Download document

Chapter 10
Strategies for Web Auctions,
Virtual Communities, and
Web Portals
Electronic Commerce
Objectives
 Key
characteristics of major auction
types
 Strategies for general and specific
consumer Web auction sites
 Strategies for business-to-business
Web auction sites
 How businesses use virtual
communities to increase brand
awareness and sales
 Strategies for Web portal sites
Objectives
 Key
characteristics of the six major
auction types
 Strategies for general and specific
consumer Web auction sites
 Strategies for business-to-business Web
auction sites
 How businesses use virtual communities
to increase brand awareness and sales
 Strategies for Web portal sites
Auction Basics
 Earliest
known auctions were in
Babylon around 500 B.C.
 Entire Roman Empire was auctioned in
193 A.D. after the death of Emperor
Pertinax
 Buddhist temples held auctions to sell
the possessions of deceased monks
 Auction firms Sotheby’s and Christie’s
began in the 17th century
Auction Basics
 English
Auctions
Bidders publicly announce their
successively higher bids until no higher bid
is offered
 Minimum price can be used to set the
price at which the auction will begin
 Reserve price is the minimum price the
seller will accept

 Yankee

Auctions
Allow the bidder to choose the quantity of
multiple items offered at the auction
Auction Basics
 Dutch Auctions
Form of open auction in which bidding
starts at a high price and drops until a
bidder accepts the price
 Usually the seller offers a number of
similar items for sale
 Good for moving large numbers of
commodity items quickly

Auction Basics
 Sealed-Bid Auctions

Bidders submit their bids independently
and are usually prohibited from sharing
information with each other
 First-price

sealed-bid
Highest bidder wins
 Second-price


sealed bid
Highest bidder wins, but at the second-highest
bidder’s price
Encourages all bidders to bid their private
valuations, reducing collusion
Auction Basics
 Double Auctions
Buyers and sellers each submit combined
price-quantity bids to an auctioneer
 The auctioneer matches the seller’s offer
(lowest price, then up) to the buyer’s offers
(highest price, then down)
 New York Stock Exchange conducts
sealed-bid double auctions of stocks and
bonds

General Consumer Auctions
 eBay
Search for specific items
 Browse by categories of items
 Seller options include bold-face type
and featured listings
 Rating system to provide feedback to
alleviate fears concerning seller
reliability

 Must build trust – “Just in Time Trust”
eBay Home Page
http://pages.ebay.co.uk/help/basics/n-index.html
Excite Auctions Home Page
http://auctions.excite.com/
Additional General
Consumer Auctions
 Amazon.com
Offers “Auctions Guarantee” to reimburse
any buyer for merchandise purchased that
was not delivered, or “materially different”
than represented
 Provides escrow service for items over
$250

Dutch Auctions
http://www.excite.co.uk/directory/Shopping/Auctions/Dutch
Golf Club Exchange Web Auction
http://www.golfclubexchange.com
Business-to-Business Auctions
 Typically
used to dispose of excess
inventory
 Large companies use liquidation
specialists to find buyers for unusable
inventory, create their own auction sites
 Smaller companies often sell their
excess inventory to liquidation brokers,
who, in turn, create auction sites
CompUSA Auctions Home Page
www.compUSA.com
Reverse Auction for Car Parts
http://www.covisint.com/
Auction-Related Services
 Escrow

service
Independent party holds buyer’s payment
until the item is received and the buyer is
satisfied with the purchase
 Directory

of available auctions
Auction Guide
 Guidance

for new auction participants
AuctionInsider
 Links
to auctions sorted by category
AuctionInsider Directory
http://www.auctioninsider.com/
Seller-Bid Auctions and
Group Purchasing Sites
 Reverse

Sellers of goods and services bid the
prices at which they are willing to sell
 Group

auctions
purchasing sites
Items are posted with a price, as the
number of bids increase, the seller
negotiates a better price with the item’s
provider
Virtual Community Strategies
 Gathering
places for people and
businesses that does not have a
physical existence
Usenet newsgroups
 Chat rooms
 Web sites

 Helps
companies, customers, and
suppliers plan, collaborate, transact
business, and interact in a mutually
beneficial way
Milpro Business-to-Business Virtual Community Site
Figure 10-8
Milpro Business-to-Business Virtual Community Site
www.milpro.com
Web Portal Strategies
 Combinations
of virtual communities,
search engines, and Web directories
 Provide a high degree of “stickiness”
that is extremely attractive to
advertisers
 Examples include AOL, Excite,
Infoseek, Lycos, MSN, Netscape
Netcenter, Snap, and Yahoo!
Web Portal Strategies
 Typically
ask members to provide
demographic information about
themselves
 Very high potential for targeted
marketing
 High visitor counts yield high
advertising rates
Excite.com Portal Home Page
http://www.excite.com/
Summary
 Key
characteristics of major auction
types
 Strategies for general and specific
consumer Web auction sites
 Strategies for business-to-business
Web auction sites
 How businesses use virtual
communities to increase brand
awareness and sales
 Strategies for Web portal sites