E-Commerce Past Paper
Economics
currency
- exchange of value (purchasing),
- store of value (savings),
- over a long period of time, with little variation.
- measure of value (accounting, pricing).
- consistent when comparing against others, GDPs.
bearer certificate: token representing values.
- exchange of value (purchasing, tradable),
- anonymity, trusted (unforgeable), coupons (interest).
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credit card and settlement
blockchain
game currency
general
Business models and strategies
network effects
- dominance firms are created where there are high fixed costs, low marginal costs, high switching costs and network externalities in a market place.
- usually happens after passing a critical mass of users.
- Metcalfe's law: the value of a network grows with the square of the number of users (super-linear growth).
- first-mover advantage: the first firm to enter a market can gain a significant advantage over its competitors, especially in markets with network effects.
- bandwagon effect with complimentary goods: people adopt certain behaviors, styles, or attitudes simply because others are doing so.
- embrace and extend.
- liquidity: the ease with which an asset can be traded without creating a significant impact on its price or value.
- y2022p8q5 (a), y2019p8q6 (c)
- y2020p8q7 (c)
- distributed ledger technology
- y2010p8q8 (b)
Fair market
- y2018p8q6 (a), y2014p8q7
- fair market value, anonymous?, reputation.
- whether the societal good (cheaper and easier trading) is outweighed
by the harm (trading bad things).
business model types
- Land grab (max market share),
- Merchant (difference between buy and sell price),
- Subscription (Pay Per View),
- Freemium (trial-ability),
- Marketplace (two-sided),
- Advertisement (targeted),
- Auctions, Charity (donation), illegal (scam, lottery, gambling).
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Legal (regulation, laws and ethics)
Consumer Rights Act
- Goods
- Satisfactory quality
- Fitness for purpose
- As described
- Digital content
- Right to repair or replacement. If not possible: price reduction or refund.
- Services
- Reasonable care and skill
- In line with information provided
- Reasonable price (if no price agreed)
- Performed within a reasonable time (if no period agreed)
- Unfair Terms not binding on consumers
Electronic Commerce Regulations 2002 / Consumer Contracts
- (1) the full name of the business,
- (2) the geographic address of the business,
- (3) the contacts (e.g. email address) of the business,
- (4) the registration number of the business,
- (5) the VAT number of the business,
- (6) optional supervisory authority or body,
- (7) clear indication of prices, including taxes, delivery costs,
- (7) anti-spam provisions,
- (8) requirements for storing of the contract and later access (email or printed paper),
- (9) users are able to correct input errors,
- (10) consumer should acknowledgement of order receipt without delay.
- y2017p8q7 (c, d)
GDPR: seven principles, six lawful purposes, data subject rights.
General case
Design and impl.
Web and search engine
Creating an e-commerce business
Pricing (service-level matrix, special customer, special offers)
Merchant system
Legal integration
Payment, settlement and tax
Customer Relationship Management (CRM), Personalization, Customer and User Profiles
Internationalization
- language (length, grammar), culture (colours, symbols)
- legal requirements,
- international trade (import/export)
- tax, IP
- privacy, environmental regulations
- legality (gambling, alcohol, tobacco, prescription drugs, guns, pornography, etc.)
- payment methods (credit card, currency, bad debt liability),
- customer support (shipping, returns, refunds, feedback, etc.)
- y2024p8q5 (a), y2019p8q6 (b), y2017p8q7 (b)
Disintermediation
Making it work
Marketing plan:
- Acquisition, Activation/Sales conversion, Retention, Revenue and Referral model;
- Multi-level marketing (direct selling vs. sub-agents), pyramid scheme.
- affiliate marketing (bandwagon effect via influencer), social media marketing, search engine optimization (SEO), search engine marketing (SEM), email marketing.
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Data mining and analytics:
- determine user behaviour via web analytics.
- hit, page view, click, visit, unique user/day, exit popups.
- Cost Per Acquisition, Cost Per Click, Average Return Per User, Customer Lifetime Value, Return on Investment.
- separate landing pages for each phase and each campaign.
- monitor costs and effectiveness of each stage in the sales funnel, as the sales funnel loses customers at each stage, minimised by understanding why.
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