Transcript virtual marketplace

Slide 2.1
CHAPTER 2
E-commerce Fundamentals
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.2
Learning outcomes
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Evaluate changes in business relationships between
organizations and their customers enabled by ecommerce
Identify the main business and marketplace models
for electronic communications and trading
Describe different revenue models and transaction
mechanisms available through online services.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.3
Management issues
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What are the implications of changes in marketplace
structures for how we trade with customers and other
partners?
Which business models and revenue models should
we consider in order to exploit the Internet?
What will be the importance of online intermediaries
and marketplace hubs to our business and what
actions should we take to partner these
intermediaries?
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.4
E-commerce environment
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Needs of customers
Local and international economic conditions
Legislation
Technological innovations
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.1
The environment in which e-business services are provided
Slide 2.6
Local conditions
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.7
Environment constraints and
opportunities
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Customers – which services are they offering via their web site that your organization could
support them in?
Competitors – need to be benchmarked in order to review the online services they are offering –
do they have a competitive advantage?
Intermediaries – are new or existing intermediaries offering products or services from your
competitors while you are not represented?
Suppliers – are suppliers offering different methods of procurement to competitors that give them
a competitive advantage?
Macro-environment
Society – what is the ethical and moral consensus on holding personal information?
Country specific, international legal – what are the local and global legal constraints for
example on holding personal information, or taxation rules on sale of goods?
Country specific, international economic – what are the economic constraints of operating within a
country or global constraints?
Technology – what new technologies are emerging by which to deliver online services such as
interactive digital TV and mobile phone-based access?
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.8
Lack of Privacy = Lack of Sales
“Consumer privacy apprehensions continue to
plague the Web. These fears will hold back
roughly $15 billion in e-commerce revenue.”
-Forrester Research, September 2001
“Privacy and security concerns could cost online
sellers almost $25 billion by 2006.”
-Jupiter Research, May 2002
“Online retail sales could be 25% higher by 2006 if
consumer’s fears about privacy and security were
addressed.”
-Jupiter Research, 2002
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
B2B and B2C interactions between an organization, its suppliers and its
customers
Figure 2.2
Slide 2.10
B2B and B2C characteristics
Characteristic
B2C
B2B
Proportion of adopters
with access
Low to medium
High to very high
Complexity of buying
decisions
Relatively simple –
individual and influencers
More complex – buying
process involves users,
specifiers, buyers, etc.
Channel
Relatively simple – direct
or from retailer
More complex, direct or
via wholesaler, agent or
distributor
Purchasing characteristics
Low value, high volume
or high value, low
volume. May be high
involvement
Similar volume/value.
May be high Involvement.
Repeat orders (rebuys)
more common
Product characteristic
Often standardized items
Standardized items or
bespoke for sale
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Marketplace channel structures
Disintermediation of a consumer distribution channel showing
(a) the original situation, (b) disintermediation omitting the wholesaler, and
(c) disintermediation omitting both wholesaler and retailer
Figure 2.3
Slide 2.12
Marketplace channel structures
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Describes the way a manufacturer delivers products
and services to its customers
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.13
Vauxhall
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.4
From original situation (a) to disintermediation (b) and reintermediation (c)
Slide 2.15
Reintermediation
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Creation of a new intermediary
Example:
 B&Q
www.diy.com
 Opodo www.opodo.com
 Boots www.wellbeing.com www.handbag.com
 Ford, Daimler (www.covisint.com)
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Partnering with existing intermediary – Mortgage
broker Charcol and Freeserve
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.16
Reintermediation
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.17
Online Intermediaries
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Directories
Search Engines
Malls
Virtual resellers
Financial Intermediaries
Forums, fan clubs and user groups
Evaluators
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Yahoo! Shopping Australia, a price comparison site based on the
Kelkoo.com shopping comparison technology (http://shopping.yahoo.com.au)
Figure 2.6
Slide 2.19
Blogs
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Give an easy method of regularly publishing web
pages, e.g. online journals, diaries or event listing
Include feedback or comments
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.5
Dave Chaffey’s blog site (www.davechaffey.com)
Slide 2.21
Importance of multi-channel
marketplace models
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Customer journey – modern multi-channel behavior
as consumers use different media
 Offline
 Mixed-mode
 Online
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Example channel chain map for consumers selecting an estate agent
to sell their property
Figure 2.7
Slide 2.23
Meta services
Search engines
Portal
Directories
‘A gateway to
information
resources and
services’
News aggregators
MR aggregators
Comparers
Exchanges
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.24
Types of portal
Type of portal
Characteristics
Example
Access portal
Associated with ISP
Wanadoo (www.wanadoo.com) and now (www.orange.co.uk)
AOL (www.aol.com)
Horizontal or
functional portal
Range of services: search engines, directories, news recruitment, personal
information management, shopping, etc.
Yahoo! (www.yahoo.com)
MSN (www.msn.com)
Google (www.google.com) for which a long period just focused on
search.
Vertical
A vertical portal covers a particular market such as construction with news
and other services.
Construction Plus (www.constructionplus.co.uk)
Chem Industry
(www.chemindustry.com)
Barbour Index for B2B resources
(www.barbour-index.com)
E-consultancy
(www.e-consultancy.com)
Focuses on e-business resources
Media portal
Main focus is on consumer or business news or entertainment.
BBC (www.bbc.co.uk)
Guardian (www.guardian.co.uk)
ITWeek (www.itweek.co.uk)
Geographical
(Region, country,
local)
May be:
horizontal
vertical
Marketplace
May be:
Horizontal
Vertical
Geographical
EC21
(www.ec21.com)
eBay (www.eBay.com)
Search portal
Main focus is on Search
Google (www.google.com)
Ask Jeeves (www.ask.com)
Media type
May be:
Voice
Video
Delivered by streaming media or downloads of files
BBC (www.bbc.co.uk)
Silicon (www.silicon.com)
Google
country versions
country and city versions
Craigslist (www.craigslist.com)
Countyweb (www.countyweb.com)
Yahoo!
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.25
Online representation
Place of
purchase
Examples of sites
A. Sellercontrolled
Vendor sites, i.e. home site of organization selling products,
e.g. www.dell.com.
B. Seller-oriented
Intermediaries controlled by third parties to the seller such as
distributors and agents, e.g. Opodo (www.opodo.com)
represents the main air carriers
C. Neutral
Intermediaries not controlled by buyer’s industry, e.g. EC21
(www.ec21.com).
Product-specific search engines, e.g. CNET
(www.computer.com)
Comparison sites, e.g. Barclay Square/Shopsmart
(www.barclaysquare.com)
Auction space, e.g. eBay (www.ebay.com)
D. Buyer-oriented
Intermediaries controlled by buyers, e.g. Covisint used to
represent the major motor manufacturers
(www.covisint.com) although they now don’t use a
single marketplace, but each manufacturer uses
technology to access its suppliers direct.
Purchasing agents and aggregators
E. Buyercontrolled
Web site procurement posting on company’s own site, e.g. GE
Trading Process Network (www.tpn.geis.com
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.26
Seller-oriented- Opodo.co.uk
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.27
Buyer-oriented-covisint.com
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.8
Variations in the location and scale of trading on e-commerce sites
Slide 2.29
Commercial arrangements for
transactions
Commercial (trading) mechanism
Online transaction mechanism of Nunes et al. (2000)
1. Negotiated deal
Example: can use similar mechanism to auction
as on Commerce One (www.commerceone.net)
Negotiation – bargaining between single seller and buyer. Continuous
replenishment – ongoing fulfilment of orders under pre-set terms
2. Brokered deal
Example: intermediaries such as screentrade
(www.screentrade.co.uk)
Achieved through online intermediaries offering auction and pure markets
online
3. Auction
Example: C2C: E-bay (www.ebay.com) B2B:
Industry to Industry
(http://business.ebay.co.uk/)
Seller auction – buyers’ bids determine final price of sellers’ offerings. Buyer
auction – buyers request prices from multiple sellers. Reverse – buyers post
desired price for seller acceptance
4. Fixed-price sale
Example: all e-tailers
Static call – online catalogue with fixed prices. Dynamic call – online
catalogue with continuously updated prices and features
5. Pure markets
Example: electronic share dealing
Spot – buyers’ and sellers’ bids clear instantly
6. Barter
Example: www.intagio.com and
www.bartercard.co.uk
Barter – buyers and sellers exchange goods. According to the International
Reciprocal Trade Association (www.irta.com ) barter trade was over $9
billion in 2002.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.9
Priceline Hong Kong service (www.priceline.com.hk)
Slide 2.31
Business model
Timmers (1999) defines a ‘business model’ as:
An architecture for product, service and information
flows, including a description of the various business
actors and their roles; and a description of the
potential benefits for the various business actors; and a
description of the sources of revenue.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.32
Business models on the web
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E-shop
E-procurement
E-malls
E-auctions
Virtual communities
Collaboration platforms
Third-party marketplace
Value-chain service providers
Information brokerage
Trust and other services
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.10
Alternative perspectives on business models
Slide 2.34
Revenue models – publisher
example
1. Subscription access to content.
2. Pay-per-view access.
3. CPM on site display advertising.
4. CPC advertising on site.
5. Sponsorship of site sections, content or widgets.
6. Affiliate revenue (CPA or CPC).
7. Subscriber data access for e-mail marketing.
8. Access to customers for research purposes.
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Figure 2.11
Alex Tew’s Million Dollar Home Page (www.milliondollarhomepage.com)
Figure 2.13
www.firebox.com
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Summary
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The constantly changing e-business environment should be
monitored by all organizations in order to be able to respond
to changes in social, legal, economic, political and
technological factors together with changes in the immediate
marketplace that occur through changes in customer
requirements and competitors’ and intermediaries’ offerings
The e-business marketplace involves transactions between
organizations and consumers (B2C) and other businesses (B2B).
Consumer-to-consumer (C2C) and consumer-to-business
categories (C2B) can also be identified
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.38
Summary
3.
The Internet can cause disintermediation within the
marketplace as an organization’s channel partners
such as wholesalers or retailers are bypassed.
Alternatively, the Internet can cause reintermediation
as new intermediaries with a different purpose are
formed to help bring buyers and sellers together in
a virtual marketplace or marketspace. Evaluation of
the implications of these changes and
implementation of alternative countermediation
strategies is important to strategy
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.39
Summary
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Trading in the marketplace can be sell-side (sellercontrolled), buy-side (buyer-controlled) or at a
neutral marketplace
A business model is a summary of how a company
will generate revenue identifying its product
offering, value-added services, revenue sources
and target customers. Exploiting the range of
business models made available through the
Internet is important to both existing companies
and start-ups
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Slide 2.40
Summary
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The Internet may also offer opportunities for new revenue
models such as commission on affiliate referrals to other sites
or banner advertising
The opportunities for new commercial arrangements for
transactions include negotiated deals, brokered deals,
auctions, fixed-price sales and pure spot markets, and
barters should also be considered
The success of dot-com or Internet start-up companies is
critically dependent on their business and revenue models
and traditional management practice
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007