Transcript Figure 6.1 In the late 1990s, Internet growth rates suggested that the

Chapter 5
Customer/ConsumerFocused
E-Commerce
Attracting customers
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Unique product or service
Low price
Convenience
Customer services
Free stuff
One good hook, by itself, is not enough
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Figure 5.1 Some sites offer free services.
Note buttons to
left of Yahoo!
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Back to Business Basics
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Brand name still counts
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Amazon
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Bricks-and-clicks strategy
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vs. WalMart
Brand name
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vs. Barnes & Noble, and Borders
Implies stability, connotes reputation
Reduces perceived risk of fraud
Minimizes returns hassle
Bricks-and clicks business partners
Copyright © 2003, Addison-Wesley
Figure 5.2 Maytag on the Sears website.
Note: This
page was
accessed
through
Sears.com
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Finding/Attracting Potential Customers
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Advertising
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Banner ads
Targeted e-mail
Untargeted e-mail
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Risk – spam, reverse denial of service attacks
Search engine
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Target – be in top 20 following search
Metatags
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Figure 5.4 The metatag entries for a
textbook’s Web page.
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Creating Repeat Customers
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Window shoppers
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generate zero revenue
may help/hurt reputation
Good Web site necessary, not sufficient
Good Web site must offer customer value
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Personalized catalog
Customer relationship management
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Figure 5.5 A personalized Web page.
No, this
customer was
not recently
married. CRM
software does
not always work
as advertised.
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Customer Relationship Management (CRM)
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Customer acquisition/retention tool
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Sales and marketing support
Data collected at all contact points
Stored in data warehouse
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Data analysis and data mining
Ultimate objective is lock-in (sustained
repeat customer)
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Customer has (in)vested interest not to change
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Sustainable Competitive Advantage
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B2C front-end easy to copy
Efficiency gains easier to protect
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Customization
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Value chain integration
Supply chain integration
Tailored products; personalized services
One-to-one relationship marketing
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CRM
Risk – privacy intrusion
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B2C Revenue Sources
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Selling digital/information products
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Software, music, images, electronic games
Immune from diminishing returns
Low distribution cost
Danger – protecting intellectual property
Selling physical products
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Intense price competition
Cost-control, customization, lock-in are key to
profitability
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Selling services
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Revenue models
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Contractual price
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Commodity/product price
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Low volume transactions, high dollar value
Negotiated off-line, executed on-line
High volume transactions, low dollar value
Fees
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Selling services
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Revenue models: Fees
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Per transaction – E-Trade
Percentage fee – eBay, Expedia
(Dis)Intermediation fee
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EC
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Referral/brokerage fee – Realtor.com
(Dis)Aggregation fee – American Express ONE
EB
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“Shipping and handling” fee – FTD
Administrative overhead/recharge fee
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Figure 5.8 A local florist’s Web site.
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Usage Charges and Subscription Fees
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Evolving model may resemble TV
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Free, over-the-air channels
Fee for basic cable/sat service
Additional fee for premium services
Per-event fee for pay-per-view
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Payment Services
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Credit cards
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Escrow services (PayPal)
Internet bill presentment and payment
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Visa, MasterCard, American Express
Service provider aggregation model
Customer aggregation model
E-cash and digital cash (not yet popular!)
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Pay for micro-transactions (intermediation “tax”)
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Figure 5.13 The Visa network.
Visa Central
Issuing Bank
Cardholder
Acquiring Bank
Cardholder
Merchant
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Merchant
Information Services
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Objective
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Provide enough value to capture visitors
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Higher advertising and referral fees
More usage fees
Search engines – Google
Portals – AOL, MSN, Yahoo
Bots, such as shopping bots – Orbitz
(questionable future?)
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Not-for-Profit/Community Web Sites
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Virtual communities
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Single focus
Information, support, interaction
Health support groups
Government-to-consumer (G2C) sites
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Information
Services
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