Digital markets

Question 1
a) What experiences have you had with shopping online?
I have never been involved with much online shopping but in the rare instances that I have done so, it was mainly to book flight tickets and also to buy some stuff from e-bay. I was not too keen on using this method due to the risk of having my details hacked into. However, I must admit that the comfort that it offers is worth it when shopping otherwise is time consuming.
b) Describe a good experience.

I have had a lot of good experiences while doing my shopping online. However one that stands out from all others is when I went to purchase my last trip around Australia online. The website that I have visited had all kinds of holiday experiences that could do with various price range, offering me great inconvenience.

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

The online store offered a great deal of convenience and a huge variety both in terms of product, quality and price. This is a true model of a one stop shop. In addition the payment method was completely safe with the website having the recognition from online payment protection agencies.

d) Describe a bad experience.

There was that one time when I wanted to buy some cheap household equipments on a website, they wanted me to register to their website and give my email address before completing the purchase. This was not even an option and after selecting my products and being ready for payment, it told me that my email was invalid, although I use it everyday. Eventually, it did not accept my purchase and I could not buy the goods, leaving me frustrated.

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

It was too rigid, putting barriers in the purchasing process that prevents the customer to complete the transaction. In addition to that, forcing the customer to give such details feels like an invasion of privacy.

f) What features make an online store more appealing?

The ease of access to it, its lower prices and its facilities for navigation

g) What features make an online store less appealing?

Bugs, lack of safety over the payment, difficult to navigate and too many processes in order to complete the transaction.

h) Should we expect to see the prices of goods and services rise or fall due to the migration of consumers online?

A movement to consumers online implies a far better product reach for consumers and competition will rise in all markets. Therefore, in order to remain profitable, the prices will eventually need to fall if stores still want to make sales.


Question 2
a) The dispersion of prices (that is, the spread between the lowest and highest price for a particular product) will narrow.

The advent of online stores means that customers will get a far better reach to all kinds of products and are better able to judge prices and will always buy at the cheapest prices. This implies that the prices for similar products will have to converge as customers become more informed.

b) The importance of brand names will decrease.

Brand names are a major factor in differentiating products in the eyes of the customer. Even if the web allows us to buy the same type of products at lower prices, loyalty to brand name will always remain a drive for customers to purchase. For instance, no matter how many type of shoes there are in the market, the brand Nike will always remain a high value brand with a devoted section of the market always purchasing the brand.

c) Price competition will make all products cheaper.

As customers can get better reach of many products around the planet, price competition will eventually be driving prices for all types of goods and services down. However, it price competition is not the only factor that matters in determining prices. Customers are also motivated by quality, brands and non price competition, thus although some goods may get cheaper with price competition. It would be wrong to think that all products will change this way.

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

Digital markets will of course be dominated by a few giants like Amazon.com due to the popularity of those giants. These sites have mastered the market really well and have developed all the criteria necessary to give the customers the best possible shopping experience. In addition to that, their status and resources at their disposal enable them to react to the dynamism of the market, hence making their chances of survival better. However, this does not mean that small sites cannot flourish, new ideas come everyday, and I see no reason to see why this should end.

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

With the digital markets empowering the customers with greater reach to various suppliers and being better informed about price, quality and market development. This I believe will shift the balance of power in favour of the buyer, however, how far is still to be determined.

f) Prices are clustered online.

Prices will tend to get clustered online due to the high level of price competition. This is because all sellers will try to match the best available price in order to sell. However, this will not be the case in all markets because product differentiation.

g) Online prices are elastic. ( i.e. immune to change up and down with demand)

Due to the fact that customers can access a far greater amount of products than in the real physical world, the customers will buy at the cheaper price, if the products are identical. Therefore demand will be very responsive to price changes hence making the statement that online prices are elastic a true one.

h) Online prices are generally transparent (the extent to which prices for a given product or service are known by buyers in the marketplace.).

Online prices are transparent because the markets are accessible by the click of the mouse. Hence customers are fully aware of the different prices charged by different sellers. The only products that this might not apply might be highly specialized products where clients might need passwords to access the product.


Question 3
a) What types of m-commerce services does your cell phone provider offer?

My cell phone provider is Optus. It offers a wide range of m-commerce services through its Optus Zoo portal. It allows me to manage my options on my mobile and it offers me products like mobile TV, news and sport updates, social networking, games and programs.

b) Which of these services do you use?

My favourite services will have to be between news updates and the social networking facilities. With social networking facilities I can stay in touch with my family and friends on the go.

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


The only transaction that I do on my mobile phone besides communicating is to buy games for my mobile phone against my mobile phone credit. Although it offers great convenience, I am still not comfortable to give my credit card details or my bank details on my mobile phone internet due to risk of hacking.


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

I would like to get more possibilities to use my phone to use platforms like eBay and bidding programs. However, with the development of the iphones with its extensive range of applications, this is becoming a reality. It allows people to have countless applications each giving more options than the last.

e) What is your opinion of wireless advertising/mobile marketing?

With the development of the Iphone by Apple, the mobile technology has taken new proportions. The Iphone has the possibility of offering a variety of applications that use the internet to operate and lots of the applications that are free are very popular with its users and some sellers use it as a platform to promote their products. In contrast, text message advertising has a lot of progress to make to obtain the desired effects.