1. Management Information Systems Chapter Ten E-Commerce: Digital Markets, Digital Goods Md. Golam Kibria Lecturer, Southeast University

2. E-commerce and the Internet E-commerce today: – Use of the Internet and Web to transact business; digitally enabled transactions – Began in 1995 and grew exponentially, still growing even in a recession – Companies that survived the dot-com bubble burst and now thrive – E-commerce revolution is still in its early stages

3. THE GROWTH OF E-COMMERCE

4. Why e-commerce is different Ubiquity Internet/Web technology available everywhere: work, home, etc., anytime. Effect:  Marketplace removed from temporal, geographic locations to become “marketspace”  Enhanced customer convenience and reduced shopping costs

5. Global Reach The technology reaches across national boundaries, around Earth Effect:  Commerce enabled across cultural and national boundaries seamlessly and without modification  Marketspace includes, potentially, billions of consumers and millions of businesses worldwide

6. Universal standards One set of technology standards: Technical standards of Internet Effect: – Disparate computer systems easily communicate with each other – Lower market entry costs—costs merchants must pay to bring goods to market – Lower consumers’ search costs—effort required to find suitable products

7. Richness Supports video, audio, and text messages Effect: – Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people – Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience

8. Richness Supports video, audio, and text messages Effect: – Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people – Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience

9. Information density Large increases in information density—the total amount and quality of information available to all market participants Effect: – Greater price transparency – Greater cost transparency – Enables merchants to engage in price discrimination

10. Personalization/Customization Technology permits modification of messages, goods Effect – Personalized messages can be sent to individuals as well as groups – Products and services can be customized to individual preferences

11. Social technology The technology promotes user content generation and social networking Effect – New Internet social and business models enable user content creation and distribution, and support social networks

12. Types of e-commerce Business-to-consumer (B2C) B2C involves retailing products and services to individual shoppers. Example: Amazon.com Business-to-business (B2B) B2B involves sales of goods and services among businesses. Example: ChemConnect.com Consumer-to-consumer (C2C) C2C involves consumers selling directly to consumers. Example: eBay.com

13. E-commerce Business Models Portal Portals offer powerful web search tools as well as an integrated package of content and services such as news, email, maps, and more, all in one place. Example: Yahoo, Google E-tailer Online retail stores that sell product and services by using website. Example: Amazon.com

14. Content Provider Creates revenue by providing digital contents, such as news, music, photos, or video over the web. Example: iTunes.com, Games.com Transaction Broker Saves users money and time by processing online sales transactions and generating a fee each time a transaction occurs. Example: Etrade.com, Expedia Market Creator Market Creator provides a digital environment where buyers and sellers can meet, search for products, display products, and establish prices for those products. Example: eBay

15. Community Provider Provides an online meeting place where people with similar interasts can communicate and find useful information Example: Facebook, MySpace Service Provider Provides Web 2.0 applications such as photo sharing, video sharing, and user generated content as services. Example: Google Apps, Xdrive.com

16. E-commerce revenue models Advertising Revenue Model In the advertising revenue model, a Web site generates revenue by attracting a large audience of visitors who can then be exposed to advertisements. Example: Yahoo.com Sales Revenue Model In the Sales Revenue Model, companies derive revenue by selling goods, information, or services to customers. Example: Amazon.com

17. Subscription Revenue Model In subscription model, a web site offering content or services charges a subscription fee for access to some or all of its offerings on an ongoining basis. Example: Wall Street Journal Free/ Freemium Revenue Model In this model, firms offer basic services or content for free, while charging a premium for advanced or special features. Example: Google, Pandora

18. Transaction Fee Revenue Model A company receives a fee for enabling or executing a transaction. Example: ebay, E*Trade Affiliate Revenue Model In the affiliate revenue model, Web sites send visitors to other Web sites in return for a refferal fee or percentage of the revenue from any resulting sales. Example: MagicRooms Solutions