How digital economy affects markets and firms (CH 4) Flashcards
Types of Marketing information in the digital economy
- Price comparison sites
- Asymmetric information
- Viral marketing and social media
How is price comparison sites beneficial for information?
-Helps to increase quantity of knowledge consumers have about G/S
- Helps to reduce some of the asymmetry of information between consumers and suppliers
Define Asymmetric information
When a party to a transaction knows more than another party
Social media and viral marketing influence
Firms cause viewers of promotion to share it with friends. Creates a campaign for the firm which might end up going viral
Factors of the Supply Side of the digital economy
- Micromarketing
- Online E Retailing and Distribution
What is micromarketing?
E-commerce where advertising is focused on a small group of consumers
What is online E retailing and distribution?
Process of selling G/S online through digital channels like websites and apps.
Whats a disadvantage of Online E retailing and distribution?
Increases chances of skills shortages for employees due to relying on technology which would cause more expenses for firms to train staff
What is the main Factor of the demand side of the digital economy?
Satisfying consumers with the long tail and wider geographical market
Explain the Wider geographical market and the effect it has on consumers and firms
- Consumers get wider choice with online retailing
- Firms gain revenue by selling a wider range of products but fewer of each
- Low costs, allow stocking wider range
What impact has the digital economy had?
- Changes consumer access, consumption, price and choice
- Linked to decline of firms
Technological change impact
- Boosts efficiency and productivity
- Low production costs
- Improves quality of G/S and quantity
- Can destroy existing markets
- Creates opportunities for firms
- Development of new markets
- More sales
- Increased recognition
