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Information Goods - Coggle Diagram

- - - - Track Customers who got free samples - Sell their info eg Digimarc+Playboy/Mcafee
    - - Elseiver - contents free - WSJ - allow search & charge for download
    - - Can charge higher; More valuable to customer; But will be copied more
  - - - Lock-in thru another offering
      - IPR
      - Ability to Innovate
      - First Mover
      - Manufacturing ability
      - Strength in complements
      - Brand Name and reputation
- - - - Larger the network,
        Better it is for both sides
        
        success & failure driven by consumer
        expectations/ luck + Underlying value
    - - -Switching cost is a norm
        
        Significant investments cause lock-in
        
        Include Social costs, eg loss of social capital
        
        Opportunity cost caused due to loss of network Effects on switching
      - 2 sided cost - Cost borne by Customer and Supplier B to place the customer in the same position as he was with Supplier A
      - Imp to recognise Switching cost and lock in by
        
        Value of installed base of consumers - to decide amt to be spent in R&D, marketing,discounts etc.
        
        Use these to evaluate a tgt company with major user base
        
        Valuation will help in determining consumer switching cost
      - Managing Lock in
        
        Customer
        
        Bargain hard for concessions before being locked-in
        
        Pursue 2nd source/Open source to reduce lock-in effects
        
        Use experience with old supplier eg maintenance costs to negotiate with new supplier to reduce lock-in chances and switching costs
        
        Supplier
        
        Build installed base using discounts/advertising
        
        Cultivate influencers and high switching cost customers
        
        Design loyalty programs to increase switching cost of customers
        
        Maximise value of installed base by selling complementary products