1 / 56

(Class5 29.01.02) Information Rules - Chapter 1: The Information Economy Shapiro & Varian modifications by J.Molka-D

(Class5 29.01.02) Information Rules - Chapter 1: The Information Economy Shapiro & Varian modifications by J.Molka-Danielsen. Overview for Class 5. Chapter 1 from Shapiro and Varian Group 1 Presentation (Nordang, Hovden, Bjerkvik, Tomren)

edith
Download Presentation

(Class5 29.01.02) Information Rules - Chapter 1: The Information Economy Shapiro & Varian modifications by J.Molka-D

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. (Class5 29.01.02)Information Rules - Chapter 1: The Information EconomyShapiro & Varianmodifications by J.Molka-Danielsen Prentice Hall, 2002

  2. Overview for Class 5 • Chapter 1 from Shapiro and Varian • Group 1 Presentation (Nordang, Hovden, Bjerkvik, Tomren) • Group 2 Student Presentation (Valderhaug, Golka, Kristensen) • Chapter 4 from Tuban (begin 4.2-4.5) • Consumer behavior online • Demographics • Consumer purchasing decision • Matching products and customers: Personalization Prentice Hall, 2002

  3. The Information Economy Carl Shapiro Hal R. Varian Prentice Hall, 2002

  4. Systems of Products • Complementary products • Hardware/software • Client/server • Viewer/content • Product lines • High fixed cost, low incremental cost • Leads to value based pricing Prentice Hall, 2002

  5. Unique Features • Complements • Different manufacturers • Strategy for complementors as well as competitors • Compatibility as strategic choice • Standards and interconnection • Product lines • Lower quality may be more expensive Prentice Hall, 2002

  6. Information • Anything that can be digitized • Text, images, videos, music, etc. • a.k.a. content, digital goods • Unique cost characteristics • Unique demand characteristics Prentice Hall, 2002

  7. Cost structure • Expensive to produce, cheap to reproduce • High fixed cost, low marginal cost • Not only fixed, but sunk • No significant capacity constraints • Particular market structures • Monopoly • Cost leadership • Product differentiation (versioning) Prentice Hall, 2002

  8. Rights Management • Low reproduction cost is two-edged sword • Cheap for owners (high profit margin) • But also cheap for copiers • Maximize value of IP, not protection • Examples • Library industry • Video industry Prentice Hall, 2002

  9. Consumption Characteristics • Experience good • Browsing • Always new • Reputation and brand identity • Overload • Economics of attention • Hotmail example • Broadcast, point-to-point, hybrid Prentice Hall, 2002

  10. Technology • Infrastructure to store, retrieve, filter, manipulate, view, transmit, and receive information • Adds value to information • Web = 1 terabyte of text = 1 million books • If 10% useful = 1 Borders Bookstore • Value of Web is in ease of access • Front end to databases, etc. • Currency Prentice Hall, 2002

  11. Systems Competition • Microsoft-Intel: Wintel • Intel • Commoditize complementory chips • Microsoft • Commoditize PCs • Apple • Integrated solution • Worked better, but lack of competition and scale led to current problems Prentice Hall, 2002

  12. Lock-In and Switching Costs • Example: Stereos and LPs • Costly switch to CDs • Systems lock-in: durable complements • Hardware, software, and wetware • Individual, organizational, and societal Prentice Hall, 2002

  13. Network Effects • Value depends on number of users • Positive feedback • Fax (patented in 1843) • Internet (1980s) • Indirect network effects • Software • Expectations management • Competitive pre-announcements Prentice Hall, 2002

  14. Compatibility • Examples • Beta v. VHS • Sony v. Philips for DVD • Role of 3rd parties • Read v. write standards • Backwards compatibility? • Windows 95 • Windows NT Prentice Hall, 2002

  15. Basic Strategies • Go it alone • Partnerships (Java) • Formal standard setting • Widespread use • Licensing requirements • Competition in a market or for a market? Prentice Hall, 2002

  16. Policy • Understand environment • IP policy • Competition policy • Regulation • Antitrust • Electronic commerce • Contracts • Privacy Prentice Hall, 2002

  17. Information is Different…but not so different • Key concepts • Versioning • Lock-in • Systems competition, • Network effects Prentice Hall, 2002

  18. Statistics on eCommerce growth Gruppe 1 Nils Einar Nordang, Karl Johan Hovden, Jan Tore Bjerkvik, Nils Kristian Tomren Internet Exercise 3, page 35

  19. eCommerce er veksande, og framtida ser lys ut for e-businesses • Mellom 2000 og 2001, vil andelen av Internett-brukarar som handlar online øke med 50%. Globalt vil andelen av Internett-brukarar øke frå 10% til 15% . • Integrert offline og online shopping aktivitetarfører stadig til økte inntjenings-moglegheiter for bedrifter: heile 15% av alle Internett-brukarar har handla offline som et resultat av informasjon dei har funne online. • Online-sikkerheit er den største bekymringa for brukarar som ikkje har handla online. • Yngre Internett-brukarar brukar ikkje so mykje pengar som eldre brukarar.

  20. Prosentvis økning: Key numbers 2001...

  21. Landsgjennosnitt (31%) Internet brukarar i verden2000/2001 Prosent av den totale voksne befolkning Prosentvis andel av befolkninga som personlig har brukt Internett den siste månaden.

  22. Online shoppers 2000/2001 Prosent av Internett-brukarar Prosentvis andel av internett-brukarar som har kjøpt varer/tenester online den siste månaden

  23. Country average (17%) Future online shoppers Prosent av Internett-brukarar Prosent av Internett-brukarar som planlegg å kjøpe dei neste 6 månadane

  24. Norge Prosent av befolkninga som bruker Internett Vekst 2000 - 1 2000 2001 + 7% Prosentvis andel av spesifikke aldersgrupper og kjønn som er Internett-brukarar (2001) %

  25. B2B handel • B2B handel vil i USA auke veldig raskt dei neste 5 åra. Frå $336 billionar i 2000 til $6.3 trillionar i 2005. • I dag utgjer Online B2B aktiviteter 3 % av det totale markedet, men innan år 2005 vil det utgjere 42%.

  26. B2C handel • B2C handel over internett utgjorde i år 2000 $ 39 billionar. I løpet av 2003 vil dette tallet auke til $143 billionar. (Forrester Research Inc)

  27. Kjelder: • Tala er henta fråTaylor Nelson Sofres som er det 4 største foretaket innanfor markedsinformasjon på Internett • Vi har også henta statistikk frå eMarketer.com

  28. Group 2 • Anita Helene Valderhaug, Katrin Elisabeth Golka, Bjørn O. Kristensen • Internet Exercise 7, page 79. Prentice Hall, 2002

  29. Packetvideo.com • The company • Technology • Potential use of PVPlatform • Use of M-commerce

  30. The company • Exists since 1998 • First company in the world to demonstrate MPEG-4 video images streaming to mobile devices • Leading Edge Company of the Year 2001

  31. Technology • PVPlatform including: -PVAuthor (encoding) -PVServer (serving) -PVPlayer (decoding) • Runs on all wireless systems, e.g. GSM • PVAirguide

  32. Potential Use of PVPlatform Transmission of e.g.: -Financial news and online trading. - Sports highlights - SMS/video email - Movie trailers and tickets - Multiplayer role-play games

  33. Use of m-commerce • Targeted Advertisement • Two-way video communications • Instant e-commerce

  34. Chapter 4(begin)- 4.2 to 4.5Internet Consumers, E-Service, and Market Research Prentice Hall, 2002

  35. Figure 4-1EC Consumer Behavior Model Source: Zinezone, c/o GMCI Co. Prentice Hall, 2002

  36. Consumer Behavior Online (cont.) • Consumer types • Individual consumers • Commands most of the media’s attention • Organizational buyers • Governments and public organizations • Private corporations • Resellers • Consumer behavior viewed in terms of: • Why is the consumer shopping? • How does the consumer benefit from shopping online? Prentice Hall, 2002

  37. Consumer Behavior Online (cont.) • Purchasing types and experiences • 2 dimensions of shopping experiences • Utilitarian—to achieve a goal • Hedonic—because it’s fun • 3 categories of consumers • Impulsive buyers—purchase quickly • Patient buyers—make some comparisons first • Analytical buyers—do substantial research before buying Prentice Hall, 2002

  38. Consumer Behavior Online (cont.) • Direct sales, intermediation, and customer relations • Companies that sell only through intermediaries still need good relations with the end-users • Example: Ford Motor Company • Do not sell directly to consumers • Recognize that drivers of Ford vehicles think of themselves as having a relationship with the company Prentice Hall, 2002

  39. Personal Characteristics and Demographics of Internet Surfers • Environmental variables • Social variables • Cultural variables • Psychological variables • Other environmental variables Prentice Hall, 2002

  40. Personal Characteristicsof Internet Surfers • Personal characteristics and differences • Consumer resources and lifestyle • Age and gender • Knowledge and educational level • Attitudes and values • Motivation • Personality Prentice Hall, 2002

  41. Demographics of Internet Surfers • Major demographics presented include • Gender • Age • Marital status • Educational level • Ethnicity • Occupation • Household income Prentice Hall, 2002

  42. Demographics of Internet Surfers (cont.) • The more experience people have on the Web, the more likely they are to buy online • Two major reasons people do not buy online • Security • Difficulty judging the quality of the product Prentice Hall, 2002

  43. Figure 4-2Amount of Money Spent on the Web Prentice Hall, 2002

  44. Consumer Purchasing Decision Making • Roles people play in decision-making • Initiator—suggests/thinksof buying a particular product or service • Influencer—advice/views carry weight in making a final buying decision • Decider--makes a buying decision or any part of it • Buyer—makes the actual purchase • User—consumesor uses a product or service Prentice Hall, 2002

  45. Consumer PurchasingDecision Making (cont.) • Purchasing decision-making model • 5 major phases of a general model • Need identification—actual and desired states of need • Information search • Alternatives evaluation—research reduces number of alternatives, may lead to negotiation • Purchase and delivery—arrange payment, delivery, warranties, etc. • After-purchase evaluation—customer service Prentice Hall, 2002

  46. Table 4-2Purchase Decision Making Process & Support System Source: O’Keefe and McEachern, 1998. Prentice Hall, 2002

  47. Figure 4-3Model of Internet Consumer Satisfaction Source: Lee (2001) Prentice Hall, 2002

  48. Matching Products with Customers: Personalization • One-to-one marketing • Relationship marketing • “Overt attempt of exchange partners to build a long term association, characterized by purposeful cooperation and mutual dependence on the development of social, as well as structural, bonds” • “Treat different customers differently” • No two customers are alike Prentice Hall, 2002

  49. Figure 4-4The New Marketing Model Source: GartnerGroup Prentice Hall, 2002

More Related