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E-commerce: Digital Markets, Digital Goods CHAPTER 10.

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Presentation on theme: "E-commerce: Digital Markets, Digital Goods CHAPTER 10."— Presentation transcript:

1 E-commerce: Digital Markets, Digital Goods CHAPTER 10

2 FEATURES OF E-COMMERCE

3  Marketspace (boundaries extended)  Transaction costs (costs to participate)  Market Entry Costs (cost to bring goods)  Search costs (costs to find products)  Richness (quality message)  Information Density (amount and quality of info)  Price transparency (find out prices in a market)  Cost transparency (discover costs merchants pay)  Price discrimination (different prices/different audiences)  Personalization (targeted marketing)  Customization (user’s preferences determine) RELATED TERMS

4  Digital Markets  Information asymmetry reduced by Internet  Flexible and efficient  Lower menu costs  Greater price discrimination  Ability to use dynamic pricing  Can either reduce or increase switching costs  Many opportunities to sell directly to customer and bypass intermediaries (like distributors or retail outlets)  Removing organization or business process layers responsible for intermediary steps in a value chain - Disintermediation  Digital Goods  Delivered over a digital network DIGITAL MARKETS AND DIGITAL GOODS

5  Business-to-consumer (B2C)  Business-to-business (B2B)  Consumer-to-consumer (C2C)  M-Commerce  B2B or B2C used in this model TYPES OF E-COMMERCE

6 INTERNET BUSINESS MODELS

7  Advertising Revenue Model (ads)  Most widely used model  Sales Revenue Model (selling to customers)  Micropayment systems (process monetary transactions)  Subscription Revenue Model (fee for subscription)  Free/Freemium Revenue Model (initial free; then pay for more)  Transaction Fee Revenue Model (every transaction=fee)  Affiliate Revenue Model (send to websites; fee for purchases) E-COMMERCE REVENUE MODELS

8  Social networking link people together who are interested in the same areas  Social shopping (viral marketing)  “Wisdom of Crowds” (more better than few)  Crowdsourcing (use customers for solving business problems)  Many ways to market and advertise online  Long tail marketing (find patterns/demand low)  Behavioral targeting (estimated 10 times more likely to produce a customer response than a randomly chosen ad)  Metrics – use to measure the effectiveness of different behaviors (abandoned shopping cart, page visits, tracked visitor, clickstream data metrics, stickiness, unique visitor, page exposures, site exposures, etc) NETWORKING AND MARKETING

9 E-BUSINESS MARKETING FORMATS

10  Growth rate 7%; by 2014 ($5.1 trillion)  Refers to the commercial transactions that occur among business firms  80% of online B2B e-commerce is still based on proprietary systems for Electronic Data Interchange (EDI)  Private industrial networks (or private exchange) – Extranet; link suppliers and other business partners  Share product design and development, marketing, production scheduling, inventory mgmt, and unstructured communication; Bring together small number of strategic business partner firms that collaborate to develop highly efficient supply chains  Net marketplace (e-hubs) – single digital marketplace based on Internet technology for many different buyers and sellers; establish prices online auctions, negotiations, or quote requests, or can used fixed prices  Sell direct goods or indirect goods  Exchanges – independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing B2B E-COMMERCE

11 Main areas of growth  Location-based services  Software application sales  Entertainment downloads  Mobile display advertising  E-book sales  Banking and financial services  Wireless advertising and retailing  Games and Entertainment MOBILE COMMERCE MISC

12  We will discuss more for SDLC project  Business objectives, system functionality, information requirements?  In-house or outsourced?  Build?  Host?  Budgets? E-COMMERCE WEBSITES


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