ITM 102 Chapter Notes - Chapter 9: Digital Goods, Delayed Gratification, Dynamic Pricing

• School: Ryerson University
• Department: Information Technology Management
• Course: ITM 102
• Professor: Bharat Shah

Document Summary

Why e-commerce is different: 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. 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. 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. )