It

Chapter 4
• Lower Information Asymmetry: Buyers
and sellers have access to more equal
[ SOME QUESTION FROM THE SLIDE]
information.
1. What are the unique features of e-
• Reduced Costs: Lower menu costs (cost to
commerce, digital markets, and digital change prices). Lower search costs
goods? (time/money spent to find products).
Lower transaction costs.
Unique Features of E-Commerce
• Dynamic Pricing: Prices can change in real-
• Ubiquity: Available everywhere, anytime.
time based on demand and supply.
Reduces transaction costs (e.g., no physical
store needed). • Switching Costs: May be higher or lower
depending on the digital product or
• Global Reach: Crosses national and cultural
service.
boundaries easily.
• Delayed Gratification: Customers may have
• Universal Standards: The Internet uses a
to wait (e.g., for delivery), though digital
single set of standards, making it easier for
products often offer instant access.
systems and businesses to connect.
• Disintermediation: Middlemen can be
• Richness: Supports text, audio, and video—
removed (e.g., manufacturers sell directly
making the communication experience
to consumers).
more effective.
Features of Digital Goods
• Interactivity: Allows two-way
communication between buyer and seller. • Intangible Products: Can be delivered via a
digital network (e.g., music, eBooks,
• Information Density: More accurate and
software).
timely information. Increases transparency
(e.g., clear pricing). Enables price • High Fixed Cost, Low Marginal Cost: High
discrimination based on customer data. cost to produce the first copy; almost zero
cost to reproduce and distribute.
• Personalization/Customization: Content
and products can be tailored to individual • Low Delivery Costs: Delivered instantly
users. over the Internet at very low cost.

• Social Technology: Encourages user • Variable Pricing: Can be priced differently

content creation and social networking based on the market or user.
(e.g., reviews, sharing on social media).
• Industries Impacted: Publishing, media,
Features of Digital Markets education, software, and music have all
been transformed by digital goods.
2. What are the principal e-commerce 7. Community Provider: Creates a digital
business and revenue models? environment for people with similar interests.

E-Commerce Business Models: These describe Example: Facebook, Reddit

how a company conducts online business. Makes money through ads and user
There are seven main types: engagement.
1. Portal: A website that acts as a gateway to E-Commerce Revenue Models: These explain
many other services. how e-commerce businesses make money.
Example: Yahoo, MSN There are six main ways:

Purpose: Users go there to find news, search, 1. Advertising: Earn money by displaying ads.
email, etc. Example: Google, Facebook
2. E-Tailer: Online retailer; sells goods directly 2. Sales: Direct sale of goods or services.
to consumers.
Example: Amazon, Apple Store
Example: Amazon, Daraz
3. Subscription: Users pay regularly to access
Like a virtual shop. content or services.
3. Content Provider: Delivers digital content Example: Netflix, LinkedIn Premium
(news, videos, music).
4. Free/Freemium: Basic services are free,
Example: Netflix, YouTube, Spotify advanced features require payment.
Makes money from subscriptions or ads. Example: Spotify, Zoom
4. Transaction Broker: Helps users conduct 5. Transaction Fee: Charge a fee for each
online transactions. transaction handled.
Example: Expedia (for booking travel), bKash Example: eBay, bKash, Upwork
(for financial transactions)
6. Affiliate: Earn commission by referring
Saves time and money for users. customers to other sites.
5. Market Creator: Provides a platform for Example: Blogs linking to Amazon products
buyers and sellers to meet.

Example: eBay, Bikroy.com

3. How has e-commerce transformed
Earns money through transaction fees.
marketing?
6. Service Provider: Offers online services like
E-commerce has changed the way businesses
storage, email, or editing tools.
find, communicate with, and sell to customers,
Example: Google Drive, Canva mostly by using the Internet and digital tools.

Revenue from subscriptions or ads.

1. New Ways to Identify and Communicate 5. Programmatic Ad Buying
with Customers
• Ads are bought and sold in real time using
• Businesses can now track users online and automated systems.
learn their interests, behavior, and needs.
• Makes advertising more efficient and
• This helps marketers target people more targeted.
accurately.
Example: An algorithm decides instantly
Example: Amazon recommends products whether to show you an ad when you load a
based on your past shopping history. web page.

2. Long Tail Marketing 6. Native Advertising

• Focuses on selling a large number of • Ads that look like regular content, blending
niche products to small audiences, rather in naturally with the website or platform.
than just a few best-sellers.
Example: A product review article
• E-commerce platforms can offer more sponsored by a company, designed to look like
products because they are not limited by a blog post.
shelf space.

Example: Netflix can stream thousands of

less popular movies and still make a profit. 4. How has e-commerce affected
business-to-business transactions?
3. New Internet Advertising Formats
1. Easier and Faster Buying: Companies can
• Includes banner ads, video ads, pop-ups, now buy and sell from each other online, not
search engine ads, and sponsored through phone calls or paper orders.
content.
Example: A supermarket orders milk and eggs
• Ads can be more interactive and from a dairy farm through an online system.
personalized.
2. Less Paperwork (Automation): Computers
Example: Google Ads show products send invoices, purchase orders, and receipts
related to what you just searched for. automatically.

4. Behavioral Targeting Example: A furniture shop sends a digital

invoice to a wood supplier using software.
• Marketers use data to track what users
do online (searches, clicks, time spent). 3. Private Company Networks: Big companies
create private websites where only trusted
• Helps deliver ads tailored to individual
suppliers can enter and trade.
behavior.
Example: Walmart has a private system where
Example: You search for shoes, and later
suppliers like Unilever log in and manage
see shoe ads on Facebook.
product delivery.
4. Online Marketplaces: Many businesses buy 2. Digital Content Sales: Buying and
and sell in shared digital marketplaces — like downloading music, movies, games, books.
an online shopping mall for companies.
Example: Watching Netflix or buying an eBook
Example: Alibaba.com connects manufacturers from Kindle
with global buyers.
3. In-App Purchases: Buying extra features or
5. Spot Buying on Exchanges: Companies can products inside mobile apps.
buy things quickly and in bulk from online B2B
Example: Buying coins or items in a mobile
exchanges.
game
Example: A car company buys steel from an
4. Location-Based Services: Apps use GPS to
exchange website at the best available price.
offer local deals, nearby stores, or directions.

Example: Google Maps shows restaurants

5. What is the role of m-commerce in nearby; Uber shows nearby drivers
business, and what are the most 5. Mobile Banking and Finance: Managing bank
important m-commerce applications? accounts, sending money, or paying bills.
M-commerce (mobile commerce) means Example: Using bKash, Nagad, or your bank’s
buying and selling using mobile phones or mobile app
tablets.
6. Mobile Advertising: Businesses show ads in
What is the Role of M-Commerce in Business? mobile apps, games, and videos.
Role in Business: Example: Seeing a product ad while watching a
YouTube video
• Fastest-growing part of e-commerce:
Growing at 20% or more every year. In
2017, it made up 35% of all e-commerce
6. What issues must be addressed when
• Makes shopping easier and faster: People building an e-commerce presence?
can buy, sell, and pay using their phones
anytime, anywhere. When a company builds an e-commerce
presence, it needs to carefully plan and make
• Helps businesses reach more customers: smart decisions. The most important issues to
Even people without computers can shop address are:
using phones.
1. Clear Business Objectives: The business must
Most Important M-Commerce Applications know exactly what it wants to achieve. This
1. Retail Shopping (Mass Market Retailing): could be selling products, providing services,
People buy clothes, groceries, electronics, etc. building brand awareness, or improving
using mobile apps or websites. customer service.

Example: Shopping on Amazon or Daraz app Example: An online clothing store may focus on
increasing online sales and improving customer
convenience.
2. Choosing the Right Technology: Selecting the Career Benefits of MIS
right tools and platforms is very important. This
1. High Demand & Strong Salaries
includes website builders, shopping cart
systems, payment gateways, and hosting • MIS roles are in high demand across
services. industries—finance, healthcare, retail,
government, and more
Example: A business may choose Shopify or
WordPress with WooCommerce to build its • In the U.S., median salaries range from
online store. around $60K for entry-level to $100K+ for
experienced roles; top roles like IT managers
3. E-Commerce Presence Map: Businesses
or information security analysts often earn
should develop a presence across different
well over $100K.
platforms. These include:
• In India, typical roles pay ₹4–8 LPA early on,
• Website
with senior roles like Cybersecurity Manager
• Email reaching ₹17–33 LPA

• Social media (like Facebook, Instagram) 2. Versatile Career Paths: You can pursue:

• Offline media (like flyers or TV ads) • Business Analyst, Data Analyst

Example: A business may run a website for • Database Administrator, Systems Analyst
shopping, use email to send promotions, and
• IT Project Manager, IS Manager
post product updates on Instagram.
• Security Analyst, BI Developer, Cloud/Data
4. Develop a Timeline with Milestones: Break
roles
the entire project into small steps with
deadlines. This helps the team stay on track. 3. Bridging Tech & Business: MIS equips you
with both technical skills (databases, SQL,
Example:
Python, BI tools, cloud platforms, cybersecurity)
• Week 1: Set goals and pick platform and business knowledge (project management,
strategy, process optimization)
• Week 2: Design website
4. Rapid Learning & Adaptability: MIS is
• Week 3: Add products
dynamic—fields like AI, cloud computing, and
• Week 4: Launch and promote cybersecurity evolve fast, and MIS professionals
learn to adapt and innovate continuously

5. Career Growth & Advancement: MIS offers

7. How will MIS help my career? solid upward mobility: Entry positions like
Analyst or DBA → Mid/Senior roles like IT
MIS blends technology and business: it uses IT
Manager, Program Lead → Executive roles such
tools (like databases, analytics, and software) to
as CIO or CTO
collect and turn data into actionable insights for
managers and decision-makers
From the slide ------------------------------------------- 5. Dynamic Pricing Enabled: Dynamic pricing
--------------------------------------------------------------- means prices can change depending on
demand, customer type, or time.
1. Key Concepts in E-Commerce – Digital
Markets and Digital Goods in a Global Example: Flight tickets often get more
Marketplace expensive when demand is high or as the
departure date gets closer.
1. Internet and Digital Markets Have Changed
6. Switching Costs: Switching costs are the costs
Business: The internet has made it easier and
a customer faces when changing from one
faster for companies to sell products, reach
seller or product to another. E-commerce may
customers worldwide, and reduce many
reduce or increase these depending on loyalty
traditional business costs.
programs, account setup, or ease of
Example: Earlier, a shop in Dhaka could only sell comparison.
locally. Now, with an online store, it can sell
Example: If you saved your address and
across Bangladesh or even globally.
payment info on one website, you might prefer
2. Information Asymmetry Reduced: to keep using it instead of switching to a new
Information asymmetry means one party site and entering everything again.
(usually the seller) knows more than the other
7. Delayed Gratification: In online shopping,
(usually the buyer). The internet gives buyers
customers usually have to wait to receive the
access to product reviews, prices,
product, unlike traditional stores where they
comparisons—so both sides have more equal
information. get it immediately.

Example: When you order shoes online, you

Example: Before buying a mobile phone online,
wait 2-3 days for delivery, unlike buying from a
a customer can compare models, read reviews,
shop where you take them home right away.
and check prices on different websites.
8. Disintermediation: Disintermediation means
3. Menu Costs Reduced: Menu costs are the
removing middlemen (like wholesalers or
costs of changing prices (like printing new
retailers) from the supply chain. Sellers can sell
menus or price tags). Online stores can change
directly to customers online.
prices instantly and at no cost.
Example: A book publisher can sell directly to
Example: An online clothing store can easily
readers through its website instead of going
update prices during a sale without printing
through bookstores.
anything.

4. Search and Transaction Costs Reduced:

Search costs = time and effort to find a product. 2. Digital Goods
Transaction costs = the cost of buying the
product (like travel, time, effort). What Are Digital Goods?
E-commerce makes both faster and cheaper.
Digital goods are products that can be
Example: Instead of visiting multiple stores, you delivered electronically over the internet. You
can find and buy a laptop online in minutes. don’t get a physical item—you get a file or
access.
Key Points: Example: People now read news online instead
of buying newspapers. Music is streamed on
1. Delivered Over a Digital Network: These
Spotify instead of buying CDs.
goods are sent online, not through physical
delivery. In short Digital goods are cheap to reproduce
and deliver, easy to distribute worldwide, and
Example: E-books, music downloads, online
are changing how many businesses work—
courses, software, and movies on Netflix.
especially in media, education, and
2. High First Copy Cost: Creating the first copy entertainment.
(like writing a book, making a software or
recording a song) takes a lot of effort and
money. But after that, making more copies 3. Types of E-Commerce
costs almost nothing.
1. Business-to-Consumer (B2C): When
Example: Making a new video game costs businesses sell directly to consumers.
millions, but sending it to a new customer
online costs almost zero. Example: Buying a shirt from Daraz or a phone
from Apple’s website.
3. Low Delivery Cost: Sending digital goods
over the internet is very cheap—no need for 2. Business-to-Business (B2B): When one
trucks, packaging, or shipping. business sells products or services to another
business.
Example: When you download an app or song,
the company doesn’t have to spend extra to Example: A software company selling
deliver it to you. accounting software to a clothing company.

4. Marketing Costs Stay the Same: Companies 3. Consumer-to-Consumer (C2C): When

still need to advertise their products, whether consumers sell to other consumers, usually
digital or physical. Ads, promotions, through a third-party platform.
influencers—these cost money. Example: Selling a second-hand phone on
Example: Spotify still spends on ads to promote Bikroy.com or Facebook Marketplace.
its digital music service. 4. Consumer-to-Business (C2B): When
5. Variable Pricing: Companies can easily individuals offer products or services to
change prices depending on the customer, businesses.
time, or region. They can offer discounts, Example: A freelancer designing a logo for a
subscriptions, or even free versions. company through Fiverr or Upwork.
Example: An online movie might cost $5 to
rent, $10 to buy, or be free with ads.

6. Industry Changes: Industries that deal with

digital goods are changing fast. Publishers,
music companies, newspapers, and film studios
are using new online business models.
4. Social E-Commerce and Social Network Example: Searching “best headphones” on
Marketing YouTube or Reddit and using the reviews to
decide.
What is Social E-Commerce?
Social Media as a Marketing Tool
Social e-commerce means buying and selling
through social media platforms, using features • Social media is the fastest-growing place
like posts, shares, and friend recommendations. for branding and marketing.

It is based on the digital social graph, which • Companies promote their products directly
maps how people are connected online on platforms like Facebook, Instagram,
(friends, followers, likes, etc.). YouTube, TikTok.

Features Driving Social E-Commerce Growth: What is Social Network Marketing?

1. Newsfeed: Users see product updates or Social network marketing means using
promotions in their feed. people’s influence on others to promote
products, especially among groups with shared
Example: A friend shares a clothing store's post, interests.
and it appears in your Facebook feed.
Key Features:
2. Timelines: Users can see a history of shared
products, likes, or reviews. 1. Individual Influence: People trust
recommendations from friends or influencers
Example: On Instagram, you can scroll through more than ads.
a brand’s past product posts.
Example: If a popular influencer wears a dress
3. Social Sign-On: Logging in to a shopping site from a brand, their followers might buy it too.
using your Facebook or Google account.
2. Targeting Groups: Companies market to
Example: Using "Sign in with Google" to access people with similar likes, habits, or
an online clothing store. communities.
4. Collaborative Shopping: Friends or groups Example: Advertising sports gear to a football
can shop together, share opinions, or fan group on Facebook.
recommend items.
3. Large Audience: Social media platforms have
Example: You and a friend chat about shoes millions (even billions) of users, making them
through Messenger and buy them from the powerful for marketing.
same shop.
Other Concepts:
5. Network Notification: You get notified when
your friend likes, comments, or buys something. Social Shopping Sites

Example: "Your friend just liked this product on Websites where people can share, discuss, and
Amazon" appears in your app. buy products together.

6. Social Search (Recommendations): Searching Example: Pinterest or Wanelo, where users

products based on what others like or suggest. collect and share product images.
Wisdom of Crowds: Trusting popular opinions • Web-enabled Private Networks: Many
or reviews when making buying decisions. companies now prefer web-enabled private
networks because:
Example: Buying a product because it has 5,000
positive reviews. ➢ They can connect with more firms than
traditional EDI.
Crowdsourcing: Getting ideas, designs, or
feedback from a large group of people online. ➢ They allow sharing a wider range of
information beyond just purchase
Example: A clothing brand asking Instagram
orders or invoices.
followers to vote for the next T-shirt design.
6. New Ways of B2B (Business-to-
Business) Buying and Selling
5. Electronic Data Interchange (EDI)
Businesses now use the Internet and digital
Electronic Data Interchange (EDI) is the networks to buy and sell goods more efficiently.
computer-to-computer exchange of standard The main methods include:
business documents, such as Invoices,
1. Private Industrial Networks (Private
Purchase orders
Exchanges): A large company sets up a secure
Instead of sending these documents on paper, website to connect with its suppliers and
businesses send them electronically in a partners. It allows them to share information,
standard format, which saves time and reduces coordinate production, and streamline
errors. communication.

Example: Suppose a company named ABC Example: A car company like Toyota uses a
Retail needs to order products from its supplier private network to connect with its tire, glass,
XYZ Electronics. and engine part suppliers. They all share
Instead of sending a paper purchase order: inventory data and production schedules in real
time.
• ABC’s computer system automatically sends
a digital purchase order to XYZ’s system 2. Net Marketplaces (E-Hubs): A single online
using EDI. platform where many buyers and sellers do
business. It helps in buying raw materials (direct
• XYZ's system instantly receives it and can
goods) or office supplies (indirect goods). These
start processing the order without human
marketplaces can be:
input.
• Vertical (specific to one industry, like
Key Points from the PDF:
healthcare)
• Standard Format: Major industries have
• Horizontal (general items used across
agreed-upon standards for EDI, so both
industries)
sender and receiver understand the data
structure. Example: Alibaba is a net marketplace where
thousands of suppliers and buyers meet and
• Efficiency: Saves time, reduces human error,
trade products globally.
and speeds up transactions.
3. Exchanges: These are independently owned In Short, Location-based services help people
third-party platforms. They allow companies to Find friends (Geosocial), See nearby ads (Geo
buy and sell instantly, often for spot purchasing advertising), Get useful local info (Geo
(buying goods quickly, as needed). Not very information)
successful long-term due to lack of trust and Using the GPS in your smartphone to make
stable relationships. everyday life easier and more connected.

Example: A company that suddenly needs 1,000

steel rods may use an online exchange to find
the lowest price and buy immediately.

7. Location-Based Services and

Applications

These are services and apps that use your

phone’s GPS to provide information or features
based on your current location.

About 74% of smartphone users use these

services.

Types of Location-Based Services:

1. Geosocial Services: These show where your

friends are or let you share your location.

Example: Using Facebook or Snapchat to check

into a place or see nearby friends.

2. Geo Advertising: This shows ads or

promotions based on where you are.

Example: You walk near a restaurant, and your

phone shows a discount coupon for it.

3. Geo Information Services: These give you

useful data about places near you.

Example: You pass by a house, and your phone

shows its price, size, and for-sale status through
a real estate app.

Based on GPS Map Services: All of these use

GPS (Global Positioning System) in your
smartphone to track your location and give
personalized content.