0. E-Marketplaces: Mechanisms, Tools and Impact of E-commerce
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E-Marketplaces:
Mechanisms, Tools and Impact of E-commerce

1. Learning Objectives Define e-marketplaces and list their components.
List the major types of e-marketplaces and describe their features.
Describe the various types of EC intermediaries and their roles.
Describe electronic catalogs, shopping carts, search engines, and portals.
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2. Learning Objectives
Describe the major types of auctions and list their characteristics.
Discuss the benefits, limitations, and impacts of auctions.
Describe bartering and negotiating online.
The major mechanisms of Web 2.0.
Understand virtual worlds and their use in EC.
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5. E-MARKETPLACES – An Overview
e-marketplace (marletspace, virtual market)
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.
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8. E-MARKETPLACES COMPONENTS
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: Hardware, Software and Networks
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9. E-MARKETPLACES COMPONENTS
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.
intermediary
A third party that operates between sellers and buyers. (create an manage online markets to match sellers and buyers)
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10. Disintermediation and Reintermediation
Disintermediation: Elimination of intermediaries between sellers and buyers. (Ex: buying airline tickets directly – no agent)
Reintermediation: Establishment of new intermediary roles for traditional intermediaries that have been disintermediated. (Ex: edmunds.com – cars)
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11. TYPES OF E-MARKETPLACES
Private e-marketplaces
Online markets owned and operated by a single company; may be either sell-side or buy-side.
sell-side e-marketplace
A private e-marketplace in which one company sells either standard and/or customized products to qualified customers – B2C or B2B (one-to-many).
(Ex: Cisco.com)
buy-side e-marketplace
A private e-marketplace in which one company makes purchases from invited suppliers – B2B (many-to-one) (Ex: Raffles hotels)
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12. TYPES OF E-MARKETPLACES
Public e-marketplaces
- B2B marketplaces, usually owned and/or managed by an independent third party (not a seller or a buyer) or by a group of buying or selling companies (referred to as consortium).
- They serve many sellers and many buyers; also known as exchanges. (Ex: Stock exchange).
- They are opened to the public and regulated by government or exchange’s owners.
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13. Customer Interaction Mechanisms: from Storefronts to Portals
E- Storefront ( Webstore )
A single company’s Web site where products or services are sold and usually has an online shopping cart associated with it. Many Webstores target a specific industry and find their own unique corner of the market.(Ex: Dell.com)
e-mall (online mall)
An online shopping center where many online stores are located. (ex: emallofmaine.com)
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14. Customer Interaction Mechanisms: from Storefronts to Portals
TYPES OF STORES AND MALLS
General stores/malls (ex:amazon.com)
Specialized stores/malls (Ex: cars.com – cars)
Regional versus global stores (furniture – nearby customers)
Pure-play online organizations (Amazon.com) versus click-and-mortar stores (Walmart.com)
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15. Customer Interaction Mechanisms: from Storefronts to Portals
Web (Information) portal
A single point of access through a Web browser to business information inside and/or outside an organization. (Scattered info. – documents, DBs, messages, …etc)
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17. Customer Interaction Mechanisms: from Storefronts to Portals
Types of Portals
Commercial (public) portals --- yahoo, msn
Corporate (enterprise) portals --- rich content, narrow community
Publishing portals --- large communities, specific interests, (extensive search features) (zdnet.com)
Personal portals – specific filtered info to individuals, narrow content, (Personalization)
ex- netvibes.com – accounts, search engines, IM, videos, …
mobile portal
A portal accessible via a mobile device.
voice portal
A portal accessed by telephone or cell phone (to retrieve ,
news, and self services. Ex: numbers).
Knowledge portals. Access knowledge by knowledge workers and facilitate collaboration
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18. THE ROLES AND VALUE OF INTERMEDIARIES IN E-MARKETPLACES
Brokers
Buy/sell fulfillment
Virtual mall – yahoo stores
Metamediary (access to variety of stores with transactional (financial) services)
Comparison agent – compare different stores
Shopping facilitator – currency converter, lang. translators, payment, delivery
Matching services – jobs to openings, buyers to products
Infomediaries
Electronic intermediaries that provide and/or control information flow in cyberspace, often aggregating information and selling it to others. (2-types: for customers, for vendors)
e-distributor In B2B
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.
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19. Tue 25-2 Electronic Catalogs
electronic catalogs (e-catalogs)
The presentation of product information in an electronic form; the backbone of most e-selling sites.
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20. Electronic Catalogs Evolution of electronic catalogs
Merchants—advertise and promote
Customers—source of information and price comparisons
Consist of product database, directory and search capability and presentation function
Replication of text that appears in paper catalogs
More dynamic, customized, and integrated
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22. EC SEARCH ACTIVITIES, TYPES, AND ENGINES
Search engine
A computer program that can access databases of Internet resources, search for specific information or keywords, and report the results.
Types of EC Searches
Internet/Web Search
enterprise search: the practice of identifying and enabling specific content across the enterprise to be indexed, searched, and displayed to authorized users.
desktop search
Search tools that search the contents of a user’s or organization’s computer files, rather than searching the Internet. The emphasis is on finding all the information that is available on the user’s PC, including Web browser histories, archives, and word processed documents, as well as in all internal files and databases.
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23. EC SEARCH ACTIVITIES, TYPES, AND ENGINES
Software (Intelligent) Agents —software that can perform routine tasks that require intelligence
E-commerce users use both search engines and intelligent agents
Search engines find products or services
Software agents conduct other tasks (comparisons, tracking movements, …etc)
Voice-Powered Search
electronic shopping cart
An order-processing technology that allows customers to accumulate items they wish to buy while they continue to shop.
Product configuration – self customizing products
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24. Auctions
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.
Auctions deal with products and services for which conventional marketing channels are ineffective or inefficient
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25. Limitations of Traditional Auctions
Traditional auctions are generally a rapid process – minutes or seconds
It may be difficult for sellers to move goods to the auction site
Bidders must be present
Commissions are fairly high – ads, employees, reserving a market
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26. Electronic Auctions
Electronic auctions (e-auctions)—auctions conducted online – stated on 1980s
Major online auctions (such as e-bay) offer:
Consumer products
Electronic parts
Artwork
Vacation packages
Airline tickets
Host sites on the Internet serve as brokers offering:
Services for sellers to post their goods for sale
Allowing buyers to bid on those items
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27. Thu 27-2 Dynamic Pricing
Dynamic pricing—prices that change based on supply and demand relationships at any given time
The four major categories of dynamic pricing are based on the number of buyers and sellers involved:
One buyer, one seller
One seller, many potential buyers
One buyer, many potential sellers
Many sellers, many buyers
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28. Types of Dynamic Pricing
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29. Dynamic Pricing (cont.)
One buyer, one seller uses
Negotiation
Bargaining
Bartering
Price will be determined by:
Each party’s bargaining power
Supply and demand in the item’s market
Possibly business environment factors
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30. Dynamic Pricing (cont.)
One seller, many potential buyers
Forward auction—an auction in which a seller entertains bids from buyers
English auction - an auction in which buyers bid on an item in sequence and the price increases with time
Yankee auction- auction of multiple identical items in which bidders can bid for any number of the items offered, and the highest bid wins
Dutch auction- auction of multiple identical items, with prices starting at a very high level and declining as the auction time passes
Free-fall (declining price) auction- a variation of the Dutch auction in which only one item is auctioned at a time; the price starts at a very high level and declines at fixed time intervals, the winning bid is the lowest one when the time expires
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31. English Auction, Ascending Price
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32. Dynamic Pricing (cont.)
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 price reducing sequentially, and the lowest bid wins; primarily a B2B or G2B mechanism
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33. The Reverse Auction Process
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34. Dynamic Pricing (cont.)
One buyer, many potential sellers (cont.)
”Name-your-own-price” model- priceline.com
Consumer-to-business (C2B) model
Many sellers, many buyers
Double Auction- buyers and their bidding prices and sellers and their asking prices are matched, considering the quantities on both sides – stocks and commodities
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36. Limitations of Electronic Auctions
Possibility of fraud—defective goods or receive goods/services without paying
Limited participation—invitation only or Open to dealers only
Minimal security—C2C auctions sometimes not done in an unencrypted environment- credit cards could be stolen
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37. Impacts of Auctions
Auctions as a social mechanism to determine a price – unique or rare items ex: fine arts
Auctions as a highly visible distribution mechanism – limited items to attract customers – ex: airline seats
Auctions as a component in e-commerce
Auctions for profit for individuals – selling thing on e-bay.
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38. Bartering Online
Bartering—an exchange of goods and services
Give your offer to intermediary
Expensive (20-30% commission)
very slow
E-bartering—bartering conducted online, usually by a bartering exchange
Bartering exchange—a marketplace in which an intermediary arranges barter transactions (variety and place)
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39. Online Negotiating
Online negotiation—electronic negotiation, usually done by software (intelligent) agents that perform searches and comparisons; improves bundling and customization of products and services
Dynamic prices can be determined by negotiation
Negotiated prices result from interactions and bargaining among sellers and buyers
Expensive items like cars and real estate or large quantities
Deal with nonpricing terms like payment method and credit
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40. Web 2.0 Mechanisms and Tools
BLOGGING (WEBLOGGING)
blog
A personal Web site that is open to the public to read and to interact with; dedicated to specific topics or issues.
A blog is differentiated by its personal nature, unique content and frequency of updates
vlog (or video blog)
A blog with video content.
Building Effective Blogs
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41. Web 2.0 Tools and Services microblogging
A form of blogging that allows users to write messages (usually up to 140 characters) and publish them, either to be viewed by anyone or by a restricted group that can be chosen by the user. These messages can be submitted by a variety of means, including text messaging, instant messaging, , MP3, or just on the Web.
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42. Web 2.0 Tools and Services Twitter
A free microblogging service that allows its users to send and read other users’ updates.
tweets
Text-based posts up to 140 characters in length posted to Twitter.
Commercial Uses of Blogs
Corporate uses of blogs mirror some of the characteristics of personal blogs and can be used for informational or PR purposes. They can be updated regularly and may put a human face on a firm.
Potential Risks of Corporate Blogs
Blogs are able to focus on niche areas and react quickly. The major risk is in this quick reaction, where posts may not be as well though out or vetted as desired.
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43. MECHANISM AIDS FOR WEB 2.0 TOOLS: TAGS, FOLKSONOMY, AND SOCIAL BOOKMARKS
A nonhierarchical keyword or term assigned to a piece of information (such as an Internet bookmark, digital image, video clip, or any computer document).
folksonomy (collaborative tagging, social classification, social indexing, social tagging)
The practice and method of collaboratively creating, classifying, and managing tags to annotate and categorize content.
social bookmarking
Web service for sharing Internet bookmarks. The sites are a popular way to store, classify, share, and search links through the practice of folksonomy techniques on the Internet and intranets.
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44. SOCIAL NETWORK SERVICES
MECHANISM AIDS FOR WEB 2.0 TOOLS: TAGS, FOLKSONOMY, AND SOCIAL BOOKMARKS
wiki (wikilog)
A blog that allows everyone to participate as a peer; anyone may add, delete, or change content.
SOCIAL NETWORK SERVICES
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45. Virtual Worlds Avatars
Animated computer characters that exhibit humanlike movements and behaviors.
individuals use them to portray themselves in virtual worlds
BUSINESS ACTIVITIES AND VALUE IN VIRTUAL WORLDS
Creating and managing a virtual business
Conducting regular business activities
Providing services for those who build, manage, or make money with virtual properties
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