Transcript B2C Electronic Marketing

Electronic Commerce
The e-Trading Business Models
B2C
Agenda
E-Commerce – A Business Perspective:
E-commerce classification and models.
The Retail/Consumer Marketplace EC models
(B2C).
2
e-Trading
Implementation Domains
1. Business-to-Consumer (B2C)
B2C Electronic Marketing
Business-to-consumer (B2C)
Ability to create direct relationships with
consumer
without
intermediaries
like
distributors, wholesalers, or dealers
4
B2C Electronic Markets
B2C business model where customers look for:
High quality
Low price
Fast shipment
Good return policy
Helpful customer service
5
What Sells Better on the Internet?
Goods that can be transformed to digitized goods like
books, music, and video
Items with high brand recognition
Items with security guarantee given by highly reliable or
known vendors
Relatively cheap items
Repetitively purchased items such as groceries
Commodities with standard specification
Items whose operating procedures can be more effectively
demonstrated by a video
Packaged items which are well known to customers and
which cannot be opened even when customers physically
visit the store
6
B2C
Different EC Models
Business Models of Electronic Marketing
Direct Marketing Manufacturers
Vs.
Indirect Marketing Manufacturers
Proactive Strategic Posture
Vs.
Reactive Strategic Posture
Electronic Mall
Vs.
Electronic Store
Sales
Vs.
Customer Services
Full Cybermarketing
Vs.
Partial Cybermarketing
Global Marketing
Electronic Distributor
Generalized Mall
Vs.
Vs.
Vs.
Regional Marketing
Electronic Broker
Specialized Mall/Store9
Business Models of Electronic Marketing (Cont.)
E-store vs. E-mall.
E-store.
 An electronic distributor whose dealing items are
handled by a single store.
E-mall.
 An electronic distributor or broker whose dealing
items are handled by more than a single electronic
store.
10
Active Electronic Intermediaries (Cont.)
Pure Vs. Partial E-Mall Strategy
Pure electronic mall
Cybermall
Company’s retailing
business exists only on the
internet
Partial electronic mall
Electronic mall as one of
existing distribution channels
11
Business Models of Electronic Marketing (Cont.)
Generalized vs. Specialized e-malls/stores
Generalized e-malls/stores
 Deal with various categories of items, so supply items
is very wide, e.g., electronic department stores.
Specialized e-malls/stores
 Focus on only special types of items, e.g., cyber-bookstores like Amazon and computer vendors like Dell.
12
Business Models of Electronic Marketing (Cont.)
E-distributor vs. E-broker
E-distributor
 Responsible of order fulfillment and guarantee, e.g.,
Amazon, eToys, Wal-mart online.
E-broker
 Introduce suppliers who deal with the items that the
customers are looking for, e.g., Choice mall,
BestBookBuys, compare.Net, and directory sites like
yahoo.
 Payments can be either collected by suppliers or brokers
depending on their agreements.
13
Active Electronic Intermediaries (Cont.)
Pure Electronic Malls
E-Distributors
E-Brokers
CDNow
ShopNow
Take full responsibility of
fulfilling orders and collecting
payments
Narrow scope of products usually
specialized
Scope of products is broad and can
link stores worldwide.
Assist the search process of
finding the appropriate products
and their vendors
May receive commissions from
vendors to whom the orders are
Needs expertise in merchandizing, channeled
Main expertise is technical
quality assurance, and customer
(Internet technology and support)
service
14
CD NOW:
Specialized e-Distributers
15
1-800-Flowers:
Specialized e-Distributers
16
1-800-Flowers
17
Anniversary Flowers
18
Flower e-shop
Bank
payment
check
physical flow
electronic flow
credit card statement
credit
authorization
credit card
account details
Calyx & Corolla
sales
marketing
IS
R&D
Grower
picking
packing
order
tracking data
sale
Retailer
sales
flowers
Parcel service
delivery
order
Customer
order
flowers
19
ShopNow:
e-Brokers
20
ShopNow:
e-Brokers
21
Business Models of Electronic Marketing (Cont.)
Direct marketing vs. Indirect marketing.
Direct marketing.
 Manufacturers advertise and distribute their own
products directly to their customers via their internetbased stores without intervention of any intermediaries,
e.g., Dell.Com.
 E-stores must be highly visible (high visibility of the
company and the brand).
Indirect marketing.
 Products are distributed through third party
intermediaries, e.g., E-malls.
 Low visibility of products should be balanced by high
visibility of the intermediary.
22
Disintermediation in B2C Distribution
Source: M. Warkentin, et al. (2000). Used with permission of Dr. Merrill Warkentin.
23
Business Models of Electronic Marketing (Cont.)
Full cybermarketing vs. Partial cybermarketing.
Full cybermarketing.
 Companies sell their products and services only through
the internet, e.g., Amazon.
 Mostly new companies born in the era of e-commerce.
 Proactive e-commerce strategy
Partial cybermarketing (Click & Mortar).
 Companies sell not only through the internet but also
through physical stores, e.g., Barns & Noble.
 Reactive response of existing companies having physical
distribution channels.
24
Business Models of Electronic Marketing (Cont.)
Proactive vs. Reactive strategic posture toward
cybermarketing
Proactive strategic posture toward cybermarketing
 A company’s main distribution channel is the internet,
and internal management such as inventory and
operations management is focused to affect the benefit of
cybermarketing
Reactive strategic posture toward cybermarketing
 The traditional physical distribution channel is left as the
company’s main distribution channel even though the
company has opened another online distribution channel
25
JCPenney:
Reactive e-Department Stores
26
Reactive Electronic Department Stores (Cont.)
The J.C. Penney case
The Internet-based revenue
amounts a small percentage
of the total revenue
Insurance
3%
Internetbased
1%
Drug Stores
32%
Updating prices and adding new
items to the electronic catalogs
is convenient and inexpensive
Overcoming the limitations of
paper catalogs without incurring
extra distribution cost
Catalog
13%
Department
Stores
51%
27
JCPenney
28
Dell.COM:
Proactive Direct Marketing
29
Ford.com
Reactive Partial Direct Marketing
30