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Business-to-Business Marketing B2B E-Marketplaces

Business-to-Business Marketing B2B E-Marketplaces. Haas School of Business UC Berkeley Fall 2008 Week 13 Zsolt Katona. 1. B2B Marketplaces are thriving. Volume is in the order of $ trillions ($2.37 trillion in 2004) 12 times higher than B2C transactions. Growth remained robust

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Business-to-Business Marketing B2B E-Marketplaces

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  1. Business-to-Business MarketingB2B E-Marketplaces Haas School of Business UC Berkeley Fall 2008 Week 13 Zsolt Katona 1

  2. B2B Marketplaces are thriving • Volume is in the order of $ trillions ($2.37 trillion in 2004) • 12 times higher than B2C transactions. • Growth remained robust • Strong standards (ebXML, RosettaNET) implemented by standards organizations (OASIS, UN/CEFACT).

  3. Examples of Marketplaces

  4. MARKET FRAGMENTATION High Exchange ? Horizontal markets(WWRE) Vertical markets(Ariba) Intermediate Materials MgmtEDI Direct Sales Low PRODUCT COMPLEXITY Low High Intermediate Which Marketplace when?

  5. SELLERS Large Small Large Buyer hubs(WWRE) Phone, Acct. reps. Reverse auctions (Freemarkets) Independent or matching markets BUYERS Direct auctions (Ad auction) Community, bazar (Industrynet, Ebay) Sellerhubs, stores (Dell.com) Small Which Marketplace when (cont.)

  6. Ownership Side 2 Side 1 Platform Network effects - ++ - Suppliers Buyers eMarketplace Buyer owned

  7. Biased Marketplaces seem to win • Biased marketplaces: owned by buyers or sellers • Independent marketplaces are crowded out • While they are neutral, • Biased ones have a greater incentive to reduce participation fees to benefit from increased network effects (participation). • Transformation of independent marketplaces • Turn into market solution providers for biased markets • Become biased by selling out to participants • Neoforma gives 46% ownership stake to Novation (largest US hospital purchasing group) • MetalSite sells off to steel manufacturers • ChemConnect partially owned by 46 chemical companies

  8. Private Marketplaces • Owned by a single buyer/seller • Buyer owned: • HP (GetSupply) • Seller owned: • Dell.com (B2B and B2C) • Google AdWords • Advantages • Retained competitive advantage • Retained information • Disadvantages - Less incentive to increase participation from the other side of the market

  9. Industrat Decision 9

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