1. E-Commerce: Digital Markets, Digital Goods
Chapter 10
E-Commerce: Digital Markets, Digital Goods

2. Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
LEARNING OBJECTIVES
Describe the unique features of e-commerce, digital markets, and digital goods.
Analyze how Internet technology has changed value propositions and business models.
Describe the various types of e-commerce and how e-commerce has changed consumer retailing and business-to-business transactions.

3. Compare the principal payment systems for electronic commerce.
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
LEARNING OBJECTIVES (cont’d)
Evaluate the role of m-commerce in business and describe the most important m-commerce applications.
Compare the principal payment systems for electronic commerce.

4. Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Major League Baseball Hits a Home Run with Information Systems
Problem: Declining revenue from traditional sales channels, declining customer base, increasing costs.
Solutions: MLB Web sites and cell phone ticketing enable electronic ticketing and delivery of online information and games, which increase sales.
SAS customer analysis software and Web site tracking tools help identify good sales prospects.
Demonstrates IT’s role in reducing cost, opening new sales channels, and building community with customers.
Illustrates the emerging digital firm landscape where businesses can use tools to analyze critical data and leverage expertise in emerging technologies to offer services to other businesses.

5. E-commerce: the use of the Internet and the web to transact business.
Management Information Systems Chapter 10 E-Commerce: Digital Markets, Digital Goods
E-commerce: the use of the Internet and the web to transact business.
Unique Features of E-commerce:
Ubiquity: Internet is available everywhere, anytime.
Global reach: the technology reaches across national boundaries.
Universal standards: one set of technology standards.
Richness: video, audio and text messages are possible.
Interactivity: the technology works through interaction with the user.
Information density: the technology reduces information costs and raises quality.
Personalization/customization: the technology allows personalized messages to be delivered to individuals as well as groups.

6. Key concepts in E-commerce:
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
Key concepts in E-commerce:
Disintermediation: The elimination of organizations or business process layers responsible for certain intermediary steps in a value chain, reducing costs to the consumer

7. The Benefits of Disintermediation to the Consumer
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
The Benefits of Disintermediation to the Consumer
Figure 10-2

8. Internet Business Models
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Internet Business Models
Business Model:
Defines an enterprise
Describes how the enterprise delivers a product or service
Shows how the enterprise creates wealth

9. Internet Business Models
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Internet Business Models
Virtual storefront: Sells goods or services online (Amazon.com)
Online marketplace: Provides a trading platform for individuals and firms (eBay.com)

10. Internet Business Models (Continued)
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Internet Business Models (Continued)
Content provider: Creates revenue by providing content (WSJ.com, TheStreet.com)
Online service provider: Provides online services for individuals and businesses (Xdrive.com)
Virtual community: Provides an online community to focused groups (Friendster.com, iVillage.com)
Portal: Provides initial point of entry to Web, specialized content, services (Yahoo.com, MSN.com)

11. Types of Electronic Commerce
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Electronic Commerce
Types of Electronic Commerce
Business-to-customer (B2C): Retailing of products and services directly to individual customers (Wal-Mart.com)
Business-to-business (B2B): Sales of goods and services to other businesses (Grainger.com, Ariba.com)
Consumer-to-consumer (C2C): Individuals using the Web for private sales or exchange (eBay.com )

12. Interactive Marketing and Personalization
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Interactive Marketing and Personalization
Clickstream tracking tools:
Collect data on customer activities at Web sites and store them in a log

13. Web Site Visitor Tracking
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
Web Site Visitor Tracking
Figure 10-3

14. Create unique personalized Web pages for each customer
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
Web Personalization
Create unique personalized Web pages for each customer
Increased closeness to customer increases value to the customer, while reducing costs of interacting with the customer

15. Web Site Personalization
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods ce
ELECTRONIC COMMERCE
Web Site Personalization
Figure 10-4

16. Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Blogs: Personal Web page that contains a series of chronological entries by its author, and links to related Web pages.
Business-to-business (B2B) electronic commerce: New efficiencies and relationships
EDI
Procurement
Private industrial networks (private exchanges)
Net marketplaces
Exchanges

17. EDI is being replaced by more powerful Web-based alternatives.
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Business-to-Business Electronic Commerce: New Efficiencies and Relationships
Electronic Data Interchange (EDI): Enables the computer-to-computer exchange between two organizations of standard transactions. Currently 80% of B2B e-commerce uses this system.
EDI is being replaced by more powerful Web-based alternatives.

18. Electronic Data Interchange (EDI)
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
Electronic Commerce
Electronic Data Interchange (EDI)
Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and inventory requirements and payment data to suppliers.
Figure 10-5

19. Private Industrial Networks
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
Private Industrial Networks
The largest Web-based form of B2B commerce
Private B2B extranets that focus on continuous business process coordination between a small group of companies for collaboration and supply chain management. Wal-Mart uses its own private network to coordinate more than 15,000 suppliers to its stores.

20. A Private Industrial Network
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
A Private Industrial Network
Figure 10-6

21. Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
ELECTRONIC COMMERCE
Net marketplaces (e-hubs) provide a single marketplace for many different buyers and sellers.

22. A Net Marketplace Management Information Systems Figure 10-7
Chapter 10 E-Commerce: Digital Markets, Digital Goods
A Net Marketplace
Figure 10-7

23. Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
M-commerce: The use of the Internet for purchasing goods and services and also for transmitting messages using wireless mobile devices

24. M-Commerce Services and Applications
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
M-Commerce Services and Applications
Information-based services: Instant messaging, , searching for a movie or restaurant using a cell phone or handheld PDA
Transaction-based services: Purchasing stocks, concert tickets, music, or games; searching for the best price for an item using a cell phone and buying it in a physical store or on the Web

25. M-Commerce Services and Applications (Continued)
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
M-Commerce Services and Applications (Continued)
Personalized services: Services that anticipate what a customer wants based on that person’s location or data profile, such as updated airline flight information or beaming coupons for nearby restaurants

26. M-Commerce Challenges
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
M-Commerce Challenges
Slow data transfer speeds on second-generation cellular networks, resulting in higher costs to customer
Limited memory and power supplies

27. M-Commerce Challenges (Continued)
Management Information Systems
Chapter 10 E-Commerce: Digital Markets, Digital Goods
M-Commerce Challenges (Continued)
More Web sites need to be designed specifically for small wireless devices.
Keyboards and screens on cell phones are still tiny and awkward to use.

28. Electronic Commerce Payment Systems
Management Information Systems
Chapter 4
The Digital Firm: Electronic Business and Electronic Commerce
ELECTRONIC COMMERCE
Electronic Commerce Payment Systems
Digital wallets
Electronic storage of I.D. and digital cash.
Accumulated balance
Used for micro payments. Similar to monthly telephone bills.
Stored value
Used for micro payments. Pre-payment of funds, debited on use.
Smart Cards
I.D. and credit information stored on a chip attached to a card. Used in Europe.
Digital cash
Electronic currency that can be transferred over the Web.
Peer-to-Peer payment
Interpersonal transfer of funds such as PayPal.
Digital checking
Electronic checks with digital signatures, used most often in B2B commerce.
Electronic billing presentment
and payment
Used by consumers to pay bills online, provided by many banks.
Credit cards
The most common form of payment.