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E-Commerce: Digital Markets and Digital Goods

Ways in which e-commerce and the internet have changed the relationship between companies and their customers

E-commerce is the use of the internet and the Web to transact businesses. This has changed the interaction between companies and customers. The internet’s availability universally has created a market space, breaking geographical locations of markets. This has enhanced customer convenience and reduced shopping costs. Because of this, there is the multicultural and multinational reach billions of customers and millions of businesses. In addition, the use of universal technology means the standards are unified internet standards, easy communications, lower market entry costs, and lower consumers’ search cost. The vastness and richness of e-commerce supports video, audio, and text messages, thus providing an easy marketing tool; customers can also engage in dialogue hence they can engage in goods delivery1.

The internet carries a lot of quality information to all the market participants, and therefore they all make informed decisions and therefore, there are greater price and cost transparency. Personalization and customization of online products make shopping as pleasurable as one to one shopping. Finally, the availability of social technology promotes the content generation, and social networking allows free interaction within consumers.

Business values in the use of personalization and customization in e-commerce

Personalization is the process of tailoring content to individual users’ characteristics of preferences. This allows communication between businesses and customers, an aspect that allows businesses to understand and satisfy customers’ needs effectively and efficiently.2. Web personalization is delivering different unique content to each individual customer based on customers’ interests as in Amazon.com. Customization of e-products prioritizes content, which is user-controlled, for instance, in My Yahoo! Moreover, companies are able to increase sales by providing personalized products based on their interaction with customers on the web. In addition, this service allows businesses to establish a chain of loyal customers through bonding in terms of customization of products.

The overall process and main decisions involved in planning a new e-commerce site

Building a Web site involves a number of considerations. If it is an e-commerce site, customer needs should inspire the design. One must understand the business, as well as the appropriate technology to support it. The planning stage must point out particular business aims for the site, and then write down the system capabilities and information requirements. How to build the Web site is among the most important decisions managers in e-commerce has to make. A team with the knowledge required for making decisions about technology, site design, social and information policies, hardware, software, and telecommunications infrastructure is mandatory. The team should consider alternatives in the site-building, whether it is completely in-house, mixed responsibility, or completely outsourced. Another consideration is Web site all the overhead costs should be included.

The main categories of e-commerce

Business-to-Business (B2B) involves companies doing business with each other, for example, manufacturers to distributors and wholesalers selling to retailers. Pricing is based on the quantity of order and is often negotiable.3.

On the other hand, business-to-consumer (B2C) involves businesses selling to the public and is the most valuable to the individual consumer. The buyer is directly online to the seller’s computer, usually via the internet with no intermediary involved. The sale or purchase transaction is completed electronically and interactively in real-time. Finally, consumer-to-consumer (C2C) is a form of trade that offers free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems such as eBay.

4 types of applications suited for m-commerce

M-commerce is the use of wireless mobile devices for purchasing goods and services. Personalization of mobile services is best done based on location. This way, maps can be used to create zones that define the location of the user.4. Location is, therefore, the strategic asset of wireless carriers. This allows for local discount offers, weather reports, and tracking people. The availability of banking- and financial services with the help of mobile telecommunication is also suited for m-commerce, a concept known as m-banking. It includes financial information services, accounting, and brokerage. Customers can access their account information and make transactions. Mobile marketing and advertising have become increasingly popular, especially with the introduction of Android. The reached consumers can respond to real-time. Entertainment and games have a wide market in m-commerce as mobile devices owners can buy and use the Apps directly.


Laudon, K & J Laudon, Management Information Systems, Prentice Hall PTR, NY, 2011.


  1. K Laudon & J Laudon, Management Information Systems, Prentice Hall PTR, NY, 2011
  2. K Laudon & J Laudon, Management Information Systems, Prentice Hall PTR, NY, 2011.
  3. K Laudon & J Laudon, Management Information Systems, Prentice Hall PTR, NY, 2011
  4. K Laudon & J Laudon, Management Information Systems, Prentice Hall PTR, NY, 2011.