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E-Commerce: Digital Markets and Goods (Unique Features (Ubiquity…
E-Commerce: Digital Markets and Goods
Unique Features
Ubiquity
Available everywhere: work, home, and so on, anytime
Global reach
Richness
Supports video, audio, and text messages
Interactivity
Technology works through interaction with the user.
Information density
Large increases in information density
Personalization/ Customization
Technology permits modification of messages, goods
Social technology
Promotes user content generation and social networking
Universal Standards
Only Internet standards
Digital Markets
Reduces information asymmetry
Offers greater flexibility and efficiency
Reduced search costs and transaction costs
Lower menu costs
Greater price discrimination
Dynamic pricing
May reduce or increase switching costs
May delay gratification: effects dependent on product
Increased market segmentation
Stronger network effects
More disintermediation
Digital Goods
Goods that 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
Types
Business-to-consumer (B2C)
Business-to-business (B2B)
Internet-enabled technologies
Electronic data interchange (EDI)
Private industrial networks (private exchanges)
Net marketplaces
Exchanges
Consumer-to-consumer (C2C)
Mobile commerce (m-commerce)
Fastest growing form of e-commerce
Location-based services
Based on GPS map services
Geosocial services
Geoadvertising
Geoinformation services
Models
Business Models
E-tailer (Amazon)
Content provider (iTumesStore)
Transaction broker (Seguros)
Market creator (eBay, OLX)
Service provider (GoogleStore)
Community provider (Facebook)
Portal (Google)
Revenue Models
Advertising
Sales (Amazon)
Subscription
Free/Freemium (LinkedIn)
Transaction fee (eBay)
Affiliate
Marketing
Internet provides new ways to identify and communicate with customers.
Long tail marketing
Internet advertising formats
Behavioral targeting
Social
Growth features
Newsfeed
Timelines
Social sign-on
Collaborative shopping
Network notification
Social search (recommendations)
Social Media
Social Network Marketing
Seeks to leverage individuals influence over others in social graph
The target is a social network of people sharing interests and advice
Facebook’s “Like button”
Social networks have huge audiences
Social shopping sites
Wisdom of crowds
Crowdsourcing
Prediction markets
Create E-Commerce Presence
Developing clear understanding of business objectives
Choose the right technology to achieve those objectives
Develop an e-commerce presence map
Four areas: Web sites, e-mail, social media, offline media
Develop a timeline: milestones