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9780538469241 ppt ch03

  1. 1. Electronic Commerce Ninth Edition Chapter 3 Selling on the Web: Revenue Models and Building a Web Presence
  2. 2. Learning Objectives <ul><li>In this chapter, you will learn about: </li></ul><ul><li>Revenue models </li></ul><ul><li>How some companies move from one revenue model to another to achieve success </li></ul><ul><li>Revenue strategy issues that companies face when selling on the Web </li></ul><ul><li>Creating an effective business presence on the Web </li></ul><ul><li>Web site usability </li></ul><ul><li>Communicating effectively with customers on the Web </li></ul>Electronic Commerce, Ninth Edition
  3. 3. Revenue Models <ul><li>Web business revenue-generating models </li></ul><ul><ul><li>Web catalog </li></ul></ul><ul><ul><li>Digital content </li></ul></ul><ul><ul><li>Advertising-supported </li></ul></ul><ul><ul><li>Advertising-subscription mixed </li></ul></ul><ul><ul><li>Fee-based </li></ul></ul><ul><li>Can work for both sale types </li></ul><ul><ul><li>Business-to-consumer (B2C) </li></ul></ul><ul><ul><li>Business-to-business (B2B) </li></ul></ul><ul><ul><ul><li>Can use same revenue model for both types of sales </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  4. 4. Web Catalog Revenue Models <ul><li>Adapted from mail-order ( catalog ) model </li></ul><ul><ul><li>Seller establishes brand image </li></ul></ul><ul><ul><li>Printed information mailed to prospective buyers </li></ul></ul><ul><ul><ul><li>Orders placed by mail or toll-free telephone number </li></ul></ul></ul><ul><li>Expands traditional model </li></ul><ul><ul><li>Replaces or supplements print catalogs </li></ul></ul><ul><ul><li>Offers flexibility </li></ul></ul><ul><ul><ul><li>Orders placed through Web site or telephone </li></ul></ul></ul><ul><ul><ul><li>Payments made though Web site, telephone, or mail </li></ul></ul></ul><ul><ul><li>Creates additional sales outlet for existing companies </li></ul></ul>Electronic Commerce, Ninth Edition
  5. 5. Web Catalog Revenue Models (cont’d.) <ul><li>Computers and consumer electronics </li></ul><ul><ul><li>Leading computer manufacturers </li></ul></ul><ul><ul><ul><li>Sell a full range of products on the Web </li></ul></ul></ul><ul><ul><li>Dell allows product configuration flexibility </li></ul></ul><ul><ul><ul><li>Creates value </li></ul></ul></ul><ul><ul><li>Crutchfield </li></ul></ul><ul><ul><ul><li>Expanded successful mail-order catalog operations to include Web sites </li></ul></ul></ul><ul><ul><li>Best Buy, J&R Music World, Radio Shack </li></ul></ul><ul><ul><ul><li>Web sites sell same products as in stores </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  6. 6. Web Catalog Revenue Models (cont’d.) <ul><li>Computers and consumer electronics (cont’d.) </li></ul><ul><ul><li>Marketing channel </li></ul></ul><ul><ul><ul><li>Pathway to customers </li></ul></ul></ul><ul><ul><li>Advantage of having several marketing channels </li></ul></ul><ul><ul><ul><li>Reach more customers at less cost </li></ul></ul></ul><ul><ul><li>Can combine marketing channels </li></ul></ul><ul><ul><ul><li>Example: in-store online ordering </li></ul></ul></ul><ul><ul><ul><li>Example: mail catalogs with reference to retailer’s Web site </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  7. 7. Electronic Commerce, Ninth Edition FIGURE 3-1 Combining marketing channels: Two retailer examples
  8. 8. Web Catalog Revenue Models (cont’d.) <ul><li>Books, music, and videos </li></ul><ul><ul><li>Most visible electronic commerce examples </li></ul></ul><ul><ul><li>Amazon.com Web-only retailer originally sold books </li></ul></ul><ul><ul><ul><li>Evolved into general retailer </li></ul></ul></ul><ul><ul><li>Barnes & Noble, Blackwell’s, Books-A-Million, Powell’s Books </li></ul></ul><ul><ul><ul><li>All adopted Web catalog revenue model </li></ul></ul></ul><ul><ul><li>CDnow Web-only online music store </li></ul></ul><ul><ul><ul><li>CD Universe copied CDnow approach </li></ul></ul></ul><ul><ul><li>Tower Records, Sam Goody retail stores </li></ul></ul><ul><ul><ul><li>Created Web sites to compete with CDnow </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  9. 9. Web Catalog Revenue Models (cont’d.) <ul><li>Luxury goods </li></ul><ul><ul><li>Difficult to sell online </li></ul></ul><ul><ul><ul><li>Customers want to see product in person or touch </li></ul></ul></ul><ul><ul><li>Vera Wang and Versace </li></ul></ul><ul><ul><ul><li>Web sites provide information </li></ul></ul></ul><ul><ul><ul><li>Shopper purchases at physical store </li></ul></ul></ul><ul><ul><ul><li>Heavy use of graphics and animation </li></ul></ul></ul><ul><ul><li>Evian Web site </li></ul></ul><ul><ul><ul><li>Presents information in a visually stunning way </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  10. 10. Web Catalog Revenue Models (cont’d.) <ul><li>Clothing retailers </li></ul><ul><ul><li>Many adapted catalog sales model to Web </li></ul></ul><ul><ul><li>Display clothing photos categorized by type </li></ul></ul><ul><ul><ul><li>Prices, sizes, colors, tailoring details </li></ul></ul></ul><ul><ul><li>Want customers to examine clothing online </li></ul></ul><ul><ul><ul><li>Place orders through Web site </li></ul></ul></ul><ul><ul><li>Lands’ End online Web shopping assistance </li></ul></ul><ul><ul><ul><li>Lands’ End Live (1999) </li></ul></ul></ul><ul><ul><ul><li>Online text chat and call-back feature </li></ul></ul></ul><ul><ul><ul><li>Ability to push Web pages to customer’s browser </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  11. 11. Web Catalog Revenue Models (cont’d.) <ul><li>Clothing retailers (cont’d.) </li></ul><ul><ul><li>Lands’ End personal shopper agent (more recent) </li></ul></ul><ul><ul><ul><li>Learns preferences and makes suggestions </li></ul></ul></ul><ul><ul><li>My Virtual Model (customers try clothes) </li></ul></ul><ul><ul><ul><li>Graphic image built from customer measurements </li></ul></ul></ul><ul><ul><li>Another feature allows: </li></ul></ul><ul><ul><ul><li>Two shoppers using different computers to simultaneously browse Web site together </li></ul></ul></ul><ul><ul><ul><li>Only one of the shoppers can purchase items </li></ul></ul></ul><ul><ul><ul><li>Either shopper can select items to view </li></ul></ul></ul><ul><ul><ul><li>Selected items appear in both Web browsers </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  12. 12. Web Catalog Revenue Models (cont’d.) <ul><li>Clothing retailers (cont’d.) </li></ul><ul><ul><li>Online overstocks stores </li></ul></ul><ul><ul><ul><li>Reach more people than physical outlet stores </li></ul></ul></ul><ul><ul><li>Problem: varying computer monitor color settings </li></ul></ul><ul><ul><ul><li>Solution: send fabric swatch on request </li></ul></ul></ul><ul><ul><ul><li>Solution: offer generous return policies </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  13. 13. Web Catalog Revenue Models (cont’d.) <ul><li>Flowers and gifts (gift retailers) </li></ul><ul><ul><li>1-800-Flowers </li></ul></ul><ul><ul><ul><li>Online extension to successful telephone business </li></ul></ul></ul><ul><ul><ul><li>Competes with online-only florists </li></ul></ul></ul><ul><ul><li>Godiva offers business gift plans </li></ul></ul><ul><ul><li>Hickory Farms and Mrs. Fields Cookies </li></ul></ul><ul><ul><ul><li>Offer familiar name brands on the Web </li></ul></ul></ul><ul><ul><li>Harry and David </li></ul></ul><ul><ul><ul><li>Original Web site for informational purposes </li></ul></ul></ul><ul><ul><ul><li>Promoted catalog business and added online ordering feature </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  14. 14. Web Catalog Revenue Models (cont’d.) <ul><li>General discounters </li></ul><ul><ul><li>Buy.com and Overstock.com </li></ul></ul><ul><ul><ul><li>Borrowed Wal-Mart and discount club sales model </li></ul></ul></ul><ul><ul><ul><li>Sell merchandise at extremely low prices </li></ul></ul></ul><ul><ul><li>Traditional discount retailers (Costco, Kmart, Target, Wal-Mart) </li></ul></ul><ul><ul><ul><li>Slow to implement online sales on their Web sites </li></ul></ul></ul><ul><ul><ul><li>Had huge investments in physical stores </li></ul></ul></ul><ul><ul><ul><li>Did not understand online retailing world </li></ul></ul></ul><ul><ul><ul><li>Now use the Web catalog revenue model in their successful online sales operations </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  15. 15. Digital Content Subscription Revenue Models <ul><li>Firms owning written information or information rights </li></ul><ul><ul><li>Embrace the Web as a highly efficient distribution mechanism </li></ul></ul><ul><ul><li>Use the digital content revenue model </li></ul></ul><ul><ul><ul><li>Sell subscriptions for access to information they own </li></ul></ul></ul><ul><li>Legal content </li></ul><ul><ul><li>LexisNexis: offers variety of information services </li></ul></ul><ul><ul><li>Lexis.com: offers original legal information product </li></ul></ul>Electronic Commerce, Ninth Edition
  16. 16. Digital Content Subscription Revenue Models (cont’d.) <ul><li>Academic research content </li></ul><ul><ul><li>ProQuest: digital copies of academic publications </li></ul></ul><ul><li>Business content </li></ul><ul><ul><li>Dow Jones newspaper publisher subscriptions </li></ul></ul><ul><ul><ul><li>Sold digitized newspaper, magazine, and journal content subscriptions </li></ul></ul></ul><ul><ul><ul><li>Factiva: online content management and integration service </li></ul></ul></ul><ul><li>Technical content </li></ul><ul><ul><li>Association for Computer Machinery (ACM): digital library </li></ul></ul>Electronic Commerce, Ninth Edition
  17. 17. Advertising-Supported Revenue Models <ul><li>Used by United States broadcast network television </li></ul><ul><ul><li>Provides free programming and advertising messages </li></ul></ul><ul><ul><ul><li>Supports network operations sufficiently </li></ul></ul></ul><ul><li>Problem: measuring and charging site visitor views </li></ul><ul><ul><li>Stickiness </li></ul></ul><ul><ul><ul><li>Keeping visitors at site and attracting repeat visitors </li></ul></ul></ul><ul><ul><ul><li>Exposed to more advertising in a sticky site </li></ul></ul></ul><ul><li>Problem: obtaining large advertiser interest </li></ul><ul><ul><li>Requires demographic information collection </li></ul></ul><ul><ul><ul><li>Characteristics set used to group visitors </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  18. 18. Advertising-Supported Revenue Models (cont’d.) <ul><li>Can obtain large advertiser interest by: </li></ul><ul><ul><li>Using a specialized information Web site </li></ul></ul><ul><ul><ul><li>Draw a specialized audience certain advertisers want to reach </li></ul></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><ul><li>The Huffington Post and the Drudge Report </li></ul></ul></ul><ul><ul><ul><li>HowStuffWorks </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  19. 19. Electronic Commerce, Ninth Edition FIGURE 3-2 Three strategies for an advertising-supported revenue model
  20. 20. Advertising-Supported Revenue Models (cont’d.) <ul><li>Web portals ( portal ) </li></ul><ul><ul><li>Site used as a launching point to enter the Web </li></ul></ul><ul><ul><ul><li>Almost always includes a Web directory or search engine </li></ul></ul></ul><ul><ul><ul><li>Often includes other features </li></ul></ul></ul><ul><ul><li>Web directories </li></ul></ul><ul><ul><ul><li>Listing of hyperlinks to Web pages </li></ul></ul></ul><ul><ul><li>Yahoo!: one of the first </li></ul></ul><ul><ul><ul><li>Presents search term triggered advertising on each page </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  21. 21. Advertising-Supported Revenue Models (cont’d.) <ul><li>Web portals (cont’d.) </li></ul><ul><ul><li>Portal sites using general interest strategy </li></ul></ul><ul><ul><ul><li>AOL, Excite, Google, Bing </li></ul></ul></ul><ul><ul><li>Portal sites not using general interest strategy </li></ul></ul><ul><ul><ul><li>Help visitors find information within a specific knowledge domain </li></ul></ul></ul><ul><ul><ul><li>Advertisers pay more </li></ul></ul></ul><ul><ul><ul><li>Example: C-NET </li></ul></ul></ul><ul><ul><li>Travel sites </li></ul></ul><ul><ul><ul><li>Successful as advertising-supported online businesses </li></ul></ul></ul><ul><ul><ul><li>Example: Kayak </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  22. 22. Advertising-Supported Revenue Models (cont’d.) <ul><li>Newspaper and magazine publishers </li></ul><ul><ul><li>Sell advertising to cover Web site costs </li></ul></ul><ul><ul><li>Internet Public Library Online Newspapers page </li></ul></ul><ul><ul><ul><li>Provides links to worldwide newspaper sites </li></ul></ul></ul><ul><ul><li>Local shopping news, alternative press newspapers </li></ul></ul><ul><ul><ul><li>Easier transition to advertising-supported Web revenue model </li></ul></ul></ul><ul><ul><li>Newspaper’s Web presence </li></ul></ul><ul><ul><ul><li>Provides greater exposure and advertising audience </li></ul></ul></ul><ul><ul><ul><li>Diverts sales from the print edition (difficult to measure) </li></ul></ul></ul><ul><ul><ul><li>Operating costs not covered by advertising revenue </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  23. 23. Advertising-Supported Revenue Models (cont’d.) <ul><li>Targeted classified advertising sites </li></ul><ul><ul><li>Can command higher rates than general advertising </li></ul></ul><ul><ul><li>Original version </li></ul></ul><ul><ul><ul><li>Newspaper classified advertising </li></ul></ul></ul><ul><ul><li>Growth of classified advertising Web sites </li></ul></ul><ul><ul><ul><li>Very bad for newspapers </li></ul></ul></ul><ul><ul><ul><li>Example: craigslist </li></ul></ul></ul><ul><ul><li>Web employment advertising </li></ul></ul><ul><ul><ul><li>Most successful targeted classified advertising category </li></ul></ul></ul><ul><ul><ul><li>Examples: CareerBuilder.com, The Ladders and Guru.com, Monster.com </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  24. 24. Advertising-Supported Revenue Models (cont’d.) <ul><li>Targeted classified advertising sites (cont’d.) </li></ul><ul><ul><li>Used vehicle sites </li></ul></ul><ul><ul><ul><li>AutoTrader.com, CycleTrader.com, BoatTrader.com </li></ul></ul></ul><ul><ul><ul><li>Accept paid advertising to sell cars, motorcycles, boats </li></ul></ul></ul><ul><ul><li>Product sites with dedicated following (VetteFinders) </li></ul></ul><ul><ul><ul><li>Successful by catering to small audiences </li></ul></ul></ul><ul><ul><li>Potential classified advertising sites </li></ul></ul><ul><ul><ul><li>Any site selling products useful to buyer after initial use </li></ul></ul></ul><ul><ul><ul><li>Musicians Buy-Line, ComicLink.com, The Golf Classifieds </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  25. 25. Advertising-Subscription Mixed Revenue Models <ul><li>Subscribers pay fee and accept advertising </li></ul><ul><ul><li>Typically less advertising compared to advertising-supported sites </li></ul></ul><ul><li>Web sites offer different degrees of success </li></ul><ul><ul><li>The New York Times (today) </li></ul></ul><ul><ul><ul><li>Bulk of revenue derived from advertising </li></ul></ul></ul><ul><ul><li>The Wall Street Journal (mixed model) </li></ul></ul><ul><ul><ul><li>Subscription revenue weighted more heavily </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  26. 26. Electronic Commerce, Ninth Edition FIGURE 3-3 Revenue models used by online editions of newspapers and magazines
  27. 27. Advertising-Subscription Mixed Revenue Models (cont’d.) <ul><li>ESPN </li></ul><ul><ul><li>Leverages brand name from cable television business </li></ul></ul><ul><ul><li>Sells advertising, offers free information </li></ul></ul><ul><ul><li>Mixed model includes advertising and subscription revenue (collects Insider subscriber revenue) </li></ul></ul><ul><li>Consumers Union (ConsumerReports.org) </li></ul><ul><ul><li>Purely a subscription-supported site </li></ul></ul><ul><ul><li>Not-for-profit organization with no advertising </li></ul></ul><ul><ul><li>Free information </li></ul></ul><ul><ul><ul><li>Attracts subscribers and fulfills mission </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  28. 28. Fee-for-Transaction Revenue Models <ul><li>Service fee charged </li></ul><ul><ul><li>Based on transaction number or size </li></ul></ul><ul><li>Web site offers visitor transaction information </li></ul><ul><ul><li>Personal service formerly provided by a human agent </li></ul></ul><ul><li>Value chain </li></ul><ul><ul><li>Disintermediation </li></ul></ul><ul><ul><ul><li>Intermediary (human agent) removed </li></ul></ul></ul><ul><ul><li>Reintermediation </li></ul></ul><ul><ul><ul><li>New intermediary (fee-for-transaction Web site) introduced </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  29. 29. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Travel </li></ul><ul><ul><li>Travel agency revenue model: receive fee for facilitating a transaction </li></ul></ul><ul><ul><ul><li>Travel agent adds information consolidation and filtering value </li></ul></ul></ul><ul><ul><li>Computers also good at information consolidation and filtering </li></ul></ul><ul><ul><ul><li>Travel agents have long used networked computers: Sabre Travel Network </li></ul></ul></ul><ul><ul><li>Internet provided a new way to do business online </li></ul></ul>Electronic Commerce, Ninth Edition
  30. 30. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Travel (cont’d.) </li></ul><ul><ul><li>Web-based travel agencies were new entrants </li></ul></ul><ul><ul><ul><li>Examples: Travelocity, Expedia, Hotels.com, Hotel Discount Reservations, Orbitz </li></ul></ul></ul><ul><ul><ul><li>Generate advertising revenue from ads placed on travel information pages </li></ul></ul></ul><ul><ul><li>Traditional travel agents: squeezed out </li></ul></ul><ul><ul><ul><li>Surviving agencies charge a flat fee </li></ul></ul></ul><ul><ul><li>Smaller travel agents specialize (cruises, hotels) </li></ul></ul><ul><ul><ul><li>May use a reintermediation strategy (WaveHunters.com) </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  31. 31. Electronic Commerce, Ninth Edition FIGURE 3-4 Orbitz home page
  32. 32. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Automobile sales </li></ul><ul><ul><li>Web sites implement the fee-for-transaction revenue model differently </li></ul></ul><ul><ul><li>CarsDirect.com model </li></ul></ul><ul><ul><ul><li>Customers select specific car, site determines price and finds local dealer </li></ul></ul></ul><ul><ul><li>Autoweb.com and Autobytel model </li></ul></ul><ul><ul><ul><li>Locate local dealers, car sells at small premium over dealer’s nominal cost </li></ul></ul></ul><ul><ul><li>Car salesperson: disintermediated </li></ul></ul><ul><ul><li>Web site: new intermediary (reintermediation) </li></ul></ul>Electronic Commerce, Ninth Edition
  33. 33. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Stockbrokers </li></ul><ul><ul><li>Original full-line brokers charged relatively high commissions </li></ul></ul><ul><ul><ul><li>Provided advice </li></ul></ul></ul><ul><ul><li>1970s: deregulation resulted in discount brokers </li></ul></ul><ul><ul><ul><li>Web-based brokerage firms: E*TRADE and Datek </li></ul></ul></ul><ul><ul><ul><li>Web allowed investment advice, fast trade execution online </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  34. 34. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Stockbrokers (cont’d.) </li></ul><ul><ul><li>1990s: discount brokers faced competition from online firms </li></ul></ul><ul><ul><ul><li>Discount brokers and full-line brokers opened new stock trading and information Web sites </li></ul></ul></ul><ul><ul><li>Online brokers offer transaction cost reductions </li></ul></ul><ul><ul><li>Traditional stockbrokers: disintermediated </li></ul></ul>Electronic Commerce, Ninth Edition
  35. 35. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Insurance brokers </li></ul><ul><ul><li>Quotesmith offered Internet policy price quotes directly to public (1996) </li></ul></ul><ul><ul><ul><li>Independent insurance agents: disintermediated </li></ul></ul></ul><ul><ul><li>Insurance policy information, comparisons, sales sites </li></ul></ul><ul><ul><ul><li>InsWeb, Answer Financial, Insurance.com </li></ul></ul></ul><ul><ul><li>Progressive Web site </li></ul></ul><ul><ul><ul><li>Provides quotes for competitors’ products too </li></ul></ul></ul><ul><ul><li>The General (General Automobile Insurance Services) Web site </li></ul></ul><ul><ul><ul><li>Offers comfortable, anonymous experience </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  36. 36. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Event tickets </li></ul><ul><ul><li>Web allows event promoters to sell tickets from one virtual location to customers worldwide </li></ul></ul><ul><ul><li>Online agencies earn a fee on every ticket sold </li></ul></ul><ul><ul><ul><li>Ticketmaster, Tickets.com, TicketWeb </li></ul></ul></ul><ul><ul><li>Web created secondary ticket market (StubHub, TicketsNow) </li></ul></ul><ul><ul><ul><li>Brokers connecting ticket owners with buyers </li></ul></ul></ul><ul><ul><ul><li>Earn fees on tickets resold for others, buy ticket blocks </li></ul></ul></ul><ul><ul><li>Web created easy-to-find central marketplace, facilitating buyer-seller negotiations </li></ul></ul>Electronic Commerce, Ninth Edition
  37. 37. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Real estate and mortgage loans </li></ul><ul><ul><li>Web sites provide all traditional broker services </li></ul></ul><ul><ul><ul><li>Coldwell Banker, Prudential </li></ul></ul></ul><ul><ul><li>National Association of Realtors Web site </li></ul></ul><ul><ul><ul><li>Realtor.com </li></ul></ul></ul><ul><ul><li>2008 financial crisis </li></ul></ul><ul><ul><ul><li>Dramatically reduced number of mortgage brokers in business </li></ul></ul></ul><ul><ul><li>Successful online mortgage brokers </li></ul></ul><ul><ul><ul><li>Ditech and E-LOAN </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  38. 38. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online banking and financial services </li></ul><ul><ul><li>No physical product </li></ul></ul><ul><ul><ul><li>Easy to offer on Web </li></ul></ul></ul><ul><ul><li>Web financial transactions concerns </li></ul></ul><ul><ul><ul><li>Trust and reliability of financial institution </li></ul></ul></ul><ul><ul><li>Solutions </li></ul></ul><ul><ul><ul><li>Use existing bank’s identification and reputation </li></ul></ul></ul><ul><ul><ul><li>Start online bank not affiliated with existing bank (First Internet Bank of Indiana) </li></ul></ul></ul><ul><ul><ul><li>Use different name (Bank One used Wingspan) </li></ul></ul></ul><ul><ul><ul><ul><li>Approach was not successful </li></ul></ul></ul></ul>Electronic Commerce, Ninth Edition
  39. 39. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online banking and financial services (cont’d.) </li></ul><ul><ul><li>Additional barriers preventing a more rapid rate of growth </li></ul></ul><ul><ul><ul><li>Lack of bill presentment features </li></ul></ul></ul><ul><ul><ul><li>Lack of account aggregation tools </li></ul></ul></ul><ul><ul><li>By 2012: </li></ul></ul><ul><ul><ul><li>Industry analysts expect most banks (online and traditional) will offer aggregation services </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  40. 40. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online music </li></ul><ul><ul><li>Recording industry: slow to embrace online distribution </li></ul></ul><ul><ul><ul><li>Feared digital copying </li></ul></ul></ul><ul><ul><li>Large online music stores </li></ul></ul><ul><ul><ul><li>Revenue from fee-for-transaction model </li></ul></ul></ul><ul><ul><ul><li>Some sites offer subscription plans </li></ul></ul></ul><ul><ul><li>Complicating issues </li></ul></ul><ul><ul><ul><li>Stores offer limited number of digital music files </li></ul></ul></ul><ul><ul><ul><li>Stores promote their own music file format </li></ul></ul></ul><ul><ul><ul><li>Artists and recording companies invoke limits </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  41. 41. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online music (cont’d.) </li></ul><ul><ul><li>Complicating issues (cont’d.) </li></ul></ul><ul><ul><ul><li>Buyers required to download and install Digital Rights Management ( DRM ) software </li></ul></ul></ul><ul><ul><ul><li>Varying restrictions confusing to consumers </li></ul></ul></ul><ul><ul><li>Online music market industry failed to embrace the network effect gained by adopting one standard file format </li></ul></ul>Electronic Commerce, Ninth Edition
  42. 42. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online music (cont’d.) </li></ul><ul><ul><li>Some stores sold audio in a generally compatible file format with no copying restrictions </li></ul></ul><ul><ul><ul><li>Mondomix MP3 and Smithsonian Folkways </li></ul></ul></ul><ul><ul><ul><li>Music not produced by major recording companies </li></ul></ul></ul><ul><ul><li>Solutions </li></ul></ul><ul><ul><ul><li>Adopt one standard file format, no copying restrictions, DRM-free MP3 format (Amazon in 2007) </li></ul></ul></ul><ul><ul><li>By 2012: 80 percent of all music will be sold online </li></ul></ul>Electronic Commerce, Ninth Edition
  43. 43. Fee-for-Transaction Revenue Models (cont’d.) <ul><li>Online video </li></ul><ul><ul><li>Issues hampering prior sales </li></ul></ul><ul><ul><ul><li>Large file size </li></ul></ul></ul><ul><ul><ul><li>Fear of online sales impairing other sales types </li></ul></ul></ul><ul><ul><ul><li>Inability to play on variety of devices </li></ul></ul></ul><ul><ul><li>Overcoming the issues </li></ul></ul><ul><ul><ul><li>New technologies improving delivery </li></ul></ul></ul><ul><ul><ul><li>Companies incorporating online distribution into revenue strategy </li></ul></ul></ul><ul><ul><ul><li>Delivery allowed on multiple devices </li></ul></ul></ul><ul><ul><ul><ul><li>Through standard Web browser </li></ul></ul></ul></ul>Electronic Commerce, Ninth Edition
  44. 44. <ul><li>Electronic books </li></ul><ul><ul><li>Forms of digital audio books </li></ul></ul><ul><ul><ul><li>CDs (originally) and various types of digital files </li></ul></ul></ul><ul><li>Audible sells subscriptions </li></ul><ul><ul><li>Allows monthly download of a certain number of books </li></ul></ul><ul><ul><ul><li>Pricing is per book </li></ul></ul></ul><ul><li>Amazon.com </li></ul><ul><ul><li>Offers books, newspapers, magazines, other digital format items </li></ul></ul><ul><ul><ul><li>Delivered directly to its line of Kindle readers </li></ul></ul></ul>Fee-for-Transaction Revenue Models (cont’d.) Electronic Commerce, Ninth Edition
  45. 45. Fee-for-Service Revenue Models <ul><li>Companies offer Web service </li></ul><ul><ul><li>Fee based on service value </li></ul></ul><ul><ul><ul><li>Not a broker service </li></ul></ul></ul><ul><ul><ul><li>Not based on transactions-processed number or size </li></ul></ul></ul><ul><li>Online games </li></ul><ul><ul><li>Sales revenue source </li></ul></ul><ul><ul><ul><li>Advertising (older concept), pay-to-play for premium games, subscription fees </li></ul></ul></ul><ul><ul><li>Average game player is 35 years old, playing computer or video games for 12 years </li></ul></ul>Electronic Commerce, Ninth Edition
  46. 46. Fee-for-Service Revenue Models (cont’d.) <ul><li>Professional services </li></ul><ul><ul><li>Limited Web use </li></ul></ul><ul><ul><ul><li>State laws prohibit extension of practice </li></ul></ul></ul><ul><ul><ul><li>Patients may set appointments, receive online consultation </li></ul></ul></ul><ul><ul><li>Major concern </li></ul></ul><ul><ul><ul><li>Patient privacy </li></ul></ul></ul><ul><ul><li>Law on the Web site </li></ul></ul><ul><ul><ul><li>Legal consultations to United Kingdom residents </li></ul></ul></ul><ul><ul><li>Martindale.com </li></ul></ul><ul><ul><ul><li>Online version of Martindale-Hubbell lawyer directory </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  47. 47. <ul><li>Professional services (cont’d.) </li></ul><ul><ul><li>CPA Directory </li></ul></ul><ul><ul><ul><li>United States accounting professionals site </li></ul></ul></ul><ul><ul><li>General health information </li></ul></ul><ul><ul><ul><li>RealAge, Dr. Andrew Weil’s Self Healing, WebMD </li></ul></ul></ul><ul><ul><li>Significant barrier </li></ul></ul><ul><ul><ul><li>Patient diagnosis difficult without physical examination </li></ul></ul></ul><ul><ul><li>Some physicians beginning to offer online consultations </li></ul></ul><ul><ul><ul><li>For ongoing, established relationship patients </li></ul></ul></ul>Fee-for-Service Revenue Models (cont’d.)
  48. 48. Free for Many, Fee for a Few <ul><li>Economics of manufacturing </li></ul><ul><ul><li>Different for physical and digital products </li></ul></ul><ul><ul><li>Unit cost high percentage of physical products </li></ul></ul><ul><ul><li>Unit cost very small for digital products </li></ul></ul><ul><li>Leads to a different revenue model </li></ul><ul><ul><li>Offer basic product to many for free </li></ul></ul><ul><ul><li>Charge a fee to some for differentiated products </li></ul></ul><ul><ul><ul><li>Examples: Yahoo e-mail accounts, bakery: free cookies </li></ul></ul></ul>
  49. 49. Revenue Models in Transition <ul><li>Companies must change revenue model </li></ul><ul><ul><li>To meet needs of new and changing Web users </li></ul></ul><ul><li>Some companies created e-commerce Web sites </li></ul><ul><ul><li>Needed many years to grow large enough to become profitable (CNN and ESPN) </li></ul></ul><ul><li>Some companies changed model or went out of business </li></ul><ul><ul><li>Due to lengthy unprofitable growth phases </li></ul></ul>Electronic Commerce, Ninth Edition
  50. 50. Subscription to Advertising-Supported Model <ul><li>Slate magazine </li></ul><ul><ul><li>Upscale news and current events </li></ul></ul><ul><li>Success expectations were high </li></ul><ul><ul><li>Experienced writers and editors </li></ul></ul><ul><ul><li>Acclaim for incisive reporting and excellent writing </li></ul></ul><ul><li>Initial revenue source </li></ul><ul><ul><li>Annual subscription did not cover operating costs </li></ul></ul><ul><li>Now an advertising-supported site </li></ul><ul><ul><li>Part of the Bing portal </li></ul></ul><ul><ul><ul><li>Value to Microsoft: increase the portal’s stickiness </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  51. 51. Advertising-Supported to Advertising-Subscription Mixed Model <ul><li>Salon.com </li></ul><ul><ul><li>Acclaimed for innovative content </li></ul></ul><ul><li>Initial revenue source </li></ul><ul><ul><li>Advertising-supported site </li></ul></ul><ul><ul><li>Needed additional money to continue operations </li></ul></ul><ul><li>Now offers optional subscription version </li></ul><ul><ul><li>Annual fee for Salon premium </li></ul></ul><ul><ul><ul><li>Free of advertising </li></ul></ul></ul><ul><ul><ul><li>Additional content </li></ul></ul></ul><ul><ul><ul><li>Downloadable content </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  52. 52. Advertising-Supported to Fee-for-Services Model <ul><li>Xdrive Technologies: offered free disk storage </li></ul><ul><li>Initial revenue source (1999): advertising-supported </li></ul><ul><ul><li>Targeted e-mail advertising </li></ul></ul><ul><ul><li>Did not cover operating costs </li></ul></ul><ul><li>2005: bought by AOL </li></ul><ul><ul><li>Switched to a subscription-supported model </li></ul></ul><ul><ul><li>Xdrive frequently adjusted its monthly fee downward </li></ul></ul><ul><ul><li>AOL closed the service in 2009 </li></ul></ul><ul><li>Successful companies: fee based on storage amount used </li></ul>Electronic Commerce, Ninth Edition
  53. 53. Advertising-Supported to Subscription Model <ul><li>Northern Light search engine includes own database </li></ul><ul><ul><li>Results include Web site links and abstracts of its owned content </li></ul></ul><ul><ul><li>Initial revenue source </li></ul></ul><ul><ul><ul><li>Combination of the advertising-supported model plus a fee-based information access service </li></ul></ul></ul><ul><ul><ul><li>Advertising revenue: insufficient to cover service </li></ul></ul></ul><ul><ul><li>Converted to a new subscription-supported revenue model </li></ul></ul><ul><ul><ul><li>Mainly large corporate clients </li></ul></ul></ul><ul><ul><ul><li>Individual monthly billing option for articles accessed </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  54. 54. Multiple Transitions <ul><li>Encyclopedia Britannica </li></ul><ul><ul><li>Initial Web offerings (1994) </li></ul></ul><ul><ul><ul><li>Britannica Internet Guide </li></ul></ul></ul><ul><ul><ul><li>Encyclopedia Britannica Online </li></ul></ul></ul><ul><ul><li>Initial revenue source </li></ul></ul><ul><ul><ul><li>Paid subscription site had low subscription sales </li></ul></ul></ul><ul><ul><li>Converted to free advertiser-supported site (1999) </li></ul></ul><ul><ul><ul><li>Advertising revenues declined </li></ul></ul></ul><ul><ul><li>2001: returned to mixed model with subscription plan and free content </li></ul></ul><ul><ul><li>Value added: sells reputation and the expertise </li></ul></ul>Electronic Commerce, Ninth Edition
  55. 55. Revenue Strategy Issues <ul><li>Topics: </li></ul><ul><ul><li>Web revenue models implementation issues </li></ul></ul><ul><ul><li>Dealing with the issues </li></ul></ul>Electronic Commerce, Ninth Edition
  56. 56. Channel Conflict and Cannibalization <ul><li>Channel conflict ( cannibalization ) </li></ul><ul><ul><li>Company Web site sales activities interfere with existing sales outlets </li></ul></ul><ul><ul><li>Levis Web site and Maytag </li></ul></ul><ul><ul><ul><li>Web sites no longer sell products </li></ul></ul></ul><ul><ul><ul><li>Sites now provide product, retail distributor information </li></ul></ul></ul><ul><ul><li>Eddie Bauer </li></ul></ul><ul><ul><ul><li>Online purchases returnable at retail stores </li></ul></ul></ul><ul><ul><ul><li>Required compensation and bonus plans adjustments to support Web site </li></ul></ul></ul><ul><ul><ul><li>Channel Cooperation made it successful </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  57. 57. Strategic Alliances <ul><li>Strategic alliance </li></ul><ul><ul><li>Two or more companies join forces </li></ul></ul><ul><ul><ul><li>Undertake activity over long time period </li></ul></ul></ul><ul><li>Yodlee account aggregation services provider </li></ul><ul><ul><li>Yodlee concentrates on developing the technology and services </li></ul></ul><ul><ul><li>Banks provide the customers </li></ul></ul><ul><li>Amazon.com </li></ul><ul><ul><li>Joined with Target, CDnow, ToysRUs </li></ul></ul><ul><ul><ul><li>ToysRUs and Amazon suing each other </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  58. 58. Creating an Effective Web Presence <ul><li>Organization’s presence </li></ul><ul><ul><li>Public image conveyed to stakeholders </li></ul></ul><ul><ul><li>Usually not important </li></ul></ul><ul><ul><ul><li>Until growth reaches significant size </li></ul></ul></ul><ul><ul><li>Stakeholders </li></ul></ul><ul><ul><ul><li>Customers, suppliers, employees, stockholders, neighbors, general public </li></ul></ul></ul><ul><li>Effective Web presence </li></ul><ul><ul><li>Critical even for smallest and newest Web operating firms </li></ul></ul>Electronic Commerce, Ninth Edition
  59. 59. Identifying Web Presence Goals <ul><li>Business physical space </li></ul><ul><ul><li>Focus: very specific objectives </li></ul></ul><ul><ul><ul><li>Not image driven </li></ul></ul></ul><ul><ul><ul><li>Must satisfy many business needs </li></ul></ul></ul><ul><ul><ul><li>Often fails to convey a good presence </li></ul></ul></ul><ul><li>Web business site </li></ul><ul><ul><li>Intentionally creates distinctive presences </li></ul></ul><ul><ul><li>Good Web site design provides: </li></ul></ul><ul><ul><ul><li>Effective image-creation features </li></ul></ul></ul><ul><ul><ul><li>Effective image-enhancing features </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  60. 60. Identifying Web Presence Goals (cont’d.) <ul><li>Web business site objectives: </li></ul><ul><ul><li>Attracting Web site visitors </li></ul></ul><ul><ul><li>Keeping visitors to stay and explore </li></ul></ul><ul><ul><li>Convincing visitors to follow site’s links to obtain information </li></ul></ul><ul><ul><li>Creating an impression consistent with the organization’s desired image </li></ul></ul><ul><ul><li>Building a trusting relationship with visitors </li></ul></ul><ul><ul><li>Reinforcing positive images about the organization </li></ul></ul><ul><ul><li>Encouraging visitors to return to the site </li></ul></ul>Electronic Commerce, Ninth Edition
  61. 61. Identifying Web Presence Goals (cont’d.) <ul><li>Making Web presence consistent with brand image </li></ul><ul><ul><li>Different firms establish different Web presence goals </li></ul></ul><ul><ul><li>Coca Cola Web site pages </li></ul></ul><ul><ul><ul><li>Usually include trusted corporate image (Coke bottle) </li></ul></ul></ul><ul><ul><ul><li>Image: traditional position as a trusted classic </li></ul></ul></ul><ul><ul><li>Pepsi Web site pages </li></ul></ul><ul><ul><ul><li>Usually filled with hyperlinks to activities and product-related promotions </li></ul></ul></ul><ul><ul><ul><li>Image: upstart product favored by younger generation </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  62. 62. Identifying Web Presence Goals (cont’d.) <ul><li>Matching site design to function </li></ul><ul><ul><li>Volkswagen of America site </li></ul></ul><ul><ul><ul><li>Accomplishes important functions for the company </li></ul></ul></ul><ul><ul><ul><li>Provides links to detailed Volkswagen model information, links to a dealer locator page, links to information about the company, a link to a set of shopping tools </li></ul></ul></ul><ul><ul><li>Volkswagen’s home page </li></ul></ul><ul><ul><ul><li>Meets the needs of most visitors quickly and effectively </li></ul></ul></ul><ul><ul><li>Volkswagen site enhances company image by providing useful information to customers online </li></ul></ul>Electronic Commerce, Ninth Edition
  63. 63. Electronic Commerce, Ninth Edition FIGURE 3-5 Volkswagen of America home page
  64. 64. Identifying Web Presence Goals (cont’d.) <ul><li>Not-for-profit organizations </li></ul><ul><ul><li>Web presence effort key goals: </li></ul></ul><ul><ul><ul><li>Image enhancement and information dissemination </li></ul></ul></ul><ul><ul><li>Successful site key elements </li></ul></ul><ul><ul><ul><li>Integrate information dissemination with fund-raising </li></ul></ul></ul><ul><ul><ul><li>Provide two-way contact channel </li></ul></ul></ul><ul><ul><li>American Civil Liberties Union (ACLU) </li></ul></ul><ul><ul><ul><li>Serves many different constituencies </li></ul></ul></ul><ul><ul><li>Web sites used to stay in touch with existing stakeholders, identify new opportunities for serving them </li></ul></ul>Electronic Commerce, Ninth Edition
  65. 65. Electronic Commerce, Ninth Edition FIGURE 3-6 ACLU home page
  66. 66. Web Site Usability <ul><li>Current Web presences </li></ul><ul><ul><li>Few businesses accomplish all goals </li></ul></ul><ul><ul><li>Most fail to provide visitors sufficient interactive contact opportunities </li></ul></ul><ul><ul><li>Improving Web presence </li></ul></ul><ul><ul><ul><li>Make site accessible to more people </li></ul></ul></ul><ul><ul><ul><li>Make site easier to use </li></ul></ul></ul><ul><ul><ul><li>Make site encourage visitors’ trust </li></ul></ul></ul><ul><ul><ul><li>Make site develop feelings of loyalty toward the organization </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  67. 67. How the Web Is Different <ul><li>Simple mid-1990s Web sites </li></ul><ul><ul><li>Conveyed basic business information </li></ul></ul><ul><ul><li>No market research conducted </li></ul></ul><ul><li>Web objectives achievement </li></ul><ul><ul><li>Failed due to no understanding for Web presence-building media </li></ul></ul><ul><li>Web sites designed to create an organization’s presence: </li></ul><ul><ul><li>Contain links to standard information set </li></ul></ul><ul><ul><li>Success dependent on how this information offered </li></ul></ul>Electronic Commerce, Ninth Edition
  68. 68. Meeting the Needs of Web Site Visitors <ul><li>Successful Web businesses: </li></ul><ul><ul><li>Realize every visitor is a potential customer (partner) </li></ul></ul><ul><li>Web presence is an important concern </li></ul><ul><ul><li>Know visitor characteristic variations </li></ul></ul><ul><ul><ul><li>Understand that the visitor is at the site for a reason </li></ul></ul></ul><ul><li>Varied motivations of Web site visitors </li></ul><ul><ul><li>Why visitors arrive at Web sites </li></ul></ul><ul><ul><ul><li>Learning about company products or services </li></ul></ul></ul><ul><ul><ul><li>Buying products or services </li></ul></ul></ul><ul><ul><ul><li>Obtaining warranty, service, repair policy information </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  69. 69. Meeting the Needs of Web Site Visitors (cont’d.) <ul><li>Varied motivations of Web site visitors (cont’d.) </li></ul><ul><ul><li>Why visitors arrive at Web sites (cont’d.) </li></ul></ul><ul><ul><ul><li>Obtaining general company information </li></ul></ul></ul><ul><ul><ul><li>Obtaining financial information </li></ul></ul></ul><ul><ul><ul><li>Identifying people </li></ul></ul></ul><ul><ul><ul><li>Obtaining contact information </li></ul></ul></ul><ul><ul><ul><li>Following a link into the site while searching for information about a related product, service, or topic </li></ul></ul></ul><ul><ul><li>Challenge to meet all motivations </li></ul></ul><ul><ul><ul><li>Visitors arrive with different needs, experience, and expectation levels </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  70. 70. Meeting the Needs of Web Site Visitors (cont’d.) <ul><li>Making Web sites accessible </li></ul><ul><ul><li>Build interface flexibility options: </li></ul></ul><ul><ul><ul><li>Frame use </li></ul></ul></ul><ul><ul><ul><li>Text-only version </li></ul></ul></ul><ul><ul><ul><li>Selection of smaller graphic images </li></ul></ul></ul><ul><ul><ul><li>Specification of streaming media connection type </li></ul></ul></ul><ul><ul><ul><li>Choice among information attributes </li></ul></ul></ul><ul><ul><li>Controversial Web site design issues </li></ul></ul><ul><ul><ul><li>Adobe Flash software use </li></ul></ul></ul><ul><ul><ul><ul><li>Some tasks lend themselves to animated Web pages </li></ul></ul></ul></ul>Electronic Commerce, Ninth Edition
  71. 71. Electronic Commerce, Ninth Edition FIGURE 3-7 Lee® Jeans FitFinder Flash animation
  72. 72. Meeting the Needs of Web Site Visitors (cont’d.) <ul><li>Making Web sites accessible (cont’d.) </li></ul><ul><ul><li>Offer multiple information formats </li></ul></ul><ul><ul><li>Consider goals in Web site construction </li></ul></ul>Electronic Commerce, Ninth Edition FIGURE 3-8 Goals for business Web sites
  73. 73. Trust and Loyalty <ul><li>Creates relationship value </li></ul><ul><li>Good service leads to seller trust </li></ul><ul><ul><li>Delivery, order handling, help selecting product, after-sale support </li></ul></ul><ul><li>Satisfactory service builds customer loyalty </li></ul><ul><li>Customer service in electronic commerce sites </li></ul><ul><ul><li>Problem </li></ul></ul><ul><ul><ul><li>Lack integration between call centers and Web sites </li></ul></ul></ul><ul><ul><ul><li>Poor e-mail responsiveness </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  74. 74. Rating Electronic Commerce Web Sites <ul><li>Companies routinely review electronic commerce Web sites for: </li></ul><ul><ul><li>Usability, customer service, other factors </li></ul></ul><ul><ul><li>Sell the gathered information directly to the companies operating the Web sites </li></ul></ul><ul><ul><ul><li>Include suggestions for improvements </li></ul></ul></ul><ul><li>BizRate.com posts ratings </li></ul><ul><ul><li>Provides comparison shopping service </li></ul></ul><ul><ul><li>Compiles ratings by conducting surveys of sites’ customers </li></ul></ul>Electronic Commerce, Ninth Edition
  75. 75. Usability Testing <ul><li>Importance </li></ul><ul><ul><li>Helps meet Web site goals </li></ul></ul><ul><ul><li>Avoids Web site frustration </li></ul></ul><ul><ul><ul><li>Customers leave site without buying anything </li></ul></ul></ul><ul><ul><li>Simple site usability changes </li></ul></ul><ul><ul><ul><li>Include telephone contact information </li></ul></ul></ul><ul><ul><ul><li>Staff a call center </li></ul></ul></ul><ul><ul><li>Learn about visitor needs by conducting focus groups </li></ul></ul><ul><ul><li>Usability testing cost </li></ul></ul><ul><ul><ul><li>Low compared to Web site design costs </li></ul></ul></ul>Electronic Commerce, Ninth Edition
  76. 76. Customer-Centric Web Site Design <ul><li>Important part of successful electronic business operation </li></ul><ul><li>Focus on meeting all site visitors’ needs </li></ul><ul><li>Customer-centric approach </li></ul><ul><ul><li>Putting customer at center of all site designs </li></ul></ul><ul><ul><ul><li>Follow guidelines and recommendations </li></ul></ul></ul><ul><ul><ul><li>Make visitors’ Web experiences more efficient, effective, memorable </li></ul></ul></ul><ul><li>Webby Awards site </li></ul><ul><ul><li>Examples of good Web site design </li></ul></ul>Electronic Commerce, Ninth Edition
  77. 77. Connecting with Customers <ul><li>Important element of a corporate Web presence </li></ul><ul><li>Identify and reach out to customers </li></ul>Electronic Commerce, Ninth Edition
  78. 78. The Nature of Communication on the Web <ul><li>Communication modes </li></ul><ul><ul><li>Personal contact ( prospecting ) model </li></ul></ul><ul><ul><ul><li>Employees individually search for, qualify, contact potential customers </li></ul></ul></ul><ul><ul><li>Mass media </li></ul></ul><ul><ul><ul><li>Deliver messages by broadcasting </li></ul></ul></ul><ul><ul><li>Addressable media </li></ul></ul><ul><ul><ul><li>Advertising efforts directed to known addressee </li></ul></ul></ul><ul><li>Internet medium </li></ul><ul><ul><li>Occupies central space in medium choice continuum </li></ul></ul>Electronic Commerce, Ninth Edition
  79. 79. Electronic Commerce, Ninth Edition FIGURE 3-9 Business communication modes
  80. 80. Summary <ul><li>Six main Web revenue models </li></ul><ul><ul><li>Models work differently </li></ul></ul><ul><ul><li>Different business types use different models </li></ul></ul><ul><ul><li>Companies change models as they learn more about: </li></ul></ul><ul><ul><ul><li>Customers, business environment </li></ul></ul></ul><ul><li>Channel conflict and cannibalization challenges </li></ul><ul><ul><li>One approach: channel cooperation </li></ul></ul><ul><li>Effective Web presence delivers customer value </li></ul><ul><ul><li>Web site visitors arrive with a variety of expectations, prior knowledge, skill levels, technology </li></ul></ul><ul><li>Web communication fits in between personal contact and mass media </li></ul>Electronic Commerce, Ninth Edition

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