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Intro/Network effects (Entering markets with network effects (Pricing,…
Intro/Network effects
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Network Effects, occur when value is generated through more users
Synchronisation benefits - These are the benefits from others having the product, being able to make calls.
Direct network effects, Increase in usage leads to direct benefit to other users, e.g. social media sites, Skype, WhatsApp.
Autarky benefits - These are the benefits from sole ownership of a product. This is positive for most products
Indirect network effects, Increases in usage of one product increases in the value of a complementary product or network, which can in turn increase the value of the original.
Synchronisation value
benefits give the basis for Metcalfe’s Law = value of a network is the square sum of its number of users
As one network gets a small advantage in number of users you gain a large advantage in the value to that user
Digital Marketing, achieving marketing objectives through applying digital technologies and media
E-Commerce is generally seen as trading (i.e. buying/selling) over electronic networks, specifically Internet based.
Ivan Menezes CEO of Diago (Beverage alcohol company) quoted "its not about doing digital marketing, it is about marketing effectively in a digital world"
Dotcom's , A dotcom is a company that embraces the internet as the key component in its business.
Advantages , Centralised scaleable, Simpler, flexible, avoid costs of store network
Disadvantages, Delivery and returns is a major challenge, costs of marketing is higher (esp. for start-ups), Need to engage customers
Multi-channel , Multichannel retailing is when a company provides numerous ways for customers to purchase goods and services.
Disadvantages, Decentralised, harder to scale, More complex; integration issues, have to bear costs of stores, delivery challenges, but can use stores for collection/return
Omni-Channel is a multi-channel approach that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.
Disintermediation , is the reduction in the use of intermediaries between producers and consumers