Monday, January 21, 2008

Chapter 3 Key Concepts

Revenue Models

Web Catalogue
-product listing with info and pricing
-sell directly to customers online
-need checkout and shipping process
-sales contracts, returns policies, etc.
-uses standard mark-up pricing model
-value-added services for additional cost
Wal Mart, Victoria’s Secret, etc.

Digital Content

-firms own rights to intellectual property (journal articles, industry reports, etc.)
-more academic and research focused
-controlled by academic institutions (Business Schools)
-subscription or purchase per use
CMA, EBSCO, ACM Digital Library, ProQuest, etc.

Advertising Supported
-solely supported by advertising
-accounting for hits on the ads
-no subscriptions
-number of impressions (# of times ad is displayed) (CPM)
-number of clicks on ads (CPC)
-high traffic websites
Search engines, Monster.ca, AOL, MSN, Autotrader, etc.

Mixed Mode
-membership requirements
-subscription fees
-advertising to generate revenue
-uses BOTH advertising and subscription
Hotmail.com, Mustang.com
-to move a customer from fee to paid; more features and less advertising

Fee-For-Transaction/Fee-For-Service
-paid per purchase
-own the product after purchase
-discounter
-pricing info and login
-transaction fees
-trying to remove the middle-man (disintermediation)
Customer Integrated Systems (CIS) where the customer does the work
Ticketselleronline.com

The product does not determine the revenue model, its how the product is delivered

Strategic Issues
Channel/Conflict Cannibalizationgic : online stores stealing sales from the physical stores
Alliances/Distribution Management: ie Amazon.com can sell products (set up a storefront online) for small companies, who are trusted and reliable. Great way for a vendor to test the market for a product
Mobile Commerce: advertising and access to digital information is going to have to hit the mobile market; blackberry, cell phones, text messaging


Web Presence

-website must be attractive

-stickiness (attracting people and getting them to stay and browse)

-provide rich links and content

-help and support

-trusting relationship with customers

-meeting expectations


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