IT: Chapter 9: E-commerce: Digital Markets, Digital Goods Flashcards
1
Q
E-commerce
A
refers to the use of the Internet and the Web to transact business
2
Q
Why E-Commerce is Different ABBREV
A
UGURIIPS
3
Q
Why E-Commerce is Different
A
Ubiquity Global Reach Universal Standards Richness Interactivity Information Density Personalization/Customization Social Technology
4
Q
Ubiquity
A
available just about anywhere, at all times
5
Q
Effect of ubiquity
A
- Marketspace
- Reduces transaction costs
- Enhanced customer convenience and reduced shopping costs
6
Q
Marketspace
A
a market place extended beyond traditional boundaries and removed from a temporal and geographic location
7
Q
transaction costs
A
costs of participating in a market
8
Q
Global Reach
A
the technology reaches across national boundaries, around Earth, far more conveniently and cost effectively than traditional commerce
9
Q
Effect of Global Reach
A
- Potential market size almost equal to size of world population
- commerce enable across cultural and national boundaries
- marketspace includes billions
10
Q
Universal standards
A
one set of technology standards and internet standards that are shared by all nations around the world and enable any computer to link with any other computer regardless of the technology platform each is using
11
Q
Effect of Universal Standards
A
- disparate computers communicate with one another
- lower market entry costs
- lower consumers’ search costs
12
Q
Entry costs
A
the costs merchants must pay simply to bring their goods to market
13
Q
Search costs
A
the effort required to find suitable products
14
Q
Information Richness
A
refers to the complexity and content of a message supporting video, audio, and text messages
15
Q
Effect of Information Richness
A
- Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people
- video audio and text marketing messages can be integrated into single marketing message and consumer experience
16
Q
Interactive
A
allow for two-way communication between merchant and consumer
17
Q
Effect of Interactivity
A
- consumers engage in dialog that dynamically adjusts experience to the individual
- consumer becomes co-participant in process of delivering goods to market
18
Q
Information density
A
the total amount and quality of information available to all market participants, consumers, and merchants alike
19
Q
Effect of Information Density
A
- Greater price transparency
- Greater cost transparency
- Enables merchants to engage in price discrimination
20
Q
Price transparency
A
the ease with which consumers can find out the variety of prices in a market
21
Q
cost transparency
A
the ability of consumers to discover the actual costs merchants pay for products
22
Q
price discrimination
A
selling the same goods, or nearly the same goods, to different targeted groups at different prices
23
Q
Personalization
A
merchants can target their marketing messages to specific individuals by adjusting the message to a person’s click stream behavior, name, interests, and past purchases
24
Q
customization
A
changing the delivered product or service based on a user’s preferences or prior behaviors
25
Effect of Personalization/Customization
- personalized messages can be sent to individuals as well as groups
- products and services can be customized to individual preferences
26
Social technology
~ More social by allowing users to create and share with their personal friends content in the form of text, videos, music, or photos
27
Effects of Social Technology
- Empower users to create and distribute content on a large scale and permit users to program their own content consumption
- Many-to-many model
28
Digital Market effects ABBREV
DIDSS
29
Digital Market Effects
- Decreased information asymmetry, Search costs, transaction costs, menu costs
- Increased dynamic pricing, price discrimination, market segmentation, disintermediation
- delayed Gratification
- Switching costs
- stronger network affects
30
Digital Market decreased ABBREV
ISTM
31
Digital Market decreased
- Information Asymmetry
- Search Costs
- Transaction costs
- Menu Costs
32
Information asymmetry
when one party in a transaction has more information that is important for the other transaction than the other party
33
Menu costs
merchant's cost of changing price
34
Digital Market increased ABBREV
DPMI
35
Digital Market Increased
- Dynamic Pricing
- Price Discrimination
- Market Segmentation
- Disintermediation
36
Dynamic pricing
the price of a product varies depending on the demand characteristics of the customer or the supply situation of the seller
37
Disintermediation
the removal of organizations or business process layers responsible for intermediary steps in a value chain
38
Digital Goods
goods that can be delivered over a digital network
39
Cost of producing first unit of digital goods
almost entire cost of product
40
marginal cost of producing second unit of digital goods
about zero
41
Types of E-Commerce ABBREV
BBCM
42
Types of E-Commerce
- Business to consumer (B2C)
- Business to business (B2B)
- Consumer-to-consumer (C2C)
- Mobile commerce or M-commerce
43
Business-to-consumer (B2C)
involves retailing products and services to individual shoppers
44
B2C example
BarnesandNoble.com
45
Business-to-business (B2B)
sales of goods and services among businesses
46
B2B example
Ex. ChemConnect
47
Consumer-to-Consumer (C2C)
consumer selling directly to consumers
48
C2C example
Ebay
49
Mobile commerce or M-Commerce
the use of handheld wireless device for purchasing goods and services from any location
50
E-Commerce Business Models ABBREV
PECTMSC
51
E-Commerce Business Models
- Portal
- E-tailer
- Content Provider
- Transaction broker
- Market creator
- Service provider
- Community provider
52
Portal
provides initial point of entry to the Web along with specialized content and other services
53
Portal example
yahoo, bing, google
54
E-tailer
online retail stores that sells physical products directly to consumers or individual businesses
55
E-tailer example
amazon, redenvelope.com
56
Content Provider
creates revenue by providing digital content, such as news, music, photos, or video, over the Web.
57
Content Provider example
iTunes.com
58
Content
include all forms of intellectual property
59
Intellectual property
refers to all forms of human expression that can be put into a tangible medium such as text, CDs, DVDs,
60
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
61
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
62
Transaction broker
Saves users money and time by processing online sales transactions and generating a fee each time a transaction occurs
63
Transaction broker example
Expedia, Etrade.com
64
Market Creator
build a digital environment in which buyers and sellers can meet, display products, search for products, and establish price for those products
65
Market Creator Example
eBay, Priceline.com
66
Service Provider
provides Web 2.0 applications such as photo sharing, video sharing, and user-generated content as services
67
Service Provider Example
Photobucket.com
68
Community Provider
provides an online meeting place where people with similar interests can communicate and find useful information
69
Community Provider Example
Facebook, Twitter
70
Revenue Model
describes how the firm will earn revenue, generate profits, and produce a superior return on investment
71
E-Commerce Revenue Models ABBREV
ASSFTA
72
E-Commerce Revenue Models
- Advertising
- Sales
- Subscription
- Fee/Freemium
- Transaction Fee
- Affiliate
73
Advertising revenue model
a Web site generates revenue by attracting a large audience of visitors who can then be exposed to advertisements
74
Advertising revenue model Example
Yahoo, Google
75
Sales Revenue Model
companies derive revenue by selling goods, information, or services to customers
76
Sales Revenue Model Example
Amazon, Gap.com
77
Micropayment systems
provide content providers with a cost-effective method for processing high volumes of very small monetary transactions
78
Subscription revenue Model
a Web site offering content or services charges a subscription fee for access to some or all of its offerings on ongoing business
79
Subscription revenue Model Example
netflix
80
Fee/Freemium revenue Model
firms offer basic services or content for free while charging a premium for advanced or special features
81
Fee/Freemium revenue Model Example
Pandora
82
Transaction fee revenue model
company receives a fee for enabling or executing a transaction
83
Transaction fee revenue model example
eBay
84
Affiliate revenue model
“affiliate Web Sites” send visitors to other Web sites in return for a referral fee or percentage of the revenue from any resulting sales
85
Affiliate revenue model example
Yelp
86
Social Shopping sites
swap shopping ideas with friends
87
crowdsourcing
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
88
Prediction markets
established as peer-to-peer betting markets where participants make bets on specific outcomes of designs for new products or political elections
89
Long tail marketing
ability to reach large audience inexpensively
90
Behavioral targeting
tracking the clickstreams (history of clicking behavior) of individuals on thousands of Web sites for the purpose of understanding their interests and intentions
91
Internet advertising formats
include search engine marketing, display ads, rich media, and e-mail
92
Social graph
a mapping of all significant online social relationships
93
Four Features of social-ecommerce driving its growth ABBREV
SCNS
94
Four Features of social-ecommerce driving its growth ABBREV
- Social Sign-on
- Collaborative Shopping
- Network notification
- Social Search
95
Social sign-on
Web sites allow users to sign into their sites through their social network pages on Facebook or another social site
96
Collaborative shopping
creating an environment where consumers can share their shopping experiences with one another by viewing products, chatting, or texting
97
Network notification
creating an environment where consumers can share their approval (or disapproval) of products, services, or content, or share their geo-location, perhaps a restaurant or club, with friends.
98
Social Search
enabling an environment where consumers can ask their friends for advice on purchases of products, services, and content
99
Social Network Marketing
seeks leverage individuals influence over others in social graph
100
Target of Social Network Marketing
a social network of people sharing interests and advice
101
Electronic data interchange (EDI
enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bill of landing, shipment schedules, or purchase orders
102
Major industries have EDI standards that
define structure and information fields of electronic documents for that industry
103
Procurement
not only involves purchasing goods and materials but also sourcing, negotiating with suppliers, paying for goods, and making delivery arrangements.
104
Through procurement, businesses can
now use the Internet to locate most low-cost supplier, search online catalogs of supplier products, negotiate with suppliers, place orders, etc.
105
Private industrial network aka
private exchange
106
Private industrial network (private exchange)
consist of a large firm using a secure Web site to link to its suppliers and other key business partners
107
Private industrial network (private exchange) owned by
buyer
108
Private industrial network (private exchange) permits sharing of
- Product design and development
- Marketing
- Production scheduling and inventory management
- Unstructured communication (graphics and e-mail)
109
New marketplaces aka
e-hubs
110
New Marketplace (e-hubs)
provide a single, digital marketplace based on Internet technology for many different buyers and sellers
111
New Marketplace (e-hubs) owned by
industry or owned by independent intermediary
112
New Marketplace (e-hubs) generate revenue from
transaction fees, and other services
113
New Marketplace (e-hubs) uses prices established through
negotiation, auction, RFQs, or fixed prices
114
New Marketplace (e-hubs) may sell
Direct or indirect goods
115
Direct goods
goods used in a production processes
116
Direct goods example
steel for auto body production
117
Indirect goods
all other goods not directly involved in the production processes
118
indirect goods example
office supplies
119
New Marketplace (e-hubs) may be
vertical or horizontal marketplaces
120
Vertical marketplace
serves specific industries
121
Horizontal marketplace
goods and services that can be found in many different industries
122
Exchanges
independently owned third-party Net marketplaces
123
Exchanges connect
thousands of suppliers and buyers for spot purchasing
124
exchanges typically provide
vertical markets for direct goods for single industry
125
M-Commerce Services and Applications ABBREV
LBMG
126
M-Commerce Services and Applications
- Location-based services
- Banking and financial services
- Mobile advertising and retailing
- Games and entertainment
127
Location-based services
social media check ins
128
Banking and financial services
Banks and credit card companies let customers manage their accounts from their mobile devices
129
Mobile Advertising and retailing
ads for nearest retail, ads on apps and games
130
2 most important management challenges in building a successful e-commerce presence
1. Developing a clear understanding of your business objectives
2. Knowing how to choose the right technology to achieve those objectives
131
Business decisions drive
the technology, not the revers
132
Business objective
capabilities the site should have
133
Business objective example
execute a transaction payment
134
System functionality
technology needed to achieve objective
135
System functionality example
a shopping cart or other payment system
136
Information requirement
specific data and processes needed
137
Information requirement example
secure credit card clearing, multiple payment options
138
Alternatives in building the Web Site ABBREV
CMC
139
Alternatives in building the Web Site
- Completely in-house
- Mixed responsibility
- Completely outsourced
140
Co-location
firm purchases or leases a Web server (and has total control over its operation) but locates the server in a vendor’s physical facility
