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EDI can be formally defined as 'The transfer of structured data, by agreed message

standards, from one computer system to another without human intervention'.

What is EDI?

Electronic data interchange (EDI) is the inter-organisational exchange of business

documents in structured, machine processable form. Electronic data Interchange can be

used to electronically transmit documents such as purchase orders, invoices, shipping

bills, receiving advices and other standard business correspondence between trading

partners. EDI can also be used to transmit financial information and payments inelectronic form. Payments carried out over EDI are usually referred to as Electro- nic

Funds Transfer (EFT).EDI should not be viewed as simply a way of replacing paper

documents and traditional methods of transmission such as mail, phone or in-person

delivery with electronic transmission. But it should be seen not as an "end" but as a

means to streamline procedures and improving efficiency and productivity.

Computers have speeded up the production of invoices, purchase orders, receiving

tickets and the like. When these documents are produced by high speed printers,

however, they still must be bursted, inserted and distributed (usually mailed) and copies

must be filed by the originating organisation. The originals must be physically

transported to the addressee, opened, carried to the appropriate individual within theaddressee organization and processed ,which actually means manually keying the data

into an MIS system.

In EDI, in the place of traditional methods for the transmission of for e.g. a purchase

order between a buyer and a seller ,data is entered into the buyer's computer system,

the same data is electro- nically sent into the seller's computer without the need for

rekeying or re-entry. This is normally referred to as application -to-application EDI. When

EDI is fully integrated with application programs, not only does data flow electronically

between trading partners without the need for rekeying, but data also flows electronically

between internal applications of each of the trading partners.

 The use of EDI eliminates many of these problems associated with traditional information

flow, as listed below.

-The delays associated with handling, filing and transportation of paper documents are

eliminated.

-Since data is keyed in only once the chances of error are reduced.

-Time required to re-enter data is saved.

-As data is not re-entered at each step in the process, labour costs can be reduced.

-Because time delays are reduced, there is more certainty in information flow. The other

advantage in the use of EDI is that it generates a functional acknowledgement whenever

an EDI message is received and it is electronically transmitted to the sender. This states

that the message has been received. Therefore the core concept of EDI is that data is

transferred electronically in machine processable form.EDI is often applied in the

following situations when there are

-A large number of repetitive standard actions

-Very tight operating margins

-Strong competition requiring significant productivity improvements.

-Operational time constraints.

It is this kind of computerisation which is forcing India as a country to adopt EDI

technology for international transactions. In India, NIC offers EDI services over its satellite

based computer communication network called NICNET, with its VSAT reach in every

district of the country on the one hand and connectivity to a large number of 

international networks on the other.

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Black box model

ENVIRONMENTAL FACTORS BUYER'S BLACK BOX BUYER'S

RESPONSEMarketing

Stimuli

Environmental

Stimuli

Buyer

Characteristics

Decision Process

ProductPrice

Place

Promotion

EconomicTechnological

Political

CulturalDemographic

 Natural

AttitudesMotivation

Perceptions

PersonalityLifestyle

Knowledge

Problemrecognition

Information

searchAlternative

evaluation

Purchase decision

Post-purchase behaviour 

Product choiceBrand choice

Dealer choice

Purchase timingPurchase amount

The black box model shows the interaction of stimuli, consumer characteristics, decision process andconsumer responses.[1] It can be distinguished between interpersonal stimuli (between people) or 

intrapersonal stimuli (within people).[2] The black box model is related to the black box theory of 

 behaviourism, where the focus is not set on the processes inside a consumer, but the relation between

the stimuli and the response of the consumer. The marketing stimuli are planned and processed by thecompanies, whereas the environmental stimulus are given by social factors, based on the economical,

 political and cultural circumstances of a society. The buyers black box contains the buyer 

characteristics and the decision process, which determines the buyers response.

The black box model considers the buyers response as a result of a conscious, rational decision

 process, in which it is assumed that the buyer has recognized the problem. However, in reality many

decisions are not made in awareness of a determined problem by the consumer.

 Problem Recognition(awareness of need)— 

difference between the desired state and the actual condition. Deficit in assortment of products.

Hunger--Food. Hunger stimulates your need to eat.

Can be stimulated by the marketer through product information--did not know you were deficient? I.E.,

see a commercial for a new pair of shoes, stimulates your recognition that you need a new pair of shoes.

Information search

Once the consumer has recognised a problem, they search for information on products and services that

can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal(memory) and an external search.

Sources of information include:

• Personal sources• Commercial sources

• Public sources

• Personal experience

The relevant internal psychological process that is associated with information search is perception.

Perception is defined as "the process by which an individual receives, selects, organises, and interpretsinformation to create a meaningful picture of the world".

The selective perception process

Stage Description

• Selective exposure consumers select which promotional messages they will expose themselves

to.

• Selective attention consumers select which promotional messages they will pay attention to.

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