e-commerce 2000 james d. clark chapter 10 strategies for web auctions, virtual communities, and web...
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E-commerce 2000 James D.
Clark
Chapter 10
Strategies for Web Auctions, Virtual
Communities, and Web Portals
Electronic Commerce
E-commerce 2000 James D.
Clark
Objectives Key characteristics of the six major
auction types Strategies for general and specific
consumer Web auction sites Strategies for business-to-business
Web auction sites How businesses use virtual
communities to increase brand awareness and sales
Strategies for Web portal sites
E-commerce 2000 James D.
Clark
The Emerging Demand Paradigm Shifting Competitive Dynamics The Experience Differentiation
E-commerce 2000 James D.
Clark
Dynamic Pricing Applications and Markets Dynamic Pricing Types
Auction—one entity selling to many buyers Haggle—only one buyer and one seller
bargaining, or haggling, to reach an agreed-upon price Exchange—many buyers and sellers
negotiating prices Bidding Process—a single buyer with multiple
sellers offering varying pricesto supply goods
E-commerce 2000 James D.
Clark
Dynamic Pricing Benefits Efficient markets are realized by:
Providing a mechanism to eliminate imperfect information.
Eliminating geographic boundaries.. Streamlining processes
Better experiences are realized through: Better entertainment More community• Increased personalization.
E-commerce 2000 James D.
Clark
Efficient Markets Increase revenues on inventory Decrease overhead costs Eliminate costly middlemen Increase inventory turns Create new intermediaries Test pricing Increase revenues with new and
one-of-a-kind items
E-commerce 2000 James D.
Clark
Better Experiences Higher repeat purchase rates “Sticky” Web sites Personalization
E-commerce 2000 James D.
Clark
E-commerce 2000 James D.
Clark
Auction Applications over the Entire ProductLife Cycle
E-commerce 2000 James D.
Clark
Auction Basics Earliest known auctions were in
Babylon around 500 B.C. Entire Roman Empire was auctioned
in 193 A.D. after the death of Emporer Pertinax
Buddhist temples held auctions to sell the possessions of deceased monks
Auction firms Sotheby’s and Christie’s began in the 17th century
Six Major Auction Types
E-commerce 2000 James D.
Clark
Web Auction Strategies 1999 PC Computing magazine survey
reported that 37% of people responding had made purchases and 12% had sold items using an on-line auction service
15% of the survey’s respondents stated that they would never use an on-line auction site
Analysts and researchers predict the on-line auctions will account for 30% of all e-commerce by 2002
E-commerce 2000 James D.
Clark
General Consumer Auctions
eBay Search for specific items Browse by categories of items Seller options include bold-face type
and featured listings Rating system to provide feedback to
alleviate fears concerning seller reliability
eBay Home Page
E-commerce 2000 James D.
Clark
Additional General Consumer Auctions
Auction Universe, owned by Classified Ventures, a partnership of eight major newspapers Apartments.com Cars.com NewHomeNetwork.com
Yahoo! and Excite have created auctions based on the eBay model
E-commerce 2000 James D.
Clark
Additional General Consumer Auctions
Amazon.com Offers “Auctions Guarantee” to
reimburse any buyer for merchandise purchased that was not delivered, or “materially different” than represented
Provides escrow service for items over $250
Klik-Klok Dutch Auction Short time-period auctions for
quantity offerings
E-commerce 2000 James D.
Clark
Klik-Klok Dutch Auction in Progress
E-commerce 2000 James D.
Clark
Specialty Consumer Auctions
Technology-related items auction sites Haggle Online CNET.com ZDNet Onsale uBid, and Bid.com
Numerous specialty auction sites Golf Club Exchange Cigar-Bid.com
E-commerce 2000 James D.
Clark
Golf Club Exchange Web Auction
E-commerce 2000 James D.
Clark
Business-to-Business Auctions
Typically used to dispose of excess inventory
Large companies use liquidation specialists to find buyers for unusable inventory, create their own auction sites
Smaller companies often sell their excess inventory to liquidation brokers, who, in turn, create auction sites
CompuUSA Auctions Home Page
E-commerce 2000 James D.
Clark
Examples of Third-Party Auction Sites
Auction IT Computer equipment
Going, Going...Sold! Laboratory equipment
FastParts.Com Electronic components
J.R. Metals Quick Bid Auction Steel
E-commerce 2000 James D.
Clark
Auction-Related Services
Escrow service Independent party holds buyer’s
payment until the item is received and the buyer is satisfied with the purchase
Directory of available auctions Auction Guide
Guidance for new auction participants AuctionInsider
Links to auctions sorted by category
AuctionInsider DirectoryFigure 10-7
E-commerce 2000 James D.
Clark
Seller-Bid Auctions andGroup Purchasing Sites
Reverse auctions Sellers of goods and services bid the
prices at which they are willing to sell Group purchasing sites
Items are posted with a price, as the number of bids increase, the seller negotiates a better price with the item’s provider
E-commerce 2000 James D.
Clark
Virtual Community Strategies
Gathering places for people and businesses that does not have a physical existence Usenet newsgroups Chat rooms Web sites
Helps companies, customers, and suppliers plan, collaborate, transact business, and interact in a mutually beneficial way
Milpro Business-to-Business Virtual Community SiteFigure 10-8
E-commerce 2000 James D.
Clark
Web Communities WELL
Whole Earth ‘lectronic Link Predates the web, began as a series of
dialogs among San Francisco authors and readers
Purchased by Salon.com GeoCities
Free web space for members Sells advertising to generate revenue Owned by Yahoo!
E-commerce 2000 James D.
Clark
Web Communities Tripod
Similar to GeoCities Owned by Lycos
Theglobe.com Created by Cornell University
students News feeds, art gallery
E-commerce 2000 James D.
Clark
Web Portal Strategies
Combinations of virtual communities, search engines, and Web directories
Provide a high degree of “stickiness” that is extremely attractive to advertisers
Examples include AOL, Excite, Infoseek, Lycos, MSN, Netscape Netcenter, Snap, and Yahoo!
E-commerce 2000 James D.
Clark
Web Portal Strategies
Typically ask members to provide demographic information about themselves
Very high potential for targeted marketing
High visitor counts yield high advertising rates
10-9
homebid.com Home PageFigure 10-9