43 terms

CH 9 Info systems E-commerce: Digital Markets, Digital Goods

use of the Internet and Web to transact business; digitally enabled transactions
Business types
Brick-and-mortar business
Click-and-mortar business (click-and-brick)
Pure-play business (also called .com's, clicks only, or virtual
A marketplace extended beyond traditional boundaries and removed from temporal, geographic locations
Global reach
Commerce enabled across cultural and national boundaries seamlessly and without modification.
Universal standards
Lower market entry costs & consumers' search costs
the complexity and content of a message
Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people
e-commerce can provide two way communication between merchant and consumer
Information density
the total amount and quality of information available to all market participants
price transparency
the ease of finding out the cost of an item
cost transparency
the ability to find out the actual cost to the merchants
price discrimination
selling the same goods to different targeted groups at different prices
ability to target marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases
modification of a good or service based on a user's preference
Social technology
Allows users to create and share content in the form of text, videos, music, photos
Digital markets reduce
Information asymmetry
Search costs
Transaction costs
Menu costs
Digital markets enable
Price discrimination
Dynamic pricing
Business-to-Consumer (B2C)
- businesses sell their products or services directly to consumers over the Internet
E-shop (e-tailer, e-store, on-line store)
an on-line version of a retail store
consists of a number of e-shops; serves as a gateway (portal) through which a consumer can access multiple e-shops
Menu-driven pricing
: company sets the price that consumers pay
consumer specifies the price he/she is willing to pay, the company can accept or reject it
Consumer-to-Consumer (C2C)
Involves business transactions between users; offer goods and services to assist consumers interacting with each other over the Internet
Forward auction
Sellers use the site as a selling channel to many buyers and the highest bid wins
Business-to-Business (B2B)
Purchase orders, invoices, inventory status, shipping logistics, business contracts, and other operations
Electronic data interchange (EDI)
Computer-to-computer exchange of standard transactions such as invoices, purchase orders
businesses can now use Internet to locate most low-cost supplier, search online catalogs of supplier products, negotiate with suppliers, place orders, and so on
Private industrial networks (private exchanges)
Large firm using extranet to link to its suppliers, distributors, and other key business partners
Reverse auction
- vendors provide quotes (bid) to firm on price they will sell for - buyer selects the vendor with the lowest bid or quote
Net marketplaces (e-hubs) or 3rd party Exchanges
Industry-owned or owned by independent intermediary.
Single digital market for many buyers and sellers.
involves the use of Internet technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer and the various branches of government
use of wireless mobile devices for purchasing goods and services
E-commerce Revenue Models
Sales (sometimes called merchant)
Transaction fee (sometimes called brokerage)
E-commerce Business Models
Content provider
Transaction broker
Market creator
Service provider
Community provider
where firms offer incentives to customers for solving a problem or coming up with an idea
Wisdom of crowds
Based on concept that large numbers of people can make better decisions about topics and products than a single person.
Prediction markets:
peer-to-peer betting markets on specific outcomes (elections, sales figures, designs for new products) - customer places bets or votes for or against specific outcomes
Long tail marketing
ability to reach a large audience inexpensively.
Behavioral targeting
tracking online behavior of individuals on thousands of Web sites
Search Engine Optimization
Method for improving the volume or quality of traffic to a Web site; improving the ranking of a web site in search engine listings
using a variety of deceptive techniques in an attempt to manipulate search engine rankings
provide content providers with a cost-effective method for processing high volumes of very small monetary transactions
Bandwidth capacity problems
Security issues
Potential Liability Issues
Taxation rules
information asymmetrey
when one party in a transaction has more information importat to the transaction than the other party.