Module 8 Flashcards
Digital markets & platform ecosystem
E-commerce
Use of the internet and web to transact business. Started in 1995 and grew exponentially, those who survived the dotcom bubble now thrive.
E-commerce segments
- retail goods
- travel services
- online content
Why is e-commerce different?
- Ubiquity (marketspace is virtual, transaction costs are reduced)
- Global reach (transactions cross cultures and nations)
- International standards (internet rules, lower market entry costs and search costs for customers)
- Interactivity (technology works through interaction with the user)
- Richness (videos, photos, messages)
- Personalization/customization: sending personalized messages to customers, customizing orders to their preferences
- Information density (transparency on costs and prices, enables price discrimination)
- Social technology (promotes user content genration and social networking)
Price discrimination
Selling the same, or almost the same, product at different prices to different groups of customers.
Marketspace
Market place extended beyond the traditional boundries and removed from temporal and geographic location.
Key concepts in E-commerce
- information assymetry (buyer/seller knowledge)
- switching costs
- menu, search and transactions cost reduces (menu costs are the costs of switching prices)
- dynamic pricing enabled: pricing products according to market demand
- delayed gratification: resisting the temptatation of immediate satisfaction in hopes of getting a more valuable long-lasting reward in the long term
- disintermediation (removing the middle man): producing at lower cost, hence charging lower prices
Disintermediation
The remmoval of business processes or organizations that serve as intermediary layers.
Digital goods
Goods that can be delivered over a digital network (music, photos)
Types of e-commerce
- Business-to-customer: retailing goods to individual shoppers
- Business-to-business: the sale of goods between businesses
- Customer-to-customer: consumers selling directly to consumers
M-commerce
Mobile commerce (35% of all e-commerce)
- the fastest growing form of e-commerce
- growing by 20+% per year
- areas of growth: mass market retailing, sale of digital content, in-app sales to mobile devices
Location based services
- Geosocial service: can tell you where your firends are meeting
- Geoadvertising: nearest supermarket
- Geoinformation: price of a house
Business models
- content provider
- e-tailer
- service provider
- community provider
- transaction broker
- portal
- market creator
Revenue models
- advertisement (web attracts visitors who can then be exposed to ads)
- sales (sale of products)
- affiliate (websites send visitors to other websites in return for a referral fee, or part of the revenue)
- subscription (some or all of a website offerings require a subscription fee)
- fee/freemium (free for the basic services and for the more special, advanced features you have to pay a fee)
- transaction costs (receive a fee for enabling a transaction)
How has e-commerce transformed marketing?
- Long tail marketing: the internet allows marketers to find customers for low-demand products.
- Behavioral targeting: Tracking the clickstream of individuals on thousands of websites to understand their interests and provide suitable ads.
- Native advertising: placing ads in social network newsfeeds and traditional editorial content such as newspaper articles.
What is the wisdom of crowds?
Wisdom of Crowds are sites where a lot of people can interact, which offers businesses a new way to market and advertise and discover who likes their product.
