Transcript Document 7146831

Electronic Commerce
043002
Chapter 3: Selling on the Web: Revenue
Models and Building a Web Presence
Dr. Mingli Song
Dr. Mingli Song - School of Computer Science, Communication University of China, Beijing; email
[email protected];
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 issues that companies face when
selling on the Web

Creating an effective business presence (企业展示)
on the Web

Web site usability (可用性)

Communicating effectively with customers on the Web2
Key Terms










account aggregation
帐户整合
addressable media
可寻址媒体
advertising-subscription mixed revenue model
广告
收费混合盈利模式
advertising-supported revenue model 广告支持盈利模式
bill presentment 帐单显示
cannibalization 互斥
catalog model
商品目录模式
category manager
品类管理公司
channel conflict 渠道冲突
channel cooperation
渠道合作
3
Key Terms











channel distribution manager 分销渠道管理公司
communication modes 沟通模式
customer-centric 以客户为中心的
demographic information
人口统计信息
disintermediation
免中介化
fee-for-service revenue model 服务费用盈利模式
fee-for-transaction revenue model
交易费用盈利模式
fulfillment manager
订单履行公司
mail order model
邮购模式
many-to-many communication 多对多的沟通
many-to-one communication model 多对一的沟通模式 4
Key Terms











mass media
大众媒体
one-to-many communication model 一对多的沟通模式
one-to-one communication model
一对一的沟通模式
personal contact
个人接触
personal shopper
采购员
portal (Web portal)
门户（门户网站）
presence
展示
prospecting
探测法
reintermediation 再中介化
stakeholder
利益相关体
5
stickiness
黏度
Key Terms




usability testing 可用性测试
virtual model
虚拟模特
Web catalogue revenue model
Web directory
网络目录
网上目录盈利模式
6
Revenue Models

Revenue model of selling goods and services
on the Web


Mail order or catalog model


Based on mail order catalog (邮寄目录) revenue
model that predates the Web
Proven to be successful for wide variety of
consumer items (消费品)
Web catalog revenue model (网上目录赢利模式)

Taking the catalog model to the Web
7
Computers and Consumer
Electronics (家用电器)

Apple, Dell, Gateway, and Sun Microsystems


Have had great success selling on the Web
Dell

Created value by designing entire business
around offering high degree of configuration
flexibility to its customers
8
Books, Music, and Videos

Retailers using the Web catalog model to
sell books, music, and videos (音像制品)


Jeff Bezos


Among the most visible examples of electronic
commerce
Formed Amazon.com in 1994
Jason and Matthew Olim


Formed online music store they called CDnow
Used the Web catalog revenue model
9
Luxury Goods (奢侈品)

People are still reluctant to buy 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 (精选的), affluent (富裕的)
group of customers
10
Clothing Retailers (服装零售店)

Lands’ End


Personal shopper (个人采购员)


Pioneered (首创) idea of online Web shopping
assistance with its Lands’ End Live feature in
1999
Intelligent agent program that learns customer’s
preferences and makes suggestions
Virtual model (虚拟模特)

Graphic image built from customer
measurements
11
Flowers and Gifts

1-800-Flowers


Created online extension to its highly successful
telephone order business
Chocolatier (巧克力商) Godiva

Offers business gift plans on its site
12
General Discounters (折扣店)

Discounters sell merchandize such as
computer equipment, software, consumer
electronics, books, music CDs and sports
equipment at extremely low prices

Some of these Web discount retailers
originally sold advertising on their sites to
subsidize (弥补) their low product prices
13
General Discounters Cont’d

Beyond.com


Closed its retail operation and sells the software it
created for operating a Web catalog site
Buy.com

Realizes advertising revenues were not sufficient
subsidies

Relies on volume-purchasing (大批采购) strategy
to keep prices low
14
Digital Content Revenue
Models (数字内容赢利模式)

Firms that own intellectual property (知识产权)


Have embraced the Web as new and highly
efficient distribution mechanism
Lexis.com

Provides full-text search (全文检索) of court cases
(法庭案例), laws, patent (专利) databases, and tax
regulations (税务法规)
15
Digital Content Revenue
Models Cont’d

ProQuest


Sells digital copies of published documents
ACM Digital Library (数字图书馆)

Offers subscriptions to electronic versions of its
journals to members and to library and
institutional subscribers
16
Advertising-Supported
Revenue Models (广告支持的赢利模式)

Broadcasters provide free programming (免费的节目)
to an audience along with advertising messages (广
告信息)

Success of online advertising hampered by

No consensus (共识) has emerged on how to measure and
charge for site visitor views


Stickiness (黏度) of a Web site: ability to keep visitors and
attract repeat visitors
Very few Web sites have sufficient visitors to interest large
advertisers (广告主)
17
Web Portals (门户)

Web directory (Yahoo! for example)


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

Also includes other features such as free e-mail,
chat room (聊天室), shopping directories, file
storage services, games, etc.

Example: Yahoo, AOL, AltaVista, and others
18
Newspaper Publishers (报纸出版
商)

Many newspapers publish all or part of their
print content on the Web

Publishers experience sales losses as a
result of online distribution

The cost of operating Web sites cannot be
covered by the revenue generated from
selling advertising on the sites
19
Targeted Classified
Advertising (分类广告) Sites

Web employment advertising (招聘广告)


Uses the same approach that search engine sites use to
offer advertisers (广告主) target markets (目标市场)
Used vehicle (二手交通工具) sites

Accept paid advertising from individuals and companies
that want to sell cars, motorcycles, boats, etc.

Give the seller the option of running the ad on the Web site
or in the print version of the advertising newspaper
20
Advertising-Subscription Mixed
Revenue Models (广告收费混合赢利模式)


Subscribers (订阅者)

Pay a fee and accept some level of advertising

Typically subjected to (经受) much less advertising
Used by

The New York Times (纽约时报) and The Wall Street
Journal (华尔街日报)
21
Advertising-Subscription
Mixed Revenue Models Cont’d

Business Week (商业周刊)

Offers some free content at its Business Week
online site

Requires visitors to buy subscription to Business
Week print magazine if they want to access the
entire site
22
Fee-for-Transaction Revenue
Models (交易费用赢利模式)

Businesses offer services and charge a fee
based on number or size of transactions
processed

Disintermediation (免中介化)


Removal of an intermediary (中介) from value
chain
Reintermediation (再中介化)

Introduction of a new intermediary
23
Travel Agents (旅行社)

A number of online travel agencies began
doing business on the Web

Expedia, Travelocity, Hotels.com, and Hotel
Discount Reservations (also elong.com in
China)

In addition to earning commissions (佣金) from the
transportation and lodging providers, these sites
generate revenue from ads on travel info pages
24
Automobile Sales (汽车销售)

Salespeople can help customers learn about
product features, arrange financing (资金),
make a purchase decision; their job also
includes extracting the highest possible price

The buyer can purchase a car without
negotiating with salesperson who is then
taken out of value chain

The car salesperson is disintermediated and
the Web site becomes the new intermediary
25
Stockbrokers (证券经纪公司)

Charge their customers commission for each
trade executed

A number of discount brokers opened after
the U.S government deregulated (撤消对…的管
制规定) the securities (证券) trading business in
the early 1970s

In the 1990s, discount brokers faced new
competition from online firms
26
Insurance brokers (保险经纪公司)

A number of intermediaries that sell insurance
policies (保险单) from variety of companies have
been online since early days of the Web

Quotesmith

Began business in 1984 as a policy-quoting (保单报价)
service for independent insurance brokers

Decided in 1996 to offer its service directly to the
public over the Internet

Disintermediated the independent insurance agents it
formerly worked with
27
Event Tickets (票务)

The Web offers event promoters ability to sell
tickets from one virtual location to customers
practically anywhere in the world (e.g.
piao.com.cn)

Online ticket agencies reduce transaction
costs for both buyers and sellers of tickets
28
Real Estate and Mortgage Loan
Brokers (房地产与抵押贷款经纪公司)

Provides all of the services that traditional
broker might provide---except that online
brokers provide them through Web sites

IndyMac Bank Home Lending

offers mortgage loan and seeks online review in
minutes

approved customers can print an approval letter
from their computers and take it the same day to
buy a new house
29
Online Banking (在线银行) and
Financial Services (金融业)

The greatest concerns that most people have
are security and reliability of the financial
institution

Online banks handle only a tiny portion of the
world’s financial transaction

Two barriers are preventing a more rapid rate of
growth in the online banking business:

a lack of bill presentment (帐单显示)

a lack of account aggregation (帐户整合)
30
Fee-for-Service Revenue
Models (服务费用赢利模式)

Fee based on value of service provided

Services


Range from games and entertainment to financial
advice
Online games

Growing number of sites include premium (高价的)
games in their offerings

Site visitors must pay to play these premium
games
31
Fee-for-Service Revenue
Models Cont’d

Concerts and films

As more households obtain broadband access to
the Internet


Companies are providing streaming (流) video of
concerts and films to paying subscribers
Professional Services (专业服务)

State laws

One of the main forces preventing U.S. professionals
from extending their practices to the Web
32
Revenue Models in Transition
(转变)

Subscription to Advertising-Supported Model

Microsoft founded its Slate magazine Web site

An upscale (高端的) news and current events
publication

Charged 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
33
Advertising-Supported to
Advertising-Subscription
Mixed Model

Salon.com

Operated for several years as an advertisingsupported site

Now offers optional subscription version of its site

Subscription offering

Motivated by company’s inability to raise additional
money from investors
34
Advertising-Supported to Feefor-Services Model

Xdrive Technologies




Opened its original advertising-supported Web
site in 1999
Offered free disk storage space online to users
After two years, was unable to pay costs of
providing the service with the advertising revenue
generated
Later switched to a subscription-supported model
35
Advertising-Supported to
Subscription Model

Northern Light

Founded in August 1997 as a search engine

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
36
Multiple Transitions

Encyclopædia Britannica (大不列颠百科全书)

Original offerings

The Britannica Internet Guide


Encyclopædia Britannica Online


Available for a subscription fee or as part of CD package
1999


Free Web navigation aid
Converted to a free, advertising-supported site
2001

Faced declining advertising revenues and returned to
a mixed model: the advertising-subscription mixed
revenue model
37
Revenue Strategy Issues

Channel conflict (渠道冲突)

Occurs whenever sales activities on a company’s
Website interfere with existing sales outlets (店铺)

Also called cannibalization (互斥) because the
Web site’s sales consume sales that would be
made in the company’s other sales channels

Levi Strauss & Company Began selling jeans online in
mid-1998 and stopped in January 2000

Maytag’s Web site allowed customers to order directly
online and after 2 years of operation it decided to
incorporate online partners into its Web site store
design
38
Revenue Strategy Issues
Cont’d

Channel cooperation (渠道合作)

Giving customers access to the company’s
products through a coordinated presence in all
distribution channels

Eddie Bauer was selling through catalog and retail
stores

The company believed that online sales could become
more attractive if customers were allowed to return
unwanted products purchased online

Eddie Bauer was able to convince all managers to
support the Web site
39
Strategic Alliances (战略联盟)
and Channel Distribution
Management

Strategic alliance


Account aggregation services


When two or more companies join forces to
undertake an activity over a long period of time
Increase propensity (倾向) of customers to return
to the site
Channel distribution managers (分销渠道管理公
司)

Companies that take over responsibility for a
particular product line within a retail store
40
Creating an Effective Web
Presence (展示)

An organization’s presence


The public image it conveys to its stakeholders (利
益相关体)
Stakeholders of a firm

Include its customers, suppliers, employees,
stockholders (股东), neighbors, and the general
public
41
Identifying Web Presence
Goals

On the Web, businesses and other
organizations have the luxury of building Web
sites intentionally to create distinctive
presence

Each entity that establishes a Web presence
should decide features the Web site can
provide and which of those features are the
most important
42
Achieving Web Presence
Goals

An effective site is one that creates an
attractive presence that meets the objectives
of business or organization

Objectives of the business

Attracting visitors to the Web site

Making the site interesting enough that visitors
stay and explore
43
Achieving Web Presence
Goals Cont’d

Convincing visitors to follow the site’s links to
obtain information

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
44
Profit-Driven (赢利性)
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
45
Profit-Driven Organizations
Cont’d

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 in 1999

Essentially the same as previous version
46
Not-for-Profit (非赢利性)
Organization

Key goal for the Web sites


Information dissemination (传播)
Key element on any successful electronic
commerce Web site

Combination of information dissemination and a
two-way contact channel
47
Web Site Usability (可用性)

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 (担保),
service, or repair policies (政策) for products they
purchased

Obtaining general information about the company
or organization
48
Web Site Usability Cont’d

Motivations of Web site visitors

Obtaining financial information for making an
investment or credit granting (授信) decision

Identifying the people who manage the company
or organization

Obtaining contact information for a person or
department in the organization
49
Making Web Sites Accessible
(可进入的)

One of the best ways to accommodate a
broad range of visitor needs


Good site design


Build flexibility into the Web site’s interface
Lets visitors choose among information attributes
Web sites

Can offer visitors multiple information formats by
including links to files in those formats
50
Making Web Sites Accessible
Cont’d

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

Provide a meaningful, two-way (interactive)
communication link with the organization

Sustain (保持) visitor attention and encourage return
visits

Offer easily accessible information about products and
51
services
Trust (信任) and Loyalty (忠诚)

Studies by business researchers


Repetition of satisfactory service


A 5 percent increase in customer loyalty can yield
profit increases between 25% and 80%
Can build customer loyalty
Customer service

A problem for many electronic commerce sites
52
Usability Testing


Companies that have done usability tests

Conduct focus groups (焦点小组/小组讨论)

Watch how different customers navigate through
a series of Web site test designs
Cost of usability testing

Low compared to total cost of a Web site design
or overhaul (翻修)
53
Customer-Centric (中心的) Web
Site Design

Putting the customer at the center of all site
designs

Guidelines (指导方针)

Design site around how visitors will navigate the
links

Allow visitors to access information quickly

Avoid using inflated (夸大的) marketing
statements
54
Customer-Centric Web Site
Design Cont’d

Guidelines

Avoid using business jargon (行话) and terms (词
汇) that visitors might not understand

Build the site to work for visitors using the oldest
browser software on the oldest computer
connected through the lowest bandwidth
connection

Be consistent in use of design features and colors
55
Customer-Centric Web Site
Design Cont’d

Guidelines

Make sure navigation controls are clearly labeled

Test text visibility on smaller monitors

Make sure that color combination do not impair
viewing clarity for color-blind visitors

Conduct usability tests
56
Connecting With Customers

Personal contact model (个人接触模式)


Prospecting (探测法)


Firm’s employees individually search for, qualify
(取得资格), and contact potential customers
Personal contact approach to identifying and
reaching customers
Mass media approach (大众媒体方法)

Firms prepare advertising and promotional
materials about the firm and its products
57
Connecting With Customers
Cont’d

Addressable media (可寻址媒体)



One-to-many communication model


Advertising efforts directed to a known addressee
(被访地址)
Also called mass media
Communication flows from one advertiser to many
potential buyers
One-to-one communication model

Both buyer and seller participate in information
exchange
58
Business Communication
Modes
59
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 to


Form strategic alliances
Contract with (缔结关系) channel distribution
managers
60
Summary

Firms


Enlisting (征募) help of users when building
test versions of the Web site


Must understand how the Web differs from
other media
A good way to create a site that represents the
organization well
Firms must also

Understand nature of communication on the
Web
61
62
63
64
65
Toyota U.S. Home page (2004)
66
Toyota U.S. Home page (2009)
67
Quaker Oats old Home Page
68
Quaker Oats Home Page: 1999
Redesign
69