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IT 360T > IT: Chapter 9: E-commerce: Digital Markets, Digital Goods > Flashcards

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

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2
Q

Why E-Commerce is Different ABBREV

A

UGURIIPS

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3
Q

Why E-Commerce is Different

A 
Ubiquity
Global Reach
Universal Standards
Richness 
Interactivity
Information Density
Personalization/Customization
Social Technology
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4
Q

Ubiquity

A

available just about anywhere, at all times

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5
Q

Effect of ubiquity

A
  • Marketspace
  • Reduces transaction costs
  • Enhanced customer convenience and reduced shopping costs
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6
Q

Marketspace

A

a market place extended beyond traditional boundaries and removed from a temporal and geographic location

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7
Q

transaction costs

A

costs of participating in a market

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8
Q

Global Reach

A

the technology reaches across national boundaries, around Earth, far more conveniently and cost effectively than traditional commerce

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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
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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

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11
Q

Effect of Universal Standards

A
  • disparate computers communicate with one another
  • lower market entry costs
  • lower consumers’ search costs
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12
Q

Entry costs

A

the costs merchants must pay simply to bring their goods to market

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13
Q

Search costs

A

the effort required to find suitable products

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14
Q

Information Richness

A

refers to the complexity and content of a message supporting video, audio, and text messages

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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
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16
Q

Interactive

A

allow for two-way communication between merchant and consumer

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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
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18
Q

Information density

A

the total amount and quality of information available to all market participants, consumers, and merchants alike

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19
Q

Effect of Information Density

A
  • Greater price transparency
  • Greater cost transparency
  • Enables merchants to engage in price discrimination
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20
Q

Price transparency

A

the ease with which consumers can find out the variety of prices in a market

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21
Q

cost transparency

A

the ability of consumers to discover the actual costs merchants pay for products

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22
Q

price discrimination

A

selling the same goods, or nearly the same goods, to different targeted groups at different prices

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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

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24
Q

customization

A

changing the delivered product or service based on a user’s preferences or prior behaviors

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25
Q

Effect of Personalization/Customization

A
  • personalized messages can be sent to individuals as well as groups
  • products and services can be customized to individual preferences
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26
Q

Social technology

A

~ More social by allowing users to create and share with their personal friends content in the form of text, videos, music, or photos

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27
Q

Effects of Social Technology

A
  • Empower users to create and distribute content on a large scale and permit users to program their own content consumption
  • Many-to-many model
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28
Q

Digital Market effects ABBREV

A

DIDSS

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29
Q

Digital Market Effects

A
  • Decreased information asymmetry, Search costs, transaction costs, menu costs
  • Increased dynamic pricing, price discrimination, market segmentation, disintermediation
  • delayed Gratification
  • Switching costs
  • stronger network affects
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30
Q

Digital Market decreased ABBREV

A

ISTM

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31
Q

Digital Market decreased

A
  • Information Asymmetry
  • Search Costs
  • Transaction costs
  • Menu Costs
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32
Q

Information asymmetry

A

when one party in a transaction has more information that is important for the other transaction than the other party

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33
Q

Menu costs

A

merchant’s cost of changing price

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34
Q

Digital Market increased ABBREV

A

DPMI

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35
Q

Digital Market Increased

A
  • Dynamic Pricing
  • Price Discrimination
  • Market Segmentation
  • Disintermediation
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36
Q

Dynamic pricing

A

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

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37
Q

Disintermediation

A

the removal of organizations or business process layers responsible for intermediary steps in a value chain

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38
Q

Digital Goods

A

goods that can be delivered over a digital network

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39
Q

Cost of producing first unit of digital goods

A

almost entire cost of product

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40
Q

marginal cost of producing second unit of digital goods

A

about zero

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41
Q

Types of E-Commerce ABBREV

A

BBCM

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42
Q

Types of E-Commerce

A
  • Business to consumer (B2C)
  • Business to business (B2B)
  • Consumer-to-consumer (C2C)
  • Mobile commerce or M-commerce
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43
Q

Business-to-consumer (B2C)

A

involves retailing products and services to individual shoppers

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44
Q

B2C example

A

BarnesandNoble.com

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45
Q

Business-to-business (B2B)

A

sales of goods and services among businesses

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46
Q

B2B example

A

Ex. ChemConnect

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47
Q

Consumer-to-Consumer (C2C)

A

consumer selling directly to consumers

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48
Q

C2C example

A

Ebay

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49
Q

Mobile commerce or M-Commerce

A

the use of handheld wireless device for purchasing goods and services from any location

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50
Q

E-Commerce Business Models ABBREV

A

PECTMSC

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51
Q

E-Commerce Business Models

A
  • Portal
  • E-tailer
  • Content Provider
  • Transaction broker
  • Market creator
  • Service provider
  • Community provider
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52
Q

Portal

A

provides initial point of entry to the Web along with specialized content and other services

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53
Q

Portal example

A

yahoo, bing, google

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54
Q

E-tailer

A

online retail stores that sells physical products directly to consumers or individual businesses

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55
Q

E-tailer example

A

amazon, redenvelope.com

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56
Q

Content Provider

A

creates revenue by providing digital content, such as news, music, photos, or video, over the Web.

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57
Q

Content Provider example

A

iTunes.com

58
Q

Content

A

include all forms of intellectual property

59
Q

Intellectual property

A

refers to all forms of human expression that can be put into a tangible medium such as text, CDs, DVDs,

60
Q

Podcasting

A

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
Q

Streaming

A

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
Q

Transaction broker

A

Saves users money and time by processing online sales transactions and generating a fee each time a transaction occurs

63
Q

Transaction broker example

A

Expedia, Etrade.com

64
Q

Market Creator

A

build a digital environment in which buyers and sellers can meet, display products, search for products, and establish price for those products

65
Q

Market Creator Example

A

eBay, Priceline.com

66
Q

Service Provider

A

provides Web 2.0 applications such as photo sharing, video sharing, and user-generated content as services

67
Q

Service Provider Example

A

Photobucket.com

68
Q

Community Provider

A

provides an online meeting place where people with similar interests can communicate and find useful information

69
Q

Community Provider Example

A

Facebook, Twitter

70
Q

Revenue Model

A

describes how the firm will earn revenue, generate profits, and produce a superior return on investment

71
Q

E-Commerce Revenue Models ABBREV

72
Q

E-Commerce Revenue Models

A
  • Advertising
  • Sales
  • Subscription
  • Fee/Freemium
  • Transaction Fee
  • Affiliate
73
Q

Advertising revenue model

A

a Web site generates revenue by attracting a large audience of visitors who can then be exposed to advertisements

74
Q

Advertising revenue model Example

A

Yahoo, Google

75
Q

Sales Revenue Model

A

companies derive revenue by selling goods, information, or services to customers

76
Q

Sales Revenue Model Example

A

Amazon, Gap.com

77
Q

Micropayment systems

A

provide content providers with a cost-effective method for processing high volumes of very small monetary transactions

78
Q

Subscription revenue Model

A

a Web site offering content or services charges a subscription fee for access to some or all of its offerings on ongoing business

79
Q

Subscription revenue Model Example

80
Q

Fee/Freemium revenue Model

A

firms offer basic services or content for free while charging a premium for advanced or special features

81
Q

Fee/Freemium revenue Model Example

82
Q

Transaction fee revenue model

A

company receives a fee for enabling or executing a transaction

83
Q

Transaction fee revenue model example

84
Q

Affiliate revenue model

A

“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
Q

Affiliate revenue model example

86
Q

Social Shopping sites

A

swap shopping ideas with friends

87
Q

crowdsourcing

A

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
Q

Prediction markets

A

established as peer-to-peer betting markets where participants make bets on specific outcomes of designs for new products or political elections

89
Q

Long tail marketing

A

ability to reach large audience inexpensively

90
Q

Behavioral targeting

A

tracking the clickstreams (history of clicking behavior) of individuals on thousands of Web sites for the purpose of understanding their interests and intentions

91
Q

Internet advertising formats

A

include search engine marketing, display ads, rich media, and e-mail

92
Q

Social graph

A

a mapping of all significant online social relationships

93
Q

Four Features of social-ecommerce driving its growth ABBREV

94
Q

Four Features of social-ecommerce driving its growth ABBREV

A
  • Social Sign-on
  • Collaborative Shopping
  • Network notification
  • Social Search
95
Q

Social sign-on

A

Web sites allow users to sign into their sites through their social network pages on Facebook or another social site

96
Q

Collaborative shopping

A

creating an environment where consumers can share their shopping experiences with one another by viewing products, chatting, or texting

97
Q

Network notification

A

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
Q

Social Search

A

enabling an environment where consumers can ask their friends for advice on purchases of products, services, and content

99
Q

Social Network Marketing

A

seeks leverage individuals influence over others in social graph

100
Q

Target of Social Network Marketing

A

a social network of people sharing interests and advice

101
Q

Electronic data interchange (EDI

A

enables the computer-to-computer exchange between two organizations of standard transactions such as invoices, bill of landing, shipment schedules, or purchase orders

102
Q

Major industries have EDI standards that

A

define structure and information fields of electronic documents for that industry

103
Q

Procurement

A

not only involves purchasing goods and materials but also sourcing, negotiating with suppliers, paying for goods, and making delivery arrangements.

104
Q

Through procurement, businesses can

A

now use the Internet to locate most low-cost supplier, search online catalogs of supplier products, negotiate with suppliers, place orders, etc.

105
Q

Private industrial network aka

A

private exchange

106
Q

Private industrial network (private exchange)

A

consist of a large firm using a secure Web site to link to its suppliers and other key business partners

107
Q

Private industrial network (private exchange) owned by

108
Q

Private industrial network (private exchange) permits sharing of

A
  • Product design and development
  • Marketing
  • Production scheduling and inventory management
  • Unstructured communication (graphics and e-mail)
109
Q

New marketplaces aka

110
Q

New Marketplace (e-hubs)

A

provide a single, digital marketplace based on Internet technology for many different buyers and sellers

111
Q

New Marketplace (e-hubs) owned by

A

industry or owned by independent intermediary

112
Q

New Marketplace (e-hubs) generate revenue from

A

transaction fees, and other services

113
Q

New Marketplace (e-hubs) uses prices established through

A

negotiation, auction, RFQs, or fixed prices

114
Q

New Marketplace (e-hubs) may sell

A

Direct or indirect goods

115
Q

Direct goods

A

goods used in a production processes

116
Q

Direct goods example

A

steel for auto body production

117
Q

Indirect goods

A

all other goods not directly involved in the production processes

118
Q

indirect goods example

A

office supplies

119
Q

New Marketplace (e-hubs) may be

A

vertical or horizontal marketplaces

120
Q

Vertical marketplace

A

serves specific industries

121
Q

Horizontal marketplace

A

goods and services that can be found in many different industries

122
Q

Exchanges

A

independently owned third-party Net marketplaces

123
Q

Exchanges connect

A

thousands of suppliers and buyers for spot purchasing

124
Q

exchanges typically provide

A

vertical markets for direct goods for single industry

125
Q

M-Commerce Services and Applications ABBREV

126
Q

M-Commerce Services and Applications

A
  • Location-based services
  • Banking and financial services
  • Mobile advertising and retailing
  • Games and entertainment
127
Q

Location-based services

A

social media check ins

128
Q

Banking and financial services

A

Banks and credit card companies let customers manage their accounts from their mobile devices

129
Q

Mobile Advertising and retailing

A

ads for nearest retail, ads on apps and games

130
Q

2 most important management challenges in building a successful e-commerce presence

A
  1. Developing a clear understanding of your business objectives
  2. Knowing how to choose the right technology to achieve those objectives
131
Q

Business decisions drive

A

the technology, not the revers

132
Q

Business objective

A

capabilities the site should have

133
Q

Business objective example

A

execute a transaction payment

134
Q

System functionality

A

technology needed to achieve objective

135
Q

System functionality example

A

a shopping cart or other payment system

136
Q

Information requirement

A

specific data and processes needed

137
Q

Information requirement example

A

secure credit card clearing, multiple payment options

138
Q

Alternatives in building the Web Site ABBREV

139
Q

Alternatives in building the Web Site

A
  • Completely in-house
  • Mixed responsibility
  • Completely outsourced
140
Q

Co-location

A

firm purchases or leases a Web server (and has total control over its operation) but locates the server in a vendor’s physical facility

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