E-commerce and M-commerce Quiz

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Questions and Answers

What distinguishes a private industrial network from a net marketplace?

A private industrial network connects a single large firm with its suppliers and partners, while a net marketplace is a digital platform that connects multiple buyers and sellers.

What are the two types of net marketplaces?

Net marketplaces can be classified as vertical marketplaces, which focus on specific industries, and horizontal marketplaces, which cater to a range of industries.

What role does m-commerce play in modern e-commerce?

M-commerce represents a rapidly growing sector, accounting for 35% of all e-commerce and experiencing annual growth of over 20%.

Identify the main areas of growth for m-commerce.

The main areas of growth for m-commerce include mass market retailing, sales of digital content, and in-app purchases. Signup and view all the answers

How do location-based services enhance the m-commerce experience?

Location-based services enhance m-commerce by providing users with geosocial, geo advertising, and geo information services based on their GPS location. Signup and view all the answers

Which companies dominate the mobile advertising market?

Google and Facebook are the largest players in the mobile advertising market, primarily through ads embedded in games and mobile apps. Signup and view all the answers

What percentage of online retailers have established m-commerce websites?

Approximately 55 percent of online retailers have developed m-commerce websites. Signup and view all the answers

What are the three major types of e-commerce?

Business-to-consumer (B2C), Business-to-business (B2B), and Consumer-to-consumer (C2C). Signup and view all the answers

What challenges must businesses address when building an e-commerce presence?

Businesses need to address issues such as security, payment processing, site usability, and effective online marketing strategies. Signup and view all the answers

Name two examples of B2B e-commerce platforms.

ChemConnect and Alibaba. Signup and view all the answers

Describe the role of a transaction broker within e-commerce business models.

A transaction broker facilitates transactions between buyers and sellers and earns fees for these services. Signup and view all the answers

What are the main sources of revenue for e-commerce businesses?

Advertising, sales, subscription models, free/freemium offerings, transaction fees, and affiliate marketing. Signup and view all the answers

How has e-commerce transformed marketing strategies for businesses?

E-commerce has introduced long tail marketing and enhanced targeting through behavioral tracking of customers. Signup and view all the answers

What is the significance of disintermediation in digital markets?

Disintermediation eliminates middlemen, allowing consumers to connect directly with producers. Signup and view all the answers

Explain the concept of dynamic pricing in e-commerce.

Dynamic pricing allows prices to change in real-time based on demand, competition, and market conditions. Signup and view all the answers

What digital goods are and how do they impact industries like publishing?

Digital goods are products that can be delivered online, greatly lowering production and delivery costs, affecting industries like publishing. Signup and view all the answers

What is social e-commerce and what features contribute to its growth?

Social e-commerce is based on a digital social graph and is driven by features like newsfeeds, timelines, collaborative shopping, and social search. Signup and view all the answers

How does social network marketing leverage individual influence?

Social network marketing leverages individual influence by targeting networks of people who share similar interests and opinions, enhancing brand visibility. Signup and view all the answers

What role did internet and networking play in B2B transactions?

Internet and networking automate procurement processes in B2B transactions, improving efficiency and cost-effectiveness. Signup and view all the answers

Define Electronic Data Interchange (EDI) and its importance in business.

EDI is the computer-to-computer exchange of standard transactions, such as invoices and purchase orders, which standardizes communication between businesses. Signup and view all the answers

What are the advantages of web-enabled private networks over traditional EDI?

Web-enabled private networks allow companies to connect with a broader range of firms and share more varied information compared to traditional EDI. Signup and view all the answers

How has e-commerce impacted marketing strategies?

E-commerce has transformed marketing strategies by enabling direct engagement with customers via social media and providing data-driven insights. Signup and view all the answers

What is the significance of the 'Like' button in social media marketing?

The 'Like' button is significant as it facilitates engagement and acts as a metric of approval and influence within social networks. Signup and view all the answers

What were the statistics of U.S. B2B trade and e-commerce in 2019?

In 2019, U.S. B2B trade was $13.5 trillion, and B2B e-commerce was $6.2 trillion. Signup and view all the answers

Study Notes

Chapter 10: E-commerce: Digital Markets, Digital Goods

E-commerce is the use of the Internet and Web to transact business.
E-commerce began in 1995 and grew exponentially, and remains stable even during recessions.
Companies that survived the dot-com bubble now thrive.
The new e-commerce is characterized by social, mobile, and local features.
There has been a shift from desktop use to smartphone use.

Learning Objectives

10.1: Unique features of e-commerce, digital markets, and digital goods are discussed.
10.2: Principal e-commerce business and revenue models are outlined.
10.3: E-commerce's impact on marketing is examined.
10.4: E-commerce's effect on business-to-business transactions is detailed.
10.5: The role of m-commerce in business and crucial m-commerce applications are elucidated.
10.6: Issues for building an e-commerce presence are analyzed.

E-Commerce Today

E-commerce: Use of the Internet and Web for business transactions.
Began in 1995 and grew exponentially; now stable through recessions.
Post-dot-com bubble companies thriving.
Current e-commerce trends: social, mobile, and local focus.
Change from desktop to smartphones.

Figure 10.1: Growth of E-Commerce

Shows the growth of e-commerce business-to-consumer (B2C) revenue from 1995 up to 2021.
Growth is substantial and continues.

Why E-Commerce is Different (Part 1)

Ubiquity: Marketspace is virtual; transaction costs are reduced.
Global Reach: Crosses cultural and national boundaries.
Universal Standards: Internet technology standards are applied.
Richness: Supports various media like video, audio, and text.

Why E-Commerce is Different (Part 2)

Interactivity: Enables two-way communication with customers.
Information Density: Greater price and cost transparency; enables price discrimination.
Personalization/Customization: Technology enables tailored messages and goods.
Social Technology: Promotes user content creation and social networking.

Key Concepts in E-Commerce

Internet and digital markets change business conduct.
Information asymmetry is reduced.
Menu costs, search costs, and transaction costs are reduced.
Dynamic pricing is enabled.
Switching costs are a factor.
Delayed gratification is a consideration.
Disintermediation occurs.

Figure 10.2: Disintermediation Benefits

Illustrates how disintermediation can benefit consumers by reducing prices due to the exclusion of intermediaries.
Shows price comparisons across different sales channels (producer, distributor, retailer).

Digital Goods

Goods delivered over a digital network.
Cost of producing the first unit is almost the entire cost.
Internet delivery costs are low.
Marketing costs remain the same, but pricing is variable.
Industries that primarily consist of digital goods undergo revolutionary changes. (Examples: publishers, music companies, and so on.)

Types of E-Commerce

Business-to-consumer (B2C): Examples include Barnes and Noble.com
Business-to-business (B2B): Examples include ChemConnect.
Consumer-to-consumer (C2C): Examples include eBay
E-commerce may be categorized by platform - including mobile commerce (m-commerce).

E-Commerce Business Models

Portal
E-tailer
Content provider
Transaction broker
Market creator
Service provider
Community provider

E-Commerce Revenue Models

Advertising
Sales
Subscription
Free/Freemium
Transaction fee
Affiliate

How Has E-Commerce Transformed Marketing?

Internet offers new customer identification and communication methods.
Long-tail marketing emerges.
New Internet advertising formats have arisen.
Online behavior tracking empowers behavioral targeting.
Programmatic ad buying becomes more prevalent.
Native advertising techniques are used.

Figure 10.3: Website Visitor Tracking

Example of how websites track customer behavior.
The tracking allows website operators to personalize the experience and offer relevant ads and offers.

Figure 10.4: Website Personalization

Illustrates how data and behavior tracking can be used to personalize user experience.
Shows how recommendations and tailoring are offered to users.

Figure 10.5: How an Advertising Network Works (like DoubleClick)

Illustrates how an advertisement network operates to track user preferences and tailor ads.
Shows how cookies and data are used to provide personalized experience.

Social e-commerce utilizes social graphs.
Key features driving social e-commerce growth: newsfeeds, timelines, social sign-on, collaborative shopping, network notification, and social search (recommendations).
Social media is a rapidly-growing medium for branding and marketing.
Social network marketing leverages individual's influence on others.
It targets a social network of people sharing the same interests.
Examples include Facebook's "Like" button, massive social network audiences, and social shopping sites.
Concepts like Wisdom of crowds and Crowdsourcing are important

How Has E-Commerce Affected Business-to-Business Transactions?

US B2B trade in 2019 was $13.5 trillion; US B2B e-commerce in 2018 was $6.2 trillion.
Internet and networking automate procurement.
Variety of Internet enabled technologies in B2B:
Electronic Data Interchange (EDI)
Private industrial networks (private exchanges)
Net marketplaces
Exchanges

Electronic Data Interchange (EDI)

Computer-to-computer exchange of standard transactions (invoices, purchase orders).
Major industries have EDI standards.
Standardizes structure and fields of electronic documents.
More companies are moving towards web-enabled private networks allowing for wider firm connections and broader information sharing.

Figure 10.6: Electronic Data Interchange (EDI)

Illustrates a diagram representing the exchange of business information between suppliers and firms using EDI.
Shows continuous replenishment as a key aspect of EDI.

New Ways of B2B Buying and Selling

Private industrial networks (private exchanges): Large firms using secure websites to connect with suppliers & partners.
Net marketplaces (e-hubs): Single digital marketplaces for multiple buyers and sellers which may focus on direct or indirect goods. Net marketplaces can be organized by industry (vertical) or focus on an array of products/services (horizontal).
Exchanges: Independently owned third-party marketplaces for spot purchasing.

Figure 10.7: Private Industrial Network

Illustrates a network of suppliers and distributors connected to a firm, representing how information flows between the parties.

Figure 10.8: Net Marketplace

Illustrates a network of buyers and suppliers connected to a net marketplace.
Shows catalogs, sourcing, automated purchasing, processing, and fulfillment as functions of a net marketplace.

What is the Role of M-Commerce in Business, and What are the Most Important M-Commerce Applications?

M-commerce in 2017 was 35% of all e-commerce.
It's the fastest-growing form of e-commerce, growing at 20% per year or more.
Main areas of growth: mass-market retailing (Amazon, eBay, etc.), selling digital content (music, TV, etc.), and in-app sales on mobile devices.

Figure 10.9: Mobile Retail Commerce Revenues

A graph illustrating the rising revenue of mobile retail commerce from 2016 onward.

Location-Based Services and Applications

Used by 74% of smartphone owners.
Based on GPS map services & geosocial services (where friends are, nearby shops, information about locations visited).
Geo advertising, and geo information services are also included (price of houses visited).

Other Mobile Commerce Services

Financial account management apps (banks, credit card companies).
Mobile advertising market (with Google and Facebook as significant players); ads embedded in various formats (games, videos, apps).
55% of online retailers have m-commerce websites.

What Issues Must Be Addressed When Building an E-Commerce Presence?

Developing a clear understanding of the business objectives.
Choosing the right technology for achieving the objectives.
Developing an e-commerce presence map with four key areas (websites, email, social media, and offline media).
Establishing a timeline with milestones and breaking the project into phases.

Figure 10.10: E-Commerce Presence Map

Shows different e-commerce presence segments (websites, emails, social media, offline media).
Links different platforms (traditional, mobile, tablet, Facebook, Twitter, Blogs, Print, TV & radio) with different activities (Search, display ads, sales, conversation, education, and more).

Copyright Information

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Intended for educational use solely.
Dissemination for commercial use is prohibited.

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Description

Test your knowledge on e-commerce and m-commerce concepts! This quiz covers key differences between private networks and marketplaces, the impact of m-commerce on modern businesses, and the challenges faced by online retailers. Evaluate your understanding of transaction brokers and major players in mobile advertising.