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E-MARKETPLACES: STRUCTURES AND MECHANISMS Chapter 2.

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1 E-MARKETPLACES: STRUCTURES AND MECHANISMS Chapter 2

2 Learning Objectives Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 1. Define e-marketplaces and list their components. 2. List the major types of e-marketplaces and describe their features. 3. Describe the various types of EC intermediaries and their roles. 4. Describe electronic catalogs, shopping carts, search engines, and portals.

3 Learning Objectives Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2 5. Describe the major types of auctions and list their characteristics. 6. Discuss the benefits, limitations, and impacts of auctions. 7. Describe bartering and negotiating online. 8. Describe the major mechanisms for delivering Web 2.0.

4 BLUE NILE INC. Changing the jewelry Industry Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3 A Pure-play online e-tailer Opportunity: - B2C EC model - no expensive stores - no intermediaries - prices 35% less than rivals - captured a high market share, more sales and a sizable profit

5 BLUE NILE INC. Changing the jewelry Industry, Cont…… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 Blue Nile offers - a huge selection of diamonds - more information on diamonds - educational guides in plain English - independent and trusted quality ratings for every stone - the ability to make a price comparison with other online stores - a 30-day money-back guarantee

6 BLUE NILE INC. Changing the jewelry Industry, Cont…… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 5 The Results: - sales reached $319 million in 2007 - became the 8 th largest specialty jewelry company in USA - lowers operating costs - bypasses the industry’s tangled supply chain - 465 small jewelry stores closed in 2003 and many others specialize in custom-crafted pieces

7 E-MARKETPLACES Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 e-marketplace (e-marketspace) An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia. Market functions: ( EC is able to decrease the cost of executing these functions ) - matching buyers and sellers - facilitating the exchange of information, goods, services, and payments associated with market transactions - providing an institutional infrastructure

8 E-MARKETPLACE COMPONENTS AND PARTICIPANTS Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7  Customers: Either consumers looking for: - Bargains - Customized items - Collectors’ items - Entertainment - socialization OR: Organizations that account for more than 85% of EC dollar activities  Sellers: - millions of storefronts on the Web, advertising and offering a huge variety of items - owned by companies, government agencies, or individuals - sellers can sell direct from their Web sites or from e- marketplaces

9 E-MARKETPLACE COMPONENTS AND PARTICIPANTS, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8  Products and services  The difference between the marketplace and the marketspace is the possible digitization of products and services in a marketspace  Although both types of markets can sell physical products, the marketspace also can sell digital products  digital products Goods that can be transformed to digital format and instantly delivered over the Internet.  Digital products have different cost curves than those of regular products  In digitization, most costs are fixed, and variable costs are very low. Profit increases rapidly when volume increases

10 E-MARKETPLACE COMPONENTS AND PARTICIPANTS, cont…  Infrastructure  The marketspace infrastructure includes electronic networks, hardware, and software  front end The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, an auction engine, a search engine, and a payment gateway. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 9

11 E-MARKETPLACE COMPONENTS AND PARTICIPANTS, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 10  back end The activities that support online order aggregation and fulfillment, inventory management, purchasing from suppliers, accounting and finance, insurance, payment processing, packaging, and delivery.

12 E-MARKETPLACE COMPONENTS AND PARTICIPANTS, cont…  intermediaries A third party that operates between sellers and buyers. most of these online intermediaries operate as computerized systems. their role:  Create and manage the online markets  Help match buyers and sellers  Provide some infrastructure services  Help customers and/or sellers to institute and complete transactions  Support the vast number of transactions that exist in providing services Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11

13 E-MARKETPLACE COMPONENTS AND PARTICIPANTS, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 12  Other business partners In addition to intermediaries, several types of partners, such as shippers, use the Internet to collaborate, mostly along the supply chain  Support services - certification - escrow services (to ensure security) - content providers

14 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13 Storefront (B2C e-marketplace) A single company’s Web site where products or services are sold. May belong to a manufacturer (Dell.com), a retailer(wishlist.com.au), individuals selling from home Companies that sell services ( insurance, hotel reservation system ) refer to their storefronts as portals

15 Electronic Storefronts Storefront Mechanisms necessary for conducting the sale: electronic catalogues search engines electronic cart (holding items until checkout) e-auction facilities payment gateway shipment court customer services (product and warranty info.) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14

16 Internet Malls e-mall (online mall) (B2C e-marketplace) An online shopping center where many online stores are located ( hawaii.com: an e-mall that aggregates Hawaiian products and stores ). Some malls does not provide shared services ( hawaii.com), other malls provide shared services ( choicemall.com ) Some malls are large click-and-mortar retailers; others are virtual retailers. Vendors use rich media (virtual reality VR) to attract users to shopping malls Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15

17 Types of Stores and Malls Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 16 TYPES OF STORES AND MALLS  General stores/malls large marketspaces that sell all types of products (amazon.com, choicemall.com) major public portals (store.yahoo.com, aol.com) major department and discount stores  Specialized stores/malls sell only one or a few types of products (1-800- Flowers.com, cattoys.com, fashionmall.com/beautyjungle)

18 Types of Stores and Malls  Regional versus global stores  E-grocers or sellers of heavy furniture, serve customers who live nearby (parknshop.com)  Some local stores will sell to customers in other countries if the customer will pay the shipping, insurance (hothothoy.com)  Pure-play online organizations versus click-and-mortar stores  Pure online (virtual or pure-play) organizations (Blue Nile, buy.com); no physical stores  Physical (click-and-mortar) stores that sell online (Wal- Mart.com) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 17

19 Types of E-Marketplaces  In the physical world: A mall is a collection of independent stores (shopping centers) where stores are isolated from each other and prices are generally fixed marketplaces, generally located outdoors, are places where many vendors compete and shoppers look for bargains and are expected to negotiate prices  On the Web: Individual customers are able to negotiate prices in storefronts or malls E-marketplace implies B2B Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 18

20 Types of E-Marketplaces Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 19 TYPES OF E-MARKETPLACES (B2B)  private e-marketplaces Online markets owned and operated by a single company; may be either sell-side and/or buy-side e- marketplaces.  sell-side e-marketplace A private e-marketplace in which one company sells either standard and/or customized products to qualified companies (Cisco; one-to-many). Similar to B2C storefront.  buy-side e-marketplace A private e-marketplace in which one company makes purchases from invited suppliers (Raffles Hotel; many-to-one).

21 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20  public e-marketplaces (NTE.NET) B2B marketplaces, usually owned and/or managed by an independent third party (not a seller or a buyer), that include many sellers and many buyers; also known as exchanges (stock exchange).  May be owned by a group of buying or selling companies called a Consortium, and they serve many sellers and many buyers.  Open to the public and are regulated by the government or the exchange’s owners

22 Information Portals Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 information portal A single point of access through a Web browser to business information inside and/or outside an organization. A mechanism used in e-marketplaces, e-stores, intrabusiness, e-learning……. It attempts to address info. Overload by enabling people to search and access relevant info. From disparate IT systems and the Internet

23 Types of Information Portals Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 Types of Portals  Commercial (public) portals (yahoo.com, aol.com, msn.com) offer content for diverse communities. Can be customized by the user, but they are still intended for broad audiences and provide routine content ( some in real time: stock ticker).  Corporate (enterprise info.)portals provide organized access to rich content within relatively narrow corporate and partners’ communities

24 Types of Information Portals  Publishing portals (techweb.com, zdnet.com) intended for communities with specific interests. They involve relatively little customization of content, but provide extensive online search features and some interactive capabilities.  Personal portals target specific filtered info. For individuals. Offer relatively narrow content and are very personalized, having an audience of one.  mobile portal (my-imode.com) A portal accessible via a mobile device versus portals which are PC based. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 23

25 Types of Information Portals  voice portals (AOL byPhone)  A portal accessed by a standard telephone or cell phone.  Web sites with audio interfaces  AOLbyPhone allows users to retrieve e-mail, news, and other content from AOL via telephone; uses speech recognition and text-to-speech technologies  Popular for 1-800 numbers that provide self-service 6to customers with info. Available in Internet databases (flight status at delta.com)  Knowledge portals Enable access to knowledge by knowledge workers and facilitate collaboration Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 24

26 Participants, Transactions, Intermediation, and Processes in EC Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 25 SELLERS, BUYERS, AND TRANSACTIONS a major EC activity is electronic trading: a seller (retailer, wholesaler, manufacturer) sells to customers. The seller buys from suppliers (raw material, finished goods. Refer to Exhibit 2.2 Internally, processes in different functional areas are supported by enterprise software, B2B, or government agencies (B2G) E-procurement: companies buy materials, products… from suppliers (B2B), distributers (B2B), or the government (G2B). Intermediaries may be involved in the process

27 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 26 Participants, Transactions, Intermediation, and Processes in EC

28 T THE ROLES AND VALUE OF INTERMEDIARIES IN E- MARKETPLACES o Two types of online intermediaries: Brokers & Infomediaries Brokers companies that facilitate transactions between buyers and sellers & provide value-added activities to buyers and sellers Types of brokers: 1. Buy/sell fulfillment: helps consumers place buy and sell orders (E*TRADE) 2. Virtual mall: helps consumers buy from a variety of stores (Yahoo!Stores) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 27

29 Types of Brokers, Cont……. 3. Metamediary: offers customers access to a variety of stores and provides them with transaction services, like financial services (AmazonzShops) 4. Search agent: helps consumers compare different stores (Shopping.com) 5. Shopping facilitator: helps consumers use online shops by providing currency conversion, language translation, payment features, delivery solutions, and user-customized interface (MyOrbital.com Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 28

30 T THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES Infomediaries Electronic intermediaries that provide and/or control info. Flow in cyberspace, often aggregating info. And selling it to others. Types of infomediaries: 1. those who offer consumers a place to gather info. About specific products and companies before they make purchasing decisions. A third-party provider of unbiased info.(Autobytel.com) 2. those who provide vendors with consumer info. That will help the vendor develop and market products. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 29

31 T THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES e-distributor (B2B e-distributer) An e-commerce intermediary that connects manufacturers with business buyers (retailers ot resellers in the computer industry) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 30

32 Participants, Transactions, Intermediation, and Processes in EC Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 31 Intermediaries provide two types of services: 1. provide relevant info. About demand, supply, prices, and requirements; therefore, help match sellers and buyers (may be eliminated) 2. offer value-added services such as transfer of products, escrow, payment arrangements, consulting, or assisting in finding a business partner disintermediation Elimination of intermediaries between sellers and buyers (travel agents). reintermediation Establishment of new intermediary roles for traditional intermediaries that have been disintermediated.

33 The Purchasing Process Customers buy goods online in two modes: purchasing from catalogs at fixed prices; prices may be negotiated or discounted dynamic pricing; refers to nonfixed prices (in auctions or stock markets) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 32

34 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 33 Participants, Transactions, Intermediation, and Processes in EC

35 Electronic Catalogs and Other Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 34 electronic catalogs The presentation of product information in an electronic form; the backbone of most e-selling sites. Consist of product database, directory and search capabilities Merchants: advertise and promote products and services Customers: locate information on products and services

36 Electronic Catalogs and Other Market Mechanisms Electronic catalogs can be classified on three dimensions: 1. The dynamics of the information presentation: can be in real time (stock exchange tickers) 2. The degree of customization: content, pricing, and display are tailored to the characteristics of specific customers (show the same item to different customers at different prices 3. Integration with business processes: like order taking and fulfillment; e-payment systems; intranet workflow software; inventory and accounting systems; suppliers’ or customers extranets; and paper catalogs (item availability and possible delivery dates) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 35

37 Electronic Catalogs and Other Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 36  Online Catalogs Versus Paper Catalogs Advantages: easy to update; ability to be integrated with the purchasing process; coverage of a wide spectrum of products; interactivity; customization; strong search capabilities  Microsoft’s Commerce Server 2006: a.NET tool for creating Web sites that include search capabilities, ability to feature large numbers of products, enhanced viewing capabilities

38 Electronic Catalogs and Other Market Mechanisms  Customized Catalogs catalogs that are assembled specifically for a buying company or tailored to loyal individual shoppers or to a segment of shoppers Approcahes to create customized catalogs  let the customers identify the products of interest to them from the total catalog  let the system automatically identify customer characteristics based on the customer’s transaction records (data-mining technology) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 37

39 Electronic Catalogs and Other Market Mechanisms  Implementing E-Catalogs implementing e-catalogs on a small scale is simple, but transforming a large-scale catalog to an e-catalog needs a customer support system. Large online catalogs need a search engine. Advanced search engines use keywords for conducting searches Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 38

40 Electronic Catalogs and Other Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 39 search engine A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results. Search engines deliver answers economically and efficiently by matching questions with FAQ templates, which respond with “canned: answers either popular search engines (Google, Alta Vista) or desktop search engines (companies have their own search engine on their portals)

41 Electronic Catalogs and Other Market Mechanisms o electronic shopping cart  An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop.  shopping carts for B2C are simple, but for B2B it may be more complex  shopping-cart software is sold or provided for free as an independent component ( easycart.com ). It is also embedded in merchants’ servers ( smallbusiness.yahoo.com/merchant ) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 40

42 Electronic Catalogs and Other Market Mechanisms o Product Configuration systems (Dell)  support the acquisition of the customer requirements while automating the order-taking process  Mass customization: allows manufacturers to produce customized products efficiently in large quantities  use AI tools because they need to support the interaction with the customers and understand their needs o ONLINE CLASSIFIED ADS used to present products and services; can be interactive and include much more info. Than newspaper ads (Craigslist. Com) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 41

43 CRAIGLIST: The Ultimate Online Classified Site Finding a job, housing, goods, services, and social activities in over 300 cities in more than 50 countries free of charge Features 80 topical discussion forums Over 4 billion page views per month; 7 th most visited site in the English language It will replace the traditional newspaper-based classified as industry; ad rates may become lower; fewer ads will be printed Charges for “help wanted” ads and apartment broker listings Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 42

44 CRAIGLIST: The Ultimate Online Classified Site Reasons for Craiglist popularity  It gives people a voice  It promotes a sense of trust  Its consistency and down-to-earth values  Its simplicity  Its social networking capabilities $27 billion annual profits for offline classifieds ; online classifieds could quadruple that amount Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 43

45 Auctions as EC Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 44 Auctions (used in B2C, B2B, C2C, G2B, G2C) A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids. Traditionally, Auctions dealt with products & services for which conventional marketing channels are ineffective or inefficient & they ensure prudent execution of sales(disposal of items that need to be liquidated, rare coins and other collectibles)

46 Auctions as EC Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 45 TRADITIONAL AUCTIONS VERSUS E-AUCTIONS  Limitations of Traditional Offline Auctions  last only a few minutes, or even seconds, for each item sold  bidders might not get what they really want, or they might pay too much for the item  bidders do not have much time to examine the goods  bidders have difficulty learning about the locations and times of the auctions  It might be difficult for sellers to move goods to an auction site  bidders must usually be physically present at auctions; many potential bidders are excluded  Commissions are fairly high

47 Auctions as EC Market Mechanisms  electronic auction (e-auction) Auctions conducted online. Host sites on the Internet serve as brokers, offering services for sellers to post their goods for sale and allowing buyers to bid on those items like:  Consumer products  electronic parts  Artwork  Vacation packages  Airline tickets  Collectibles  Excess supplies and inventories are auctioned off by B2B marketers  Bidding for online procurements (Raffles Hotel) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 46

48 Auctions as EC Market Mechanisms DYNAMIC PRICING AND TYPES OF AUCTIONS  dynamic pricing Prices that change based on supply and demand relationships at any given time. o Catalog prices are fixed. Prices in department stores, supermarkets, and many electronic storefronts are also fixed Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 47

49 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 48 Auctions as EC Market Mechanisms

50 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 49  One Buyer, One Seller (popular in B2B) One can use negotiation, bargaining, or bartering. The resulting price will be determined by each party’s bargaining power, supply and demand in the item’s market, and possibly business environment factors.  One Seller, Many Potential Buyers  forward auction  An auction in which a seller entertains bids from buyers. Bidders increase price sequentially.  Types of Forward Auction (can be used for liquidation or for market efficiency): 1. English and Yankee auctions: bidding prices increase as the auction progresses 1. Dutch and Free-Fall auctions: bidding prices decline as the auction progresses

51 Auctions as EC Market Mechanisms  One Buyer, Many Potential Sellers  reverse auction (bidding or tendering system) Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism. individuals (in C2C auctions) sometimes conduct reverse auctions. May create a RFB for individuals to fill.  “name-your-own-price” model (Priceline.com) Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 50

52 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 51 Auctions as EC Market Mechanisms

53 Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 52  Many Sellers, Many Buyers  double auction (e.g. stocks & commodities) Auctions in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides. buyers and sellers can be individuals or businesses  vertical auction Auction that takes place between sellers and buyers in one industry or for one commodity (flowers, cars, or cattle). Activity goes up and down the supply chain in a single industry, rather than horizontally between members of supply chains in different industries Useful in B2B Policeauctions.com specializes in selling unclaimed or seized properties  auction vortal Another name for vertical auction portal.

54 Auctions as EC Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 53 BENEFITS, LIMITATIONS, AND IMPACTS OF E- AUCTIONS  Benefits of E-Auctions Benefits to sellers 1. Increased revenues (broadening bidder base & shortening cycle time) 1. Opportunity to bargain instead of selling at a fixed price 2. Optimal price setting determined by the market 3. Sellers gain more customer dollars by offering items directly 4. Can liquidate large quantities quickly 5. Improved customer relationship and loyalty ( in specialized B2B auction sites and e-exchanges

55 Auctions as EC Market Mechanisms  Benefits of E-Auctions Benefits to buyers 1. Opportunities to find unique items and collectibles 2. Entertaining and exciting 3. Buyers can bid from anywhere, even with a cell phone 4. Buyers can remain anonymous with the help of a third party 5. Possibility of finding bargains (for individuals & organizations) 6. Price transparency allows buyers to be careful in making offers Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 54

56 Auctions as EC Market Mechanisms  Benefits of E-Auctions Benefits to E-Autioneers  Higher repeat purchases; auction sites, such as eBay, garner high higher repeat-purchase rates than the top B2C sites  High “stickiness” to the Web site. Stickier sites generate more ad revenue for the e-auctioneer  Easy expansion of the auction business  Limitations of E-Auctions  Minimal security  Possibility of fraud  Limited participation Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 55

57 Auctions as EC Market Mechanisms Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 56  Impacts of Auctions  Auctions as a coordination mechanism  Auctions as a social mechanism to determine a price  Auctions as a highly visible distribution mechanism  Conducting Auctions  Auctions are conducted usually on specialized sites (eBay)  Auctions as an EC component They can stand alone or they can be combined with other e- commerce activities (group purchasing with reverse auctions)

58 Bartering and Negotiating Online Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 57 ONLINE BARTERING  bartering The exchange of goods or services. Primarily done between organizations. Using classified ads does by individuals and organizations does not always guarantee finding what they want. Using Intermediaries can be expensive and slow.  e-bartering (electronic bartering) Bartering conducted online, usually in a bartering exchange. Can improve the matching process by attracting more partners to the barter. Matching also can be done faster. Items bartered online: office space, storage, and factory space idle facilities and labor products banner ads

59 Bartering and Negotiating Online  bartering exchange (barteryourservices.com) A marketplace in which an intermediary arranges barter transactions.  The company tells the bartering exchange what it wants to offer  The exchange assesses the value of the company’s products or services & offers it certain “points” or “barteringdollars”.  The company can use the “points” to buy things it needs from a participating member in the exchange Bartering sites must be financially secure  Consumer-to-Consumer Barter Exchanges More individuals use the bartering method (Swap Village, Swap things, Trade Away, Lala.com) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 58

60 Bartering and Negotiating Online ONLINE NEGOTIATING dynamic prices also can be determined by negotiations; common for Expensive ( real estate, automobile purchases, contract work ) Specialized products When large quantities are purchased Personalized & bundled digital products It differs from auctions in that it also deals with nonpricing terms (payment method & credit) Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 59

61 Web 2.0 Mechanisms and Tools Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 60 e-marketplaces, shopping carts, e-catalogs, and auctions are major Web 1.0 mechanisms Mechanisms used for user-generated content, collaboration, file sharing (Web 2.0), INCLUDE: Weblogging (blogging); Technology for personal publishing on the Internet. blog A personal Web site on which the owner expresses his feelings or opinions. It is open to the public to read and to interact with; often dedicated to specific topics or issues.

62 Web 2.0 Mechanisms and Tools Weblogging, cont… Types of blogs: professional blogs: focus on professions, job aspects, and career building personal blogs: contain thoughts, poems, experiences, and other personal matters (online diary) topical blogs: focus on a certain topic or niche, discussing specific aspects of the chosen subject business blogs: discussions about business and/or the stock market science blogs, culture blogs, educational blogs, political blogs, and photo blogs Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 61

63 Web 2.0 Mechanisms and Tools Weblogging, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 62  Creating Blogs Bloggers (people who create and maintain blogs) are given a fresh space on their Web site to write in each day. They can easily edit and add entries, broadcasting whatever they want by simply clicking the send key. Examples of blogging software: Blogger.com, pitas.com: user friendly programs to create blogs WordPress or Movable Type: helps bloggers update there blogs Free blog generators (e.g. Blogger): lets users host their content on Google servers without having to install any software or obtain a domain

64 Web 2.0 Mechanisms and Tools Weblogging, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 63  Creating Blogs Trackbacks, blogrolls, pings, Feedblitz (an e-mail list management solution), and RSS feeds are features that distinguish a blog from a regular Web page; bloggers also use a special terminology Trackbacks: methods for Web authors to request notification when sombody links to one of their documents. This enable authors to keep track of who is linking, and so referring, to their articles Blogrolls: a list of other blogs that a blogger might recommend by providing links to them

65 Web 2.0 Mechanisms and Tools Weblogging, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 64  Creating Blogs Trackbacks, blogrolls, pings, Feedblitz (an e-mail list management solution), and RSS feeds are features that distinguish a blog from a regular Web page; bloggers also use a special terminology Pings: is an XML –based push mechanism by which a weblog notifies a server that its content has been updated Feedblitz : is an e-mail list management solution

66 Web 2.0 Mechanisms and Tools Weblogging, cont… Principles for building effective blogs:  focus on a narrow niche, one whose audience has a tendency for high margin products  set up the blog so that each post gets its own permanent URL  Think of a blog as a database, not a newspaper-like collection of dispatches  blog frequently and create at least half a dozen posts every weekday  use striking images that liven up the pages and attract readers  enable comments and interact with readers  make friends with other bloggers, online and off Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 65

67 Web 2.0 Mechanisms and Tools Weblogging, cont…  Commercial Uses of Blogs (business blogs)  External blogs to communicate with customers and other third parties  internal blogs to enhance employees’ communication with one another  CEOs are using blogs to build trust-based relationships, polish corporate reputations, and promote social causes  Blogging provides the ability to supplement corporate public relations, press releases, and brochures  A skillfully written, content-rich business blog can help organizations position executives as industry thought leaders, build brand awareness, and facilitate two-way communications Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 66

68 Web 2.0 Mechanisms and Tools Weblogging, cont…  Potential Risks of Blogs Risk of revealing trade secrets in corporate blogs Risk of making statements that could be construed as libel or defamation  Three Es of e-risk management ( to minimize blog-related risks) 1. Establish comprehensive, written rules and policies 2. Educate employees about blog-related risks, rules, and regulations 3. Enforce blog policy with disciplinary action and technology Use search engines to monitor the blogosphere and so to keep track of what is being written about your company  Bloggers and Politics Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 67

69 Web 2.0 Mechanisms and Tools Weblogging, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 68 wikilog (wikiblog or wiki) (extension of a blog) A blog that allows everyone to participate as a peer; anyone can add, delete, or change content. creating a wikilog is a collaborative process

70 Web 2.0 Mechanisms and Tools Weblogging, cont… RSS (Rich Site Summary)(Really Simple Syndication)  An XML format for syndicating and sharing Web content.  A web site that wants to allow other sites to publish some of its content creates an RSS document and registers it with an RSS publisher  Often used to publish frequently updated digital content (blogs, news stories, podcasts)  users can view it as a “What’s New” on a site Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 69

71 Web 2.0 Mechanisms and Tools Weblogging, cont… RSS benefits 1. Timeliness (users can automatically receive updates from their favorite Web sites when new content becomes available) 2. Efficiency (users can quickly scan over headlines & summaries) 3. Coverage (users receive updates from multiple Web sites into one location: their RSS or aggregator Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 70

72 Web 2.0 Mechanisms and Tools Weblogging, cont… Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 71 Podcast  A media file that is distributed (by subscription) over the Internet using syndication feeds for playback on mobile devices and personal computers. As with the term radio, it can mean both the content and the method of syndication  A podcast is a collection of audio files in MP3 format, represented by an RSS 2.0 news feed  A podcast distinguishes itself from other digital audio formats by its ability to download automatically using software capable of reading feed formats such as RSS

73 Web 2.0 Mechanisms and Tools Weblogging, cont… Mashup A Web site that combines content data from more than one source to create a new user experience. Example applications of mashups:  Pubwalk.com  Google Transit Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 72


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