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Chapter 10 E-commerce: Digital Markets, Digital Goods (10. 1 What are the…

- - - - rapid growth of social sites like facebook, Google+twiter
    - - rapid growth os smartphones after iphone
      - Mobile devices expand to use smartphones
    - - growing interest in local marketing
  - - - Internet/Web technology available everywhere: work, home, and so on, anytime
      - Reduces transaction costs
      - Marketplace removed from temporal, geographic locations to become “marketspace”
      - Enhanced customer convenience and reduced shopping costs
    - - Technology permits modification of messages, goods
      - Personalized messages can be sent to individuals as well as groups.
      - Products and services can be customized to individual preferences.
  - - - can be delivered over a digital network
      - Cost of producing first unit is almost entire cost of product
      - Costs of delivery over the Internet very low
      - Marketing costs remain the same; pricing highly variable
      - Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.)
    - - Reduces information asymmetry
      - Offers greater flexibility and efficiency
      - May reduce or increase switching costs
      - May delay gratification: effects dependent on product
      - Increased market segmentation
      - Stronger network effects
      - More disintermediation
- - - - Ex: Yahoo, Facebook
    - - Ex: Amazon
    - - Ex: itunes, netflix, streaming news, podcasting
    - - Ex: Expedia, and travel brokers
    - - Ex: Amazon's Merchant platform, e-bay
    - - Ex: SaaS, Google APS, Gmail, Google sites
    - - Ex: linkedin, twitter
- - - - Newsfeed
      - Timelines
      - Social sign-on
      - Collaborative shopping
      - Collaborative shopping
      - Social search (recommendations)
- - - - Electronic data interchange (EDI)
      - Private industrial networks (private exchanges)
      - Net marketplaces
        
        Exchanges
        
        Industry-owned or owned by independent intermediary
        
        Generate revenue from transaction fees, other services
        
        Use prices established through negotiation, auction, RFQs, or fixed prices
        
        May focus on direct or indirect goods
        
        May be vertical or horizontal marketplaces
      - Exchanges
        
        Independently owned third-party Net marketplaces
        
        Connect thousands of suppliers and buyers for spot purchasing
        
        Typically provide vertical markets for direct goods for single industry (food, electronics)
        
        Proliferated during early years of e-commerce; many have failed