Management Information Systems: Session-04

Management Information Systems
Sixteenth Edition
Session- 04
E-commerce: Digital Markets, Digital Goods
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Dip IT (US Army), Dip Mgmt (US Army),Dip Sys Analysis & Design,
MACS(AUS), MBCS(UK), MCS (SL)
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Learning Objectives
• 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
• What issues must be addressed when building an e-commerce
presence?
•
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
Figure 10.1 The Growth of E-Commerce
5
Electronic Commerce
• Electronic commerce (e-commerce)
– Systems that support electronically executed business
transactions
– The fundamental purpose of e-commerce is to execute
transactions
E-Business
E-business (electronic business), is the conduct of
business on the internet, not only buying and
selling, also servicing for customers and
collaborating with business partners.
Global
Dissemination
Integration Interaction
Strategic values of
internet that powers the
growth of business
Electronic
Customization
Commerce
Collaboration
Copyright © 2017, 2014, 2011 Pearson Education, Inc. All Rights Reserved.
How Internet is used in Business
Electronic Commerce
Business Value of the Internet
Attract new customers
Improve services to existing customers
Develop new web-based markets and distribution

channels
Develop new information-based products
accessible on the web
Provide Strategic Alliances
Customers
Suppliers
Consultants
Subcontractors
Competitors
Banks and Share Holders
Regulators
Competitors
Electronic Commerce
Communications and
Collaboration
Electronic Commerce
Interactive Marketing
Communications and collaboration
Employees
Government Customers
Other
business Suppliers
Partners
Bulleting Board Audio and

Emails Discussion Group Websites Whiteboard sharing
Systems Videoconferencing
Electronic Commerce
Activities
Marketing
Buying
Selling
Support of Product & Services
Applications
Business transaction
Online Order processing Electronic Data Exchange Electronic Fund Transfer
Documentation
Interactive Marketing Process
Create
promotional Put the
Segment
, material on Interacting Learning Online
and Identify
advertising Customers’ with from the customer
Potential
and computer Customers customers service
customers
educational screen
material
Electronic Commerce
Pull Search
Marketin Engine
Optimization
g
Push Email
Marketin campaign,
Banners etc.
g
Business benefits of EDI
Electronic Commerce
Benefits of E-Commerce
Benefits to Organizations.
• Expands the market place to national and international markets, With minimum
capacity can quickly find more customers, best suppliers and most suitable
business partners.
• Decreases purchasing and administrative cost
• Improve customer service levels.
• Increased productivity
• Receive electronic orders
• Provide after-sales service
• Order and pay for business supplies
• Monitor Competitor activities
• Undertake market research
Electronic Commerce
Electronic Commerce
Electronic Commerce
Disadvantages/Challenges
Common Drivers for EC
Low barriers to entry
Abundant niche markets
Many revenue sources
No geographical boundaries
Fair playing field [Same technology available to all]
Universal access
Room for teams of successful players in virtual space
E-Commerce from the Buyer’s 22
Perspective
• Process of buying or acquiring goods or services
– Realizing a need
– Researching a product
– Selecting a vendor
– Providing payment
– Accepting delivery
– Using product support
E-Commerce from the Buyer’s 23
Perspective
Customer/Buyer Benefits
Lower support costs by empowering customer to solve issues

independently
Provide global access to critical customer service information and forums

online
Improve service by focusing internal customer support resources on

complex issues
Empower business partners with hot links to related online resolution

information
Create proactive services and marketing programs
Seamless Web/telephony integration for priority responsiveness
E-Commerce from the Seller’s 25
Perspective
• Sellers business practices

– Market research to identify customer needs
– Manufacturing products or supplying services that meet
customer needs
– Marketing and advertising to make customers aware of
available products and services
E-Commerce from the Seller’s
26
Perspective
• Sellers business practices
– Providing a method for acquiring payments
– Making arrangements for delivery of the product
– Providing after-sales support
• Supply chain management
– From the seller’s perspective, the process of producing and
selling goods
– Involves three areas of focus: demand planning, supply
planning, and demand fulfillment
• Demand fulfillment: process of getting the product or service to
the customer
E-Commerce from the Seller’s
27
Perspective
E-Commerce from the Seller’s Perspective…
Benefit of web based sales force automation
shortened the sales cycle through prequalification of

prospects
Increase revenue through targeted marketing
Automate the management and qualification of Web leads
Capture all consumer information directly into a sales

database
Enhance order management with access to data on pricing,

promotions, availability, production schedule, export
regulation, carriers and transport schedule
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
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
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
The Benefits of Disintermediation to
the Consumer
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.)
Types of E-Commerce 34
• Business-to-consumer e-commerce (B2C)

– Connects individual consumers with sellers , cutting out the
middleman
– E.g. Amazon.com
• Business-to-business e-commerce (B2B)
– Supports business transactions on across private networks,
the Internet, and the Web
• Consumer-to-consumer e-commerce (C2C)
– Connects individual sellers with people shopping for used
items
– E.g. ebay.com
E-commerce can be categorized by platform Mobile commerce (M-commerce)
Types of E-Commerce
Type of E commerce
• C2C (Consumer-to-Consumer)
Consumer sells directly to consumer.
There are many sites offering free classifieds (Residential property, Cars)
auctions, and forums where individuals can buy and sell with assistance
of online payment systems. people can send and receive money online
easily.
eBay’s auction service is great example of where person-to-person
transactions take place.
Advertising personal services on internet and setting knowledge and
expertise skills.
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 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
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
Figure 10.9 Mobile Retail Commerce
Revenues
Location-Based Services and
Applications
• Used by 74 percent of smartphone owners
• Based on G PS map services
• Geosocial services
– Where friends are
• Geo advertising
– What shops are nearby
• Geo information services
– Price of house you are passing
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
Interrelationship
Benefits and Challenges of E-
44
Commerce
• Buyers enjoy the convenience of shopping from their
desktop
• B2C e-commerce
– Levels the playing field between large and small businesses
• Challenges
– Established businesses must alter systems and business
practices
– Security, privacy, reliability: E-commerce can survive only if
all involved can trust the system
– Social concerns
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
46
Marketing
47
Electronic Payment System

Management Information Systems: Session-04

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Management Information Systems

E-commerce: Digital Markets, Digital Goods

Slide in this Presentation Contain Hyperlinks.

Attract new customers

Improve services to existing customers

Develop new web-based markets and distribution

Banks and Share Holders

Bulleting Board Audio and

Support of Product & Services

Low barriers to entry

Abundant niche markets

Many revenue sources

Fair playing field [Same technology available to all]

Room for teams of successful players in virtual space

Lower support costs by empowering customer to solve issues

Provide global access to critical customer service information and forums

Improve service by focusing internal customer support resources on

Empower business partners with hot links to related online resolution

Create proactive services and marketing programs

Seamless Web/telephony integration for priority responsiveness

• Sellers business practices

Benefit of web based sales force automation

shortened the sales cycle through prequalification of

Increase revenue through targeted marketing

Automate the management and qualification of Web leads

Capture all consumer information directly into a sales

Enhance order management with access to data on pricing,

• Business-to-consumer e-commerce (B2C)

Electronic Payment System

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