C9LO#1

Ecommerce & Internet

Transcript

1. Chapter 9 : E-commerce: Digital Markets, Digital Goods Management Information System (CSC408) Erny Arniza Ahmad Faculty of Computer and Mathematical Sciences Universiti Teknologi MARA (UiTM) Kedah
2. Learning Objective #1 E-commerce and the Internet What are the unique features of e- commerce, digital markets, and digital goods? What are the principal e- commerce business and revenue models? How has e- commerce transformed marketing? How has e- commerce affected business-to- business transactions? What is the role of m- commerce in business and what are the most important m- commerce applications? What issues must be addressed when building an e- commerce presence?
3. E-commerce Today E-commerce refers to the use of the Internet and Web to transact business. Began in 1995 and grew exponentially and still stable even in a recession. Companies that survived the dot-com bubble now thrive. The new e-commerce : social, mobile, local
4. The Growth of E-commerce
5. The New E-commerce: Social, Mobile, Local One of the biggest changes is the extent to which e-commerce has become more social, mobile, and local. Online marketing - creating a corporate Web site, buying display ads on Yahoo, purchasing ad words on Google, and sending e-mails. The workhorse of online marketing was the display ad, but being replaced by video ads which are far more effective. From eyeballs (customers) to conversations (engagement). 5
6. The Growth of E-commerce 6
7. The Growth of E-commerce 7
8. The Growth of E-commerce 8
9. Why E-commerce Is Different? E-commerce Features Ubiquity Global reach Universal standards Richness Interactivity Information density Personalization/ customization Social technology
10. Why E-commerce Is Different? • Internet/Web technology available everywhere: work, home, and so on, anytime • Effect: i. Marketplace removed from temporal, geographic locations to become “marketspace” ii. Enhanced customer convenience and reduced shopping costs • Reduces transaction costs − Costs of participating in market Ubiquity
11. Why E-commerce Is Different? 11 • The technology reaches across national boundaries, around Earth • Effect: i. Commerce enabled across cultural and national boundaries seamlessly and without modification. ii. Marketspace includes, potentially, billions of consumers and millions of businesses worldwide. Global Reach
12. Why E-commerce Is Different? • One set of technology standards: Internet standards • Effect: i. Disparate computer systems easily communicate with one another ii. Lower market entry costs—costs merchants must pay to bring goods to market iii. Lower consumers’ search costs—effort required to find suitable products Universal Standards
13. Why E-commerce Is Different? • Refers to the complexity and content of a message. • Supports video, audio, and text messages • Effect: i. Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people. ii. Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience. Richness
14. Why E-commerce Is Different? • The technology works through interaction with the user. • Effect: i. Consumers engaged in dialog that dynamically adjusts experience to the individual. ii. Consumer becomes co-participant in process of delivering goods to market. Interactivity
15. Why E-commerce Is Different? • Large increases in information density - the total amount and quality of information available to all market participants • Effect: i. Greater price transparency - the ease with which consumers can find out the variety of prices in a market ii. Greater cost transparency - the ability of consumers to discover the actual costs merchants pay for products iii. Enables merchants to engage in price discrimination Information Density
16. Why E-commerce Is Different? • Technology permits personalization and customization of messages and goods • Effect: i. Personalized messages can be sent to individuals as well as groups. ii. Products and services can be customized to individual preferences. Personalization/ Customization
17. Why E-commerce Is Different? • The technology promotes user content generation and social networking • Effect: i. New Internet social and business models enable user content creation and distribution, support social networks ii. Many-to-many model - content is created in a central location by experts and audiences are concentrated in huge numbers to consume a standardized product Social Technology
18. Key Concepts in E-commerce : Digital Markets • Reduces information asymmetry • Offers greater flexibility and efficiency because of: i. Reduced search costs and transaction costs ii. Lower menu costs - merchants’ costs of changing prices iii. Greater price discrimination iv. Dynamic pricing • May reduce or increase switching costs • May delay gratification: effects dependent on product • Increased market segmentation • Stronger network effects • More disintermediation Effect of the Internet on the marketplace
19. The Benefits of Disintermediation to the Consumer
20. Digital Markets Compared to Traditional Markets 20
21. Key Concepts in E-commerce : Digital Goods • Goods that can be delivered over a digital network − For example: music tracks, video, software, newspapers, books • 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.) Digital Goods
22. Reference Kenneth C. Laudon And Jane P. Laudon, Management Information Systems: Managing the Digital Firm, 14th edition (Global Edition), Pearson Prentice Hall, 2016. 22