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110 Cards in this Set
- Front
- Back
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Different sectors of the economy
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-MO/TO (mail order and telephone order)
-durable goods -general merchandise -food and beverage -specialty stores -gasoline and fuel -online retail firms |
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Durable goods
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-goods that are consumed over a longer period of time (generally more than a year)
-ex: automobiles, appliances, building supplies, and furniture -largest segment of the U.S. retail market |
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Non-durable goods
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-goods that are consumed quickly and have shorter life spans.
-ex: general merchandise, clothing, music, drugs, and groceries |
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Online retailing
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-most high-profile sector of e-commerce on the web; refers solely to sales of physical goods over the internet.
-over the passed decade, this sector has experienced both explosive growth and spectacular failures |
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General merchandise
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-highly concentrated with large firms dominating sales.
-these large firms have developed highly automated real-time inventory control systems (systems that collect point of sale data from cash registers, update inventory records and inform vendors of stock levels), large national customer bases, and customer databases containing detailed purchasing information. |
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Specialty retailers
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-catering to much smaller segments with higher priced goods; the success depends on building unique products for a marketing segment, offering strong customer service, and providing a persuasive shopping experience to support the brand image.
-ex: The Gap, Banana Republic, Athletes foot, Sports Authority, Victoria's secret, Staples and many others (based on upscale youth market segments) |
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MOTO (mail and telephone order)
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-distribute millions of physical catalogs and operate large telephone call centers to accept orders; are advantaged when competing in e-commerce, and the transition to e-commerce has not been difficult.
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Food and beverage
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-use the web to inform people of their physical locations and menus, while others offer delivery via web orders.
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Which sector is most similar to the online retail sector?
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Mail order/telephone order (MOTO) sector
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Advantages of online retailing
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-lower supply chain costs by aggregating demand at a single site and increasing purchasing power.
-lower cost of distribution using websites rather than physical stores -ability to reach quickly to customer tastes and demands -ability to change prices nearly instantly -ability to rapidly change visual presentation of goods -Avoidance of direct marketing costs of catalogs and physical mail -increased opportunities for personalization, customization -ability to improve info and knowledge delivered to consumer -ability to lower consumers overall market transaction cost |
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challenges of online retailing
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-consumers concerns about the security of transactions
-consumers concerns about the privacy of personal info given to websites -inconvenience associated with return of damaged or exchange goods -overcoming lack of consumer trust in online brand names -added expenses for online photography, video, and animated presentations -online marketing costs for search, email and displays -added complexity to product offerings and customer service -greater customer info can translate into price competition and lower profits |
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Advantages of virtual merchants
(define virtual merchant) |
-do not have to bear the costs associated with building and maintaining a physical store
-adopt low costs and convenience strategies, coupled with effective and efficient fulfillment processes -ensure customers receive what they ordered as fast as possible -virtual merchant- single channel web firms that generate almost all their revenue from online sales |
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Challenges of virtual merchants
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-must build a business and brand name from scratch, quickly, in a new channel
-confront many virtual merchant competitors -large costs in building and maintaining a website, building an order fulfillment infrastructure -customer acquisition costs are high, learning curve is steep -gross margins are low |
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Amazon.com
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-objective: to offer the earths biggest selection and to be the earths most customer-centric company where customers find and discover anything they might want to buy
-most innovative online retailing stories in history of e-commerce -adapted its business model based on both its market experience and its insight into the online consumer |
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Different types of electronic merchants
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-brick and clicks
-catalog merchants -manufacturer-direct -small mom-and-pop retailers that use eBay, Amazon, and yahoo stores sales platforms -affiliate merchants |
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Bricks and Clicks
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-companies that have a network of physical stores as their primary retail channel, but have also introduced online offerings
-also called multi-channel merchants -ex: walmart, sears, JCPenney, Staples, OfficeMax, Costco, Macy's, and Target. |
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Advantages of Bricks and Clicks
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-brand name
-national customer base -warehouses -large scale -trained staff |
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Disadvantages of Bricks and Clicks
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-leveraging their strengths and assets to the web
-building a credible website -hire new skilled staff -building rapid response order entry and fulfillment systems |
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Catalog merchants
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-established companies that have a national offline catalog operation that is their largest retail channel, but who have recently developed online capabilities.
-face very high costs for printing and mailing millions of catalogs each year -generally have few, if any physical stores -typically developed centralized fulfillment and call centers, extraordinary service, and excellent fulfillment in partnership with package delivery firms -face similar challenges of bricks and clicks -Ex: L.L. Bean, Eddie Bauer, Victoria's Secret |
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Manufacturer-direct
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-single or multi-channel manufacturers who sell directly online to consumers without the intervention of retailers.
-ex: computer hardware such as Apple, Dell, Sony, and HP -ex: Apparel manufacturers such as Ralph Lauren, Nike, Under Armour, Fossil, Crocs, Jones Retail, and Vera Bradley |
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Channel-conflict challenges
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-occurs when physical retailers of products must compete on price and currency of inventory directly against the manufacturer, who does not face the cost of maintaining inventory, physical stores, or sales staff
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Affiliate merchants
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-primary revenue derives from sending traffic to "mother" sites
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mom-and-pop retailers
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-use eBay, Amazon, and Yahoo store sales platforms
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Online placement services/recruitment sites
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-recruitment sites are popular because they save time and money for both job hunters and employers seeking recruits.
-resumes can be made widely available to recruiters and a variety of other related job-hunting services. -They offer skill assessment, personality assessment questionnaires, personalized account management for job hunters, organizational culture assessments, job search tools, employer blocking, employee blocking and email notification |
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Free content
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-"free" would drive out "paid," gladly accepted "free" advertiser-supported content when that content is deemed not worth paying for but entertaining nevertheless.
-free content can drive customers to paid content, as the recorded music firms have discovered with services like Pandora. |
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Paid content
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-growing about 20% a year, faster than the internet itself.
-The growth in the audience size is largely attributable to the growth in the entertainment segment of music, news, television, and high quality professional videos, Hollywood movies, and production television shows. |
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Ways of paying for internet content and services
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-large majorities were willing to accept advertising as a way to pay for free content.
-few thought the "fee" model could compete with the "free" model and most internet aficionados and "experts" just felt that "information on the internet wants to be free" -cable TV systems have always charged for service and content as well, and cable tv "experts" never thought information wanted to be free -apple iTunes charges for services and content as well |
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Technological convergence
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-development of hybrid devices that can combine the functionality of two or more existing media platforms into a single device
-ex: iPad, iPhone, Blackberry, and Android |
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Content convergence
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-convergence in the design, production, and distribution of content
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Industry convergence
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-merger of media enterprises into synergistic combinations that create and cross-market content on different platforms and create new works that use multiple platforms.
-ex: AOL and time warner (failed) -has a poor track record |
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Media convergence
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-is a much used but poorly defined term--being able to get any content you want, when you want it, on whatever platform you want it
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different "free" revenue models
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-marketing revenue model
-advertising revenue model -pay-per-view/pay-for-download revenue model -subscription revenue model |
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Marketing revenue model
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-media companies give away content for free in the hope that visitors to the site will purchase the product offline or view a show offline
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Advertising revenue model
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-content is free to the consumer, advertisers pay for the cost of the site through placement ads
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Pay-per-view/pay-for-download revenue model
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-content providers charge for each viewing of premium content such as a video, book, archived newspaper article, or consulting report
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Subscription revenue model
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-content providers such as the Wall Street Journal and Consumer Reports charge a monthly or annual fee for bulk access to online content
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Discussion of Michelle Obama, who shops and target; and H. Ross Perot
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-Michelle Obama was spotted shopping at Target because she said it was important for her to still be able to go shopping without the secret service on her 24/7 (even though they still showed up). She also said that a woman spotted her and asked her to reach a top shelf for her.
Ross Perot: http://www.ecommercetimes.com/story/358.html |
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Discussion of trending in Austin: Google fiber delivery service (faster service)
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http://www.statesman.com/news/business/its-official-Austin-getting-super-fast-google-fibe/nXG3g/
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How do media distribution companies make money?
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-media distributors like Hulu make money by selling advertisement space at the beginning of all their videos and movies to various companies
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What's the conflict with illegally copied and produced digital products from China?
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China-There is no stigma attached buying or even selling pirated goods even with a phony brand names like Sone instead of Sony. The government quietly tolerates pirating and fake good manufacturing to some degree because they provide employment for large number of people laid from state-owned enterprises. So, when Americans download pirated content via the internet, China tolerates it but America does not (think knock off Louis Vuitton purses and such)
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Where was Olympus has Fallen filmed? and why?
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-Shreveport, LA
-because everything is cheap there |
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Who are the players in the entertainment industry?
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-radio, music, television, motion pictures and video games
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What are the forms of media and how are they delivered to people?
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-the media can be delivered to people in a multitude of ways, through DVD's, CD's (physical outlets like TV, the movies, newspapers, video game consoles) You can also download pretty much any form of media from the internet on file sharing websites and other sites that allow you to illegally download content.
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How does media generate revenue?
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-The revenue models for the different types of media are (for both online and physical media outlets like TV) are through marketing, advertising, pay-per view, subscription, value-added and mixed (in economics, the sum of the unit profit, the unit depreciation cost, and the unit labor cost is the unit value added). A mixed revenue model would be a model that gets revenue from subscriptions as well as advertising space sales.
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How does the entertainment industry make money electronically? and how do they make the most of your money?
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-the entertainment industry has created legitimate networks (where you cant pirate) by creating alliances with platform owners like Apple, Google, Amazon to create streaming services like Hulu, CinemaNow and Netflix. Hulu (the most successful so far) like Netflix charges a subscription fee monthly for their services and they also gain revenue through advertisements at the beginning of movies and TV shows (Hulu).
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Where should you invest your money?
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-you should invest your money in any of the media services you find reliable (its a matter of opinion) if you don't mind paying a subscription fee then get Netflix, some goes for online radio and movie distributor services.
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Who delivers content electronically?
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-almost every for of media delivers content electronically BUT music and movies have significantly through iTunes where users can buy content they want as opposed to albums with 10-15 songs on them
-Radio, tv, internet |
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Discussion of the difference between TV & films
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-TV is electronic, visual programming on a television set streamed through a home television through a broadcast network like CBS, ABC, or NBC, that get money through ads on TV from large businesses.
-Films are motion pictures that are produced by studios in Hollywood and make money off of ticket sales and movie purchases, plus any advertisements associated with the movie. |
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Top ten social network sites in 2011
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1.) facebook
2.) LinkedIn 3.) Twitter 4.) MySpace 5.) iVillage 6.) MyLife 7.) Tumblr 8.) Classmates.com 9.) Tagged 10.) Hi5 |
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What can you do with social network?
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-email, chat, message board, instant messaging
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other functionalities of social networks:
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-friends, profiles, storage, membership managment
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membership management
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-people who sign up and become members like on dating websites and Facebook
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practice networks
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-offer members focused discussion groups, help, information and knowledge relating to an area of shared practice.
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sponsored communities
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-online communities created by government, non profit, or for profit organizations for the purpose of pursuing organizational goals. These goals can be diverse, from increasing the information available to citizens.
-Westchestergov.com, eBay, tide.com (sponsored by an offline branded product company Procter and Gamble), Cisco, IBM, and HP. |
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affinity communities
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-offer members focused discussions and interaction with other people who share the same affinity.
-"affinity" refers to self and group identification. -ppl can self identify themselves on the basis of religion, ethnicity, gender, sexual orientation, political beliefs, and geographical location. -ex: iVillage, Oxygen, and NaturallyCurley |
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Internet based social networks
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-offer members focused discussion groups based on a shared interest in some specific topic
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Social network functionalities: What can they do?
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-Social networks have developed software applications that allow users to engage in many of the same activities. There is an emerging feature-set template that many of the social network platforms are using that is outlined in the previously mentioned table on page 719. Some of these software tools are built into the site, while others can be added to users' profile pages as widgets.
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How many types of social networks do we have when the book was written?
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-There were 10 different types of social networks when the book was written according to table on page 712
-these ten sites account for well over 90% of the internets social network activity |
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Auctions
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-markets in which prices are variable and based on the competition among participants who are buying and selling products and services.
-the most popular (was the most popular in 2011) auction site but is decreasing because people are starting to prefer fixed prices. -Sams club and Wal-Mart are also trying to add auction features to their websites. - |
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Merchants (B2B selling)
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-sell their products to businesses because the dynamic pricing changes according to the demand of the market at the time, potentially resulting in a higher price for the buyer.
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Different types of pricing
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-dynamic pricing
-fixed pricing -trigger pricing -utilization pricing -personalization pricing -consumer-to-consumer auctions -business-to-consumer auctions |
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Dynamic pricing
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-the price of the product varies, depending directly on the demand characteristics of the customer and the supply situation of the seller.
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Fixed pricing
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-one national price, everywhere, for everyone
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Trigger pricing
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-adjusts prices based on the location of the consumer.
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Utilization pricing
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-adjusts prices based on the utilization of the product.
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Personalization pricing
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-adjusts prices based on the merchants estimate of how much the customer truly values the product.
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Consumer-to-consumer auctions
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-Auction house acts as an intermediary market maker, providing a forum where consumers can discover prices and trade.
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Business-to-consumer auctions
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-auction house sells goods it owns, or controls, using various dynamic pricing models
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Types of E-pricing
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-fixed pricing
-trigger pricing -utilization pricing -personalized/personalization pricing |
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What kind of pricing do we have?
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-Generally, we have a dynamic pricing model for most markets. Prices vary between products based on consumer demand characteristics and the supply situation of the seller
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Advantages of electronic network-based auctions
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-liquidity
-price discovery -price transparency -market efficiency -lower transaction costs -consumer aggregation -network effects |
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Disadvantages of electronic network-based auctions
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-delayed consumption costs
-monitoring costs -equipment costs -trust risks -fulfillment costs |
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liquidity
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-sellers can find willing buyers and buyers can find willing sellers
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price discovery
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-buyers and sellers can quickly develop prices whereas it would be difficult in a normal supply and demand atmosphere
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price transparency
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-merchants cannot partake in price discrimination without easily being found out, when the items are available on auctions
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market efficiency
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-auctions lead to reduced prices, leading to an increase in consumer welfare, wide range of goods sold
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lower transaction costs
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-can lower cost of selling and purchasing products, because they have zero transaction costs
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consumer aggregation
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-are good at aggregating a large pool of consumers who are motivated to buy many things in one market space
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network effects
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Because sites like eBay have developed such a large network, it more likely now that if you auction something off on the site, someone somewhere will want to buy it.
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delayed consumption costs
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-internet auctions can go on for days and shipping will take additional time
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monitoring costs
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-participation in auctions requires your time to monitor bidding
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equipment costs
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-internet auctions require you to purchase a computer system and subscribe to an internet service
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trust risks
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-internet auctions are the single largest source of internet fraud
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fulfillment costs
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-buyer pays costs of packing and shipping
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Methods of inventory cost management
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-methods of inventory cost management can be defined as the different procedures used to obtain and maintain a minimum amount of stock in a stores inventory while considering the price and cost it takes to sustain that amount of stock and evaluating whether its the best way to maintain its inventory.
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Just-in-time production
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-a method of inventory cost management which seeks to eliminate excess inventory to a bare minimum
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Supply chain management
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-refers to a wide variety of activities that firms and industries use to coordinate the key players in their procurement process.
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Lean production
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-a set of production methods and tools that focuses on the elimination of waste throughout the customer value chain
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Tight coupling
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-A method for ensuring that suppliers precisely deliver the ordered parts, at a specific time and particular location, to ensure the production process is not interrupted for lack of parts.
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Adaptive supply chains
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-a one-world view of the world in order to achieve simplicity
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Sustainable supply chain
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-"sustainable business" is a call for business to take social and ecological interests, and not just corporate profits, into account in all their decision making throughout the firm.
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Electronic data interchange
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-EDI was developed to reduce the cost, delays, and errors inherent in the manual exchanges of documents such as purchase orders, shipping documents, price lists, payments and customer data.
-it is a broadly defined communications protocol for exchanging documents among computers using technical standards developed by the United Nations to oversee the communications between recipients -usually used by large businesses in retail |
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Collaborative commerce
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-the use of digital technologies to permit organizations to collaboratively design, develop, build and manage products through life cycles.
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2 main types of internet-based B2B commerce
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-net marketplaces
-private industrial networks |
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Exchanges
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-net marketplaces
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4 main types of net marketplaces
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-E-distributor
-E-procurement networks -exchanges -industry consortia |
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Private industrial networks
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-direct descendants of EDI networks.
-It is a Web-enabled network for the coordination of trans-organizational business processes. Usually involves many suppliers focused around one manufacturing form and solicits the communication between the suppliers and manufacturer regarding business exchanges. -bring together a small number of strategic business partner firms that collaborate to develop highly efficient supply chains and satisfy customer demand for products. |
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E-distributor
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-provides electronic catalogue that represents the products of thousands of direct manufacturers
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E-procurement net marketplace
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-independently owned intermediary that connects hundreds of online suppliers offering millions of maintenance and repair parts to business firms who pay fees to join the market
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Industry consortium
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-industry owned vertical market that enables buyers to purchase direct inputs (both goods and services) from a limited set of invited participants
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Collaborative commerce cont.
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-the collaboration among businesses to do a wide variety of things like product design, resource planning, forecasting, replenishment, marketing, demand chain activities, supply chain activites.
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Collaborative resource planning
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-involves working with network members to forecast demand, develop production plans, and coordinate shipping, warehousing, and stocking activities to ensure that retail and wholesale shelf space is replenished with just the right amount of goods
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Marketing coordination and product design
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-manufacturers that use highly engineered parts use private industrial networks to coordinate their internal design and marketing activities, as well as the activities of their supply and distribution chain partners.
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some questions about Amazon.com:
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-they are facing a number of lawsuits
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Types of social networks and online communities
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-General
-Practice -Interest -Affinity -Sponsored |
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General social networks
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-online social gathering place to meet and socialize with friends, share content, and interests.
-ex: Facebook and myspace |
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Practice social networks
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-Social network of professionals and practitioners, creators of artifacts such as computer code or music.
-Ex: Just plain folks (musicians community) and LinkedIn (business) |
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Interest social networks
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-Community built around a common interest, such as games, sports, music, stock markets, politics, health, finance, foreign affairs, or lifestyle.
-ex: E-democracy.org (political discussion group) and SocialPicks (stock market site) |
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Affinity social networks
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-Community of members who self-identify with a demographic or geographic category, such as women, African americans, or arab americans
-BlackPlanet (African American community and social network site) and iVillage (focusing on women) |
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Sponsored social networks
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-network created by commercial, government, and non-profit organizations for a variety of purposes.
-ex: Nike, IBM, Cisco, and political candidates |
