电子商务课件03.ppt

1、Chapter 3,Selling on the Web: Revenue Models and Building a Web Presence,2020/7/9,Zhigang Chen College of Management,2,Learning Objectives,In this chapter, you will learn about: Revenue models How some companies move from one revenue model to another to achieve success Revenue strategy

2、issues that companies face when selling on the Web Creating an effective business presence on the Web Web site usability Communicating effectively with customers on the Web,2020/7/9,Zhigang Chen College of Management,3,Revenue Models,Web business revenue generating models Web catalog Di

3、gital content Advertising-supported Advertising-subscription mixed Fee-based Can work for both sale types Business-to-consumer (B2C) Business-to-business (B2B) Can work with one Web site, separate sites, or separate pages,2020/7/9,Zhigang Chen College of Management,4,Web Catalog Revenue

4、 Models,Adapted from traditional catalog-based model Seller established brand image Sold through printed information Mailed to prospective buyers Web sites expand traditional model Replace or supplement print catalogs Offer flexibility Order through Web site or telephone Payment though Web site, tel

5、ephone, or mail Creates additional sales outlet,2020/7/9,Zhigang Chen College of Management,5,Web Catalog Revenue Models (contd.),Computers and consumer electronics Apple, Dell, Gateway, Hewlett-Packard, IBM, Sun Microsystems Sell full range of products Dell Allows product configuration

6、; creates value Crutchfield and The Sharper Image Successful mail order expansion includes Web sites Best Buy, Circuit City, J short articles (increases stickiness) M,2020/7/9,Zhigang Chen College of Management,19,2020/7/9,Zhigang Chen College of Management,20,Advertising-S

7、upported Revenue Models (contd.),Targeted classified advertising sites (contd.) Used vehicle sites AutoT, CycleT, BoatT Accepts paid advertising and charge listing fee Seller ad options: Web site only, print version inclusion Dedicated following product sites (VetteFinders) Caters to small audiences

8、 Product sites useful to buyer after use Musicians Buy-Line, ComicL, The Golf Classifieds,2020/7/9,Zhigang Chen College of Management,21,Advertising-Subscription Mixed Revenue Models,Subscribers Pay fee and accept advertising Typically less advertising Compared to advertising-supported

9、sites Web sites offer different degrees of success The New York Times (today) Bulk of revenue derived from advertising The Wall Street Journal (mixed model) Subscription revenue weighted more heavily Print edition and online editions Different model versions,2020/7/9,Zhigang Chen College of Manageme

10、nt,22,Advertising-Subscription Mixed Revenue Models (contd.),The Washington Post , Los Angeles Times Mixed revenue model variation No subscription fee charges Current stories free Pay for archived articles Business Week Mixed revenue model variation Free content at online site Requires

11、paid subscription to print magazine Archived article additional charge (over five years old),2020/7/9,Zhigang Chen College of Management,23,Advertising-Subscription Mixed Revenue Models (contd.),ESPN Leverages brand name from cable television business Sells advertising, offers free info

12、rmation Collects Insider subscriber revenue Consumers Union (ConsumerR) Subscriptions and charitable donations Not-for-profit organization No advertising Free information Attracts subscribers and fulfills mission,2020/7/9,Zhigang Chen College of Management,24,Fee-for-Transacti

13、on Revenue Models,Service fee based on transaction number or size Web site offers visitor personal service Formerly, human agents provided service Value chain Disintermediation Intermediary (human agent) removed Reintermediation New intermediary (fee-for-transaction Web site) introduced,2020/7/9,Zhi

14、gang Chen College of Management,25,Fee-for-Transaction Revenue Models (contd.),Travel agents Receive fee for initiating transaction Replaced by computers Online travel agents Saber system (Travelocity) Expedia, H, Hotel Discount Reservations All profitable Orbitz Five major U.S. airline

15、s consortium Generates advertising revenue,2020/7/9,Zhigang Chen College of Management,26,2020/7/9,Zhigang Chen College of Management,27,Fee-for-Transaction Revenue Models (contd.),Travel agents (contd.) Traditional travel agents being squeezed out Reduced or eliminated fee

16、s Smaller travel agents specializing (cruises, hotels) Reintermediation strategy Travel agents focus on groups Cruise Web sites VacationsToG, Cruise Specialists Group travel Web sites WaveH, WannaSurf,2020/7/9,Zhigang Chen College of Management,28,Fee-for-Transaction Revenue Models (con

17、td.),Automobile sales Web site removes salesperson negotiation Reduces costs Provides buyers information service CarsD model Customers select specific car, site determines price and finds local dealer A and Autobytel model Site locates local dealers, car sells at small premium over dealers nominal c

18、ost Car salesperson disintermediated Web site: new intermediary (reintermediation),2020/7/9,Zhigang Chen College of Management,29,Fee-for-Transaction Revenue Models (contd.),Stockbrokers Charge customers trade execution commission Web-based brokerage firms (E*TRADE and Datek) Offer inve

19、stment advice, fast trade execution Creates competition Discount brokers and full-line brokers Web sites opened for stock trading and information Transaction cost reductions (like online auto buying) Stockbrokers disintermediated,2020/7/9,Zhigang Chen College of Management,30,Fee-for-Tr

20、ansaction Revenue Models (contd.),Insurance brokers Quotesmith Internet policy price quotes direct to public (1996) Independent insurance agents disintermediated Insurance policy information, comparisons, sales sites InsWeb, Answer Financial, I, YouD Progressive Web site Provides quotes for competit

21、ors products too Major insurance company Web sites Offer information or policies for sale,2020/7/9,Zhigang Chen College of Management,31,2020/7/9,Zhigang Chen College of Management,32,Fee-for-Transaction Revenue Models (contd.),Event tickets Event promoters use Web Ticketma

22、ster, T, TicketWeb Sell original tickets Customers reside anywhere worldwide Secondary market tickets StubHub, TicketsNow Operate as brokers Connect ticket owners with buyers Reduce transaction costs,2020/7/9,Zhigang Chen College of Management,33,Fee-for-Transaction Revenue Models (cont

23、d.),Real estate and mortgage loan brokers Web sites provide all traditional broker services Coldwell Banker, Prudential National Association of Realtors Web site R IndyMac Bank Home Lending Offers online credit review, decision in minutes, printing approval letter Successful Web mortgage brokers Dit

24、ech and E-LOAN,2020/7/9,Zhigang Chen College of Management,34,2020/7/9,Zhigang Chen College of Management,35,Fee-for-Transaction Revenue Models (contd.),Online banking and financial services No physical product Easy to offer on Web Web financial transactions concerns Trust

25、and reliability of financial institution Solutions Use existing banks identification and reputation (Citibank Online) Start online bank not affiliated with existing bank (First Internet Bank of Indiana) Use different name (Bank One used Wingspan),2020/7/9,Zhigang Chen College of Management 135071159

26、13 ,36,Fee-for-Transaction Revenue Models (contd.),Online music Amazon MP3, Apples iTunes, eMusic, Microsofts MSN Music, Napster, Rhapsody, Yahoo!, W Music Downloads Sell single songs (tracks) and albums Sales revenue source Fee-for-transaction model Some sites offer subscription plans,2020/7/9,Zhig

27、ang Chen College of Management,37,Fee-for-Transaction Revenue Models (contd.),Online music (contd.) Problems Digital products easily copied Stores promote own music file format Buyers required to download and install software Software limits number of audio file copies Software does not

28、 prevent illegal copying Solution Adopting one standard file format No copying restrictions DRM-free MP3 format (Amazon),2020/7/9,Zhigang Chen College of Management,38,Online Video,Copying control Use DRM software Three issues hampering sales Large file size Reduced by higher Internet c

29、onnection speeds Fear of online sales impairing other sales types Potential serial release pattern impact Inability to play on variety of devices DRM not platform compatible,2020/7/9,Zhigang Chen College of Management,39,Fee-for-Service Revenue Models,Companies offer Web service Fee bas

30、ed on service value Not broker service Not based on transactions-processed number or size Online games Sales revenue source Advertising (older concept) Pay-to-play premium games Subscriptions Frequent player demographics 40% over age 35,2020/7/9,Zhigang Chen College of Management,40,Fee

31、-for-Service Revenue Models (contd.),Professional services Limited Web use State laws prohibit extension of practice Patients may set appointments Major concern Patient privacy Significant barrier Patient diagnosis difficult without physical examination,2020/7/9,Zhigang Chen College of Management 13

32、507115913 ,41,Revenue Models in Transition,Need to change revenue model When Web users needs change Conditions after 2000 Funding became scarce Unprofitable growth phase Change model or go out of business,2020/7/9,Zhigang Chen College of Management,42,Subscription to Advertising-Support

33、ed Model,Slate magazine (e-zine) Upscale news and current events Success expectations were high Experienced writers and editors Acclaim for incisive reporting and excellent writing Initial revenue source Annual subscription Did not cover operating costs Now an advertising-supported site Part of MSN

34、portal Increases stickiness,2020/7/9,Zhigang Chen College of Management,43,Advertising-Supported to Advertising-Subscription Mixed Model,S Acclaim for innovative content Initial revenue source Advertising-supported site Needed additional money to continue operations Investors did not pr

35、ovide Now offers optional subscription version Annual fee for Salon premium Free of advertising Downloadable content Additional content,2020/7/9,Zhigang Chen College of Management,44,Advertising-Supported to Fee-for-Services Model,Xdrive Technologies Free disk storage Initial revenue so

36、urce (1999) Advertising-supported Pages contained advertising Targeted e-mail advertising Did not cover operating costs Now subscription-supported service Monthly fee dropping Other similar companies (IBackup and Kela),2020/7/9,Zhigang Chen College of Management,45,Advertising-Supported

37、 to Subscription Model,Northern Light Search engine (includes own database) Results include Web site links and abstracts Initial revenue source Combination (advertising-supported and fee-based) Individual article payment Search results page advertising Did not cover operating costs Now subscription

38、model Annual, large clients,2020/7/9,Zhigang Chen College of Management,46,Multiple Transitions,Encyclopedia Britannica Initial Web offerings Britannica Internet Guide Encyclopedia Britannica Online Initial revenue source Paid subscription site Low subscription sales Converted to free a

39、dvertiser-supported site Sold educational and scientific products Returned to mixed model Subscription plan and free content,2020/7/9,Zhigang Chen College of Management,47,2020/7/9,Zhigang Chen College of Management,48,Revenue Strategy Issues,Implementations issues Channel

40、conflict and cannibalization Strategic alliances and channel distribution management Mobile commerce,2020/7/9,Zhigang Chen College of Management,49,Channel Conflict and Cannibalization,Channel conflict (cannibalization) Company Web site sales activities interfere with existing sales out

41、lets Retail distribution partner issues Levis: stopped selling products on company Web site Site now provides product information Maytag: incorporated online partners into Web site Site now provides product information Eddie Bauer Online purchases returnable at retail stores Required compensation an

42、d bonus plans adjustments to support Web site,2020/7/9,Zhigang Chen College of Management,50,Strategic Alliances and Channel Distribution Management,Strategic alliance Two or more companies join forces Undertake activity over long time period Joining Web sites with channel distribution

43、management firms Yodlee Relationship with portal site clients A Joined with Target, Borders, CDnow, ToyRUs Handleman Company Manages music inventories (Walmart, KMart),2020/7/9,Zhigang Chen College of Management,51,Mobile Commerce,Few companies successful generating significant revenues

44、 NTTs DoCoMo I-Mode service (Japan cell phone) Send short messages, play games, obtain weather forecasts AvantGo (United States) Offers channels of information as PDA downloads Mobile commerce: $400 billion by 2012 Requires larger memory, easier-to-use interfaces, higher screen resolutions E-mail, t

45、elephone, Web access, entertainment services convergence,2020/7/9,Zhigang Chen College of Management,52,Creating an Effective Web Presence,Organizations presence Public image conveyed to stakeholders Usually not important Until growth reaches significant size Stakeholders Customers, sup

46、pliers, employees, stockholders, neighbors, general public Effective Web presence Critical Even for smallest and newest Web operating firms,2020/7/9,Zhigang Chen College of Management,53,Identifying Web Presence Goals,Business physical space Focus on very specific objectives Not image d

47、riven Must satisfy many business needs Fails to convey good presence Web business site intentionally creates distinctive presence Good Web site design Provides effective image-creation features Provides effective image-enhancing features Serves as sales brochure, product showroom, financial report,

48、employment ad, customer contact point,2020/7/9,Zhigang Chen College of Management,54,Identifying Web Presence Goals (contd.),Making Web presence consistent with brand image Different firms establish different Web presence goals Coca Cola pages Usually include trusted corporate image (Co

49、ke bottle) Traditional position as a trusted classic Pepsi pages Usually filled with hyperlinks to activities and product-related promotions Upstart product favored by younger generation,2020/7/9,Zhigang Chen College of Management,55,Achieving Web Presence Goals,Effective site creates a

50、ttractive presence Meets business or organization objectives Objectives Attract visitors to the Web site Make site interesting Convince visitors to follow sites links Create impression consistent with organizations desired image Build trusting relationship with visitors Reinforce positive image Enco

51、urage visitors to return,2020/7/9,Zhigang Chen College of Management,56,Achieving Web Presence Goals (contd.),Profit-driven organizations Toyota Good example of effective Web presence Presence consistent with corporate goal Quaker Oats older Web site Offered little sense of corporate pr

52、esence Quaker Oats current Web site Much better,2020/7/9,Zhigang Chen College of Management,57,2020/7/9,Zhigang Chen College of Management,58,2020/7/9,Zhigang Chen College of Management,59,2020/7/9,Zhigang Chen College of Management,60,Achieving We

53、b Presence Goals (contd.),Not-for-profit organizations Web presence effort goals Image-enhancement capability Provide information dissemination Successful site key elements Integrate information dissemination with fund-raising Provide two-way contact channel American Civil Liberties Union (ACLU) Ser

54、ves many different constituencies Political party Web sites,2020/7/9,Zhigang Chen College of Management,61,2020/7/9,Zhigang Chen College of Management,62,Web Site Usability,Current Web presences Few businesses accomplish all goals Most fail to provide visitors sufficient in

55、teractive contact opportunities Improve Web presence Make site accessible to more people Make site easier to use Make site encourage visitors trust Develop feelings of loyalty toward organization,2020/7/9,Zhigang Chen College of Management,63,How the Web Is Different,Simple mid-1990s We

56、b sites Conveyed basic businesses information No market research conducted Web objectives achievement failure Not understanding Web presence-building media Web objective achievement success Sites create organizations presence Sites contain standard information set History, objectives, mission, produ

57、ct information, financial information, two-way meaningful communication,2020/7/9,Zhigang Chen College of Management,64,Meeting the Needs of Web Site Visitors,Successful Web businesses: Realize every visitor is a potential customer (partner) Crafting Web presence is an important concern

58、Know visitor characteristic variations Visitor at site for a reason,2020/7/9,Zhigang Chen College of Management,65,Meeting the Needs of Web Site Visitors (contd.),Web site visitor motivations Learning about company products or services Buying products or services Obtaining warranty, ser

59、vice, repair policy information Obtaining general company information Obtaining financial information Identifying people Obtaining contact information Visitors have: Various needs, experience, expectations, technology,2020/7/9,Zhigang Chen College of Management,66,Meeting the Needs of Web Site Visitors (contd.),Making Web sites accessible Build interface flexibility Optional to use frames Offer text-only version Option to select smaller graphic images Option to specify streaming media connection type Option to choose among inform