Electronic Commerce - Chapter 3: Pricing & revenue models - Tran Thi Que Nguyet

Nội dung text: Electronic Commerce - Chapter 3: Pricing & revenue models - Tran Thi Que Nguyet

1. Electronic Commerce Chapter 3: Pricing & revenue models Email: ttqnguyet@hcmut.edu.vn
2. Factors affecting pricing • Factors affecting pricing • Demand
3. Factors affecting pricing • Factors affecting pricing • Market structure • Recession • Production cost
4. Determining price • Game theory model • A player’s best response is the strategy that maximizes the player’s payoff, given the strategies of the other players • A strategy is a dominant strategy for a firm if it is optimal, no matter what strategy is used by the other players • The firms are in a Nash Equilibrium if the strategy of each firm is the best response to the strategies of the other firms. Equivalently, in a Nash equilibrium, none of the firms have any incentive to unilaterally deviate from its strategy
5. Determining price DISCUSSION • Game theory model • Companies A and B both produce phones
6. Dynamic pricing • Definitions • Price dispersion • Price discrimination • Price dispersion • Spatial • Temporal • Price discrimination • First degree (perfect) differentiation: different prices for different units sold and people • Second degree price differentiation: different prices for different units sold • Third degree price differentiation: different prices for different people
7. Auctions • From Babylon to the Roman Empire to Buddhists • Auction: seller offering item for sale • Bids: price potential buyer willing to pay • Bidders: potential buyers • Private valuations: amounts bidders willing to pay • Auctioneer: manages auction process • Shill bidders: bidder who seller or auctioneer employees
8. Auctions • English auctions • Reserve price • Seller’s minimum acceptable price • Not announced • If not exceeded: item withdrawn (not sold) • Yankee auctions • Multiple items are offered • Highest bidder allotted bid quantity • Remaining items allocated to next highest bidders until all items distributed • Bidders pay lowest successful bidder price
9. Auctions • Dutch auctions • Open auction • Bidding starts at a high price • Drops until bidder accepts price • Also called descending-price auctions • Seller offers number of similar items for sale • Common implementation • Use a clock (price drops with each tick) • If items remain: clock restarted
10. Auctions • Sealed-bid auctions • Bidders submit bids independently • Prohibited from sharing information • First-price sealed-bid auction • Highest bidder wins • If multiple items auctioned: next highest bidders awarded remaining items at their bid price • Second-price sealed-bid auction (Vickrey auctions) • Highest bidder awarded item at second-highest bidder price • William Vickrey: 1996 Nobel Prize in Economics
11. Auctions • Reverse (Seller Bid) Auctions • Multiple sellers submit price bids • Auctioneer represents single buyer • Bids for given amount of specific item to purchase • Prices go down as bidding continues • Until no seller is willing to bid lower • Used by consumers • Largest dollar volume • Businesses: both buyers and sellers • Buyer acts as auctioneer • Screens sellers before participation
12. Revenue models • Revenue model: how businesses generate revenue? • Web catalog • Digital content • Advertising-supported • Advertising-subscription mixed • Fee-for-transaction • Fee-for-service • These models are not exclusive and can combine together • Work for both B2B and B2C categories
13. Revenue models • Digital content • Sell subscriptions for access to the information • Most of these digital content providers specialize in legal, academic research, business, or technical material • Advertising-Supported • Free content with advertising messages • Stickiness • Keeping visitors at site and attracting repeat visitors • Exposed to more advertising in sticky site • Large visitors vs. targeted visitors (demographic information) • Web portal: Yahoo!
14. Revenue models • Fee-for-service • Fee based on service value • Used in: online games, professional services • Revenue Strategy Issues • Channel conflict and cannibalization • Company Web site sales activities interfere with existing sales outlets • Strategic alliances (partners) • Two or more companies join forces undertake activity over long time period
15. Business canvas model • Customer Segments: which customers it tries to serve. • Channels: A company can deliver its value proposition to its targeted customers through different channels. • Customer Relationships: To ensure the survival and success of any businesses, companies must identify the type of relationship they want to create with their customer segments. • Personal Assistance - Dedicated Personal Assistance • Self Service • Automated Services • Communities • Co-creation
16. Business model canvas
17. End of chapter 3