Week 6 - Digital Markets

Read or listen to the podcast on Managing the Digital Enterprise on digital markets, then answer the questions about an online shopping experience you have had. There are three questions to answer.

Question 1

a) What experiences have you had with shopping online?

I have had many experiences with shopping online, I have purchased clothing, DVDs, phone accessories and much more.

b) Describe a good experience.

I recently went to purchase a present for a work mate through an Australian seller on eBay, only to find that I did not have enough money in my PayPal at the time and would have to wait 3 - 5 business days for the payment to clear. This was a problem because I needed the product within two days, I contacted the seller and told them my issue. The seller expressed posted the product for me and was trusting enough to do so prior to my payment clearing.

c) What did you like about the online store you used?

eBay is always a really good site for online shopping as it has many products from around the world, includes customer feed back and has many options when it comes to finding and paying for products.

d) Describe a bad experience.

Two weeks ago I purchased a jumper online from Dotti, the purchase was simple however when I checked out I had the option of standard post or express post. It showed that express post was a cost of $9.95 and did not show a price for standard post I selected standard post then continued to make my purchase, upon payment I found that standard post was $7.95, so I ended choosing express post.

e) What problems did you have with the online store?

The price of standard post was not specified when asking what post type you would like.

f) What features make an online store more appealing?

Professional look, appealing design and easy to access and use.

g) What features make an online store less appealing?

Pop-up ads, messy/ unprofessional design and difficult to use.

h) Should we expect to see the prices of goods and services rise or fall due to the migration of consumers online?

To accommodate for the shift to online shopping I think the prices of goods and services will have to drop to stay competitive.

Question 2

I have included an additional reading from MIT (Understanding Digital Markets). After reading it please discuss the following statements and indicate if you agree with them or not. Please note there may not be a right or wrong answer.

a) The dispersion of prices (that is, the spread between the lowest and highest price for a particular product) will narrow.

I believe this statement to be true, because information is so easy to access people will be able to compare prices quickly and without any trouble.

b) The importance of brand names will decrease.

I believe that the importance of brand names will decrease, because access to brand name products will become so easy that the significance of brand names will diminish. 

c) Price competition will make all products cheaper.

Yes, I believe all markets will become more competitive and as a result products will become cheaper.

d) Digital markets will become dominated by a handful 

of mega-sites, like Amazon.com.

I believe this to be untrue, digital markets will become so common that it will be hard to dominate.

e) How do you think the balance of power between buyer’s and seller’s will change?

I think buyers will have all the power because they have so much choice.

f) Prices are clustered online.

All prices will be similar for similar products, so they can be competitive.

g) Online prices are elastic. ( i.e. immune to change up and down with demand)

Online prices are inelastic because the demand and supply effects the prices.

h) Online prices are generally transparent (the extent to which prices for a given product or service are known by buyers in the marketplace.).

This is true, because prices are easily compared.

Question 3

a) What types of m-commerce services does your cell phone provider offer?

• Internet Banking
• Apps
• Internet
• Mobile Ticketing
• Mobile Entertainment
• Mobile Sales
• Mobile Marketing
• Mobile Payments

b) Which of these services do you use?

All of the above

c) What types of transactions do you perform through your cell phone or other wireless device?

• Banking
• Music/ App Download
• Online Shopping

d) What types of transactions would you like to perform, but are currently unable to?

I am currently happy with all the transaction I am able to perform on my mobile device.

e) What is your opinion of wireless advertising/mobile marketing?

It is inconvenient when it appears whilst I am using an app.

Reference:

Business Driven Information Systems 2nd Edition (Baltzan, Lynch and Blakey)

Week 5 - Business Models

There are nine types of business models and below are examples of each:

Brokerage

- bring buyers and sellers together

- facilitate transactions

- charges a fee for each transaction
Example: PayPal is an example of brokerage, it brings the buyer to the seller and makes for easier transactions.

Advertising

- provides visual content in the form of banner ads

- banner ads are a major source of revenue

- works better with larger volumes of traffic

Example: Gumtree it is an on line buy/swap/sell site which requires you to become a member and may charge a fee for the content that you upload.


Infomediary

- collects data on consumers and their habits and trends

- assist buyers and sellers to understand the market

- allows an advantage to buyers and sellers

Example: Pop up ads/banners that appear when you go on certain websites.

Merchant

- concerns wholesalers and retailers of their goods and services

- Sales are based on price lists or through auctions.

Example: A store that operates solely on the internet, such as the iTunes store.

Manufacturer (Direct)

- allows manufacturer to reach buyers directly

- compresses the distribution channel

- more efficient, better customer service and a better understanding of customer preference.

Example: Renting movies on line through the iTunes store, in agency with the 'Terms & Conditions".


Affiliate

- provides purchase opportunities to when ever a potential buyer is on the web

- offers financial incentives to partner sites

- It is a pay-for-performance model

Example: On line book stores that are linked with amazon.com and share a percentage of the sales.


Community
- based on user loyalty and the time they spend

- revenue can be based on voluntary contribution or based on the sales of ancillary products and services.

- more fertile area of development

Example: Wikipedia is open globally to the content and opinion of others.


Subscription

- users are charged a periodic fee to subscribe to the service

- combining free content with premium membership

- costs are irrespective of actual usage rates

Example: Magazines such as Dolly or Cleo who charge a monthly subscription to access there content on line.


Utility

- 'pay as you go' approach

- charges customers for active connection minutes

- based on actual usage rates

Example: Water rates, customers are charged by the amount they use.

http://ebusinessfundamentalsbrandon.blogspot.com.au/2013/04/topic-5-business-models.html


1) What is the Mobile phone use /100 population - compare Australia, USA, China, India, Your Country

Australia ranks 70 out of 142, America 88, China 113, India 117.

2) Internet use / 100 population - compare Australia, USA, China, India, Your Country

Australia ranks 19 out of 142, America 22, China 76, India 124.

http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/a#topmobilemarkets

Week 4 - Digital Design

Questions
 
1. In two paragraphs explain why a customer centric Web site design is so important, yet so difficult to accomplish
 
Customer Centric - A strategy in which store designs and layouts, merchandising activity, product selection and/or marketing initiatives are developed to meet the needs of specific consumer groups.
http://www.popdesign.com/glossary?letter=c

A customer centric website design is very important, as this is what creates appeal for certain customer groups. If a customer doesn't like what they see on a particular website or does not find the site easy to use then they are unlikely to keep using that site. This means that the site has to address the needs of the consumer, by using appropriate design.
 
Achieving a customer centric website design is very difficult, mainly because every customer is different. The design of a website may seem fantastic to one customer, but may seem terrible to the next. Website designers need to decide whether the want to target a niche client group or whether they want to focus on a broad range of customers, so that they can decide on their website design.

2. Define the term ‘presence’. Write an additional paragraph that describes why firms that do business on the Web should be more concerned about presence than firms that operate in the physical world.

Presence - The state or the fact of being present, as with others or in a place. 
http://dictionary.reference.com/browse/presence?s=t

Firms that do business on the web should be more concerned about presence then firms that operate in the physical world because on the web people have access to an endless supply of resources. In the physical world of business people are limited to proximity and availability, whereas on the web if people don't like what they see they will just keep searching. Therefore online business need to obtain a strong presence so that they can be found and not overlooked.



 3. *Usable Doesn’t Have To Mean Ugly ‘for a web design to be truly beautiful, it has to be functional, have purpose and contribute in some way to the website’s intuitiveness, usefulness and branding. All of these things contribute to the overall effect of a design’. This is a quote from one of the articles on web design linked on Web pages that suck. Find a web page that ‘does not suck’ and discuss the features that make it work.

boohoo.com is a site that I use regularly, it is an online clothing and accessory store based in the UK. I think it's a good website as it is easy to navigate and use and the design is appealing to the target audience, which I believe to be men and women aged between 16 and 25. The site advertises on TV in Australia and also offers free postage and student discounts. The free postage is great as lots of people wont buy a product online if the postage is too expensive, and the student discount is another appeal factor to there target consumers.

 

http://www.boohoo.com/aus/page/home/