Hit a home run with information systems. MLB. Operate 2 to

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eCommerceDigital markets, Digital goods

• The new frontier of business

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4FOOD Burgers go Social

• Organic burger restaurant
• Mannhattan
• Promise of delicious food
• Drive business with social networking
• Giant monitor streams
• Tweeter tweets
• Restaurant info
• Foursquare check-ins

3

• Options for place orders
• ipad to an employee
• Online
• Tagging its Facebook wall
• Eligible to win an iPad
• Tweet a picture of yourself
• Win 20 worth of food
• Hire employee from social networking

4

• Crowdsourcing for marketing menu development
• Online tool to build your own sandwiches
• Name your own inventions
• Someone order your item
• Get .25 in-store credit
• Get customers to use social media to promote
  their burger

5

• 10.1 eCommerce and the Internet
• 10.2 eCommerce
• 10.3 mCommerce
• 10.4 Building an E-commerce Web site

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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
• New medium for advertising and sales

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

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• eCommerce outlook is positive
• Online consumer sales will still increase in 2008
• Cyber Monday
• Thanksgiving (black Friday, traditional)
• On the average day,
• 140 million send email
• 5 million write blogs
• B2B eCommerce will continue to expand

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• 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

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

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• Global reach
• Cross cultural and national boundaries
• Conveniently
• Cost effectively
• Potential market size

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• Universal standards
• Internet standard
• Shared by all nations
• Regardless of the technology platform
• Lower market entry cost
• Reduce search cost

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• Richness
• The complexity and content of a message
• Traditional sale rep
• Great richness
• personal, face-to-face service
• Web
• Interactivity
• Allow two-way communication
• Similar to face-to-face experience

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• Information density
• The total amount and quality of info available
• eCommerce
• Reduce info costs
• collection, storage, processing, communication
• Greatly increase quality
• currency, accuracy, timeliness

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

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• Personalization / customization
• Personalization
• Adjust the message to customers interests and
  past purchases
• Customization
• Changing the delivered products and services
  based on a users preference
• Ex Wall Street Journal
• Customers choose types of news first

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• Social technology
• User content generation
• Social networking
• Expanding the number of business social
  contacts by making connections through
  individuals
• Allow user to create and share contents
• Text
• Video
• Music
• Photo

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• Key concepts in eCommerce
• Info asymmetry
• One party of transaction has more info
• Important to transaction
• Help determining bargaining power

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• Digital market
• More transparent in info
• Reduced search and transaction cost
• Lower menu price
• Merchants cost of changing price
• Lower price discrimination
• Ex Auto sales

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• Dynamic pricing
• Price varies on the demand characteristics
• Switching cost
• Increase or reduce
• Immediate gratification
• Can
• Digital music downloaded
• Can not
• Clothes purchased

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• Disintermediation
• Removal of organizations and business process
  layer

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

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• Cost structure
• Producing another copy
• Marginal, (zero)
• Producing the original
• Relatively high
• The impact of the Internet
• Music industry
• Loss CD sales, reach more customers
• Books
• Video

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• 10.1 eCommerce and the Internet
• 10.2 eCommerce
• 10.3 mCommerce
• 10.4 Building an E-commerce Web site

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10.2 electronic commerce

• Categories
• Classify by the nature of the participant
• Business-to-consumer (B2C)
• Retailing
• amazon.com
• Business-to-business (B2B)
• ?????? business procurement
• ?????
• Consumer-to-consumer (C2C)
• eBay
• C2B??

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• Classify by participants connection
• Wired network
• Mobile commerce (m-Commerce)
• The use of wireless internet appliance

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E-Commerce business models

• Portal
• Google, Bing, Yahoo!, MSN, AOL
• Powerful web search tools
• Integrated package of content and services
• Revenue
• Ad placement
• Collect referral fees
• Charge for premium services

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• E-tailers
• Online retail stores
• Convenient
• Low cost
• 24/7
• Large selections
• Types
• Bricks-and-clicks Walmart
• e-tailer Amazon

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• Content provider
• Content all forms of intellectual property
• Text, music, movie
• Podcasting
• Publish audio and video content from i-store
• Streaming
• Flow a continuous stream of content
• without being stored locally

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• Transaction broker
• Process transactions for consumers
• Financial service
• Travel service
• Market creator
• Build digital environments
• eBay
• Priceline.com

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• Service provider
• Offer services online
• Online backup and storage
• Google apps
• Gmail
• Community provider
• Create online environment where people with
  similar interests can transact
• Facebook, MySpace

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E-Commerce revenue models

• Advertising revenue model
• Exposing advertisements to visitors
• Most widely used revenue model
• Yahoo banner ads
• Google keywords

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• Sales revenue model
• Selling goods, information, or service
• Amazon, iTune
• Subscription revenue model
• Charge a subscription fee for access contents or
  services
• Netflix
• Wall Street Journal

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• Free/Freemium revenue model
• Offer basic services or content for free
• Charge a premium for advanced or special feature
• FarmVille on Facebook

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• Transaction fee revenue model
• Fee for enabling or executing a transaction
• eBay
• ETrade
• Affiliate revenue model
• Referral fee
• Percentage of the revenue from any resulting
  sales
• Amazon logo on blogs

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Web 2.0

• Social networking The wisdom of crowds
• Link people through their mutual business or
  personal connection
• Enable to mine their friends friends friend)
• Sales leads
• Job-hunting tips
• New friends

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• Social networking sites sell
• Banner, video, and text ads
• User preference info to marketers
• Product
• PG, MySpaces fictional character Miss
  Irresistable
• Social shopping
• Swap shopping ideas with friends
• Ideal venues to employ viral marketing techniques
• Fat wallet
• Word-of-mouth marketing

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• The wisdom of crowds
• Firm should consult as many customers as possible
• Establish relationships first
• Actively solicit comments
• Understand how products and services are used and
  appreciated (or rejected)

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• The wisdom of crowds techniques
• Crowdsourcing
• Involve crowd of customers for ideas
• Netflix offer 1 million for ideas to predict
  what movie customers like
• Prediction markets
• Peer-to-peer betting markets
• Participants make bets on specific outcomes
• For example, political elections

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• E-commerce marketing
• Long tail marketing
• Find potential customers for which demand is very
  low
• e.g. independent music
• Behavioral targeting
• Tracking the click-streams to understand their
  interests and intentions

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• Clickstream tracking
• Collect data on customer activity at website

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43

• Web personalization
• Modify webpages presented to each customer
• Collaborative filter
• Compare info collected about a specific users
  behavior
• to data about other customers with similar
  interests
• Ex www.books.com.tw
• ??????,????
• people bought this book also
  bought

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Web personalization
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• B2B e-commerce
• New efficiencies relationship
• EDI
• Electronic data interchange
• Proprietary
• 80 of B2B e-commerce
• Computer-to-computer exchange of transactions
• Invoices, Orders
• Just-in-time inventory / continuous replenishment

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• Internet and web based
• Public network
• Flexible and low cost
• Extranet
• Private intranet extend to authorized users
  outside the company
• Fedex.com

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

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• Net marketplace
• Transaction oriented digital market
• Sellers
• Buyers
• Types of net marketplace
• Direct goods
• Indirect goods
• Vertical markets
• ??? Steel
• Horizontal market
• ?? office furniture

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

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• 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

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• 10.1 eCommerce and the Internet
• 10.2 eCommerce
• 10.3 mCommerce
• 10.4 Building an E-commerce Web site

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10.3 m-Commerce

• Use wireless mobile devices
• Purchasing
• Transmitting message
• M-Commerce services and applications
• GPS built-in smartphone
• Global positioning system
• Check in at places
• Broadcast their location to friends

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• Banking and financial services
• Text message of credit card transactions
• Check balance
• Transfer funds
• Wireless advertising
• Valuable personal info available from service
  provider
• Higher response rates

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

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• 10.1 eCommerce and the Internet
• 10.2 eCommerce
• 10.3 mCommerce
• 10.4 Building an E-commerce Web site

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10.4 Building an E-commerce Web site

• Management challenges in building a successful
  e-commerce site
• Business objectives
• Choose the right technology

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• Business objectives, system functionality, and
  information requirements
• Business objectives
• Capabilities your site to have
• System functionality
• Types of information capabilities needed to
  achieve business objectives
• Information requirements
• The information elements that the system must
  produce

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• Building the Web site
• In-house vs. Outsourcing

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• The building decision
• Pre-built template
• Yahoo merchant solutions, Amazon stores, eBay
• Least costly and simplest solution
• Limited look and feel and functionality

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• Build your own site
• Adobe Dreamweaver, Microsoft SharePoint Designer
• Built exactly what you want
• Cost is high
• Complexity of features
• Shopping carts
• Credit card authentication
• Long and difficult learning curve
• Poor design

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• The hosting decision
• Outsourcing
• site is live or accessible 24 hours a day
• Web server maintenance (hardware software)
• Telecommunication link
• backup
• Monthly fee
• 4.95 several hundred thousands
• Size, bandwidth, storage, support

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• Website Budgets