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eCommerce: Digital markets, Digital goods

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

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  1. eCommerce:Digital markets, Digital goods The new frontier of business

  2. Major League Baseball • Hit a home run with information systems • MLB • Operate 2 top baseball leagues in north America • National league • American league

  3. 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

  4. 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

  5. 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

  6. 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

  7. eCommerce • New channels for reaching customers • Compete with other forms of entertainment • New digital products and service • New marketing tools

  8. 10.1 eCommerce and the Internet 10.2 eCommerce 10.3 mCommerce 10.4 Electronic commerce payment systems

  9. 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

  10. The “dot-com” bubble • 2001, burst • A large number of company failed • Some results still positive • Amazon • eBay • Google

  11. 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

  12. 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

  13. Customers’ viewpoint • Reduce transaction cost no need to spend money and time to reach market less mental efforts for purchasing

  14. 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

  15. 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

  16. 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

  17. Merchants • Discover more about customers segment markets • Price discrimination selling the same goods or almost the same goods to different group at different prices

  18. 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 • …

  19. 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)

  20. 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

  21. 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

  22. Disintermediation • Removal of organizations and business process layer

  23. Digital Goods • Goods that can be delivered over a digital network • Music • Video • Software • Newspaper • Magazine • eBooks

  24. 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

  25. 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

  26. Communication and community • Internet’s rich communication capability • eBay • online community • iVillage • Source of revenue • Banner ads • Pop-up ads

  27. Social networking • MySpace.com • Can create more targeted promotion • Visitors are more “sticky” • Social shopping • Provide online meeting place to swap shopping idea

  28. 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

  29. 10.1 eCommerce and the Internet 10.2 eCommerce 10.3 mCommerce 10.4 Electronic commerce payment systems

  30. 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

  31. Classify by participant’s connection • Wired network • Mobile commerce (m-Commerce) • The use of wireless internet appliance

  32. Achieving customer intimacy • Internet • Additional channel of communication • Closer interaction • More cost effective • Interactive marketing & personalization • Make products available • for million • and personal

  33. 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

  34. 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"

  35. 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 …

  36. Web personalization

  37. 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

  38. Marketers analyze • Blog • Chat group • Message board for comments of new product, old brands “blog watching service”

  39. Customer self-service • Web-based service • At customer’s convenience • Lower cost • Not a live customer service • FAQ • Airlines’ websites • Tracking shipment • Fedex

  40. B2B e-commerce: • New efficiencies & relationship • EDI • Electronic data interchange • Proprietary • 80% of e-commerce • Computer-to-computer exchange of transactions • Invoices • Orders …

  41. 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

  42. Private industrial network • B2B extranet • Collaboration and supply chain management • Suppliers • Distributors • Business partners • Private exchange • VWGroupSupply.com • Volkswagon

  43. 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

  44. Industry-owned net marketplace • Exostar • Aerospace and defense industry • Boeing • Lockheed Martin • Raytheon …

  45. 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

  46. 10.1 eCommerce and the Internet 10.2 eCommerce 10.3 mCommerce 10.4 Electronic commerce payment systems

  47. 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, …

  48. Banking and financial services • Text message of credit card transactions • Check balance • Transfer funds • Wireless advertising • Same as portal • Ads come with search results

  49. Games and entertainments • Portable entertainment platforms • Downloadable digital games • Ringtone • On-demand video clips • Music

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