chapter 3 selling on the web revenue models and building a web presence l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Chapter 3: Selling on the Web: Revenue Models and Building a Web Presence PowerPoint Presentation
Download Presentation
Chapter 3: Selling on the Web: Revenue Models and Building a Web Presence

Loading in 2 Seconds...

play fullscreen
1 / 46

Chapter 3: Selling on the Web: Revenue Models and Building a Web Presence - PowerPoint PPT Presentation


  • 261 Views
  • Uploaded on

Chapter 3: Selling on the Web: Revenue Models and Building a Web Presence. Electronic Commerce, Sixth Edition. Objectives. In this chapter, you will learn about: Revenue models How some companies move from one revenue model to another to achieve success

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Chapter 3: Selling on the Web: Revenue Models and Building a Web Presence' - jana


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
chapter 3 selling on the web revenue models and building a web presence

Chapter 3:Selling on the Web: Revenue Models and Building a Web Presence

Electronic Commerce, Sixth Edition

objectives
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 issues that companies face when selling on the Web

Electronic Commerce, Sixth Edition

objectives continued
Objectives (continued)
  • Creating an effective business presence on the Web
  • Web site usability
  • Communicating effectively with customers on the Web

Electronic Commerce, Sixth Edition

revenue models
Revenue Models
  • Mail order or catalog model
    • Proven to be successful for a wide variety of consumer items
  • Web catalog revenue model
    • Taking the catalog model to the Web

Electronic Commerce, Sixth Edition

computers and consumer electronics
Computers and Consumer Electronics
  • Apple, Dell, Gateway, and Sun Microsystems have had great success selling on the Web
  • Dell created value by designing its entire business around offering a high degree of configuration flexibility to its customers

Electronic Commerce, Sixth Edition

books music and videos
Books, Music, and Videos
  • Retailers use the Web catalog model to sell books, music, and videos
    • Among the most visible examples of electronic commerce
  • Jeff Bezos
    • Formed Amazon.com
  • Jason and Matthew Olim
    • Formed an online music store they called CDnow
    • Used the Web catalog revenue model

Electronic Commerce, Sixth Edition

luxury goods
Luxury Goods
  • People are still reluctant to buy luxury goods through a Web site
  • Web sites of Vera Wang and Versace
    • Constructed to provide information to shoppers, not to generate revenue
  • Web site of Evian
    • Designed for a select, affluent group of customers

Electronic Commerce, Sixth Edition

clothing retailers
Clothing Retailers
  • Lands’ End
    • Pioneered the idea of online Web shopping assistance with its Lands’ End Live feature in 1999
  • Personal shopper
    • Intelligent agent program that learns customer’s preferences and makes suggestions
  • Virtual model
    • Graphic image built from customer measurements

Electronic Commerce, Sixth Edition

flowers and gifts
Flowers and Gifts
  • 1-800-Flowers
    • Created an online extension to its telephone order business
  • Chocolatier Godiva
    • Offers business gift plans on its site

Electronic Commerce, Sixth Edition

digital content revenue models
Digital Content Revenue Models
  • Firms that own intellectual property have embraced the Web as a new and highly efficient distribution mechanism
  • Lexis.com
    • Provides full-text search of court cases, laws, patent databases, and tax regulations
  • ProQuest
    • Sells digital copies of published documents

Electronic Commerce, Sixth Edition

advertising supported revenue models
Advertising-Supported Revenue Models
  • Broadcasters provide free programming to an audience along with advertising messages
  • Success of Web advertising is hampered by
    • No consensus on how to measure and charge for site visitor views
      • Stickiness of a Web site: the ability to keep visitors and attract repeat visitors
    • Very few Web sites have sufficient visitors to interest large advertisers

Electronic Commerce, Sixth Edition

web portals
Web Portals
  • Web directory
    • A listing of hyperlinks to Web pages
  • Portal or Web portal
    • Site used as a launching point to enter the Web
    • Almost always includes a Web directory and search engine
    • Examples: Yahoo!, AOL, AltaVista

Electronic Commerce, Sixth Edition

advertising subscription mixed revenue models
Advertising-Subscription Mixed Revenue Models
  • Subscribers
    • Pay a fee and accept some level of advertising
    • Typically are subjected to much less advertising
  • Used by
    • The New York Times and The Wall Street Journal

Electronic Commerce, Sixth Edition

advertising subscription mixed revenue models continued
Advertising-Subscription Mixed Revenue Models (continued)
  • Business Week
    • Offers some free content at its Business Week onlinesite
    • Requires visitors to buy a subscription to the Business Week print magazine

Electronic Commerce, Sixth Edition

fee for transaction revenue models
Fee-for-Transaction Revenue Models
  • Businesses offer services and charge a fee based on the number or size of transactions processed
  • Disintermediation
    • Removal of an intermediary from a value chain
  • Reintermediation
    • Introduction of a new intermediary

Electronic Commerce, Sixth Edition

fee for service revenue models
Fee-for-Service Revenue Models
  • Fee based on the value of a service provided
  • Services range from games and entertainment to financial advice
  • Online games
    • Growing number of sites include premium games in their offerings
    • Site visitors must pay to play these premium games

Electronic Commerce, Sixth Edition

fee for service revenue models continued
Fee-for-Service Revenue Models (continued)
  • Concerts and films
    • As more households obtain broadband access to the Internet, companies are providing streaming video of concerts and films to paying subscribers
  • Professional Services
    • State laws are one of the main forces preventing U.S. professionals from extending their practices to the Web

Electronic Commerce, Sixth Edition

revenue models in transition
Revenue Models in Transition
  • Subscription to advertising-supported model
    • Microsoft founded its Slate magazineWeb site
      • An upscale news and current events publication
      • Charged an annual subscription fee after a limited free introductory period
      • Was unable to draw sufficient number of paid subscribers
      • Now operated as an advertising-supported site

Electronic Commerce, Sixth Edition

advertising supported to advertising subscription mixed model
Advertising-Supported to Advertising-Subscription Mixed Model
  • Salon.com
    • Operated for several years as an advertising-supported site
    • Now offers an optional subscription version of its site
    • Subscription offering was motivated by the company’s inability to raise additional money from investors

Electronic Commerce, Sixth Edition

advertising supported to fee for services model
Advertising-Supported to Fee-for-Services Model
  • Xdrive Technologies
    • Opened its original advertising-supported Web site in 1999
    • Offered free disk storage space online to users
    • After two years, it was unable to pay the costs of providing the service with the advertising revenue generated
    • Later switched to a subscription-supported model

Electronic Commerce, Sixth Edition

advertising supported to subscription model
Advertising-Supported to Subscription Model
  • Northern Light
    • Founded in August 1997 as a search engine with a twist
    • Revenue model
      • Combination of advertising-supported model plus a fee-based information access service
    • January 2002
      • Converted to a new revenue model that was primarily subscription supported

Electronic Commerce, Sixth Edition

multiple transitions
Multiple Transitions
  • Encyclopædia Britannica
    • Original offerings
      • The Britannica Internet Guide
        • Free Web navigation aid
      • Encyclopædia Britannica Online
        • Available for a subscription fee or as part of a CD package
    • 1999
      • Converted to a free, advertiser-supported site
    • 2001
      • Returned to a mixed model

Electronic Commerce, Sixth Edition

revenue strategy issues
Revenue Strategy Issues
  • Channel conflict
    • Occurs whenever sales activities on a company’s Web site interfere with existing sales outlets
    • Also called cannibalization
  • Channel cooperation
    • Giving customers access to the company’s products through a coordinated presence in all distribution channels

Electronic Commerce, Sixth Edition

strategic alliances and channel distribution management
Strategic Alliances and Channel Distribution Management
  • Strategic alliance
    • When two or more companies join forces to undertake an activity over a long period of time
  • Account aggregation services
    • Increase the propensity of customers to return to the site
  • Channel distribution managers
    • Companies that take over the responsibility for a particular product line within a retail store

Electronic Commerce, Sixth Edition

creating an effective web presence
Creating an Effective Web Presence
  • An organization’s presence
    • The public image it conveys to its stakeholders
  • Stakeholders of a firm
    • Include its customers, suppliers, employees, stockholders, neighbors, and the general public

Electronic Commerce, Sixth Edition

achieving web presence goals
Achieving Web Presence Goals
  • Objectives of the business
    • Attracting visitors to the Web site
    • Making the site interesting enough that visitors stay and explore
    • Convincing visitors to follow the site’s links to obtain information

Electronic Commerce, Sixth Edition

achieving web presence goals continued
Achieving Web Presence Goals (continued)
  • Objectives of the business
    • Creating an impression consistent with the organization’s desired image
    • Building a trusting relationship with visitors
    • Reinforcing positive images that the visitor might already have about the organization
    • Encouraging visitors to return to the site

Electronic Commerce, Sixth Edition

profit driven organizations
Profit-Driven Organizations
  • Toyota site
    • A good example of an effective Web presence
    • Provides links to
      • Detailed information about each vehicle model
      • A dealer locator page
      • Information about the company and the financing services it offers

Electronic Commerce, Sixth Edition

toyota u s home page
Toyota U.S. Home page

Electronic Commerce, Sixth Edition

profit driven organizations continued
Profit-Driven Organizations (continued)
  • Quaker Oats
    • Web site does not offer a particularly strong sense of corporate presence
    • Site is a straightforward presentation of links to information about the firm
    • Redesigned site is essentially the same as the previous version

Electronic Commerce, Sixth Edition

quaker oats old home page
Quaker Oats Old Home Page

Electronic Commerce, Sixth Edition

quaker oats home page 1999 redesign
Quaker Oats Home Page: 1999 Redesign

Electronic Commerce, Sixth Edition

not for profit organizations
Not-for-Profit Organizations
  • Key goal for the Web sites
    • Information dissemination
  • Key element on any successful electronic commerce Web site
    • Combination of information dissemination and a two-way contact channel

Electronic Commerce, Sixth Edition

web site usability
Web Site Usability
  • Motivations of Web site visitors
    • Learning about products or services that the company offers
    • Buying products or services that the company offers
    • Obtaining information about warranty, service, or repair policies for products they purchased
    • Obtaining general information about the company or organization

Electronic Commerce, Sixth Edition

web site usability continued
Web Site Usability (continued)
  • Motivations of Web site visitors
    • Obtaining financial information for making an investment or credit granting decision
    • Identifying the people who manage the company or organization
    • Obtaining contact information for a person or department in the organization

Electronic Commerce, Sixth Edition

making web sites accessible
Making Web Sites Accessible
  • One of the best ways to accommodate a broad range of visitor needs is to build flexibility into the Web site’s interface
  • Good site design lets visitors choose among information attributes
  • Web sites can offer visitors multiple information formats by including links to files in those formats

Electronic Commerce, Sixth Edition

making web sites accessible continued
Making Web Sites Accessible (continued)
  • Goals that should be met when constructing Web sites
    • Offer easily accessible facts about the organization
    • Allow visitors to experience the site in different ways and at different levels
    • Sustain visitor attention and encourage return visits
    • Offer easily accessible information

Electronic Commerce, Sixth Edition

trust and loyalty
Trust and Loyalty
  • A 5 percent increase in customer loyalty can yield profit increases between 25% and 80%
  • Repetition of satisfactory service can build customer loyalty
  • Customer service is a problem for many electronic commerce sites

Electronic Commerce, Sixth Edition

usability testing
Usability Testing
  • Companies that have done usability tests
    • Conduct focus groups
    • Watch how different customers navigate through a series of Web site test designs
  • Cost of usability testing is low compared to the total cost of a Web site design or overhaul

Electronic Commerce, Sixth Edition

customer centric web site design
Customer-Centric Web Site Design
  • Putting the customer at the center of all site designs
  • Guidelines
    • Design the site around how visitors will navigate the links
    • Allow visitors to access information quickly
    • Avoid using inflated marketing statements

Electronic Commerce, Sixth Edition

customer centric web site design continued
Customer-Centric Web Site Design (continued)
  • Guidelines
    • Avoid using business jargon and terms that visitors might not understand
    • Be consistent in use of design features and colors
    • Make sure navigation controls are clearly labeled
    • Test text visibility on smaller monitors
    • Conduct usability tests

Electronic Commerce, Sixth Edition

connecting with customers
Connecting With Customers
  • Personal contact model
    • Firm’s employees individually search for, qualify, and contact potential customers
  • Prospecting
    • Personal contact approach to identifying and reaching customers
  • Mass mediaapproach
    • Firms prepare advertising and promotional materials about the firm and its products

Electronic Commerce, Sixth Edition

connecting with customers continued
Connecting With Customers (continued)
  • Addressable media
    • Advertising efforts directed to a known addressee
    • Also called mass media
  • One-to-many communication model
    • Communication flows from one advertiser to many potential buyers
  • One-to-one communication model
    • Both buyer and seller participate in information exchange

Electronic Commerce, Sixth Edition

business communication modes
Business Communication Modes

Electronic Commerce, Sixth Edition

summary
Summary
  • Models used to generate revenue on the Web
    • Web catalog
    • Digital content sales
    • Advertising-supported
    • Advertising-subscription mixed
    • Fee-for-transaction and fee-for-service
  • Companies undertaking electronic commerce initiatives sometimes
    • Form strategic alliances
    • Contract with channel distribution managers

Electronic Commerce, Sixth Edition

summary continued
Summary (continued)
  • Firms must understand how the Web differs from other media
  • Enlisting the help of users when building test versions of the Web site is a good way to create a site that represents the organization well
  • Firms must also understand the nature of communication on the Web

Electronic Commerce, Sixth Edition