In Part I, we provide an overview of today’s business environment as well as the fundamentals of EC and some of its terminology (Chapter 1 ). A dis-cussion of electronic markets and their impacts is provided in Chapter 2 , where special attention is given to EC mechanisms ranging from traditional shopping carts to social networks and social software tools. We also intro-duce augmented reality, crowdsourcing and virtual worlds as platforms for EC in this chapter.
Preface
Part II – E-Commerce Applications
In Part II, we describe EC applications in three chapters. Chapter 3 addresses e-tailing and electronic service industries (e.g., e-travel, e-banking) as they relate to individual consumers. In Chapter 4 , we examine the major B2B models, including online auctions, online trading, e-procurement, and online marketplaces. In Chapter 5 , we present several non-selling applications, such as e-government, e-learning, e-books, collaborative commerce, and person-to- person EC.
Part III – Emerging EC Platforms
Chapter 6 explores the developing applications in the world of wireless EC (m-commerce, l-commerce, and pervasive computing). In addition, we cover the Internet-of-Things, smart systems and wearables. In Chapter 7 , we explore the world of social media marketing and social CRM. Chapter 8 covers enter-prise social networks, crowdsourcing, and other social media applications.
Part IV – EC Support Services
There are four chapters in this part. Chapter 9 is dedicated to online consumer behavior, market research and advertising. Chapter 10 begins with a discus-sion of the need to protect EC systems. It also describes various types of attacks on e-commerce systems and their users, including fraud, and how to minimize these risks through appropriate security programs. The chapter also deals with the various aspects of cyberwars. Chapter 11 describes a major EC support service – electronic payments including mobile payments. Chapter 12 concentrates on order fulfi llment, supply chain improvement, and the role of RFID and CPFR.
Part V – E-Commerce Strategy and Implementation
Chapter 13 discusses the process of EC strategy and strategic issues in imple-menting EC. The chapter also presents global EC and EC for small busi-nesses. Chapter 14 deals with implementation issues, concentrating on justifi cation and cost–benefi t analysis, system acquisitions and developments, and the impacts of EC on organizations. Chapter 15 deals with legal, ethical, and societal issues concentrating on regulatory issues, privacy, and green IT.
Part VI – Launching Online Businesses and EC Projects
Chapter 16 is unique; it describes how to build an e-business from scratch, as well as how to add e-commerce projects to conventional businesses. It also
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takes the reader through all the major steps of online store building and provides guidelines for success.
Learning Aids
The text offers the student a number of learning aids:
• Chapter Outlines. A listing of the main headings (“Content”) at the begin-ning of each chapter provides a quick overview of the major topics covered.
• Learning Objectives. Learning objectives at the beginning of each chap-ter help students focus their efforts and alert them to the important con-cepts to be discussed. Additionally, note the newly added learning objectives for the entire book.
• Opening Cases. Each chapter opens with a real-world example that illus-trates the importance of EC to modern corporations. These cases were carefully chosen to call attention to some of the major topics to be covered in the chapters. Following each opening case is a short section titled
“Lessons learned from the case,” that relates the important issues in the case to the forthcoming content of the chapter.
• EC Application Cases. In-chapter cases highlight real-world problems encountered by organizations as they develop and implement EC. Questions follow each case to help direct the student’s attention to the implications of the case material.
• Real World Examples. Dozens of examples illustrate how EC concepts and tools are applied. These are usually linked to detailed descriptions.
• Figures and Tables. Numerous eye-catching fi gures and tables extend and supplement the text presentation.
• Review Questions. Each section in each chapter ends with a series of review questions about that particular section. These questions are intended to help students summarize the concepts introduced and digest the essentials of each section before moving on to another topic.
• Glossary and Key Terms. Each key term is defi ned in the text when it fi rst appears. In addition, an alphabetical list of key terms appears at the end of each chapter.
• Managerial Issues. At the end of every chapter, we explore some of the special concerns managers face as they prepare to do business in cyber-space. These issues are framed as questions to maximize the readers’
active participation.
• Chapter Summary. The chapter summary is linked one-to-one with the learning objectives introduced at the beginning of each chapter.
• End-of-Chapter Exercises. Different types of questions measure the stu-dents’ comprehension and their ability to apply the learned knowledge.
Questions for Discussion by individual students are intended to challenge them to express their thinking about relevant topics. Topics for Class Discussion and Debates promote dialogs and develop critical-thinking skills. Internet Exercises are challenging assignments that require students to surf the Internet and apply what they have learned. Over 250 hands-on
Preface
exercises send students to interesting websites to conduct research, learn about applications, download demos, or research state-of-the-art technol-ogy. The Team Assignments and Projects are thought-provoking group projects designed to foster teamwork.
• Closing Cases. Each chapter ends with a comprehensive case, which is presented somewhat more in depth than the in-chapter EC Application Cases. Questions follow each case relating the case to the topics covered in the chapter.
• List of Online Resources. At the end of each chapter, we provide a list of the chapter’s online fi les with a brief description of their content. In addi-tion, we provide a list of Web addresses linked to relevant resources that can be used to supplement the chapter.
Supplementary Materials
The following support materials are also available.
• The Instructor’s Manual , written by Jon. C. Outland, includes answers to all review and discussion questions, exercises, and case questions. He also wrote the Test Item File that is an broad set of multiple-choice, true-false, and essay questions for each chapter.
• The PowerPoint Lecture Notes , by Judy Lang, highlight the important areas and are related to the text learning objectives.
Companion Website: ( affordable-ecommerce-textbook.com/
turban )
The book is supported by a companion website that includes:
• Five online tutorials.
• Bonus EC Application Cases and other features, which can be found in each chapter’s online fi les.
Content Contributors
The following individuals contributed material for this edition.
• Linda Lai updated Chapter 3 and created Chapter 16 .
• Fabio Cipriani contributed his eCRM and social CRM slides to Chapters 1 and 7 .
• San Murugesan contributed to Chapter 8 and to the Online Tutorials.
• Judy Lang updated material in several chapters and conducted supporting research.
• Ivan C. Seballos II contributed the new illustrations and helped update several chapters.
• Jörg Blankenbach and Christian Hickel contributed to the closing case of Chapter 5 : “From Local SDI to E-Government.”
• Judy Strauss contributed an example in Chapter 13 .
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Acknowledgments
Many individuals helped us create this text. Faculty feedback was solicited via written reviews and through individual interviews. We are grateful to them for their contributions.
Several individuals helped us with the research and the administrative work. We thank all these individuals for their dedication and excellent perfor-mance shown throughout the project. We recognize the outstanding contribu-tion of Daphne Turban in reading the entire manuscript, researching and providing relevant sources, performing a preliminary copyediting, and offer-ing over 3,000 useful comments.
We also recognize the various organizations and corporations that pro-vided us with their permission to reproduce material. Last, but not least, we thank Judy Lang, who as coordinator, advisor, and problem solver, contrib-uted innovative ideas and provided the necessary editing and formatting of this text.
We appreciate the assistance provided by the Springer team under the lead-ership of Neil Levine, Matthew Amboy, and Christine Crigler. We also recog-nize Ramesh Sharda (Oklahoma State University) for his guidance and advise.
Reviews
The previous editions of the book were reviewed by many professors.
We wish to thank all of them for the valuable comments they provided. We also thank the reviewers of this edition, the anonymous faculty from the fol-lowing universities: Franklin Pierce University, University of Maryland, California State University, Clark State Community College, and the University of Houston, who provided a very useful and comprehensive reviews.
Preface
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Part I Introduction to E-Commerce and E-Marketplaces
1 Overview of Electronic Commerce ... 3
Opening Case: How Starbucks Is Changing to a Digital and Social Enterprise ... 3
The Problem ... 4
The Solution: Going Digital and Social ... 4
The Results... 6
1.1 Electronic Commerce: Defi nitions and Concepts ... 7
Defi ning Electronic Commerce... 7
Defi ning E-Business... 7
Major EC Concepts ... 7
Electronic Markets and Networks ... 8
1.2 The Electronic Commerce Field: Growth, Content, Classifi cation, and a Brief History ... 8
The Content and Framework of E-Commerce ... 8
An EC Framework ... 9
Classifi cation of EC by the Nature of the Transactions and the Relationships Among Participants ... 10
A Brief History of EC ... 11
Case 1.1: Net-a-Porter: Dress for Success ... 13
The Opportunity ... 14
The Solution ... 14
The Results... 14
1.3 Drivers and Benefi ts of E-Commerce ... 15
The Drivers of E-Commerce ... 15
The Benefi ts of E-Commerce... 15
1.4 E-Commerce 2.0: From Social Commerce to Virtual Worlds ... 16
Social Computing ... 16
Web 2.0 ... 17
Social Media ... 18
Social Networks and Social Network Services ... 18
Enterprise Social Networks ... 19
Social Commerce ... 19
Virtual Worlds and Second Life ... 20
The Major Tools of Web 2.0 ... 20
Contents
1.5 The Digital and Social Worlds: Economy, Enterprises,
and Society ... 20
The Digital Economy ... 21
The Digital Enterprise ... 22
The Social Business (Enterprise) ... 23
The Digital Revolution and Society ... 24
1.6 The Changing Business Environment, Organizational Responses, and EC and IT Support ... 27
The Changing Business Environment ... 28
Performance, Business Pressures, and Organizational Responses and EC Support ... 28
1.7 Electronic Commerce Business Models ... 31
The Structure and Properties of Business Models ... 31
Typical EC Business Models... 33
Classifi cation of Business Models in E-Commerce ... 34
1.8 The Limitations, Impacts, and the Future of E-Commerce ... 34
The Limitations and Barriers of EC ... 34
Why Study E-Commerce? ... 35
The Future of EC ... 36
1.9 Overview of This Book ... 37
Part I: Introduction to E-Commerce and E-Marketplaces ... 37
Part II: EC Applications ... 38
Part III: Emerging EC Delivery Platforms ... 38
Part IV: EC Support Services ... 38
Part V: EC Strategy and Implementation ... 38
Part VI: Launching Online Businesses and EC Projects ... 38
Online Mini Tutorials ... 38
Online Supplements ... 38
Managerial Issues... 38
Closing Case: E-Commerce at the National Football League (NFL) ... 43
Glossary ... 45
References ... 46
2 E-Commerce: Mechanisms, Platforms, and Tools ... 51
Opening Case: Pinterest: A New Kid on the E-Commerce Block ... 51
The Opportunity ... 52
The Solution ... 52
Results and Managerial Issues ... 53
Conclusion ... 54
2.1 Electronic Commerce Mechanisms: An Overview ... 54
EC Activities and Support Mechanisms ... 54
The Online Purchasing Process ... 55
2.2 E-Marketplaces ... 55
Electronic Markets ... 57
Components of and the Participants in E-Marketplaces ... 58
Disintermediation and Reintermediation ... 59
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Case 2.1: EC Application: How Blue Nile Inc.
Is Changing the Jewelry Industry... 59
Types of E-Marketplaces ... 60
2.3 Customer Shopping Mechanisms: Webstores, Malls, and Portals ... 61
Webstores ... 61
Electronic Malls ... 61
Web (Information) Portals ... 62
The Roles and Value of Intermediaries in E-Marketplaces ... 63
2.4 Merchant Solutions: Electronic Catalogs, Search Engines, and Shopping Carts ... 64
Electronic Catalogs ... 64
EC Search Activities, Types, and Engines ... 65
Shopping Carts ... 66
2.5 Auctions, Bartering, and Negotiating Online ... 67
Defi nition and Characteristics ... 67
Dynamic Pricing ... 67
Traditional Auctions Versus E-Auctions... 68
Types of Auctions ... 68
Benefi ts and Limitations of E-auctions ... 70
Impacts of Auctions ... 72
Online Bartering... 72
Online Negotiating ... 72
2.6 Virtual Communities and Social Networks ... 73
Characteristics of Traditional Online Communities and Their Classifi cation ... 73
Online Social Networks and Social Network Sites ... 74
Social Network Services ... 74
Business-Oriented Public Social Networks ... 75
Case 2.2: EC Application: Craigslist: The Ultimate Online Classifi ed Community ... 76
Private (or Enterprise) Social Networks ... 77
Business Models and Services Related to Social Networking... 77
Mobile Social Commerce ... 78
Mobile Social Networking ... 78
Recent Innovative Tools and Platforms for Social Networking ... 79
2.7 Virtual Worlds as an Electronic Commerce Platforms ... 80
Major Features ... 80
Avatars ... 80
Business Activities and Value in Virtual Worlds... 81
2.8 Emerging EC Platforms: Augmented Reality and Crowdsourcing ... 83
Augmented Reality ... 83
Crowdsourcing ... 83
2.9 The Future: Web 3.0, Web 4.0 and Web 5.0 ... 86
Web 3.0: What Does the Future Hold? ... 86
The Technological Environment ... 87
Contents
Managerial Issues... 88
Closing Case: Madagascar’s Port Modernizes Customs with TradeNet ... 93
Glossary ... 95
References ... 96
Part II E-Commerce Applications 3 Retailing in Electronic Commerce: Products and Services ... 103
Opening Case: Amazon.com: The King of E-Tailing ... 104
3.1 Internet Marketing and B2C Electronic Retailing ... 106
Overview of Electronic Retailing ... 107
Size and Growth of the B2C Market ... 107
What Sells Well on the Internet ... 108
Characteristics and Advantages of Successful E-Tailing ... 108
3.2 E-Tailing Business Models ... 110
Classifi cation of Models by Distribution Channel ... 110
Other B2C Models and Special Retailing ... 113
B2C Social Shopping ... 113
Virtual Visual Shopping ... 114
3.3 Online Travel and Tourism (Hospitality) Services ... 114
Characteristics of Online Travel ... 114
Special Online Travel Services ... 115
Case 3.1: EC Application: WAYN: A Lifestyle and Travel Social Network ... 116
Benefi ts, Limitations, and Competition in Online Travel Services ... 117
Competition in Online Travel ... 117
Corporate Travel ... 117
3.4 Employment and the Online Job Market ... 118
The Internet Job Market ... 118
Benefi ts and Limitations of the Electronic Job Market ... 120
3.5 Online Real Estate, Insurance, and Stock Trading ... 121
Real Estate Online ... 121
Insurance Online ... 122
Online Stock Trading and Investments ... 123
3.6 Online Banking and Personal Finance ... 124
E-Banking ... 125
Online Banking Capabilities ... 125
Pure Virtual Banks ... 125
International and Multiple-Currency Banking ... 126
Online Financial Transaction Implementation Issues ... 126
Case 3.2: EC Application: Security for Online Bank Transactions ... 126
Online Billing and Bill Paying ... 128
3.7 On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming ... 129
On-Demand Delivery of Products ... 129
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Online Delivery of Digital Products,
Entertainment, and Media ... 130 Social Television (TV) ... 131 3.8 Other B2C Services: From Dating Services
to Wedding Planning ... 133 Online Dating Services ... 133 Planning a Wedding ... 134 Buying Cars Online ... 134 Selling-Build-to-Order Cars Online ... 134 Other Online Services ... 135 3.9 Online Purchasing-Decision Aids ... 136 Shopping Portals ... 136 Helping Communities ... 136 Price and Quality Comparison
by Shopbot Software Agents ... 136 Ratings, Reviews, and Recommendation Sites ... 137 Comparison Shopping Websites... 138 Trust Verifi cation Sites ... 138 Other Shopping Assisting Tools ... 139 Virtual Visual Shopping ... 140 Mobile Apps ... 141 3.10 The New Face of Retail Competition: Retailers
Versus E-Tailers... 141 The Online Versus Offl ine Competition:
An Overview ... 141 Retailers Versus E-Tailers ... 142 What Can Traditional Retailers Do? ... 144 3.11 Issues in E-Tailing and Lessons Learned ... 145 Disintermediation and Reintermediation ... 145 Channel Confl ict... 146 Possibility of a Price Confl ict and Determining
the Right Price by Sellers ... 146 Product and Service Customization
and Personalization ... 147 Fraud and Other Illegal Activities ... 147 Lessons Learned from Failures and Lack
of Success of E-Tailers ... 147 Managerial Issues... 148 Closing Case: Etsy – A Social-Oriented B2C Marketplace ... 154 Glossary ... 156 References ... 156 4 Business-to-Business E-Commerce ... 161
Opening Case: Alibaba.com: The World’s Largest
B2B Marketplace ... 161 4.1 Concepts, Characteristics, and Models
of B2B E-Commerce ... 164 Basic B2B Concepts and Process ... 164
Contents
The Basic Types of B2B Transactions
and Activities... 165 The Basic Types of B2B E-Marketplaces
and Services ... 165 Market Size and Content of B2B ... 166 B2B Components ... 167 Service Industries Online in B2B ... 168 Partner and Supplier Relationship Management ... 170 The Benefi ts and Limitations of B2B ... 170 4.2 One-to-Many: Sell-Side E-Marketplaces ... 171
Sell-Side Models ... 171 Sales from Catalogs: Webstore ... 171 Comprehensive Sell-Side Systems ... 173 Selling via Distributors and Other Intermediaries ... 173 4.3 Selling via E-Auctions ... 173 The Benefi ts of Auctions on the Sell Side ... 173 Auctioning from the Company’s Own Site ... 174 Using Intermediaries in Auctions ... 174 Case 4.1: EC Application: How the Commonwealth
of Pennsylvania Sells Surplus Equipment ... 174 Examples of B2B Forward Auctions ... 175 4.4 One-From-Many: E-Procurement at Buy-Side
E-Marketplaces ... 175 Ineffi ciencies in Traditional Procurement
Management ... 175 Procurement Methods ... 176 E-Procurement Concepts ... 177 The Benefi ts and Limitations of E-Procurement ... 179 4.5 Reverse Auctions at Buy-Side E-Marketplaces
(E-Tendering) ... 180 The Major Benefi ts of Reverse Auctions ... 180 Conducting Reverse Auctions ... 180 Case 4.2: EC Application: Branas Isaf Competes
by Using E-Tendering ... 181 Group Reverse Auctions. ... 182 4.6 Other E-Procurement Methods ... 183 Desktop Purchasing ... 183 Group Purchasing ... 183 Buying from Other Sources ... 183 Acquisition Via Electronic Bartering ... 184 Selecting an Appropriate E-Procurement Solution ... 185 4.7 B2B Exchanges (E-Marketplaces):
Defi nitions and Concepts ... 185 Ownership of B2B Exchanges ... 187 Dynamic Pricing in B2B Exchanges ... 188 Advantages, Limitations, and the Revenue
Model of Exchanges ... 189 4.8 B2B Portals and Directories ... 190 B2B Portals: An Overview ... 190
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Corporate (Enterprise) Portals... 190 Directory Services and Search Engines ... 191 4.9 B2B in Web 2.0 and Social Networking ... 192 E-Communities in B2B ... 192 The Opportunities of Social Commerce in B2B ... 192 The Use of Web 2.0 Tools in B2B ... 193 Virtual Trade Shows and Trade Fairs ... 193 Social Networking in B2B ... 194 Examples of Other Activities of B2B Social Networks ... 194 Strategy for B2B Social Networking ... 195 The Future of B2B Social Networking ... 195 4.10 Some B2B Support Mechanisms ... 195 Organizational Buyer Behavior ... 195 The Marketing and Advertising Processes in B2B ... 196 Methods for B2B Online Advertising and Marketing ... 197 Other B2B Support Mechanisms ... 197 Managerial Issues... 198 Closing Case: The University of Sheffi eld
E-Tendering System ... 203 Glossary ... 204 References ... 206 5 Innovative EC Systems: From E-Government
to E-Learning, Collaborative Commerce,
and C2C Commerce ... 209 Opening Case: Compass Group Turns Managers
into Detectives to Enhance E-Training ... 209 5.1 E-Government: An Overview ... 211
Defi nition and Scope ... 211 Government-to-Citizens ... 211 Government-to-Business ... 214 Government-to-Government ... 215 Government-to-Employees and Internal Effi ciency
and Effectiveness ... 215 Implementing E-Government ... 216 The Transformation to E-Government ... 216 E-Government 2.0 and Social Networking ... 216 M-Government ... 217 5.2 E-Learning, E-Training, and E-Books ... 218
The Basics of E-Learning: Defi nitions
and Concepts ... 218 Benefi ts and Drawbacks of E-Learning ... 219 Distance Learning and Online Universities ... 221 Online Corporate Training ... 222 Social Networks and E-Learning ... 224 Learning in Virtual Worlds and Second Life ... 224 Visual Interactive Simulation ... 225 E-Learning Management Systems ... 226 Electronic Books (E-Books) ... 226
Contents
5.3 Knowledge Management, Advisory Systems,
and Electronic Commerce ... 229 An Overview of Knowledge Management ... 229 Knowledge Management Types and Activities ... 229 Knowledge Sharing ... 230 Case 5.2: EC Application: Knowledge Management
at Infosys Technologies ... 230 How Is Knowledge Related to E-Commerce? ... 231 KM and Social Networks ... 232 Finding Expertise and/or Experts Electronically
and the Use of Expert Location Systems ... 233 5.4 Collaborative Commerce ... 236
Essentials of Collaborative Commerce ... 236 The Elements and Processes of C-Commerce ... 236 Collaboration Hubs ... 237 Representative Examples of Collaborative
Commerce ... 238 Barriers to C-Commerce ... 240 5.5 Consumer-to-Consumer Electronic Commerce ... 241 E-Commerce: C2C Applications ... 241 Managerial Issues... 243 Closing Case: From Local SDI to E-Government ... 247 Glossary ... 251 References ... 252 Part III Emerging EC Delivery Platforms
6 Mobile Commerce and Ubiquitous Computing ... 257 Opening Case Hertz Goes Mobile All the Way ... 258 6.1 Mobile Commerce: Concepts, Landscape, Attributes,
Drivers, Applications, and Benefi ts ... 259 Basic Concepts, Magnitude, and the Landscape ... 260 The Attributes of M-Commerce ... 261 An Overview of the Applications of M-Commerce ... 262 The Benefi ts of M-Commerce ... 264 6.2 The Enabling Infrastructure: Components
and Services of Mobile Computing ... 265 Overview of Mobile Computing ... 265 Mobile Devices ... 265 Mobile Computing Software and Services ... 267 Wireless Telecommunications Networks ... 268 Putting It All Together ... 271 6.3 Mobile Financial Applications ... 271 Mobile Banking ... 271 Other Mobile Finance Applications ... 272 6.4 Mobile Enterprise Solutions: From Supporting
the Workforce to Improving Internal Operations... 273 Defi ning Mobile Enterprise (Enterprise Mobility) ... 273
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The Framework and Content
of Mobile Enterprise Applications ... 274 Mobile Workers ... 274 Other Enterprise Mobile Applications ... 274 6.5 Mobile Entertainment, Gaming, Consumer Services,
and Mobile Shopping ... 275 Overview of Mobile Entertainment ... 275 Mobile Streaming Music and Video Providers ... 276 Entertainment in Cars ... 276 Mobile Games ... 276 Mobile Gambling ... 277 Mobility and Sports ... 277 Service Industry Consumer Applications... 278 Mobile Shopping and Advertising ... 279 6.6 Location-Based Mobile Commerce
and Mobile Social Networks ... 280 Basic Concepts in L−Commerce ... 281 L-Commerce Infrastructure ... 281 Barriers to Location-Based M-commerce ... 285 6.7 Ubiquitous (Pervasive) Computing and Sensory
Networks ... 285 Overview of Ubiquitous Computing ... 286 Smart Application: Grid, Homes, Cars, and More ... 287 Wireless Sensor Networks... 289 Case 6.1: EC Application: Sensors at INRIX Help
People Avoid Traffi c Jams ... 290 Implementation Issues in Ubiquitous Computing... 291 6.8 Emerging Topics: From Wearables and Google Glass
to Smart Cities ... 291 Wearable Computing Devices ... 291 Google Glass ... 292 Smart Cities ... 293 6.9 Implementation Issues in Mobile Commerce:
From Security and Privacy to Barriers to M-commerce ... 293 M-commerce Security and Privacy Issues ... 293 Technological Barriers to M-commerce ... 294
From Security and Privacy to Barriers to M-commerce ... 293 M-commerce Security and Privacy Issues ... 293 Technological Barriers to M-commerce ... 294