Management Information Systems Chapter 10
Advertising Revenue Model
A Web site generates revenue by attracting a large audience of visitors who can then be exposed to advertisements
Subscription Revenue Model
A Web site offering content or services charges a subscription free for access to some or all of its offerings on an ongoing basis
Transaction Fee Revenue Model
A company receives a fee for enabling or executing a transaction
Social Graph
A mapping of all significant online social relationships
Marketspace
A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location
Podcasting
A method of publishing audio or video broadcasts via the Internet, allowing subscribing users to download audio or video files onto their personal computers or portable music players
Streaming
A publishing method for music and video files that flows a continuous stream of content to a user's device without being stored locally on the device
Indirect Goods
All other goods not directly involved in the production process, such as office supplies or products for maintenance and repair
Sharing Economy
Based on the idea of a market creator building a digital platform where supply meets demand
Market Creators
Build a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices
Customization
Changing the delivered product or service based on a user's preferences or prior behavior
E-tailers
Comes in all sizes, from giant Amazon to tiny local stores that have Web sites
Sales Revenue Model
Companies derive revenue by selling goods, information, or services to customers
Private Industrial Networks
Consist of a large firm using a secure Web site to link to its suppliers and other key business partners Aka Private Exchange
Revenue Model
Describes how the firm will earn revenue, generate profits, and produce a superior return on investment
Consumer-to-consumer (C2C)
Electronic commerce involves consumers selling directly to consumers
Business-to-consumer (B2C)
Electronic commerce involves retiling products and services to individual shoppers
Business-to-business (B2B)
Electronic commerce involves sales of goods and services among businesses
Electronic Data Interchange (EDI)
Enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bills of lading, shipment schedules, or purchase orders
Prediction Markets
Established as peer-to-peer betting markets where participants make bets on specific outcomes of, say, quarterly sales of a new product, designs for new products, or political elections
Information Asymmetry
Exists when one party in a transaction has more information that is important for the transaction than the other party
Crowdsourcing
Firms can be actively helped in solving some business problems through this method
Free/Freemium Revenue Model
Firms offer basic services or content for free, while charging a premium for advanced or special features
Portal
Gateways to the Web, and are often defined as those sites which users set as their home page
Digital Goods
Goods that can be delivered over a digital network
Direct Goods
Goods used in a production process, such as sheet still for auto body production
Location-Based Services
Include geosocial services, geo-advertising, and geo-information services
Exchanges
Independently owned third-party Net marketplaces that connect thousands of suppliers and buyers for spot purchasing
Personalization
Merchants can target their marketing messages to specific individuals by adjusting the message to a person's clickstream behavior, name, interests, and past purchases
Menu Costs
Merchants' costs of changing prices
Micropayment Systems
Provide content providers with a cost-effective method for processing high volumes to very small monetary transactions
Intellectual Property
Refers to all forms of human expression that can be put into a tangible medium such as text, CDs, or DVDs, or stored on any digital (or other) media, including the web
Cost Transparency
Refers to the ability of consumers than in the past
Richness
Refers to the complexity and content of a message
Price Transparency
Refers to the ease with which consumers can find out the variety of prices in a market
Price Discrimination
Selling the same goods, or nearly the same goods, to different targeted groups at different prices
Social Shopping
Sites like Pinterest, Caboodle, ThisNext, and Stylehive, you can swap shopping ideas with friends
Community Providers
Sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, videos, communicate with like-minded people; receive interest-related information; and even play out fantasies by adopting online personalities called avatars
"The Wisdom of Crowds"
Some argue that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts
Net Marketplaces
Sometimes called e-hubs, provide a single digital marketplace based on Internet technology for many different buyers and sellers
Behavioral Targeting
Techniques to increase the effectiveness of banners, rich media, and video ads
Market Entry Costs
The cost merchants must pay simply to bring their goods to market
Transaction Costs
The costs of participating in a market
Search Costs
The effort required to find suitable products
Dynamic Pricing
The price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller
Disintermediation
The removal of organizations or business process layers responsible for intermediary steps in a value chain
Information Density
The total amount and quality of information available to all market participants, consumers, and merchants alike
Geoinformation Services
This can tell you the price of a house you are looking at, or about special exhibits at a museum you are passing
Geoadvertising Services
This can tell you where to find the nearest Italian restaurant
Geosocial Service
This can tell you where your friends are meeting
Affiliate Revenue Model
Web sites send visitors to other Web sites in return for a referral fee or percentage of the revenue from any resulting sales