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9.1 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Lecturer:
Richard Boateng, PhD. • Lecturer in Information Systems, University of Ghana Business School
• Executive Director, PearlRichards Foundation, Ghana
Email:
[email protected]
E-commerce: Digital Markets and Digital
Goods
E-commerce
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9.2 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
E-commerce: Digital
Markets, Digital Goods
Lecturer:
Richard Boateng, PhD. • Lecturer in Information Systems, University of Ghana Business School
• Executive Director, PearlRichards Foundation, Ghana
Email:
[email protected]
Chapter 9
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9.3 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Class Website
• www.vivaafrica.net
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9.4 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
LEARNING OBJECTIVES
This session seeks to introduce e-commerce and discuss the
various ways in which technology is changing the conduct of
commerce. Learning objectives include:
1. Identify the unique features of e-commerce, digital markets,
and digital goods.
2. Describe how Internet technology has changed business
models.
3. Identify the various types of e-commerce and explain how e-
commerce has changed consumer retailing and business-to-
business transactions.
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9.5 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods Visit Nike ID – www.nikeid.com create your own shoe
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9.6 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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9.7 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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9.8 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
• Electronic Commerce: Sharing business information, managing business relationships and facilitating transactions with Internet technology. (linking buyers and sellers).
• Electronic Business: Executing all the firm’s business processes with Internet technology. (sales, finance, human resources, manufacturing)
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9.9 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
1. Ubiquity
• Internet/Web technology available everywhere: work, home,
etc., and anytime
2. Global reach
• The technology reaches across national boundaries, around
Earth
3. Richness
• Supports video, audio, and text messages
4. Universal Standard
• Internet provides a universal standard for communication
Unique Features of Internet Technology for Business
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9.10 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Unique features (cont.)
5. Interactivity
• The technology works through interaction with the user
6. Information density
• Vast increases in information density—the total amount and
quality of information available to all market participants
7. Personalization/Customization:
• Technology permits modification of messages, goods
8. Social technology
• The technology promotes user content generation and social
networking
Unique Features of Internet Technology for Business
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9.11 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
• Key concepts in e-commerce
• Digital markets reduce
• Information asymmetry
• Search costs
• Transaction costs
• Digital markets enable
• Price discrimination
• Dynamic pricing
• Disintermediation
Electronic Commerce and the Internet
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9.12 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Figure 10-2
The typical distribution channel has several intermediary layers, each of which adds to the final
cost of a product, such as a sweater. Removing layers lowers the final cost to the consumer.
The Benefits of Disintermediation to the Consumer
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9.13 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
• Key concepts in Internet Business (cont.)
• Digital goods
• Goods that can be delivered over a digital network
• E.g., Music tracks, video, software, newspapers, books
• Cost of producing first unit almost entire cost of product:
marginal cost of producing 2nd unit is about zero
• 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.)
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E-commerce: Digital Markets, Digital Goods
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9.15 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Music Industry and Internet
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E-commerce: Digital Markets, Digital Goods
INTERNET BUSINESS MODELS
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9.17 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Internet Revenue Models
• A revenue model specifies how the firm intends to make money – Pay for service: The firm offers a product or a service for
sale – Subscription: Customers pay for the right to access the
content – Advertisement support: The firm makes its content or
service free for a large audience and sells access to its audience to interested advertisers
– Affiliate: The firm generates revenue from a third-party based on traffic it send to the partner web site.
– Freemium: The firm gives away its product or service for free, and attempts to build a large customer base by reducing the obstacle created by the payment
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9.18 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
1. Social Network
• Online meeting place
• Social shopping sites
• Can provide ways for corporate clients to
target customers through banner ads and pop-up ads
2. Online marketplace:
• Provides a digital environment where buyers and sellers can
meet, search for products, display products, and establish prices
for those products.
Internet Business Models
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E-commerce: Digital Markets, Digital Goods
3. Content provider
• Providing digital content, such as digital news, music, photos, or
video, over the Web – yahoo,
4. Service provider
• Provides Web 2.0 applications such as photo sharing and interactive
maps, and services such as data storage - google maps, flickr,
5. Portal
• “Supersite” that provides comprehensive entry point for huge array of
resources and services on the Internet – yahoo
6. Blogs
• Personal web pages that contain series of chronological entries by
author and links to related Web pages – wordpress.com
Internet Business Models
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9.20 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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9.21 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Google is doing great right now, Yahoo is not.
If Yahoo is in some kind of a problem
today, it's because they have tried to wear
other people's clothes that were mostly
falling down their ankles. Yahoo wanted
to be many things, from Media
Company to Myspace. Lack of focus
and direction made them languish.
Yahoo makes its money selling online ads. Yahoo's reach is enormous: 600 million unique visitors a month.
Google on other hand has worked towards being a
knowledge-based company and not just search. This does
not mean they have not done anything wrong or failed, but
they have a permission-to-fail policy.
Internet Business Models
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9.22 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
7. Virtual storefront:
• Sells physical products directly to consumers or to
individual businesses – prada.com, best buy
8. Information broker:
• Provides product, pricing, and availability information to
individuals and businesses – kbb.com, pricerunner.co.uk,
nexttag.com
9. Transaction broker:
• Saves users money and time by processing online sales
transactions and generating a fee for each transaction –
expedia.com, etrade.com
Internet Business Models
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9.23 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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9.24 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Actors involved in the transaction
• Business-to-consumer (B2C)
• Business-to-business (B2B)
• Consumer-to-consumer (C2C)
• Government-to-citizen (G2C)
• Government-to-government (G2G)
• Government-to-business (G2B)
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E-commerce: Digital Markets, Digital Goods
B2B Networks
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E-commerce: Digital Markets, Digital Goods
• Private industrial networks (private exchanges)
• Large firm using extranet to link to its suppliers, distributors
and other key business partners
• Owned by buyer
• Permits sharing of:
• Product design and development
• Marketing
• Production scheduling and inventory management
• Unstructured communication (graphics and e-mail)
B2B Networks
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9.27 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
A private industrial
network, also known
as a private exchange,
links a firm to its
suppliers, distributors,
and other key
business partners for
efficient supply chain
management and other
collaborative
commerce activities.
A Private Industrial Network
B2B Networks
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9.28 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
• Net marketplaces (e-hubs)
• Single market for many buyers and sellers
• Industry-owned or owned by independent intermediary
• Generate revenue from transaction fees, other services
• Use prices established through negotiation, auction, RFQs, or
fixed prices
• May focus on direct or indirect goods
• May support long-term contract purchasing or short-term spot
purchasing
• May serve vertical or horizontal marketplaces
B2B Networks
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9.29 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Net marketplaces
are online
marketplaces
where multiple
buyers can
purchase from
multiple sellers.
A Net Marketplace
B2B Networks
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9.30 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Building the Web Site: In-house Versus Outsourcing
Building an E-commerce Web Site
• Choices:
• Completely in-house
• Building and hosting within the company
• Mixed responsibility
• Building within the company, hosting outside
• Hosting within the company, building outside
• Completely outsourced
• Outsourcing both building and hosting of the site
• Co-location
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9.31 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Phases of E-commerce
31
no e-commerce
Connected
Informational
Interactive
Transactional
Integrated
Increasing complexity of relationships, information and
transactions
Telephone & Fax
Email & basic website
Website with feedback and relational features
Transactional features: orders
Integrated value chain
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9.32 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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Lankah A car firm that enables Ghanaians to purchase used cars from Germany. The
firm has no physical showroom or warehouse for the cars. Customers view the
cars through the firm’s website and express their interest. Cars are shipped to
Ghana after the customers make payment. The company sold 9 cars in 2004;
16 (2005) and 18 (2006). In 2009 (100 cars every two months).
Kasapreko A Beverage manufacturing firm which uses its website and email to source for
suppliers of production materials. The company was able to curb a problem of
imitated products by introducing unique bottle caps which was produced by
Indian firm. The supplier was discovered through the Internet and the bottle
caps were produced email and telephone communication.
Lizdon A Fabric and Garment Manufacturing firm which uses the Internet to market
products and also source for garment designs. Through an email managed
relationship with an American partner, the company exported garments to the
USA and made revenues totalling US $ 10,000 a year (2001 – 2006).
E-COMMERCE IN GHANA – SUCCESS STORIES…
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9.33 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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Latest catalogue entries
Search functionality
Featured entries
Articles to support buying decisions
Advanced search Online catalogue
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E-commerce: Digital Markets, Digital Goods
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9.35 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
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Lizdon Fabrics and Garments Ltd. Lizdon
Product Kaleidoscope/Catalogue
Choice of style (Complete Outfit)
Tools:
Email Product
Print Product
Save Product As PDF
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E-commerce: Digital Markets, Digital Goods
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Choice of Design (Screen-print Symbol)
Choice of Fabric (and Colour)
Choice of Style (Complete Outfit)
Alimex Baltimore, USA
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E-commerce: Digital Markets, Digital Goods E-commerce in Ghana – where we are…
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9.38 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
E-commerce - Challenges
In developing countries - legislation delays, poor change management, socio-cultural barriers, payment and delivery.
Poor change management occurs from lack of stakeholder
involvement, lack of support from senior management, or even lack of organizational support. Most transitional economies are struck with problems of unemployment and since e-commerce decentralises all commercial and purchasing activities, the threat of redundancy, redeployment or loss of power is likely to lead to resistance to the implementation of the system.
Legislation delays arise when there is a need for new legislation and
rules to support this form of procurement. Most transitional economies lack these laws; hence there is reduction of interest of organizations to participate in it. Legality of Electronic Documents and Legality of Electronic Transactions
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9.39 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
E-commerce - Challenges
Ghana’s Electronic Transactions Act 772 (2008) seeks to provide for and facilitate electronic communications and related transactions in the public interest, and to remove and prevent barriers to electronic communications and transactions; promote legal certainty and confidence and provide legal safe environment for the conduct of transactions with public and private bodies, institutions and citizens.
The Act covers electronic records, digital signature, electronic signatures, consumer protection, cyber offences etc.
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E-commerce: Digital Markets, Digital Goods
Obtaining electronic payment medium falsely 119. A person who makes or causes to be made either directly or
indirectly, a false representation to procure the issue of an electronic payment medium personally or to another person commits an offence and is liable on summary conviction to a fine of not more than five thousand penalty units or to a term of imprisonment of not more than ten years or to both.
General provision for cyber offences 123. Except as provided for in this Act, any offence
under a law which is committed in whole or in part by use of an electronic medium or in electronic form is deemed to have been committed under that Act and the provisions of that Act shall apply.
Ghana’s Electronic Transactions Act 772 (2008)
E-commerce Challenges
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9.41 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
Socio-cultural barriers to e-buying
include language preferences, income and literacy levels, attitudes toward distance buying, methods of payment. High existence of these barriers could lead to poor adoption of the system.
For instance consumers in Mexico and Egypt are generally accustomed to touching merchandise before buying. Other issues relating methods of payment are prominent where credit card usage is low and the tradition of cash payment exists, like Egypt and Ghana.
E-commerce Challenges
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9.42 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
E-commerce Challenges
• Electronic Payment Systems – Visa payments at point of sale – Mr. Price and Truthworths at
Accra Mall
– Visa Payments at Hotels in Accra
– Ezwich in Ghana – payments of National Service and government employees and selected retail shops
• Mobile Payment - Remittances, buying of airtime and payment in selected retail
shops
• Addressing System for Delivery – Using the nearest landmark
– Drawing of maps and Google Maps
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9.43 © 2009 by Prentice Hall www.vivaafrica.net | Dr. Richard Boateng ([email protected] ) |
E-commerce: Digital Markets, Digital Goods
E-commerce in Ghana – Where are we?
Go to the Class website:
www.vivaafrica.net
Under Case studies download the paper
on E-commerce in Ghana and Read for
discussion and a quiz next week.
Government Readiness Market Readiness Technology Readiness Cultural Readiness