Chapter 10: Quiz 11

menu-cost

(merchants' costs of changing prices), greater price discrimination, and the ability to change prices dynamically based on market conditions.

Three major types of E-Commerce

- Business-to-consumer (B2C) ▪ Example: Barnes and Noble.com- --Business-to-business (B2B) ▪Example: ChemConnect- Consumer-to-consumer (C2C) ▪Example: eBay

New Ways of B2B Buying and Selling: Net Marketplaces

- Single digital marketplace for many buyers and sellers - May focus on direct or indirect goods - May be vertical or horizontal marketplaces

Why E-Commerce is Different Personalization/customization

- Technology permits modification of messages, goods Merchants can target their marketing messages to specific individuals by adjusting the message to a per-son's clickstream behavior, name, interests, and past purchases. customization: changing the delivered product or service based on a user's preferences or prior behavior

E-commerce Business Models: Community Provider

Creates a digital online environment where people with similar interests can interact (e.g., Reddit, Patientslikeme.com)

Native adversiting

Placing ads in social network newsfeeds or within traditional editorial content such as a newspaper article

E-commerce Business Models Transaction Broker:

Saves users money and time by processing online sales transactions and generating a fee for each transaction (e.g., Orbitz.com, Honey)

long tail marketing

ability to reach a large audience inexpensively refers to the strategy of targeting a large number of niche markets with a product or service.

E-commerce business models: Portal

are gateways to the web and are often defined as those sites that users set as their home page. "Supersite" that provides comprehensive entry point forhuge array of resources and services on the Internet (E.g., Yahoo!, MSN.com)

Why E-commerce is different Interactivity

meaning they allow for two-way communication between merchant and consumer and peer-to-peer communication among friends. Television, for instance, cannot ask viewers any questions or enter conversations with them, and it can-not request customer information to be entered on a form.

dynamic pricing

the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller.

New Ways of B2B Buying and Selling: Exchanges

- Independently owned third-party Net marketplaces for spot purchasing Many exchanges provide vertical markets for a single industry, such as food, electronics, or in-dustrial equipment, and they primarily deal with direct inputs

E-commerce today

E-commerce: Use of the Internet and Web to transact business Began in 1995 and grew exponentially; still stable even in a recession Companies that survived the dot-com bubble now thrive The new e-commerce: social, mobile, local Move from desktop to smartphone

ubiquity

available just about everywhere, at all times It makes it possible to shop from your desktop, at home, at work, or even from your car, using smart-phones. transactions are reduced through shopping online

Social E-Commerce

• Social e-commerce based on digital social graph • Features of social e-commerce driving its growth - Newsfeed - Timelines - Social sign-on -Collaborative shopping - Network notification - Social search (recommendations) • Social media - Fastest growing media for branding and marketing

Programmatic Ad Buying

Real-time bidding on targeted ads

New Ways of B2B Buying and Selling: Private industrial Networks

- Private exchanges - Large firm using a secure website to link to suppliers and partners

Why E-Commerce is Different Social technology

- Promotes user content generation and social networking Internet and e-commerce technologies have evolved to be much more social by allowing users to create and share with their friends (and a larger worldwide community) content in the form of text, videos, music, or photos. By using these forms of communication, users can create new social networks and strengthen existing ones.

Social Network Marketing

- Seeks to leverage individuals' influence over others - Targeting a social network of people sharing interests and advice - Facebook's "Like" button - Social networks have huge audiences • Social shopping sites • Wisdom of crowds (large number of people can make better decisions than 1) • Crowdsourcing (asking producers/customers for help)

Global Reach

E-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce.

Digital Goods

Goods that can be delivered over a digital network Cost of producing first unit is almost entire cost of product Costs of delivery over the Internet very low Marketing costs remain the same; pricing highly variable Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.)

Key Concepts in E-Commerce -Digital Markets and Digital Goods in a Global Marketplace

Internet and digital markets have changed the way companies conduct business Information asymmetry reduced Menu costs search and transaction costs reduced Dynamic pricing enabled Switching costs Delayed gratification Disintermediation

e-commerce can be categorized by Platform

Mobile commerce (m-commerce) All three types of e-commerce transactions can take place using m-commerce technology,

universal standards

One set of technology standards: Internet standards All nations around the world share them and enable any computer to link with any other computer regardless of the technology platform each is using.

E-commerce Business Models: Service Provider

Photo sharing and online sites for data backup and storage all use a service provider business model. (google drive) Provides Web 2.0 applications such as photo sharing and interactive maps, and services such as data storage (e.g., YouTube.com)

E-commerce Business Models: Market creator

Provides a digital environment where buyers and sellers can meet, search for products, display products, and establish prices for those products (e.g., eBay.com, ChemConnect.com)

E-commerce business models: Content provider

Providing digital content, such as digital news, music, photos, or video, over the Web E.g, CNN.com, Netflix

E-commerce business models: E-tailer

Sells physical products directly to consumers or to individual businesses (online retail stores ) (e.g., Amazon.com, Wayfair.com)

richness

Supports video, audio, and text messages. refers to the complexity and content of a message. Traditional markets, national sales forces, and small retail stores have great richness; they can provide personal, face-to-face service, using aural and visual cues when making a sale. ads that place videos rather than just a picture

Disintermediation

The removal of organizations or business process layers responsible for intermediary steps in a value chain is called when you cut out the middle man and are able to maximize profits and provide the best deals for your customer

Behavioral targeting

Tracking online behavior of individuals on thousands of Web sites and within apps

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. Transactions are automatically transmitted from one in-formation system to another through a network, eliminating the printing and handling of paper at one end and the inputting of data at the other - Allow them to link to a wider variety of firms than EDI allows - Enable sharing a wider range of information -firm systems and Supplier systems interact with one another

information asymmetry

exists when one party in a transaction has more information that is impor-tant for the transaction than the other party. That information helps determine their relative bargaining power.

Why E-Commerce is Different Information Density

the total amount and quality of information available to all market participants, consum-ers, and merchants alike. - Greater price and cost transparency: refers to the ease with which consumers can find out the variety of prices in a market; cost transparency: refers to the ability of consumers to discover the actual costs merchants pay for products. - Enables price discrimination: selling the same goods, or nearly the same goods, to different targeted groups at different prices.

E-Commerce Revenue Models

• Advertising - Yahoo• Sales - Amazon• Subscription - Wall Street Journal• Free/freemium - Spotify, pandora • Transaction fee - eTrade, bay, teacher pay teachers. • Affiliate - Amazon, MyPoints: Amazon is a marketplace

How Has E-Commerce Affected Business-To Business Transactions?

• Internet and networking helps automate procurement • Variety of Internet-enabled technologies used in B2B: - Electronic data interchange (EDI) - Private industrial networks (private exchanges) - Net marketplaces - Exchanges

Location-Based Services and Applications

• Used by 74 percent of smartphone owners • Based on GPS map services • Geosocial services - Where your friends are meeting • Geo advertising - What shops are nearby • Geo information services- Price of house you are passing