3. Market Overview
3.1. Need and opportunity in the market
3.2. Micro-payment in virtual world – internet
3.3. Micro-payment in real world – vending machine
3.4. Market players – Competition – Alliances
4. Local Turkish Market
5. Case Study “A startup company and its marketing plan”
This paper aims to define the micro-payment & micro-commerce concepts and how there effect our daily life.
The main goal in this paper is to analyze the whole micro-payment world and emphasize the main difficulties related to the micro-payments throughout the world.
The second section analyzes the microcommerce market conditions.
In the next section local Turkish market will be analyzed.
Within the last section there will be a case study that will be prepared by the researcher addressing micro-commerce and the Turkish market.
This section is designed to acquaint its readers with key terms and concepts in the field of micro-payments.
In brief micro-payments refer to small purchases if anything from a fraction of a penny to a quarter, or more.
Another definition can be transactions with monetary values in the cents even fractions of cents vs dollar range.
As an example, Purchasing with cent, penny or below 1 million Turkish lira can be categorized as micro-commerce.
Every moment in our daily life we need and use little amount of money.
For instance buying a newspaper or taking a trip by bus or buying cigarettes.
Especially in Turkey small change is becoming a serious problem because of low value of Turkish Lira and also bank’s ATMs (Automatic Teller Machine) serve money in minimum 5.000.000 TL paper money format
As a result for instance;
You have enough money in pocket and want to take a taxi for short distance because of rain but taxi driver can not change the money so that you try to take a new taxi with hope that the new taxi driver is capable to change your paper money into smaller ones and thus not get wet.
Not only in daily life but also new digital development ( based on internet ) also suffer from micro-payment problem. How?
If we look at the barriers to retard electronic commerce booming, we can see that lots of survey point the payment security. Actually there is another problem to be solved in terms of Internet payment. It means:
Nature of Internet commerce is based on content and service providing. But nowadays people often complain that while there is no shortage of information or service, the quality is inconsistent and there are few means to signal the provider to improve the content.
The possible solution is becoming the current issue at nowadays:
Web content provider should charge little amount of money and utilize this revenue to improve them. In this approach, user can be easily segmented in terms of their demand.
This approach targets to get together users, who can pay for good service or well prepared information with Web providers who are capable to provide good service with little charge of money. The rest of the users and providers can continue their life as usual
But in most cases, the cost to transact the purchase exceeds the monetary value of the purchase.
To sum up, whether in virtual world or real life the micro-payment is an important factor to effect the commerce in any way.
The following sections will guide to describe related issues in details.
3. Market Overview
3.1. Need and opportunity in the market
As described above, the necessity and difficulties in the market is clear although some experts think that micro-payments are not needed because people don’t have enough microproducts.
The market should be analyzed in two different categories:
Virtual world – internet commerce
Real world – traditional commerce
3.2. Virtual World – Internet commerce:
Everybody knows the power of Internet and impacts on their life.
In the last decade commerce on Internet – electronic commerce was to become a hot issue.
There are enormous developments in e-commerce world.
Nowadays, mobile commerce is beginning to be discussed throughout the world
At that time, there are millions of web site and millions of users. The important majority applies e-commerce. But existing payment approachand solutions can not accelerate the commerce even does not meet the needs of all parties.
The current payment over Internet is done by credit card in % 93. ( Visa International,2000 )
Whether security problems for users (stolen credit card numbers and frauds) or transaction cost for merchants – nearly $ 1 fee per transaction or average % 3-6 of turnover (MasterCard International, 2000, & Anadolu Kredi Karti, 2000) – is proof that the current credit card schemes does not fit internet commerce.
When the payment size is low, risk of stealing credit card number for users and fee cost for merchants can not be justified
However there are some projects / ideas that have potential to succeed. Some of the examples are;
The shareware programs that is not commercial can be downloaded in return small for charge§
The types of purchases with a price tag of 1 cent include the rights to download an image§
Language translation services could also offer its services on an as-needed§
Online magazines could sell 5-minute sub§scriptions,
The music listening service (Some music as a part of album) can be provided.§
Political cartoons are worth less than a penny.§
Breaking a single issue of a national weekly magazine into online content, the price of a simple, one-page article is about two cents.§
In addition to that there is some user requirements for micro-payments
* Usage of the payment tools in brief:
• anonymity – privacy
• contract shy – 90% no subscription
• kids and teenagers
• …..s without credit card
• combination of physical and virtual world
(Europay International, Fall 2000)
All of the factors presented that there are many potential providers who could sell information on the Internet and many potential customers for that information. What is missing is an electronic commerce mechanism that links the merchants and the customers in an effective way.
In addition to these, it is estimated that lots of dot com companies that provide service with free of charge will not escape from sink. The solution for those companies is to charge little money in return for their service
Hence there is a gap in the field of micro-payment instrument over Internet.
Web merchants and service provider who are needed to make differentiation should pay attention into microcommerce
For payment industry this situation can be interpreted as a great opportunity especially in the untouched market – for instance Turkey
Micro-payments evolved in the early 1990’s as an alternative payment method for small purchases over Internet. There are some models that are directed in order to fill the gap. For instance:
Trivnet Inc., an Israeli company with offices in California, introduced its micro-payment method in 1999. Under the Trivnet protocol, Trivnet’s system records charge for transactions and then bills the consumer’s Internet service provider. The service provider retains 70 to 90 percent of the fees, with the balance going to Trivnet.
This model is named as IP billing and has potential to become very common.
Total digital content market that can be potential for micro-commerce estimated by JP Morgan at $185 billion and $ 275 billion in 2003.
The estimation shows the size of hidden market and there are lots of opportunities in the market.
Security is an important concern for Internet commerce. The sophisticated security infrastructure has been developed. These systems started with SSL (Secure Socket Layer) for general purpose and then SET (Secure Electronic Transaction) was developed addressing only payment transaction. There is inverse relationship between security and easiness of usage. It means that every preventive action makes the existing model more complex and then this is reflected to user as slowness, hard to use etc.
In this point, micro-payment may have potential to change the general picture little more.
If a well-defined micro-payment system can be used, subjects that may be exposed from risk are already minimized. Therefore the issue of strong public key encryption for additional security can be avoided because it is unnecessary. The computer resources and opportunity cost of time to steal or forge micro-payments would greatly outstrip the value of the payment itself.
There is a good example to explain that idea:
Lets consider 1967 model old car with car alarm, the auto thief would not consider the car valuable enough to foil the advanced alarm systemand risk getting caught.
The goal of security for micro-payments is risk management, not total prevention
3.3. Real world – traditional commerce
In the physical world, many products exist which cannot be sold profitably except by cash or coin, such as soda pop from a vending machine, a single pack of gum, one photocopy. The cost of processing a transaction via the credit card system would destroy any profit margin on these inexpensive consumer items.
In this point Vending machines are so crucial. Because vending machine is an effective point of sale in the manufacturer’s point of view. It is automated, needs small area versus traditional shop and only necessities of its are electricity power and periodically maintenance.
In many countries vending machine usage is very common. Newspapers, drinkable, tickets, condoms etc are sold in vending machine.
As an example In Spain market;
The 380 000 food, drink and tobacco vending machines in Spain are expected to generate sales of Pta258bn in 2001, a 9% increase on the previous year, helped by new advances in technology which make it possible for an ever wider range of products to be sold via self service machines. Hamburgers, pizzas, hot and cold sandwiches and French fries have now joined more traditional products such as cigarettes, hotand cold drinks, confectionery and snacks.
Recent market research in Spain market shows that while tobacco and drinks account for by far the largest proportion of the market–140 000 machines sell tobacco, 137 000 sell hot drinks and 79 000 sell cold drinks — food vending machines are showing the fastest growth, increasing sales by around 30% a year on average. In value terms, tobacco is by far the biggest player, accounting for 60% of revenues in 1999 with sales of Pta151.5bn. Cold drinks were in second place with Pta39.4bn. (Agra group & Gale group, 2000)
But the drawback is again payment method. If the vending machine is not supported by easy to use payment method, actually it is converted to cost box. It means that, there are some initial fixed costs such as value of vending machine, cost of place where the vending machine stands inand other variable costs such as electricity, maintenance, operational ones. The lower volume of usage is to cause that the vending machine not to cover its initial fixed cost and variable operational cost.
Let’s consider how to well-defined and easy payment method accelerates the volume of usage.
Under these circumstances, all the way is towards the digital cash based solution.
In general, there are two distinct types of digital cash: identified digital cash and anonymous digital cash. Identified digital cash contains information revealing the identity of the person who originally withdrew the money from the bank. Also, in much the same manner as credit cards, identified digital cash enables the bank to track the money as it moves through the economy. Anonymous digital cash works just like real paper cash. Once anonymous digital cash is withdrawn from an account, it can be spent or given away without leaving a transaction trail. You create anonymous digital cash by using numbered bank accounts and blind signatures rather than fully identified accounts and non-blind signatures (Miller, 2000)
But the big question is not how to develop. Developing can be done in a way if we consider the speed of technological innovations The big question to be answered is how to force / adapt the people to use new payment method. In order to understand the difficulty we should see credit card world. * Credit card is a most penetrated payment method after cash, however many years has passed for adapting people to credit card usage.
In my opinion the better way to pursue is adding new micro-payment solution to exist tool or system that is already in use rather than trying to create new platform that needs more time and work
( Europay & Visa international , 2000)
There are some attempts to generate some solution in that sense. These are:
§ andersen Consulting, and Qpass are pilottesting a mobile micro-payment system in andersen’s laboratories in France. They are using the infrared port on an Ericsson phone to pay for drinks from a soda machine. The phone and the vending machine in France communicate with Qpass’s back-end servers in Washington State to authorize the payments
GAP company has already presented an innovative solution for micro-payment together with Siemens at the GSM World Congress in Cannes§ and at the CeBit 99: a soda machine which allows the user to buy a cola with his mobile phone and which transmits its status via SMS.
The Virgin Mobile Company is introducing a vending machine that, when a purchaser (using his/her cell phone) rings the number on the side of the machine, a drink is dispensed§ and the cost is charged to the purchaser’s phone bill.
These examples indicate that micro-payment stands for the payment with a mobile phone instead of coins or notes. Potential users often do not have the needed coins or the coin slot does not work properly. It means mobile phones are convenient platform for adding new payment logic.
Not only physical goods or services but also daily routine expense with small charge is another topic in terms of micro-payment
Let’s consider Turkey / Istanbul daily life. As described above, small change is a hard issue for Turkish people. Besides Turkish people usually do not like to carry coins because of its weight
Under this circumstances a tool that help people to pay easily is valuable
In turkey case, “Akbil” system that is implemented by municipality attracted attention of Turkish people seriously. Akbil is actually digital cash example in closed circuit. Although some operational problems exist in this system People are to get used to Akbil and majority of that is happy with Akbil.
The Turkish market and a special case study will be taken up in next sections.
3.4. Market players – Competition – Alliances
In order to list the players in microcommerce we should see the traditional payment industry and commerce parties
The list is shown below:
Payment skimsØ and banks:
These ( Visa International, MasterCard Int. JCB (Japanese Credit Bank), American Express and their distributors – banks) are big players in current market. Their services / products have huge penetration throughout the world. Especially credit cards and debit cards (also known as ATM cards) are preferred by lots of people.
But their current systems can not meet the gap in the micro-payment industry hence they make effort to develop and offer new payment logic.
Their most important scheme is chip card – smart card. This scheme does not specially address the microcommerce market. Its target is general purpose but offline logic can serve solution for micro-payment problem
Chip card – smart card logic is based on offline payment authorization rather than online payment authorization in credit cards.
Online versus offline payment means that:
When a credit card user buys something with a credit card, the card information verification should be handled by only related central bank system. For that, there must be online connection with point of sale and bank’s system for every transaction (current system) whereas with chip card it is not necessary.
With offline logic, actually lots of problems will be overcome. They try to replace all magnetic stripe cards (usual credit cards that we are currently using with online payment) with new chip card until 2005.
On the other hand Europay-Mastercard International has some future plans that is called “E-purse and Clip on the Internet – micro-payments on the Internet”
It is important because it can be interpreted as a signal that the financial institutions is aware of micro-payment’s importance
GSM operators, mobile device manufacturers, networking companies
These companies are also big players in their market. They have great customer database and ability to improve their system immediately in terms of technology
Their product / service life cycles are shorter than traditional industry
These factors enable them to be more competitive in the market
One important goal of them is getting hold of payment transactions from current payment skims and banks. To succeed they try to work in new product development.
Their solution logic is based on enabling mobile telephone users to buy something with using only telephone rather than using extra tools
Examples in previous sections indicate that telecommunication companies are capable to provide payment alternatives and fill the gap.
Nokia announced the “Dial A Coke” concept – a new application for the Nokia Card Phone designed to extend greater convenience to the consumer. The innovative application displayed at CommunicAsia ’98 integrates the wireless data capabilities of a Nokia Card Phone with a Coca-Cola vending machine, and allows consumers to purchase a drink simply by using their mobile phone (Nokia Asia Pacific, 1998)
GoodsØ and / or service provider:
These companies are manufacturers, distributors or providers of commodities that are actually purchased by people. Newspaper distributors, cigarette manufacturers, beverage companies can be given an example.
Their role in microcommerce market is critical. Because their adaptation ability for new technology and payment system and commitment for microcommerce are to determine whether or not microcommerce market will be developed
In the early version of this paper it was planned that detailed list of goods and service provider, who are subject to microcommerce would be provided.
But now it is decided not to involve this type of analysis. Because related goods & service market is very fragmented and also the kind of information may not be more beneficial in scope of this paper.
4. Local Turkish Market
The culture and habits of Turkish people is another important thing to be considered to understand the Turkish market and analyze shape of the micro-commerce in Turkey.
The majority of young people majority in the Turkish population has an accelerating effect for usage of high – tech product. There are more people, who favor new product usage and even excessive consumption
The economic instability and low income per capita can be a barrier for new product.
But it may not be current for micro-commerce market if people are not forced to expose extra cost to use it. It means for example cellular phonealternative They have already mobile phones – 17 million Gsm subscribers as of December 2000 – (Telepati Telekomunikasyon Weekly Magazine, 2001)
They do not have to make extra effort to buy something from vending machine via mobile phones.
Not only payment mechanism but also other factors that can effect micro-commerce such as vending machine penetration, service quality is so critical for growth of micro-commerce in Turkey.
Compared to potentiality of market, there is not sufficient number of vending machine in Turkey owing to coin problem. It means that the important distribution channel of micro-commerce does not exist as much as needed.
In addition to vending machine case Turkish e-commerce market can be also subject to micro-commerce in light of virtual world section in this paper.
According to market surveys the melody transfer for cellular phones is creating biggest revenue among Turkish e-sale sites. These types of sites are still working with credit card payment or direct debit account options. These methods can be perceived as risky or not easy-to use by some consumers (IBS Surveys, 2000 )
In the end it can be said that Turkish population is inclined and potential for well-defined micro-payment scenarios such as cellular phones likein the case study.
5. Case Study
In this section, real project plan that will be prepared by the researcher will be presented
There are some new practical ideas about Turkey microcommerce market.
If the needed feasibility can be done, this plan may be put into use
It means that this paper may be groundwork for new initiatives
“Pasific” is assumed as a startup company specializing in IT (Information Technology) based projects consulting & implementation in Turkey. Its expertise is electronic payment & microcommerce.
“Pasific” can be described as a vendor of some software & hardware packages.
Also It has qualified experts related to the payment industry.
Not only selling some products but also needed implementation, support and consultant service can be provided by “Pasific”.
Especially “Pasific” micro-payment services and its potential customers / partners will be analyzed in scope of this paper.
The basic principle of the service, which is taken up in this paper, is using cellular phones to purchase something in micro-payment sense.
There are actually two different environments to be considered.
A) Vending Machines
B) Internet Shopping Sites
The flowchart and step by step explanations are below:
– Exhibit 1.a –
Firstly the consumer reaches vending machine or browses Internet shopping site and selects what he/she wants to buy.
1. The consumer enters his/her cellular phone number into form at the Internet shopping site or consumer sends a signal to vending machine via his/her cellular phone to buy it.
2. The shopping site or vending machine transfers cellular phone number to Gsm Operator.
3. Gsm Operator automatically sends a sms message that includes purchase details to the consumer to verify it.
4. The consumer receives the message and controls purchase details then if OK reply is taken the sms message with his/her password is confirmed
5. Gsm operator sends a signal to vending machine or Internet shopping site that everything is OK.
6. The shopping site or vending machines delivers the product/service to consumer.
7. At the end of the month or circle Gsm Operator makes billing the transaction with normal cellular phone fees to consumer and collects money via exist collection system.
8. Gsm operator pays money of sold good/service to its seller.
The role of “Pasific” in this scenario is integration & implementation issues in terms of both technical and business needs.
This case study does not include ready to implement marketing plan with all details
The only goal of case study is crafting marketing strategy in conceptual sense for a company like “Pasific”
Under this circumstances the following sections will answer questions such as:
• Which parties are involved?
• What are the characteristics of the parties?
• What are their situations?
• What kind of strategic action should be taken?
“Pasific” prefers turnkey solution in their projects. Because there is a knowledge lack in the market and also integrity of all issues and parties is vital for project accomplishment in this type of business. Only high expertise like in “Pasific” can make it possible.
But “Pasific” has some resource constraints in human resource and financial manner.
It can only focus their work field whereas it also wants to manage other issues in its projects. For turnkey solution A logical way for “Pasific” is making strategic alliances with suitable partners in most cases.
“Pasific” can have commanding influence over the project with turn key solution logic
It can be interpreted as a core competency
In this circumstances “Pasific“ ‘s duties and responsibilities are;
Defining project scopeØ and roles of parties.
Preparing project planØ and milestones.
Coordination between parties ( “Pasific” – client / partner )Ø
Steering projects in terms of project manaØgement.
Providing necessary softwareØ & hardware packages.
Technical implementationØ & support & consultant
Value chain is the identifying way to understand the whole picture.
The business flow and its components for this case should be analyzed focusing value chain.
Especially, understanding the one to one relationship between two parties is so crucial. With respect to this analysis “Pasific” can easily determine where “Pasific” can play a role?
The following value chain diagram illustrates which parties involve and what are their roles.
– Exhibit 1.b –
A) Service / Product provider:
This party provides goods or services to be sold.
For vending machine case it can be distributors of drinkable, newspapers, condoms etc.
Their importance of this value chain is determining what type of product can be sold effectively and also operational tasks (i.e. provide necessary amount of good on time to prevent some typical problems such as no good in vending machine etc.)
For Internet shopping site case, it can again be distributors/seller of some specials goods or services such as Nokia in the melody case, owner of Amazon etc. Their additional task comparing the distributors for vending machine is making some preparations & regulations that are needed from nature of internet environment such as using well-defined internet site map or easy to use site style etc.
B) Distribution Channel Maker:
For vending machine case it is a supplier of vending machine.
For Internet shopping site case it is a designer/creator of web page.
For both of them it has also maintenance and enhancement responsibilities.
The role of this party is providing an effective sale environment/distribution channel therefore its tasks are mostly operational and technical based.
The most important thing is that it plays critical roles in service availability and quality of service.
In the integration manner “Pasific” will spend more time & effort with this party.
C) System Integrator:
“Pasific” is a system integrator. The most critical roles are gathered in this party.
There are two types of technical integration and implementation to be considered.
The first one is to make distribution channel / sale platform (vending machine or Internet shopping site) available to handle transactions likedescribed Exhibit 1.a. It means that the sale environment should be connected logically with a cellular phone.
The second one is to make Gsm operator available to handle transactions.
In brief “Pasific” should make some software and hardware installation/configuration in both party
“Pasific” manages not only technical integration but also business issues
The most important one is to convey its business know-how to strategic partner.
D) Gsm Operator:
Gsm operator is most sensitive spot of value chain.
Actually it should work like a clearinghouse in banking industry
The logic in this paper relies that a common and penetrated device can be used to make micro-payment easier than now. This device is cellular phone and Gsm operators are supreme of mobile phone world.
In brief the main advantage of Gsm operators is their exist market position. Not only their many cellular phone customer but also their robust technical and business infrastructure (billing and collection system etc.), brand images are to make Gsm operators’ role extremely important in this scenario.
With Gsm Operator:
“Pasific” should focus on GSM operators, who are willing to discover some niche in the market.
In the value chain the first and second parties can be changed case by case and relatively less critical but cellular phone usage and integration with any system are constant.
Hence, the most important target for “Pasific” is making strategic alliance with a suitable Gsm Operator.
Gsm Operators in Turkey are larger companies that are founded by the greatest holdings in Turkey and foreign investor. Their real names are not stated in this paper because of some regulations. Company A, B, C notation will be used if necessary.
Within the Gsm Operators targets are marketing and IT managers.
The micro-payment/microcommerce concept can be new business line for them
In this point of view marketing managers are so crucial to understand what is the micro-payment importance is for their company and how to utilize that
Besides to set micro-payment infrastructure needs to be IT effort. It means that contributions of IT side is mandatory for project success
These executives do not want to waste their time or risk their money looking for bargain information or questionable expertise. As they go into markets looking at new opportunities, they are very sensitive to risking their company’s name and reputation.
With Service / Product Providers:
Service / product providers can be strategic partners. But this type of alliance may not cause synergic effect as much as with Gsm alliance case. Moreover there are lots of companies in the market. When a strategic alliance is done with company x the company y as a potential customer for “Pasific” may not want to work with Pasific
In brief unless there is a big distributor or provider that exists having huge market share, “Pasific” should avoid partnership with this party.
With Distribution Channel / Sell Platform Maker:
This strategic alliance with internet site designer/creator or vending machine supplier can be beneficial for both “Pasific” and platform maker.
Actually it is not only beneficial but also must in some cases
The business of both parties is based on technical things. As described before the integration will already force the parties to have more frequent face to face communication
Besides operational activities such as maintenance must be done harmoniously
In addition to these, some shared development and enhancement efforts can also take place. Within this point of view, the strategic alliance may cut the R & D cost and synergic effect may produce good results.
In brief, an alliance with sell platform maker should be taken into consideration
The SWOT analysis covers strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are generally internal attributes, which “Pasific” can address by changing its business. Opportunities and threats are generally external.
The Internet and technological innovations offer “Pasific” opportunities and threats. “Pasific” need to use its strengths as core competencies,and must minimize weaknesses.
All of “Pasific” ‘s principals know this area very well. Its expertise and know-how is better than any potential rival. Currently there is no company focusing on micro-commerce niche in Turkey.
Some application service provider in IT sector may be interested in this niche in the future.
“Pasific” does not have to support a large overhead it means as a start-up company “Pasific” has excess capacity now. Therefore its possible clients/partners will know that “Pasific” will deliver what it has promised them.
Manageable size also decrease the administrative.
The most important advantage is characteristic of flexible/ rapid moving in its area.
Especially to be able to decide and apply rapidly is competitive advantage
“Pasific” is a new entity, It can be perceived as an innovative and so risky choice by executives of potential clients/partners.
“Pasific” as a new enterprise has no huge financial budget. It may also meet some creditability problem with banks. High interest rate and not long term credit agreement can be inevitable
It means it is not easy for “Pasific” to solve the financial problems in some cases.
“Pasific” technical and business teams are composed of well-educated, qualified experts. This is absolutely an advantage. But it is risky as well. Some rivals can attract “Pasific” staff with assertive proposal. “Pasific” may not have retention ability in order to defend its core team
There is not enough experienced employee to hire in the case of any loss or expansion necessity.
Although there are experts and smart people in its team, “Pasific” does not possess enough market experience in terms of business.
It may cause to slow down and loss some advantages.
The main opportunity is that the micro-commerce market in Turkey has not been discovered yet.
It means that “Pasific” will be able to benefit from first mover advantage. Hence, a successful strategic alliance will have a chance to skim the market.
* According to the research Turkish marketing trends in Internet usage and penetration shows optimistic pictures. In 2005 it is expected that one of each two Internet user (50 %) in Turkey will somehow involve e-commerce issues. This is really a big potential as Internet shopping sites is an important part of “Pasific” ‘s targets
* resource: IBS Internet Usage Survey June 2000
Need of small charge:
Overall, the main idea of creating “Pasific” is shortage of small change in daily life.
The easy-to use payment method is very important in daily life and Internet environment
If the scope of micro-commerce is expanded from vending machine to great ones (all where in token or coin used) it can be seen that the opportunity is valuable to be considered.
There is currently economic and politic crisis in Turkey. Past experiences say that the fluctuations can easily take in place when you do not estimate. It is categorized as macroeconomic risk that effects all companies. The financial weakness makes “Pasific” more fragile against in the environment
Not only individual risk but also possible problems in partners in terms of strategic alliance may be a threat for “Pasific”.
The Internet is a threat as well as an opportunity:
The nature of Internet is based on continuously changing The main impact is that daily new system development is going on. Therefore product life cycle may be too short to keep up with for “Pasific”. Though there is no established trend in micro-commerce market the impact must be paid attention.
The one impact is to widen the range of competition that “Pasific” will expose. It means In addition to local rival International & multinational companies is also potential competitor for “Pasific”
No barrier to new entry:
The micro-commerce & micro-payment is fully a niche market. In general market trends of niche marketing shows us that the giant companies, who notice the attractiveness of niche will attack the firm like “Pasific”. With this point of view “Pasific” should put some barriers to make the potential new entry harder than now
Keys to Success
• Introducing itself to its potential client/partner very well and how “Pasific” can add value to their business are more critical because of “Pasific” ‘s weak brand image.
• Venture capital – risk funds should be researched to take preventive measures against potential finance problem
• The establishment of well-defined strategic alliance with suitable partner(s) is key success factor for “Pasific” to leave a mark on the market.
• Developing visibility to generate new business lead is also so crucial
• In the long run the service differentiation and related diversification are ways to hedge individual risk.
It can be said that the micro-commerce has been escaped from eyes.
The basic principle is making people possible to purchase easily using existing instruments like Gsm phones.
The key points for companies like “Pasific” are lower profit margin but huge volume potential in the market.
It means that The company like “Pasific” should make effort to cut the costs and increase the volume of transaction for survival
The chance to be successful in business addressing the micro-payment is respectively higher in the developing countries like Turkey.
Again I would like to thank all of you for giving me a chance for working this project.
I am very glad to prepare this interesting graduate project. I am determined to continue the research in this area
• Visa International, (August 2000), Members Guide
• MasterCard international, (2000), International Chargeback Program documentation
• Anadolu Kredi Karti, (Summer 2000 ), Chargeback Department Reports
• Europay International,(Fall 2000), Electronic Commerce Expert group Meeting, Madrid
• Agra group & Gale group – http://www.agra-food-news.com/Aggroup.html, (March 2000), Business Report
• Miller Jim, (2000), Digital Cash Mini-FAQ
• Nokia Mobile Phones Asia Pacific group, (1998), Periodical Bulletin
• Telepati Telekomunikasyon Weekly Magazine,(January 2001), Statistic Section
• IBS Research Company, (June 2000), Internet User Report in Turkey