1. Chapter 2 E-Marketplaces: Structures and Mechanisms

2. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall1 Learning Objectives 1.Define e-marketplaces and list their components. 2.List the major types of e-marketplaces and describe their features. 3.Describe the various types of EC intermediaries and their roles. 4.Describe electronic catalogs, shopping carts, search engines, and portals.

3. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall2 Learning Objectives 5.Describe the major types of auctions and list their characteristics. 6.Discuss the benefits, limitations, and impacts of auctions. 7.Describe bartering and negotiating online. 8.Describe the major mechanisms for delivering Web 2.0.

4. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall3 E-MARKETPLACES e-marketplace An online market, usually B2B, in which buyers and sellers exchange goods or services; the three types of e-marketplaces are private, public, and consortia.

5. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall4 E-MARKETPLACES E-MARKETPLACE COMPONENTS AND PARTICIPANTS Customers Sellers Products and services digital products Goods that can be transformed to digital format and delivered over the Internet. Infrastructure

6. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall5 E-MARKETPLACES front end The portion of an e-seller’s business processes through which customers interact, including the seller’s portal, electronic catalogs, a shopping cart, a search engine, and a payment gateway. back end The activities that support online order fulfillment, inventory management, purchasing from suppliers, payment processing, packaging, and delivery.

7. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall6 E-MARKETPLACES intermediary A third party that operates between sellers and buyers. Other business partners Support services

8. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall7 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals storefront A single company’s Web site where products or services are sold. e-mall (online mall) An online shopping center where many online stores are located.

9. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall8 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals TYPES OF STORES AND MALLS General stores/malls Specialized stores/malls Regional versus global stores Pure-play online organizations versus click-and-mortar stores

10. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall9 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals TYPES OF E-MARKETPLACES private e-marketplaces Online markets owned by a single company; may be either sell-side and/or buy-side e-marketplaces. sell-side e-marketplace A private e-marketplace in which one company sells either standard and/or customized products to qualified companies. buy-side e-marketplace A private e-marketplace in which one company makes purchases from invited suppliers.

11. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall10 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals public e-marketplaces B2B marketplaces, usually owned and/or managed by an independent third party, that include many sellers and many buyers; also known as exchanges.

12. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall11 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals information portal A single point of access through a Web browser to business information inside and/or outside an organization.

13. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall12 Types of E-Marketplaces and Mechanisms: from Storefronts to Portals Types of Portals Commercial (public) portals Corporate portals Publishing portals Personal portals mobile portal A portal accessible via a mobile device. voice portal A portal accessed by telephone or cell phone. Knowledge portals

14. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall13 Participants, Transactions, Intermediation, and Processes in EC SELLERS, BUYERS, AND TRANSACTIONS THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES Brokers Infomediaries e-distributor An e-commerce intermediary that connects manufacturers with business buyers (customers) by aggregating the catalogs of many manufacturers in one place—the intermediary’s Web site.

15. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall14 Participants, Transactions, Intermediation, and Processes in EC

16. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall15 Participants, Transactions, Intermediation, and Processes in EC disintermediation Elimination of intermediaries between sellers and buyers. reintermediation Establishment of new intermediary roles for traditional intermediaries that have been disintermediated.

17. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall16 Participants, Transactions, Intermediation, and Processes in EC

18. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall17 Electronic Catalogs and Other Market Mechanisms electronic catalogs The presentation of product information in an electronic form; the backbone of most e- selling sites. Electronic catalogs can be classified on three dimensions: 1.The dynamics of the information presentation 2.The degree of customization 3.Integration with business processes

19. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall18 Electronic Catalogs and Other Market Mechanisms Online Catalogs Versus Paper Catalogs Customized Catalogs Implementing E-Catalogs

20. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall19 Electronic Catalogs and Other Market Mechanisms search engine A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results. electronic shopping cart An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop. Product Configuration ONLINE CLASSIFIED ADS

21. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall20 Auctions as EC Market Mechanisms auction A competitive process in which a seller solicits consecutive bids from buyers (forward auctions) or a buyer solicits bids from sellers (backward auctions). Prices are determined dynamically by the bids.

22. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall21 Auctions as EC Market Mechanisms TRADITIONAL AUCTIONS VERSUS E- AUCTIONS Limitations of Traditional Offline Auctions electronic auction (e-auction) Auctions conducted online. DYNAMIC PRICING AND TYPES OF AUCTIONS dynamic pricing Prices that change based on supply and demand relationships at any given time.

23. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall22 Auctions as EC Market Mechanisms

24. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall23 Auctions as EC Market Mechanisms One Seller, Many Potential Buyers forward auction An auction in which a seller entertains bids from buyers. Bidders increase price sequentially. One Buyer, Many Potential Sellers reverse auction (bidding or tendering system) Auction in which the buyer places an item for bid (tender) on a request for quote (RFQ) system, potential suppliers bid on the job, with the price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism. “name-your-own-price” model Auction model in which a would-be buyer specifies the price (and other terms) he or she is willing to pay to any willing and able seller. It is a C2B model that was pioneered by Priceline.com.

25. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall24 Auctions as EC Market Mechanisms

26. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall25 Auctions as EC Market Mechanisms Many Sellers, Many Buyers double auction Auctions in which multiple buyers and their bidding prices are matched with multiple sellers and their asking prices, considering the quantities on both sides. vertical auction Auction that takes place between sellers and buyers in one industry or for one commodity. auction vortal Another name for vertical auction portal.

27. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall26 Auctions as EC Market Mechanisms BENEFITS, LIMITATIONS, AND IMPACTS OF E-AUCTIONS Benefits of E-Auctions Limitations of E-Auctions Minimal security Possibility of fraud Limited participation

28. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall27 Auctions as EC Market Mechanisms Impacts of Auctions Auctions as a coordination mechanism Auctions as a social mechanism to determine a price Auctions as a highly visible distribution mechanism Conducting Auctions Auctions as an EC component

29. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall28 Bartering and Negotiating Online ONLINE BARTERING bartering The exchange of goods or services. e-bartering (electronic bartering) Bartering conducted online, usually in a bartering exchange. bartering exchange A marketplace in which an intermediary arranges barter transactions. Consumer-to-Consumer Barter Exchanges ONLINE NEGOTIATING

30. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall29 Web 2.0 Mechanisms and Tools Weblogging (blogging) Technology for personal publishing on the Internet. blog A personal Web site that is open to the public to read and to interact with; often dedicated to specific topics or issues.

31. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall30 Web 2.0 Mechanisms and Tools Creating Blogs Commercial Uses of Blogs Potential Risks of Blogs 1.Establish comprehensive, written rules and policies 2.Educate employees about blog-related risks, rules, and regulations 3.Enforce blog policy with disciplinary action and technology Bloggers and Politics

32. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall31 Web 2.0 Mechanisms and Tools wikilog (wikiblog or wiki) A blog that allows everyone to participate as a peer; anyone can add, delete, or change content. RSS An XML format for syndicating and sharing Web content.

33. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall32 Web 2.0 Mechanisms and Tools podcast A media file that is distributed over the Internet using syndication feeds for playback on mobile devices and personal computers. As with the term radio, it can mean both the content and the method of syndication. mashup A Web site that combines content data from more than one source to create a new user experience.

34. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall33 Managerial Issues 1.What about intermediaries? 2.Should we auction? 3.Should we barter? 4.Should we sponsor blogs and wikis? 5.Can we blog for business?

35. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall34 Summary 1.E-marketplaces and their components. 2.The role of intermediaries. 3.The major types of e-marketplaces. 4.Electronic catalogs, search engines, and shopping carts.

36. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall35 Summary 5.Types of auctions and their characteristics. 6.The benefits and limitations of auctions. 7.Bartering and negotiating. 8.The major mechanisms of Web 2.0.

37. Chapter 2 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall36 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall