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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.
- Spring '11