Chapter 10 - Chapter 10 E‐Commerce: Digital Markets,...

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Unformatted text preview: Chapter 10 E‐Commerce: Digital Markets, Digital Goods Part 1: E‐Commerce Fundamentals Learning ObjecCves •  IdenCfy the unique features of e‐commerce, digital markets, and digital goods •  Describe how the Internet has changed business models •  IdenCfy the various types of e‐commerce and explain how e‐commerce has changed consumer retailing and business‐to‐business transacCons •  Evaluate the role of m‐commerce in business, and describe the most important m‐commerce applicaCons Produced by Dr. Brian Janz 1 Electronic Commerce and the Internet •  E‐commerce –  Use of the Internet and the web to transact business –  Digitally enabled transacCons –  Began in 1995 and grew exponenCally; sCll growing at an annual rate of 16 percent –  Rapid growth led to market bubble –  While many companies failed, many survived with soaring revenues –  E‐commerce today the fastest growing form of retail trade in U.S., Europe, Asia •  History of e‐commerce The Growth of E‐Commerce Produced by Dr. Brian Janz 2 Unique Features of E‐commerce Technology •  Ubiquity •  Global reach –  Internet/Web technology available everywhere, anyCme –  The technology reaches across naConal boundaries, around the globe •  Universal standards •  Richness –  One set of technology standards: Internet standards –  Supports video, audio, and text messages •  InteracCvity –  The technology works through interacCon with the user –  Vast increase in quality info available to all market parCcipants •  InformaCon density •  PersonalizaCon/CustomizaCon: •  Social technology –  Technology permits modificaCon of messages, goods –  The technology promotes user content generaCon and social networking Key Concepts in E‐Commerce •  Digital markets reduce: – InformaCon asymmetry – Search costs – TransacCon costs – Menu costs •  Digital markets enable: – Price discriminaCon – Dynamic pricing – DisintermediaCon Produced by Dr. Brian Janz 3 The Benefits of DisintermediaCon to the Consumer Key Concepts in E‐Commerce (cont.) •  Digital goods –  Goods that can be delivered over a digital network •  E.g., Music tracks, video, so_ware, newspapers, books –  Cost of producing first unit almost enCre cost of product: marginal cost of producing 2nd unit is about zero –  Costs of delivery over the Internet very low –  MarkeCng costs remain the same; pricing highly variable –  Industries with digital goods are undergoing revoluConary changes (publishers, record labels, newspapers, etc.) Produced by Dr. Brian Janz 4 Key Concepts in E‐Commerce (cont.) •  Internet business models –  Pure‐play models –  Clicks‐and‐mortar models •  Social Network –  Online meeCng place –  Social shopping sites –  Can provide ways for corporate clients to target customers through banner ads and pop‐up ads •  Online marketplace: –  Provides a digital environment where buyers and sellers can meet, search for products, display products, and establish prices for those products Key Concepts in E‐Commerce (cont.) •  Content provider –  Providing digital content, such as digital news, music, photos, or video, over the Web –  Online syndicators: Aggregate content from mulCple sources, package for distribuCon, and resell to third‐ party Web sites –  Provides Web 2.0 applicaCons such as photo sharing and interacCve maps, and services such as data storage –  “Supersite” that provides comprehensive entry point for huge array of resources and services on the Internet •  Service provider •  Portal Produced by Dr. Brian Janz 5 Key Concepts in E‐Commerce (cont.) •  Virtual storefront: – Sells physical products directly to consumers or to individual businesses •  InformaCon broker: – Provides product, pricing, and availability informaCon to individuals and businesses •  TransacCon broker: – Saves users money and Cme by processing online sales transacCons and generaCng a fee for each transacCon Types of Electronic Commerce •  Business‐to‐consumer (B2C) •  Business‐to‐business (B2B) •  Consumer‐to‐consumer (C2C) •  Mobile commerce (m‐commerce) Produced by Dr. Brian Janz 6 InteracCve MarkeCng and PersonalizaCon •  Web sites are bounCful source of details about customer behavior, preferences, buying paderns used to tailor promoCons, products, services, and pricing •  Clickstream tracking tools: Collect data on customer acCviCes at Web sites –  Used to create personalized Web pages •  CollaboraCve filtering: Compares customer data to other customers to make product recommendaCons Website Visitor Tracking Produced by Dr. Brian Janz 7 InteracCve MarkeCng and PersonalizaCon •  Blogs –  Personal web pages that contain series of chronological entries by author and links to related Web pages –  Has increasing influence in poliCcs, news –  Corporate blogs: New channels for reaching customers, introducing new products and services –  Blog analysis by marketers •  Customer self‐service –  Web sites and e‐mail to answer customer quesCons or to provide customers with product informaCon –  Reduces need for human customer‐support expert Chapter 10 E‐Commerce: Digital Markets, Digital Goods Part 2: B2B E‐Commerce RelaConships Produced by Dr. Brian Janz 8 B2B E‐Commerce: New Efficiencies and RelaConships •  Electronic data interchange (EDI) –  Computer‐to‐computer exchange of standard transacCons such as invoices, purchase orders –  Major industries have EDI standards that define structure and informaCon fields of electronic documents for that industry –  e.g., Procurement: Businesses can now use Internet to locate most low‐cost supplier, search online catalogs of supplier products, negoCate with suppliers, place orders, etc. •  More companies increasingly moving away from private networks to Internet for linking to other firms Private Industrial Networks (Private Exchanges) •  Large firm using extranet to link to its suppliers, distributors and other key business partners •  Owned by buyer •  Permits sharing of: –  Product design and development –  MarkeCng –  ProducCon scheduling and inventory management –  Unstructured communicaCon (graphics and e‐mail) Produced by Dr. Brian Janz 9 Net Marketplaces (E‐hubs) •  Single market for many buyers and sellers •  Industry‐owned or owned by independent intermediary •  Generate revenue from transacCon fees, other services •  Prices established through negoCaCon, aucCon, RFQs, or fixed prices •  May focus on direct or indirect goods •  May support long‐term contract purchasing or short‐term spot purchasing •  May serve verCcal or horizontal marketplaces A Net Marketplace Produced by Dr. Brian Janz 10 Exchanges •  Independently owned third‐party Internet‐based marketplaces •  Connect thousands of suppliers and buyers for spot purchasing •  Typically provide verCcal markets for direct goods for single industry (food, electronics) •  Proliferated during early years of e‐commerce; many have failed –  CompeCCve bidding drove prices down and did not offer long‐term relaConships with buyers or services to make lowering prices worthwhile Chapter 10 E‐Commerce: Digital Markets, Digital Goods Part 3: M‐Commerce and Payment Systems Produced by Dr. Brian Janz 11 M‐Commerce Services and ApplicaCons •  Although m‐commerce represents small fracCon of total e‐commerce transacCons, revenue has been steadily growing – LocaCon‐based services – Banking and financial services – Wireless adverCsing – Games and entertainment Global M‐commerce Revenue 2000‐2012 Produced by Dr. Brian Janz 12 M‐Commerce •  LimitaCons in mobile’s access of web informaCon – Data limitaCons – Small display screens •  Wireless portals (mobile portals) – Feature content and services opCmized for mobile devices to steer users to informaCon they are most likely to need M‐Commerce •  Types of electronic payment systems – Digital wallet •  Stores credit card and owner idenCficaCon informaCon and enters the shopper’s name, credit card number, and shipping informaCon automaCcally when invoked to complete a purchase – Accumulated balance digital payment systems •  Used for micropayments ($10 or less) •  AccumulaCng debit balance that is paid periodically on credit card or telephone bills Produced by Dr. Brian Janz 13 Electronic Commerce Payment Systems •  Stored value payment systems –  Enable online payments based on value stored in online digital account –  May be merchant plalorms or peer‐to‐peer (PayPal) –  Extend funcConality of exisCng checking accounts to be used for online payments •  Digital checking •  Electronic billing presentment and payment systems –  Paying monthly bills through electronic fund transfers or credit cards Electronic Commerce Payment Systems •  Digital payments systems for m‐commerce – Three types of mobile payment systems in use in Japan •  Stored value system charged by credit cards or bank accounts •  Mobile debit cards •  Mobile credit cards – In the U.S., the cell phone has not yet evolved into a mobile payment system Produced by Dr. Brian Janz 14 ...
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This note was uploaded on 02/24/2011 for the course MIS 7650 taught by Professor Janz during the Spring '11 term at U. Memphis.

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