Management Information Systems: Managing the Digital Firm PDF

Management Information Systems: Managing the Digital Firm Sixteenth Edition Chapter 10 E-commerce: Digital Markets, Digital Goods Sl...

Management Information Systems: Managing the Digital Firm Sixteenth Edition Chapter 10 E-commerce: Digital Markets, Digital Goods Slide in this Presentation Contain Hyperlinks. JAWS users should be able to get a list of links by using INSERT+F7 Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Learning Objectives 10.1 What are the unique features of e-commerce, digital markets, and digital goods? 10.2 What are the principal e-commerce business and revenue models? 10.3 How has e-commerce transformed marketing? 10.4 How has e-commerce affected business-to-business transactions? 10.5 What is the role of m-commerce in business, and what are the most important m-commerce applications? 10.6 What issues must be addressed when building an e-commerce presence? Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved E-Commerce Today E-commerce: Use of the Internet and Web to transact business Began in 1995 and grew exponentially; still stable even in a recession Companies that survived the dot-com bubble now thrive The new e-commerce: social, mobile, local Move from desktop to smartphone Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.1 The Growth of E-Commerce Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Why E-Commerce is Different (1 of 2) Ubiquity – Marketspace is virtual – Transaction costs reduced Global reach – Transactions cross cultural and national boundaries Universal standards – One set of technology standards: Internet standards Richness – Supports video, audio, and text messages Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Why E-Commerce is Different (2 of 2) Interactivity Information density – Greater price and cost transparency – Enables price discrimination Personalization/customization – Technology permits modification of messages, goods Social technology – Promotes user content generation and social networking Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Key Concepts in E-Commerce – Digital Markets and Digital Goods in a Global Marketplace Internet and digital markets have changed the way companies conduct business Information asymmetry reduced Menu costs, search and transaction costs reduced Dynamic pricing enabled Switching costs Delayed gratification Disintermediation Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.2 The Benefits of Disintermediation to the Consumer Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Digital Goods Goods that can be delivered over a digital network Cost of producing first unit is almost entire cost of product Costs of delivery over the Internet very low Marketing costs remain the same; pricing highly variable Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.) Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Types of E-Commerce Three major types – Business-to-consumer (B2C)  Example: Barnes and Noble.com – Business-to-business (B2B)  Example: ChemConnect – Consumer-to-consumer (C2C)  Example: e Bay E-commerce can be categorized by platform – Mobile commerce (m-commerce) Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved E-Commerce Business Models Portal E-tailer Content provider Transaction broker Market creator Service provider Community provider Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved E-Commerce Revenue Models Advertising Sales Subscription Free/Freemium Transaction fee Affiliate Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved How Has E-commerce Transformed Marketing? Internet provides new ways to identify and communicate with customers Long tail marketing Internet advertising formats Behavioral targeting – Tracking online behavior of individuals Programmatic ad buying Native advertising Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.3 Website Visitor Tracking Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.4 Website Personalization Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.5 How an Advertising Network Such as DoubleClick Works Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Social E-Commerce and Social Network Marketing (1 of 2) Social e-commerce based on digital social graph Features of social e-commerce driving its growth – Newsfeed – Timelines – Social sign-on – Collaborative shopping – Network notification – Social search (recommendations) Social media – Fastest growing media for branding and marketing Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Social E-Commerce and Social Network Marketing (2 of 2) Social network marketing – Seeks to leverage individuals’ influence over others – Targeting a social network of people sharing interests and advice – Facebook’s “Like” button – Social networks have huge audiences Social shopping sites Wisdom of crowds Crowdsourcing Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved How Has E-Commerce Affected Business-To Business Transactions? U.S. B2B trade in 2019 is $13.5 trillion – U.S. B2B e-commerce in 2018 is $6.2 trillion Internet and networking helps automate procurement Variety of Internet-enabled technologies used in B2B – Electronic data interchange (EDI) – Private industrial networks (private exchanges) – Net marketplaces – Exchanges Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Electronic Data Interchange (EDI) Computer-to-computer exchange of standard transactions such as invoices, purchase orders Major industries have EDI standards – Define structure and information fields of electronic documents More companies are moving toward web-enabled private networks – Allow them to link to a wider variety of firms than EDI allows – Enable sharing a wider range of information Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.6: Electronic Data Interchange (EDI) Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved New Ways of B2B Buying and Selling Private industrial networks – Private exchanges – Large firm using a secure website to link to suppliers and partners Net marketplaces (e-hubs) – Single digital marketplace for many buyers and sellers – May focus on direct or indirect goods – May be vertical or horizontal marketplaces Exchanges – Independently owned third-party Net marketplaces for spot purchasing Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.7 A Private Industrial Network Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.8 A Net Marketplace Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved What is the Role of M-Commerce in Business, and What are the Most Important M-Commerce Applications? M-commerce in 2017 is 35 percent of all e-commerce Fastest growing form of e-commerce – Growing at 20 percent or more per year Main areas of growth – Mass market retailing (Amazon, eBay, etc.) – Sales of digital content (music, T V, etc.) – In-app sales to mobile devices Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.9 Mobile Retail Commerce Revenues Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Location-Based Services and Applications Used by 74 percent of smartphone owners Based on GPS map services Geosocial services – Where friends are Geo advertising – What shops are nearby Geo information services – Price of house you are passing Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Other Mobile Commerce Services Financial account management apps – Banks, credit card companies Mobile advertising market – Google and Facebook are largest markets – Ads embedded in games, videos, and mobile apps 55 percent of online retailers have m-commerce websites Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved What Issues Must Be Addressed When Building an E-Commerce Presence? Most important management challenges – Developing clear understanding of business objectives – Knowing how to choose the right technology to achieve those objectives Develop an e-commerce presence map – Four areas: websites, e-mail, social media, offline media Develop a timeline: milestones – Breaking a project into discrete phases Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Figure 10.10 E-Commerce Presence Map Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved