of Shares failed to pay the consecutive call money, their shares
will be forfeited and re-issued to another person at a
discount of Rs. 2 per share.
05. Appointment of Resolved that Gupta & Gupta Company of
Auditor Gandhinagar be appointed as the auditor of the
company at a fees of Rs. 1,00,000 per annum in place
of our existing 1 auditor Khan & Singh Company who 2
has resigned.
06. Redemption of Resolved that the 10% debentures of Rs. 80,000 be
Debentures redeemed at two installments after six 3 months each.
07. Miscellaneous, if No special point has been raised and discussed.
any
08. Date of the Next Resolved that the next board meeting will be held on
Meeting March 15, 2018 at 4 p.m. at the registered office of the
company.
09. Vote of Thanks The meeting ended 4 with a vote of thanks to the chair.

1.3 Circulars
Purpose: To convey messages to customers, suppliers, employees, etc.
Format:
• Date, reference number.
• Subject.
• Message.
• Signature.
Example:
CIRCULAR LETTER
ANANDA BAZAR PATRIKA
6, PRAFULLA SARKAR STREET
KOLKATA: 700001
Date: 10.04.2018

87
 Circular No.: C/78/2018
Subject: Increase in price of the products
Dear Customers,
We regret to inform you that due to an increase in the price of material, labour,
and transport costs, we have been bound to increase the price of our daily
newspapers by Re. 1 per paper/day. The discount rate applicable for our customers
will remain the same as before.
As the price increase is for reasons beyond our control, we hope that you will bear
with us as before for such inevitable increases in the price of our daily
newspapers. We hope that you will appreciate our difficulties and will extend your
full cooperation and patronage as before.
Sorry for the inconvenience put to you due to such increase in price and the
impact of financial burden 1 on you are highly regretted
Thanking you,
Yours faithfully,
For Ananda Bazar Patika
(Sales Manager)

2. Report Writing
2.1 Need for Computerization in Accounts
Format:
• Introduction.
• Benefits of computerization.
• Initial investment and training required.
• Conclusion.
Example:
REPORT ON THE NEED FOR INSTALLATION OF COMPUTERIZED ACCOUNTING
SYSTEM
Bharat Glass Company
174, B.T. Road, Rathtalla
Kolkata: 700057

Date: 10.04.2018

To

88
The Board of Directors,
Bharat Glass Company,
174, B.T. Road, Rathtalla,
Kolkata: 700057
Subject: Report on the need for installation of computerized accounting system
Dear Sir,
The rapid advancement in technology has made it imperative for businesses to
adopt computerized systems to stay competitive. The users of computer
technology are always in a better position over those who are not. If the staff can
perform their accounts-related work through the computer, they can do the work
with high speed; it will save time and labor; it will ensure greater accuracy in
calculations; it will provide better control; it will reduce cost; it will eliminate
human errors and finally, it will help to take quick decisions relating to financial
matters.
However, the installation of a computerized accounting system involves a huge
initial investment and requires trained staff. Despite these challenges, the long-
term benefits far outweigh the initial costs.
Thanking you,
Yours faithfully,
(Secretary)
2.2 Report of Worker Agitation for Higher Puja Bonus
Format:
• Introduction.
• Details of the agitation.
• Impact on the company.
• Conclusion.
Example:
REPORT ON THE AGITATION OF THE WORKERS FOR HIGHER PUJA BONUS
Bengal Flame
272, B.T. Road
Kolkata: 700108
Date: 19.03.2018
To
The Board of Directors,
Bengal Flame,

89
 272, B.T. Road,
Kolkata: 700108

Subject: Report on the agitation of the workers for higher puja bonus

Dear Sir,
The workers of our company have been agitating for a hike in wages and puja
bonus. They have staged a protest outside the factory gate, demanding immediate
action. The agitation has caused a significant disruption in our daily operations.

The workers have expressed their dissatisfaction with the current bonus structure
and have demanded a substantial increase. The management has tried to address
their concerns, but the workers are adamant about their demands.

This agitation has not only affected our production but also our reputation in the
market. It is crucial that we address this issue promptly to restore normalcy.

Thanking you,
Yours faithfully,
(Secretary)
2.3 Accident Report Due to Machine Breakdown
Format:
• Date and time of the accident.
• Details of the incident.
• Injuries sustained.
• Immediate actions taken.
• Recommendations.
Example:
REPORT ON AN ACCIDENT DUE TO BREAKDOWN OF A MACHINE IN A FACTORY
Bharat Engineering Tools
262, Ballygunje Circular Road
Kolkata: 700029
Date: 12.05.2018

90
To
The Board of Directors,
Bharat Engineering Tools,
262, Ballygunje Circular Road,
Kolkata: 700029

Subject: Report on an accident due to breakdown of a machine in a factory

Dear Sir,
An accident occurred at our Dankuni Workshop on 11.05.2018 at approximately
14.30 p.m. The shed covering the machine collapsed due to old corrugated sheets,
causing the machine to break down. Two workers were injured, but their injuries
were minor. They were immediately taken to the nearest State General Hospital for
treatment and were released in the evening.

The workers at the workshop gate were agitating, demanding compensation for
the injured. I assured them that the company would bear all medical expenses.

In view of the above situation, I request you to kindly bear the medical expenses
and grant two weeks leave with full pay to the injured workers. Additionally, I
suggest that we remove the damaged shed and repair the machine at the earliest.

Thanking you,
Yours faithfully,
(Secretary)

3. Business Letters
3.1 Seeking Sole-Selling Agency
Format:
• Introduction.
• Expression of interest.
• Request for consideration.
Example:
LETTER OF AGENCY
The FAIR & GOOD LTD.

91
 Paradise Place
Jalpaiguri: 735101

Date: 10.01.2018
Ref: TP/18/1/2018
The Lux Toilet Company
38, Park Street
Kolkata: 700016

Subject: Seeking for an agency

Dear Sir,
With reference to your advertisement published in "The Economic Times" dated
5th January 2018, seeking a sole selling agent for your products in the district of
Jalpaiguri, we would like to represent ourselves to do the same in our locality
where your products have good demand. We have a good reputation and goodwill
in our locality and can assure you of patronage in this area.

Thanking you,
Yours faithfully,
(Manager)
3.2 Quotation for Stationery Items
Format:
• Introduction.
• List of items with quantities and rates.
• Conclusion.
Example:
LETTER OF QUOTATION
BHOLANATH TRADING MART
19, Mahatma Gandhi Road
Kolkata: 700012

Date: 24.04.2018

92
Our Ref: Sal/290/4/18
Your Ref: Pur-enq/20/3/18

The B.K. Enterprise

5, S.P. Mukherjee Street
Kolkata: 700025

SUB: Quotation of Stationery Goods

Dear Sir,
Thank you for the letter of March, 2018. From your letter we have come to know
that your firm has deal with few stationery items that fit our business
requirements. In reply to your enquiry, we take the pleasure in submitting
quotation for the articles specified in your letter.
SL.NO. PRODUCTS DESCRIPTION QUANTITY RATE
01 White Paper Per Rim 80
02 Envelopes Per Dozen 10
03 Clips Per Dozen 05
04 Pins Per Dozen 08
05 Pencils (Red & White) Per Packets 30
06 Refills Per Dozen 32
07 Carbon Papers Per Dozen 24
08 Binder Clips Per Packet 12
Please further note, our business terms include 5% discount on bulk purchase at
cash and the delivery within a month of receiving the order at our cost. We further
assume you, in case any product fails to satisfy the specification we would take
back the material and replace the same at the earliest. For your further
information, however, we enclose a catalogue indicating the details of quality of
different variety of the materials. Hope you would find our quotation and terms
most favourable.
Thanking you,
Yours faithfully,
(Manager)
3.3 Order Placement for Electronic Items
Format:

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 • Introduction.
• List of items with quantities.
• Conclusion.
Example:
PLACEMENT OF ORDER
M/S LOKNATH ENTERPRISE
13, PG. Lane
Kolkata: 700023

Date: 22.03.2018
REF: PU/03/18/5/2018

The Sales Manager,

Bipasa Electronics,
19, Park Street
Kolkata: 700016
Subject: Order for Large LED TV
Dear Sir,
Thank you for your quotation and price list of LED TV vide your letter no.
sale/TV/119/03/18/45. Since your quotation is favourable for us, hence we place
an order of the following items:
SL.NO. DESCRIPTION QUANTITY TYPE SIZE
01 LED TV SET (LG) 200 LARGE 56"
02 LED TV SET (LG) 300 MEDIUM 42"
03 LLED TV SET (LG) 150 SMALL 36"
Since the above mentioned items are required immediately, so please send the
same to us urgently. Otherwise our stock will be exhausted very soon. The said
items will have to be delivered at our site at Behala on and before 5th April, 2018.
Carriage on dispatch is supposed to be borne by you. Please send all the
commercial and financial documents along with the consignment. Please confirm
this order and oblige.
Thanks.
Yours faithfully,
(Purchase Manager)

94
3.4 Confirmation of Order
Format:
• Acknowledgment of order.
• Assurance of timely delivery.
• Conclusion.
Example:
CONFIRMATION OF ORDER
M/S BIPASA ELECTRONICS
19, Park Street
Kolkata: 700016

Date: 24.03.2018
REF: Sales/TV/03/2018

The Purchase Manager,

ATHSHALA
13, PG. Lane
Kolkata: 700023
Subject: Confirmation of order
Dear Sir,
We are glad to acknowledge you letter no. PU/03/18/5/2018 dated 22.03.2018 for
the supply of few LED LG TV Sets. Thanks for that you favour us by granting order
for supplying few LED LG TV Sets.
The order is in process of execution and it will be dispatched within seven days
from the date of receipt of your letter by our delivery van. As soon as the
consignment is ready, we will inform you about the same. Original copy of the
invoice will be sent along with the consignment and the scanned copy of the same
will be sent to your email. The goods have warranty of two years and we hope that
our goods will surely appreciated by your esteemed customers. Hope, we will
receive further order from your sides and similar co-operation in the future.
Thanking you,
Yours faithfully,
(Sales Manager)

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 3.5 Refusal of Order
Format:
• Explanation of the reason for refusal.
• Suggestion for an alternative.
• Conclusion.
Example:
REFUSAL OF ORDER
M/S BIPASA ELECTRONICS
19, Park Street
Kolkata: 700016

Date: 24.03.2018
REF: Sales/TV/03/2018

The Purchase Manager,

ATHSHALA
13, PG. Lane
Kolkata: 700023
Subject: Refusal of order
Dear Sir,
I would like to thank you for your order for supplying different size of LED LG TV
dated 22.03.2018. We are very sorry to inform you our inability to supply LED LG
Brand TV SET before 31st, April, 2018 as our stock has been exhausted and it will
not replenished before the above mentioned date. However we have stock of other
brand of TV SET i.e. Samsung Brand LED TV. This is also a good brand TV SET and
still today we have not received any complain from our customers. It is cheaper
than your ordered brand.
Now if you are interested then you can place order for this kind of brand by email.
We hope that this brand will get popularity very soon in your locality and both of
us will be benefited by this step. Sorry for the inconvenience put to you because of
our inability.
Thanking you,
Yours faithfully,
(Sales Manager)

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3.6 Cancellation of Order
Format:
• Explanation of the reason for cancellation.
• Request for understanding.
• Conclusion.
Example:
CANCELLATION OF ORDER
M/S LOKNATH ENTERPRISE 13, P.G. LANE, KOLKATA: 700 023.
PHONE NO.: (033) 2247-5336 FAX NO.: (033) 2247-5336 EMAIL: [email address
removed]
DATE: 22.04.2018.
REF: SR/04/18/03/2018
The Sales Manager,
Bipasa Electronics,
19, Park Street,
Kolkata: 700 016
SUB: Cancellation of order.
Dear Sir,
Please refer to our letter no. PU/03/18/5/2018 dated 22.03.2018 in which we have
placed order for supplying few different size of LED LG TV SET. But we are sorry to
inform you that till this date your silence in the execution of order within the
stipulated time 26th March, 2018 is really surprised us.
Since we require those consignment before 31st March, 2018, we can't wait further
and compelled to cancel our order due to failure on your part in delivering the
consignment in due time as time was of prime importance in this respect.
Moreover, further delay on your part definitely cause serious injury to our
business as well as market reputation.
Sorry for the inconvenience put to you. However, we assure you to place further
order very soon.
Thanking you,
(Purchase Manager)
Yours faithfully,

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 3.7 Extension of Time for Delivery
Format:
• Explanation of the delay.
• Request for extension.
• Assurance of prompt delivery.
• Conclusion.
Example:
EXTENSION OF TIME
FORTUNATE ENTERPRISES
29, S.P. MUKHERJEE ROAD,
KOLKATA: 700 025.
PHONE NO.: (033) 2246-3295
FAX NO.: (033) 2246-3295
EMAIL: [email address removed]
DATE: 22.04.2018
REF: SALE/OR/226/4/2018
The Manager,
Gold Electronics,
102, Park Street,
Kolkata: 700 016
SUB: Delay in delivery of your order no. PU/OR/25/04/2018.
Dear Sir,
We are in receipt of your letter of April 15, 2018, reminding us of our failure to
execute the order of electronic items like Laptop, Computer, UPS and Printer
within the due date.
We are sorry for this delay over which we little control. The goods you have
ordered could not make available due to delay in import from China. In spite of our
best effort we could not procure such consignment before first week of May, 2018.
In these circumstances may we request you to extend the time of delivery for a
fortnight and we hope that we can deliver your consignment within 15th May,
2018, positively.
Hope you would realize our difficulties and allow us this extension by a letter in
return.
We are sorry for the inconvenience caused to you.

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Thanking you,
(Sales Manager)
Yours faithfully,
3.8 Reminding Letter for Settlement of Accounts
Format:
• List of outstanding bills.
• Request for prompt settlement.
• Conclusion.
Example:
REMINDING LETTER
KOLKATA TRADERS BAGRI MARKET, KOLKATA: 700 00
PHONE NO. (033) 2212-3089 FAX NO. (033) 2212-3089 EMAIL: [email address
removed] DATE: 25.04.2018.
REF: RWL/12/2018 Mr. D.K. Dutta, Dutta & Sons, 12A. Lake Avenue, Kolkata: 700
026.
SUB: Request to settle the accounts
Dear Sir,
This is to inform you that the payment of the following bills is lying pending for
more than 3 months.
SL.NO. BILL DATE PRODUCTS AMOUNT
NO. (₹)
01 1023 10.01.2018 Noga Pine 8,000
Apple Helly
02 2029 25.01.2018 Orange Squash 12,000
03 2683 28.01.2018 Lime Juice 10,000
04 3987 02.02.2018 Mango Squash 15,000
TOTAL DURING JANUARY 45,000
TO FEBRUARY, 2018

Probably you would appreciate that quite a big amount is blocked in those bills
and for a small firm like ours delay in those bills for a small firm like us delay in
clearing the bills beyond the credit period causes much inconvenience and turns
the small margin of profit into loss. This apart we face difficulties in meeting the
claims of our creditors. As a result, our standing and reputation in the market is
likely to be damaged.

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 Hope you would appreciate our position and arrange funds to clear the above
outstanding bills within a fortnight.
Please drop a few words by the return of the post.
Thanking you,
(Proprietor)
Yours faithfully,
3.9 Banking Correspondence
3.9.1 Request for Overdraft Facilities
Format:
• Introduction.
• Request for overdraft facilities.
• Offer of securities.
• Conclusion.
Example:
BANKING LETTER
FORTUNATE ENTERPRISES
29, S.P. Mukherjee Road
Kolkata: 700025

Date: 22.04.2018
REF: SALE/OR/226/4/2018

The Branch Manager,

State Bank of India,
102, Park Street
Kolkata: 700016

Subject: Requesting for granting overdraft facilities

Dear Sir,
We are in dire need of funds for the expansion of our business. Therefore, we
intend to start an overdraft facility of Rs. 10,00,000 (Rupees ten lakhs) only at

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present to meet our current demand for funds. We are willing to deposit securities
worth Rs. 15,00,000 as collateral.

Considering our need for funds as against the securities proposed to be pledged,
please approve the above-mentioned overdraft limit at the earliest.

Thanking you,
Yours faithfully,
(Proprietor)

3.9.2 Query Regarding Dishonor of Cheque

Format:
• Details of the cheque.
• Explanation of the situation.
• Request for clarification.
• Conclusion.
Example:
FORTUNATE ENTERPRISES
29,
S.P. MUKHERJEE ROAD,
KOLKATA: 700 025.
PHONE NO.: (033) 2246-3295
FAX NO.: (033) 2246-3295
EMAIL: [email address removed]
DATE: 22.04.2018
REF: E/B/22/4/2018
The Branch Manager, State Bank of India, 102, Park Street, Kolkata: 700 016.
SUB: Query for dishonour of a cheque no. C/SB/02350
Dear Sir,
I would like to draw your attention that a cheque of us bearing the number
mentioned above for Rs. 90,000 drawn on your bank has been dishonoured with
the remark "Balance inadequate".
On an examination of the bank statement, we find that our balance with your
bank branch on 02.04.2018 stood Rs. 78, 000. Please note on the next day i.e. on
03.04.2018 I have deposited a cheque of Rs. 20, 000 drawn on UBI of the local

101
 branch. In fact you had sufficient time to collect the sum so as to raise my balance
to Rs. 98, 000 on 10th April, 2018, leaving a balance of Rs. 8, 000 to my credit
even after honouring the aforesaid cheque. Moreover, the cheque is complete in all
respect.
You should appreciate that the dishonour of this cheque has our reputation and
social status to a great extent. Would you please let us know, therefore, the
reasons for dishonouring the cheque at your best early date.
Thanking you,
(Proprietor)
Yours faithfully,
3.10 Insurance Claim Correspondence
3.10.1 Claim for Fire Damage
Format:
• Details of the incident.
• Request for inspection.
• Enclosure of claim form.
• Conclusion.
Example:
LETTER OF INSURANCE CLAIM
UTE GOODS LTD.
29, S.P. MUKHERJEE ROAD, KOLKATA: 700 025.
PHONE NO.: (033) 2257-3295
FAX NO.: (033) 2257-3295
Email: [email address removed]
DATE: 22.04.2018
REF: A/F/20/01/2018
SUB: Destruction of goods and claim for damages thereon against Fire Insurance
Policy No. 32815 of dated 6th June, 2017.
The Branch Manager, CLAIM DIVISION (MANAGER) NATIONAL INSURANCE
COMPANY, 1, Fairle Place, Kolkata: 700 001
Dear Sir,
This is to inform you that in spite of adequate precautionary measures, a fire broke
out in our godown at Baranagar, Kolkata, at about 12.30 a.m., last night. When the
watchman noticed it, he informed the fire brigade at once over the mobile phone
and the firefighting people arrived within 10 minutes at the godown site, but in the
meantime 2,800 bales of jute and few thousands of jute bags were completely

102
gutted. In our estimate the damage incurred must be over Rs. 1 crore. Since none
of our staff was present at that time except the watchman, we are unable to state
the exact cause of fire. But in the opinion of the fire brigade it was due to short
circuit.
In these circumstances, we would request you to kindly send a surveyor to
investigate the matter and arrange for immediate settlement of claims at the
earliest.
Hope you would do the needful and oblige.
Thanking you,
Yours faithfully,
(Proprietor)
3.11 Status Enquiry Correspondence
3.11.1 Request for Status Enquiry
Format:
• Introduction.
• Request for status enquiry.
• Assurance of confidentiality.
• Conclusion.
Example:
LETTER FOR STATUS ENQUIRY
FORTUNATE ELECTRONICS
29, S.P. Mukherjee Road
Kolkata: 700025

Date: 22.04.2018
REF: SE/COM/22/4/2018
The Branch Manager,
State Bank of India,
102, Park Street
Kolkata: 700016
SUB: Status enquiry regarding Mr. X of Kolkata
Dear Sir,
We like to draw your attention that Mr. X of 124 M.B. Road, Kolkata 700 057, has
placed an order for supply of 500 Desktop on credit for one month credit. The

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 value of the consignment will be around Rs. 1, 50, 00,000 (Rupees one crore and
fifty lakhs) only. Mr. X has mentioned your name as referee. But Mr. X is quite
unknown to us. We have no information regarding his financial base and
creditworthiness.
As we are one of your old customers, so we request you to enquire his financial
soundness, creditworthiness and business reputation and inform the same to us at
the earliest. We again request you to let us know whether the credit up to Rs. 1, 50,
00, 000 can be granted to him.
It is needless to mention that your feedback information as to the financial
soundness and creditworthiness of Mr. X will be treated as strictly confidential. An
early reply from your side will be highly appreciated.
Thanking you,
(Secretary)

3.11.2 Favorable Reply to Status Enquiry

Format:
• Acknowledgment of the enquiry.
• Details of the customer's creditworthiness.
• Assurance of confidentiality.
• Conclusion.
Example:
REPLY TO STATUS ENQUIRY
STATE BANK OF INDIA
102, Park Street
Kolkata: 700016
Date: 28.04.2018
The Secretary,
Fortunate Electronics,
29, S.P. Mukherjee Road
Kolkata: 700025
Subject: Reply to status enquiry
Dear Sir,
We acknowledge the receipts of your letter, no. S E/COM/22/4/2018 dated
22.04.2018. In response to your enquiry about the financial soundness and credit
worthiness of Mr. X, we pleased to inform you that he has good reputation in the
local market as a dealer of computer over a period of last 10 years. We have a good
business relationship with him for the last 8 years. So far as financial condition, it
is very sound.

104
It may be stated that in our opinion you may grant credit of Rupees one crore and
fifty lakhs. It may be reminded to you that whatever information and opinion
given by us is nothing but confidential comment for which we have no
responsibilities.
Hope you will keep the information in strict confidence.
Thanking you,
Yours faithfully,
(Branch Manager)

4. Curriculum Vitae (CV) Writing

4.1 CV for the Post of Assistant Cashier
Format:
• Personal details.
• Educational qualifications.
• Declaration.
• Signature.
Example:
CURRICULUM VITAE
To
The Manager,
Bandhan Bank
172, B.T. Road
Kolkata: 700108

Subject: Application for the post of Assistant Cashier

SUB: Application for the post of Assistant Cashier

Dear Sir,
I, the undersigned do hereby offer myself as a candidate for the post mentioned
above vide Advertisement No. BCA/25/4/18 dated 7th April, 2018, in the
Employment News in your esteemed bank. In this context the relevant particulars
and curriculum vitae (CV) are given below for your consideration.
CURRICULUM VITAE
1. NAME : MISS SATARUPA MUKHERJEE
2. FATHER'S NAME : SRI PULAK MUKHERJEE

105
 3. MOTHER'S NAME : MRS. KAKULI MUKHERJEE
4. PRESENT ADDRESS : 66/4 GHOLA BAZAR, KOLKATA: 700 110.
5. PERMANENT ADDRESS : SAME AS PRESENT ADDRESS.
6. NATIONALITY : INDIAN
7. CASTE : HINDUISM
8. CATEGORY : GENERAL
9. GENDER : FEMALE
10. DATE OF BIRTH : 15th August, 1992.
11. LANGUAGE KNOWN : BENGALI, ENGLISH, HINDI
12. EDUCATIONAL QUALIFICATION :
NAME OF THE
YEAR OF MARKS DIVISION/CLASS
EXAMINATION BOARD
PASSING OBTAINED /GRADE
/UNIVERSITY
Secondary ICSE 2007 96 I
Higher
ISC 2009 94 I
Secondary
Calcutta
B.Sc. (Hon.) 2012 94 I
University
Calcutta
M.Sc. 2014 98 I
University
Calcutta
Ph.D. 2017 - -
University

Declaration: I declare that all the particulars stated above is true as per my
knowledge and belief.
SIGNATURE:
(Team NEX Edu)
DATE: 14.04.2025
4.2 CV for the Post of Assistant Professor
Format:
• Personal details.
• Educational qualifications.
• Declaration.
• Signature.

106
Example:
CURRICULUM VITAE
To
The Manager,
Bandhan Bank
172, B.T. Road
Kolkata: 700108
Subject: Application for the post of Assistant Professor
Dear Sir,
I, the undersigned do hereby offer myself as a candidate for the post mentioned
above vide Advertisement No. BCA/25/4/18 dated 7th April, 2018, in the
Employment News in your esteemed bank. In this context the relevant particulars
and curriculum vitae (CV) are given below for your consideration.
CURRICULUM VITAE
1. NAME : MISS SATARUPA GHOSH
2. FATHER'S NAME : MR. RAJ KUMAR GHOSH
3. MOTHER'S NAME : MRS. RADHA RANI GHOSH
4. PRESENT ADDRESS : 66/4, BIDDON STREET, KOLKATA: 700 006.
5. PERMANENT ADDRESS : SAME AS PRESENT ADDRESS.
6. NATIONALITY : INDIAN
7. CASTE : HINDUISM
8. CATEGORY : GENERAL
9. GENDER : FEMALE
10. DATE OF BIRTH : 26th JANUARY, 1989.
11. LANGUAGE KNOWN : BENGALI, ENGLISH, HINDI
12. EDUCATIONAL QUALIFICATION :
EXAMINATION NAME OF THE YEAR OF MARKS DIVISION/CLASS
BOARD PASSING OBTAINED /GRADE
/UNIVERSITY
Secondary ICSE 2004 96 I
Higher ISC 2006 94 I
Secondary
B.Sc. (Hon.) Calcutta 2009 84 I
University

107
 M.Sc. Calcutta 2011 98 I
University
Ph.D. Calcutta 2014 - -
University
Declaration: I declare that all the particulars stated above is true as per my
knowledge and belief.
SIGNATURE:
(R. AVIRUP GHOSH)
DATE: 14.04.2018

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