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eCommerce: Digital markets, Digital goods The new frontier of business Major League Baseball Hit a home run with information systems MLB Operate 2 top baseball leagues in north America National league American league Big business Tickets Television broadcast

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ecommerce digital markets digital goods

eCommerce:Digital markets, Digital goods

The new frontier of business

major league baseball
Major League Baseball
  • Hit a home run with information systems
    • MLB
      • Operate 2 top baseball leagues in north America
        • National league
        • American league
slide3
Big business
      • Tickets
      • Television broadcast
      • Find sources to pay for stadiums and teams
    • Promote and grow its business
  • Business challenges
    • Top players’ salary
    • Fans watch games
      • On TV
      • Rather attending in persons
    • Some teams fill the stadium
      • Most of half full or less
slide4
Publicize games
    • Traditional
      • Newspaper, television, radio
    • New way
      • Internet, IT
        • Broadcast offer to fans’ cell phone
        • Purchase ticket via cell phone

bar code transmitted to cell phone

accepted at the gate

slide5
MLB.com
    • Check game scores
    • Purchase game tickets
    • Shop for caps ….
    • Post opinions
    • Play “fantasy teams”
    • Streaming videos of games
      • 800,000 pay 79.95 per year
slide6
Working with SAS Inc.
    • Collect and analyze its customer data
      • The most popular parts of websites
      • Ball games watched or downloaded
      • Online games played
      • Team merchandise bought
  • Leverage streaming technology to other business
    • Major league soccer, entertainer Jimmy Buffet
slide7
eCommerce
    • New channels for reaching customers
      • Compete with other forms of entertainment
    • New digital products and service
    • New marketing tools
slide8
10.1 eCommerce and the Internet

10.2 eCommerce

10.3 mCommerce

10.4 Electronic commerce payment systems

10 1 ecommerce internet
10.1 eCommerce & Internet
  • eCommerce
    • The use of the Internet and the Web to transact business
      • Digitally enabled commercial transactions
      • Exchange of values
    • First eCommerce
      • 1995, Netscape.com accept first Ads
slide11
The “dot-com” bubble
    • 2001, burst
      • A large number of company failed
      • Some results still positive
        • Amazon
        • eBay
        • Google
slide12
eCommerce outlook is positive
    • Online consumer sales will still increase in 2007
    • The number of individual online will expand
    • On the average day,
      • 140 million send email
      • 5 million write on their blogs
    • The number of people who have purchased something expand
    • B2B eCommerce will continue to expand
slide13
Why eCommerce is different
    • Unique features of the Internet & Web
      • Ubiquity
        • Traditional commerce
          • Marketplace is a physical place

bookstore, classroom

        • eCommerce
          • Everywhere

beyond traditional boundaries

          • any time

remove from temporal

slide14
Customers’ viewpoint
    • Reduce transaction cost

no need to spend money and time

to reach market

less mental efforts for purchasing

slide15
Global reach
    • Cross cultural and national boundaries
      • Conveniently
      • Cost effectively
    • Potential market size
  • Richness
    • The complexity and content of a message
      • Traditional sale rep

Great richness

personal, face-to-face service

      • Web
slide16
Universal standards
    • Internet standard
      • Shared by all nations
      • Regardless of the technology platform
    • Lower market entry cost
    • Reduce search cost
  • Interactivity
    • Allow two-way communication
    • Similar to face-to-face experience
slide17
Information density
    • The total amount and quality of info available
    • eCommerce
      • Reduce info costs

collection, storage, processing, communication

      • Greatly increase quality

currency, accuracy, timeliness

    • Customers
      • Price transparency
      • Cost transparency
slide18
Merchants
    • Discover more about customers

segment markets

    • Price discrimination

selling the same goods

or almost the same goods

to different group at different prices

slide19
Personalization / customization
    • Personalization
      • Adjust the message to customers’ interests and past purchases
    • Customization
      • Changing the delivered products and services based on a user’s preference
    • Ex: Wall Street Journal
      • Customers choose types of news first
slide20
Key concepts in eCommerce
    • Digital markets, digital goods
      • itune, music (video) download
    • Business Models
      • Location, timing, revenue of a business

are based partly on

      • Cost and distribution of information
    • Ex: 水貨、跑單幫
      • Parallel imports (Timberland products)
slide21
Info asymmetry
    • One party of transaction has more info
      • Important to transaction
      • Help determining bargaining power
  • Digital market
    • More transparent in info
    • Reduced search and transaction cost
    • Lower menu price
      • Merchant’s cost of changing price
    • Lower price discrimination

Ex: Auto sales

slide22
Dynamic pricing
    • Price varies on the demand characteristics
  • Switching cost
    • Increase or reduce
  • Immediate gratification
    • Can immediately consume a product
      • Digital music downloaded
    • Can not
      • Clothes purchased
slide23
Disintermediation
    • Removal of organizations and business process layer
slide24
Digital Goods
    • Goods that can be delivered over a digital network
      • Music
      • Video
      • Software
      • Newspaper
      • Magazine
      • eBooks
slide25
Cost structure
    • Cost of producing another copy
      • Marginal, (zero)
    • Cost of producing the original
      • Relatively high
  • The impact of the Internet
    • Music industry
      • Loss CD sales, reach more customers
    • Books
    • Video
internet business models
Virtual storefront

amazon.com

Information brokers

realtor.com

Transaction brokers

etrade.com

Online marketplace

eBay.com

Content provider

WSJ.com

Online service provider

Salesforce.com

Virtual community

iVillage.com

Portal

yahoo.com

Internet business models
slide27
Communication and community
    • Internet’s rich communication capability
      • eBay
    • online community
      • iVillage
    • Source of revenue
      • Banner ads
      • Pop-up ads
slide28
Social networking
    • MySpace.com
    • Can create more targeted promotion
    • Visitors are more “sticky”
    • Social shopping
      • Provide online meeting place to swap shopping idea
slide29
Digital content, entertainment, service
    • Alternatives of traditional print and broadcast media
      • New York Times (online)
      • Online games
      • Internet radio
      • Podcasting
        • Self publishing
      • Portal
        • Syndicators
      • Application service provider

Pure players

Clicks-and-mortar

slide30
10.1 eCommerce and the Internet

10.2 eCommerce

10.3 mCommerce

10.4 Electronic commerce payment systems

10 2 electronic commerce
10.2 electronic commerce
  • Categories
    • Classify by the nature of the participant
      • Business-to-consumer (B2C)
        • Retailing
        • amazon.com
      • Business-to-business (B2B)
        • 企業採購作業 business procurement
        • 台塑採購網
      • Consumer-to-consumer (C2C)
        • eBay
slide32
Classify by participant’s connection
    • Wired network
    • Mobile commerce (m-Commerce)
      • The use of wireless internet appliance
achieving customer intimacy
Achieving customer intimacy
      • Internet
        • Additional channel of communication
        • Closer interaction
        • More cost effective
  • Interactive marketing & personalization
    • Make products available
      • for million
      • and personal
slide34
Interactive feature of website
      • Hold customer’s attention
      • Capture customer’s taste and interests
        • Tailor

promotion

Product

Service

Pricing

  • Customer info
    • “Register”
    • Software tools to track website activities
slide35
Clickstream tracking
    • Collect data on customer activity at website

218.175.238.94 - - [08/Oct/2006:23:37:28 +0800] "GET /seminar/pom/2005/tinghan/%AAA %B0%C8%AB~ %BD%E8%A7 @%B7~.doc HTTP/1.1" 200 51712 "http://www.google.com.tw/search?hl=zh-TW&q=PZB%E6%A8%A1%E5%BC%8F &meta=lr%3Dlang_zh-TW" "Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; .NET CLR 1.1.4322)"

218.175.238.94 - - [08/Oct/2006:23:37:29 +0800] "OPTIONS /seminar/pom/2005/tinghan/ HTTP/1.1" 200 - "-" "Microsoft Office Protocol Discovery"

218.175.238.94 - - [08/Oct/2006:23:38:35 +0800] "OPTIONS / HTTP/1.1" 200 - "-" "Microsoft Data Access Internet Publishing Provider Protocol Discovery"

218.175.238.94 - - [08/Oct/2006:23:38:35 +0800] "OPTIONS /seminar/pom/2005/tinghan/%25AAA%25B0%C8 %AB%7E%25BD%25E8%25A7%40%25B7%7E.doc HTTP/1.1" 200 - "-" "Microsoft Data Access Internet Publishing Provider Protocol Discovery"

220.134.186.63 - - [08/Oct/2006:23:42:20 +0800] "GET /2004/jasper/ch4%B8%EA%AE%C6%A4%C0%AAR%BBP%B0Q%BD%D7.doc HTTP/1.1" 200 159744 "http://www.google.com.tw/search?hl=zh-TW&q=%E5%9B%A0%E7%B4%A0%E9%99%A1%E5%9D %A1%E5%9C%96&btnG=Google+%E6%90%9C%E5%B0%8B&meta=cr%3DcountryTW" "Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; InfoPath.1; .NET CLR 1.1.4322)"

220.134.186.63 - - [08/Oct/2006:23:42:21 +0800] "OPTIONS /2004/jasper/ HTTP/1.1" 200 - "-" "Microsoft Office Protocol Discovery"

slide36
Web personalization
    • Modify webpages presented to each customer
      • Collaborative filter
        • Compare info collected about a specific user’s behavior

Ex: www.books.com.tw

買這本書的人,也會購買 …

slide38
Blog
    • Weblog
    • A personal way of presenting info
      • Typically chronological entries
      • Popular and impact the news and political events
    • Corporate blog
      • Macromedia (acquired by adobe in 2005)
        • Use blog to tie customers with new software development
        • New users come to learn
slide39
Marketers analyze
    • Blog
    • Chat group
    • Message board

for comments of new product, old brands

“blog watching service”

slide40
Customer self-service
    • Web-based service
      • At customer’s convenience
      • Lower cost
        • Not a live customer service
      • FAQ
        • Airlines’ websites
      • Tracking shipment
        • Fedex
slide41
B2B e-commerce:
    • New efficiencies & relationship
    • EDI
      • Electronic data interchange
        • Proprietary
      • 80% of e-commerce
        • Computer-to-computer exchange of transactions
          • Invoices
          • Orders …
slide42
EDI
    • Private networks
  • Internet and web based
    • Public network
      • Flexible and low cost
    • Extranet
      • Private intranet extend to authorized users outside the company
        • Fedex.com
slide43
Private industrial network
    • B2B extranet
    • Collaboration and supply chain management
      • Suppliers
      • Distributors
      • Business partners
    • Private exchange
      • VWGroupSupply.com
        • Volkswagon
slide44
Net marketplace
    • Transaction oriented digital market
      • Sellers
      • Buyers
    • Types of net marketplace
      • Direct goods
      • Indirect goods
      • Vertical markets
        • 鋼鐵業 Steel
      • Horizontal market
        • 家具 office furniture
slide45
Industry-owned net marketplace
    • Exostar
      • Aerospace and defense industry
        • Boeing
        • Lockheed Martin
        • Raytheon …
slide46
Exchanges
    • Independently owned third-party net marketplaces
      • Foodtrader.com
    • Many have failed
      • Suppliers reluctant to join
        • Encourage competitive bidding

Drive price down

        • Did not offer long term relationship

Make lowering price un-worthwhile

        • Do not offer delivery timing, customization, and quality of products
slide47
10.1 eCommerce and the Internet

10.2 eCommerce

10.3 mCommerce

10.4 Electronic commerce payment systems

10 3 m commerce
10.3 m-Commerce
    • Use wireless mobile devices
      • Purchasing
      • Transmitting message
  • M-Commerce services and applications
    • Content and location-based service
      • NTT DoCoMo
        • Wireless websites
          • Train schedule, movie listing, …
slide49
Banking and financial services
    • Text message of credit card transactions
    • Check balance
    • Transfer funds
  • Wireless advertising
    • Same as portal
    • Ads come with search results
slide50
Games and entertainments
    • Portable entertainment platforms
      • Downloadable digital games
      • Ringtone
      • On-demand video clips
      • Music
slide51
Accessing info from wireless web
    • Display screen is small
      • Info handled at one time is limited
    • Wireless portal
      • Feature contents and service optimize for mobile device
slide52
M-Commerce challenges
    • Wi-Fi hotspots
      • Wireless internet access is limited
    • Keyboard and screen
      • Tiny and awkward to use
    • Phone
      • Limited memory and power supply

(3G & smart phones remove all these challenges)

slide53
10.1 eCommerce and the Internet

10.2 eCommerce

10.3 mCommerce

10.4 Electronic commerce payment systems

10 4 ecommerce payment systems
10.4 eCommerce payment systems
  • Electronically pay for goods on the Internet
    • Digital credit card payments
    • Digital wallet
    • Accumulated balance digital payment systems
    • Stored value payment systems
    • Digital checking
    • Electronic billing presentment and payment systems
slide55
eCommerce payment systems
    • Credit cards
      • 80% of online payments in the US
      • Authenticating the purchaser’s credit card
    • Digital wallets
      • Securely store credit card and owner identification
        • Eliminate the needs for shoppers to enter
          • Address
          • Credit card info
        • Amazon.com: 1-click shopping
slide56
Micropayment
    • Accumulated balance digital payment
      • Accumulate a debit balance
      • Pay periodically via
        • Credit card
        • Phone bill
    • Stored value payment
      • Digital account
      • Smart card
        • 7-Eleven i-cash
      • Digital cash
        • Used client software to exchange money
slide57
Peer-to-peer payment system
    • Vendor and individual who are not set up to accept credit card payment
      • PayPal
  • Digital checking
    • Checks are encrypted with a digital signature
      • Can be verified by banks
slide58
Electronic billing presentment and payment systems
    • Service
      • Enable users to
        • View their bill electronically
        • Pay bill through electronic fund transfer
slide59
Digital payment systems for mCommerce
      • Take advantage of all existing forms of Internet payment
      • Micropayment systems
        • Soft drink
        • Newspaper

paid by

        • mobile telephone bill
          • NTT DoCoMo
        • PayPal mobile