Chapter 10 - E-Commerce: Digital markets, digital goods
1. Management Information SystemsManagement Information Systems MANAGING THE DIGITAL FIRM, 12TH EDITION E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS Chapter 10 VIDEO CASES Case 1: M-Commerce: The Past, Present, and Future Case 2: Ford AutoXchange B2B Marketplace
2. Management Information SystemsManagement Information Systems • What are the unique features of e-commerce, digital markets, and digital goods? • What are the principal e-commerce business and revenue models? • How has e-commerce transformed marketing? • How has e-commerce affected business-to-business transactions? • What is the role of m-commerce in business and what are the most important m-commerce applications? • What issues must be addressed when building an e-commerce Web site? Learning Objectives CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS © Prentice Hall 20112
3. Management Information SystemsManagement Information Systems • Problem - Differentiate a burger restaurant’s services in crowded marketplace (Manhattan) • Solution – Utilize social networking and crowdsourcing for marketing and services – Ordering via iPad, online – Customers can create and name own sandwiches – Twitter, Facebook, Foursquare integration • Illustrates: Use of information systems to create new products and services • Demonstrates: Use of social networking technologies as marketing tool 4FOOD: Burgers Go Social CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS © Prentice Hall 20113
4. Management Information SystemsManagement Information Systems • E-commerce today: – Use of the Internet and Web to transact business; digitally enabled transactions – Began in 1995 and grew exponentially, still growing even in a recession – Companies that survived the dot-com bubble burst and now thrive – E-commerce revolution is still in its early stages E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 4 © Prentice Hall 2011
5. Management Information SystemsManagement Information Systems E-commerce and the Internet THE GROWTH OF E-COMMERCE Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed measurably. In 2010, e-commerce revenues are growing again at an estimated 12 percent annually. FIGURE 10-1 CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS © Prentice Hall 20115
6. Management Information SystemsManagement Information Systems • Why e-commerce is different – 8 unique features 1. Ubiquity • Internet/Web technology available everywhere: work, home, etc., anytime. • Effect: – Marketplace removed from temporal, geographic locations to become “marketspace” – Enhanced customer convenience and reduced shopping costs E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 6 © Prentice Hall 2011
7. Management Information SystemsManagement Information Systems • 8 unique features (cont.) 2. Global reach • The technology reaches across national boundaries, around Earth • Effect: – Commerce enabled across cultural and national boundaries seamlessly and without modification – Marketspace includes, potentially, billions of consumers and millions of businesses worldwide E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 7 © Prentice Hall 2011
8. Management Information SystemsManagement Information Systems • 8 unique features (cont.) 3. Universal standards • One set of technology standards: Internet standards • Effect: – Disparate computer systems easily communicate with each other – Lower market entry costs—costs merchants must pay to bring goods to market – Lower consumers’ search costs—effort required to find suitable products E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 8 © Prentice Hall 2011
9. Management Information SystemsManagement Information Systems • 8 unique features (cont.) 4. Richness • Supports video, audio, and text messages • Effect: – Possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people – Video, audio, and text marketing messages can be integrated into single marketing message and consumer experience E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 9 © Prentice Hall 2011
10. Management Information SystemsManagement Information Systems • 8 unique features (cont.) 5. Interactivity • The technology works through interaction with the user • Effect: – Consumers engaged in dialog that dynamically adjusts experience to the individual – Consumer becomes co-participant in process of delivering goods to market E-commerce and the Internet CHAPTER 10: E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS 10 © Prentice Hall 2011
11. Management Information SystemsManagement Information Systems • 8 unique features (cont.) 6. Information density • Large increases in information density—the total amount and quality of information available to all market partic