Topic Six - Digital Markets

Question 1

a) What experiences have you had with shopping online?

b) Describe a good experience.

c) What did you like about the online store you used?

d) Describe a bad experience.

Questions A through to D are irrelevant to myself as I have never purchased anything online, nor has anyone in my immediate family.

e) What problems did you have with the online store?

By just viewing some online stores I have noticed that navigation is often difficult as well as getting the most information available to make the best purchase choices.

f) What features make an online store more appealing?

Online stores are appealing due to the freedom of being able to browse products online without having to leave the house and be bothered by busy stores or pushy shop assistants, different pay options, its quick, easy and cheap as well as extensive information such as product information, reviews and buyer opinions.

g) What features make an online store less appealing?

Online shopping can appeared less appealing due to lack of information, navigation issues, time spent on postage and the costs therefore involved, problems with bandwidth connections and confusion when trying to compare similar products.

h) Should we expect to see the prices of goods and services rise or fall due to the migration of consumers online?
I would assume that prices would rise with the introduction of online customers and for the fact that sellers will continue to use online auction based sites in order to sell to the consumer willing to pay the highest prices.

Question 2

a) The dispersion of prices (that is, the spread between the lowest and highest price for a particular product) will narrow.

I believe that online prices will always have a narrow effect because it is in the consumer’s best interest to search and compare when deciding on purchases. Therefore internet distributors of similar companies will always keep their prices low close to equal.

b) The importance of brand names will decrease.

I don’t believe brand names will decrease because they are important to distinguish between companies and their own guaranteed qualities. However due to the increase in internet shopping, consumers may be less concerned about a particular brand name as they are just looking for particular services that the product can provide such as 3G network, wireless and Bluetooth on a mobile phone, rather than just relying on the Nokia brand. Without contradicting myself I do acknowledge that the internet will provide a massive rival for conventional stores, however I do believe that for the time being and the near future, that brand names will still play a large part in the recognition on shopping for certain products.

c) Price competition will make all products cheaper.

Yes, competition of the same or similar product will usually make prices cheaper.

d) Digital markets will become dominated by a handful of mega-sites, like Amazon.com.

People generally do a large search before purchasing anything on the internet which allows customers to get a great knowledge about the product and the companies involved. It is this knowledge which companies may take for granted, as mega-sites like Amazon.com may in fact overlook smaller sites which can sometimes offer cheaper prices. All sites have to start off small therefore I think it would take a very long time for domination to occur as competition is increased every day.

e) How do you think the balance of power between buyer’s and seller’s will change?

Since buyers are able to search and gain more information about products and comparative prices, it is the buyers who will essentially gain power. Sellers will always have less power as they rely on the buyers.

f) Prices are clustered online.

- I don’t really understand this question, but I think all prices whether online or in conventional stores, need to reflect the quality of the product and the services it displays.

Question 3

a) What types of m-commerce services does your cell phone provider offer?

Content and products, wireless advertising, games and entertainment

b) Which of these services do you use?

Contents and products, wireless advertising

c) What types of transactions do you perform through your cell phone or other wireless device?

Nothing

d) What types of transactions would you like to perform, but are currently unable to?

I prefer to make transactions in person rather than an online basis.

e) What is your opinion of wireless advertising/mobile marketing?
Advertising is essential to understand the product, promotion and for the companies to gain profits.Mobile advertising is usually in the form of sms promotions which are often annoying if you are not interested in the content, but can also be essential if you do require certain information straightaway, such as mobile phone access to emails.