CS330 Chapter Notes - Chapter 10: Digital Goods, Mobile Commerce, Dynamic Pricing
11 Dec 2016
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Chapter 10- E-commerce: Digital Markets and Digital Goods
10.1 E-Commerce and the Internet
- use of internet and the web to do business
- digitally enabled transactions
- began in 1995
- continues to grow
- many people connected globally
- mobile phones will become most common internet access device
Why E-Commerce is Different
- Ubiquity: available anywhere at all times
- Marketspace- marketplace extended beyond traditional boundaries and removed from a
temporal and geographic location
- Reduces transaction costs
- Global reach
- Standards are universal
- Lowers market entry costs- costs to bring goods to market
- Lowers search costs- effort to find suitable products
- Richness- complexity and content of a message; slowly getting more rich
- Interactivity- can engage customers as if face-to-face but globally
- Information density- total amount and quality of information available to all market participants
- Transparency- ease which consumers can find out variety of prices in a market
- Cost transparency- ability of consumers to discover actual costs merchants pay
- Price discrimination- selling same good to different people at different prices
- Lowers price discrimination
- Personalization/ customization- allows customization of messages and products
Key Concepts in E-Commerce: Digital Markets and Digital Goods in a Global Marketplace
- Information asymmetry- one party in a transaction has more information than the other
- Helps determine bargaining power
- Internet shrinks it
- Menu costs- erhats’ osts of hagig pries
- Is lowered
- Dynamic pricing- price of product varies change depending on demand characteristics of the
customers or supply
- Disintermediation- removal of organizations or business process layers responsible for
intermediary steps in a value chain
- Digital goods- goods that can be delivered over a digital network
- Marginal cost of producing copies is nothing
- High cost of production
- Copying cost is nothing
- Distribution costs is low
- Inventory costs is low
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Document Summary
Chapter 10- e-commerce: digital markets and digital goods. Use of internet and the web to do business. Mobile phones will become most common internet access device continues to grow. Marketspace- marketplace extended beyond traditional boundaries and removed from a temporal and geographic location. Lowers market entry costs- costs to bring goods to market. Lowers search costs- effort to find suitable products. Richness- complexity and content of a message; slowly getting more rich. Interactivity- can engage customers as if face-to-face but globally. Information density- total amount and quality of information available to all market participants. Transparency- ease which consumers can find out variety of prices in a market. Cost transparency- ability of consumers to discover actual costs merchants pay. Price discrimination- selling same good to different people at different prices. Personalization/ customization- allows customization of messages and products. Key concepts in e-commerce: digital markets and digital goods in a global marketplace.
