HC3152 Ebusiness Selling on the Web代写
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HC3152 Ebusiness Selling on the Web代写
Selling on the Web: Revenue Models and Building a Web Presence
HC3152 Ebusiness Applications Week 2
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 on the Web
Web site usability
Communicating effectively with customers on the Web
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Revenue Models
Web business revenue-generating models
Web catalog
Digital content
Advertising-supported
Advertising-subscription mixed
Fee-based
Can work for both sale types
Business-to-consumer (B2C)
Business-to-business (B2B)
•Can use same revenue model for both types of sales
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Web Catalog Revenue Models
Adapted from mail-order (catalog) model
Seller establishes brand image
Printed information mailed to prospective buyers
•Orders placed by mail or toll-free telephone number
Expands traditional model
Replaces or supplements print catalogs
Offers flexibility
•Orders placed through Web site or telephone
•Payments made though Web site, telephone, or mail
Creates additional sales outlet for existing companies
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Web Catalog Revenue Models (cont’d.)
Computers and consumer electronics
Leading computer manufacturers
• Sell a full range of products on the Web
Dell allows product configuration flexibility
• Creates value
Crutchfield
• Expanded successful mail-order catalog
operations to include Web sites
Best Buy, J&R Music World, Radio Shack
• Web sites sell same products as in stores
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Web Catalog Revenue Models (cont’d.)
Computers and consumer electronics (cont’d.)
Marketing channel
• Pathway to customers
Advantage of having several marketing channels
• Reach more customers at less cost
Can combine marketing channels
• Example: in-store online ordering
• Example: mail catalogs with reference to retailer’s
Web site
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FIGURE 3-1 Combining marketing channels: Two retailer examples
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Web Catalog Revenue Models (cont’d.)
Books, music, and videos
Most visible electronic commerce examples
Amazon.com Web-only retailer originally sold books
• Evolved into general retailer
Barnes & Noble, Blackwell’s, Books-A-Million,
Powell’s Books
• All adopted Web catalog revenue model
CDnow Web-only online music store
• CD Universe copied CDnow approach
Tower Records, Sam Goody retail stores
• Created Web sites to compete with CDnow
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Web Catalog Revenue Models (cont’d.)
Luxury goods
Difficult to sell online
•Customers want to see product in person or touch
Vera Wang and Versace
•Web sites provide information
•Shopper purchases at physical store
•Heavy use of graphics and animation
Evian Web site
•Presents information in a visually stunning way
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Web Catalog Revenue Models (cont’d.)
Clothing retailers
Many adapted catalog sales model to Web
Display clothing photos categorised by type
•Prices, sizes, colors, tailoring details
Want customers to examine clothing online
•Place orders through Web site
Lands’ End online Web shopping assistance
•Lands’ End Live (1999)
•Online text chat and call-back feature
•Ability to push Web pages to customer’s browser
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Web Catalog Revenue Models (cont’d.)
Clothing retailers (cont’d.)
Lands’ End personal shopper agent (more recent)
•Learns preferences and makes suggestions
My Virtual Model (customers try clothes)
•Graphic image built from customer measurements
Another feature allows:
•Two shoppers using different computers to simultaneously browse Web site together
•Only one of the shoppers can purchase items
•Either shopper can select items to view
•Selected items appear in both Web browsers
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Web Catalog Revenue Models (cont’d.)
Clothing retailers (cont’d.)
Online overstocks stores
•Reach more people than physical outlet stores
Problem: varying computer monitor color settings
•Solution: send fabric swatch on request
•Solution: offer generous return policies
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Web Catalog Revenue Models (cont’d.)
Flowers and gifts (gift retailers)
1-800-Flowers
•Online extension to successful telephone business
•Competes with online-only florists
Godiva offers business gift plans
Hickory Farms and Mrs. Fields Cookies
•Offer familiar name brands on the Web
Harry and David
•Original Web site for informational purposes
•Promoted catalog business and added online ordering feature
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Web Catalog Revenue Models (cont’d.)
General discounters
Buy.com and Overstock.com
•Borrowed Wal-Mart and discount club sales model
•Sell merchandise at extremely low prices
Traditional discount retailers (Costco, Kmart, Target, Wal-Mart)
•Slow to implement online sales on their Web sites
•Had huge investments in physical stores
•Did not understand online retailing world
•Now use the Web catalog revenue model in their successful online sales operations
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Digital Content Subscription Revenue Models
Firms owning written information or information rights
Embrace the Web as a highly efficient distribution mechanism
Use the digital content revenue model
•Sell subscriptions for access to information they own
Legal content
LexisNexis: offers variety of information services
Lexis.com: offers original legal information product
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Digital Content Subscription Revenue Models (cont’d.)
Academic research content
ProQuest: digital copies of academic publications
Business content
Dow Jones newspaper publisher subscriptions
•Sold digitised newspaper, magasine, and journal content subscriptions
•Factiva: online content management and integration service
Technical content
Association for Computer Machinery (ACM): digital library
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Advertising-Supported Revenue Models
Used by United States broadcast network television
Provides free programming and advertising messages
• Supports network operations sufficiently
Problem: measuring and charging site visitor views
Stickiness
• Keeping visitors at site and attracting repeat visitors
• Exposed to more advertising in a sticky site
Problem: obtaining large advertiser interest
Requires demographic information collection
• Characteristics set used to group visitors
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Advertising-Supported Revenue Models
(cont’d.)
Can obtain large advertiser interest by:
Using a specialised information Web site
• Draw a specialised audience certain advertisers
want to reach
Examples:HC3152 Ebusiness Selling on the Web代写
• The Huffington Post and the Drudge Report
• HowStuffWorks
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FIGURE 3-2 Three strategies for an advertising-supported revenue model
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Advertising-Supported Revenue Models
(cont’d.)
Web portals (portal)
Site used as a launching point to enter the Web
• Almost always includes a Web directory or search
engine
• Often includes other features
Web directories
• Listing of hyperlinks to Web pages
Yahoo!: one of the first
• Presents search term triggered advertising on
each page
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Advertising-Supported Revenue Models (cont’d.)
Web portals (cont’d.)
Portal sites using general interest strategy
•AOL, Excite, Google, Bing
Portal sites not using general interest strategy
•Help visitors find information within a specific knowledge domain
•Advertisers pay more
•Example: C-NET
Travel sites
•Successful as advertising-supported online businesses
•Example: Kayak
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Advertising-Supported Revenue Models (cont’d.)
Newspaper and magazine publishers
Sell advertising to cover Web site costs
Internet Public Library Online Newspapers page
•Provides links to worldwide newspaper sites
Local shopping news, alternative press newspapers
•Easier transition to advertising-supported Web revenue model
Newspaper’s Web presence
•Provides greater exposure and advertising audience
•Diverts sales from the print edition (difficult to measure)
•Operating costs not covered by advertising revenue
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Advertising-Supported Revenue Models (cont’d.)
Targeted classified advertising sites
Can command higher rates than general advertising
Original version
•Newspaper classified advertising
Growth of classified advertising Web sites
•Very bad for newspapers
•Example: craigslist
Web employment advertising
•Most successful targeted classified advertising category
•Examples: CareerBuilder.com, The Ladders and Guru.com, Monster.com
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Advertising-Supported Revenue Models (cont’d.)
Targeted classified advertising sites (cont’d.)
Used vehicle sites
•AutoTrader.com, CycleTrader.com, BoatTrader.com
•Accept paid advertising to sell cars, motorcycles, boats
Product sites with dedicated following (VetteFinders)
•Successful by catering to small audiences
Potential classified advertising sites
•Any site selling products useful to buyer after initial use
•Musicians Buy-Line, ComicLink.com, The Golf Classifieds
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Advertising-Subscription Mixed Revenue Models
Subscribers pay fee and accept advertising
Typically less advertising compared to advertising-supported sites
Web sites offer different degrees of success
The New York Times (today)
•Bulk of revenue derived from advertising
The Wall Street Journal (mixed model)
•Subscription revenue weighted more heavily
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FIGURE 3-3 Revenue models used by online editions of newspapers and magazines
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Advertising-Subscription Mixed Revenue Models (cont’d.)
ESPN
Leverages brand name from cable television business
Sells advertising, offers free information
Mixed model includes advertising and subscription revenue (collects Insider subscriber revenue)
Consumers Union (ConsumerReports.org)
Purely a subscription-supported site
Not-for-profit organisation with no advertising
Free information
•Attracts subscribers and fulfills mission
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Fee-for-Transaction Revenue Models
Service fee charged
Based on transaction number or size
Web site offers visitor transaction information
Personal service formerly provided by a human agent
Value chain
Disintermediation
•Intermediary (human agent) removed
Reintermediation
•New intermediary (fee-for-transaction Web site) introduced
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Fee-for-Transaction Revenue Models (cont’d.)
Travel
Travel agency revenue model: receive fee for
facilitating a transaction
• Travel agent adds information consolidation and
filtering value
Computers also good at information consolidation and
filtering
• Travel agents have long used networked
computers: Sabre Travel Network
Internet provided a new way to do business online
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Fee-for-Transaction Revenue Models (cont’d.)
Travel (cont’d.)
Web-based travel agencies were new entrants
• Examples: Travelocity, Expedia, Hotels.com, Hotel
Discount Reservations, Orbitz
• Generate advertising revenue from ads placed on
travel information pages
Traditional travel agents: squeezed out
• Surviving agencies charge a flat fee
Smaller travel agents specialise (cruises, hotels)
• May use a reintermediation strategy
(WaveHunters.com)
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FIGURE 3-4 Orbitz home page
Fee-for-Transaction Revenue Models (cont’d.)
Automobile sales
Web sites implement the fee-for-transaction revenue
model differently
CarsDirect.com model
• Customers select specific car, site determines
price and finds local dealer
Autoweb.com and Autobytel model
• Locate local dealers, car sells at small premium
over dealer’s nominal cost
Car salesperson: disintermediated
Web site: new intermediary (reintermediation)
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Fee-for-Transaction Revenue Models (cont’d.)
Stockbrokers
Original full-line brokers charged relatively high commissions
•Provided advice
1970s: deregulation resulted in discount brokers
•Web-based brokerage firms: E*TRADE and Datek
•Web allowed investment advice, fast trade execution online
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Fee-for-Transaction Revenue Models (cont’d.)
Stockbrokers (cont’d.)
1990s: discount brokers faced competition from online firms
•Discount brokers and full-line brokers opened new stock trading and information Web sites
Online brokers offer transaction cost reductions
Traditional stockbrokers: disintermediated
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Fee-for-Transaction Revenue Models (cont’d.)
Insurance brokers
Quotesmith offered Internet policy price quotes directly to public (1996)
•Independent insurance agents: disintermediated
Insurance policy information, comparisons, sales sites
•InsWeb, Answer Financial, Insurance.com
Progressive Web site
•Provides quotes for competitors’ products too
The General (General Automobile Insurance Services) Web site
•Offers comfortable, anonymous experience
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Fee-for-Transaction Revenue Models (cont’d.)
Event tickets
Web allows event promoters to sell tickets from one virtual location to customers worldwide
Online agencies earn a fee on every ticket sold
•Ticketmaster, Tickets.com, TicketWeb
Web created secondary ticket market (StubHub, TicketsNow)
•Brokers connecting ticket owners with buyers
•Earn fees on tickets resold for others, buy ticket blocks
Web created easy-to-find central marketplace, facilitating buyer-seller negotiations
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Fee-for-Transaction Revenue Models (cont’d.)
Real estate and mortgage loans
Web sites provide all traditional broker services
•Coldwell Banker, Prudential
National Association of Realtors Web site
•Realtor.com
2008 financial crisis
•Dramatically reduced number of mortgage brokers in business
Successful online mortgage brokers
•Ditech and E-LOAN
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Fee-for-Transaction Revenue Models (cont’d.)
Online banking and financial services
No physical product
•Easy to offer on Web
Web financial transactions concerns
•Trust and reliability of financial institution
Solutions
•Use existing bank’s identification and reputation
•Start online bank not affiliated with existing bank (First Internet Bank of Indiana)
•Use different name (Bank One used Wingspan)
–Approach was not successful
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Fee-for-Transaction Revenue Models (cont’d.)
Online banking and financial services (cont’d.)
Additional barriers preventing a more rapid rate of growth
•Lack of bill presentment features
•Lack of account aggregation tools
By 2012:
•Industry analysts expect most banks (online and traditional) will offer aggregation services
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Fee-for-Transaction Revenue Models (cont’d.)
Online music
Recording industry: slow to embrace online distribution
•Feared digital copying
Large online music stores
•Revenue from fee-for-transaction model
•Some sites offer subscription plans
Complicating issues
•Stores offer limited number of digital music files
•Stores promote their own music file format
•Artists and recording companies invoke limits
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Fee-for-Transaction Revenue Models (cont’d.)
Online music (cont’d.)
Complicating issues (cont’d.)
•Buyers required to download and install Digital Rights Management (DRM) software
•Varying restrictions confusing to consumers
Online music market industry failed to embrace the network effect gained by adopting one standard file format
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Fee-for-Transaction Revenue Models (cont’d.)
Online music (cont’d.)
Some stores sold audio in a generally compatible file format with no copying restrictions
•Mondomix MP3 and Smithsonian Folkways
•Music not produced by major recording companies
Solutions
•Adopt one standard file format, no copying restrictions, DRM-free MP3 format (Amazon in 2007)
By 2012: 80 percent of all music will be sold online
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Fee-for-Transaction Revenue Models (cont’d.)
Online video
Issues hampering prior sales
•Large file size
•Fear of online sales impairing other sales types
•Inability to play on variety of devices
Overcoming the issues
•New technologies improving delivery
•Companies incorporating online distribution into revenue strategy
•Delivery allowed on multiple devices
–Through standard Web browser
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Fee-for-Transaction Revenue Models (cont’d.)
Electronic books
Forms of digital audio books
•CDs (originally) and various types of digital files
Audible sells subscriptions
Allows monthly download of a certain number of books
•Pricing is per book
Amazon.com
Offers books, newspapers, magazines, other digital format items
•Delivered directly to its line of Kindle readers
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Fee-for-Service Revenue Models
Companies offer Web service
Fee based on service value
•Not a broker service
•Not based on transactions-processed number or size
Online games
Sales revenue source
•Advertising (older concept), pay-to-play for premium games, subscription fees
Average game player is 35 years old, playing computer or video games for 12 years
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Fee-for-Service Revenue Models (cont’d.)
Professional services
Limited Web use
•State laws prohibit extension of practice
•Patients may set appointments, receive online consultation
Major concern
•Patient privacy
Law on the Web site
•Legal consultations to United Kingdom residents
Martindale.com
•Online version of Martindale-Hubbell lawyer directory
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Fee-for-Service Revenue Models (cont’d.)
Professional services (cont’d.)
CPA Directory
•United States accounting professionals site
General health information
•RealAge, Dr. Andrew Weil’s Self Healing, WebMD
Significant barrier
•Patient diagnosis difficult without physical examination
Some physicians beginning to offer online consultations
•For ongoing, established relationship patients
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Free for Many, Fee for a Few
Economics of manufacturing
Different for physical and digital products
Unit cost high percentage of physical products
Unit cost very small for digital products
Leads to a different revenue model
Offer basic product to many for free
Charge a fee to some for differentiated products
•Examples: Yahoo e-mail accounts, bakery: free cookies
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Revenue Models in Transition
Companies must change revenue model
To meet needs of new and changing Web users
Some companies created e-commerce Web sites
Needed many years to grow large enough to become profitable (CNN and ESPN)
Some companies changed model or went out of business
Due to lengthy unprofitable growth phases
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Subscription to Advertising-Supported Model
Slate magazine
Upscale news and current events
Success expectations were high
Experienced writers and editors
Acclaim for incisive reporting and excellent writing
Initial revenue source
Annual subscription did not cover operating costs
Now an advertising-supported site
Part of the Bing portal
•Value to Microsoft: increase the portal’s stickiness
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Advertising-Supported to Advertising-Subscription Mixed Model
Salon.com
Acclaimed for innovative content
Initial revenue source
Advertising-supported site
Needed additional money to continue operations
Now offers optional subscription version
Annual fee for Salon premium
•Free of advertising
•Additional content
•Downloadable content
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Advertising-Supported to Fee-for-Services Model
Xdrive Technologies: offered free disk storage
Initial revenue source (1999): advertising-supported
Targeted e-mail advertising
Did not cover operating costs
2005: bought by AOL
Switched to a subscription-supported model
Xdrive frequently adjusted its monthly fee downward
AOL closed the service in 2009
Successful companies: fee based on storage amount used
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Advertising-Supported to Subscription Model
Northern Light search engine includes own database
Results include Web site links and abstracts of its owned content
Initial revenue source
•Combination of the advertising-supported model plus a fee-based information access service
•Advertising revenue: insufficient to cover service
Converted to a new subscription-supported revenue model
•Mainly large corporate clients
•Individual monthly billing option for articles accessed
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Multiple Transitions
Encyclopedia Britannica
Initial Web offerings (1994)
•Britannica Internet Guide
•Encyclopedia Britannica Online
Initial revenue source
•Paid subscription site had low subscription sales
Converted to free advertiser-supported site (1999)
•Advertising revenues declined
2001: returned to mixed model with subscription plan and free content
Value added: sells reputation and the expertise
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Revenue Strategy Issues
Topics:
Web revenue models implementation issues
Dealing with the issues
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Channel Conflict and Cannibalization
Channel conflict (cannibalization)
Company Web site sales activities interfere with existing sales outlets
Levis Web site and Maytag
•Web sites no longer sell products
•Sites now provide product, retail distributor information
Eddie Bauer
•Online purchases returnable at retail stores
•Required compensation and bonus plans adjustments to support Web site
•Channel Cooperation made it successful
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Strategic Alliances
Strategic alliance
Two or more companies join forces
•Undertake activity over long time period
Yodlee account aggregation services provider
Yodlee concentrates on developing the technology and services
Banks provide the customers
Amazon.com
Joined with Target, CDnow, ToysRUs
•ToysRUs and Amazon suing each other
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Creating an Effective Web Presence
Organisation’s presence
Public image conveyed to stakeholders
Usually not important
•Until growth reaches significant size
Stakeholders
•Customers, suppliers, employees, stockholders, neighbors, general public
Effective Web presence
Critical even for smallest and newest Web operating firms
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Identifying Web Presence Goals
Business physical space
Focus: very specific objectives
•Not image driven
•Must satisfy many business needs
•Often fails to convey a good presence
Web business site
Intentionally creates distinctive presences
Good Web site design provides:
•Effective image-creation features
•Effective image-enhancing features
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Identifying Web Presence Goals (cont’d.)
Web business site objectives:
Attracting Web site visitors
Keeping visitors to stay and explore
Convincing visitors to follow site’s links to obtain information
Creating an impression consistent with the organisation’s desired image
Building a trusting relationship with visitors
Reinforcing positive images about the organisation
Encouraging visitors to return to the site
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Identifying Web Presence Goals (cont’d.)
Making Web presence consistent with brand image
Different firms establish different Web presence goals
Coca Cola Web site pages
•Usually include trusted corporate image (Coke bottle)
•Image: traditional position as a trusted classic
Pepsi Web site pages
•Usually filled with hyperlinks to activities and product-related promotions
•Image: upstart product favored by younger generation
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Identifying Web Presence Goals (cont’d.)
Matching site design to function
Volkswagen of America site
•Accomplishes important functions for the company
•Provides links to detailed Volkswagen model information, links to a dealer locator page, links to information about the company, a link to a set of shopping tools
Volkswagen’s home page
•Meets the needs of most visitors quickly and effectively
Volkswagen site enhances company image by providing useful information to customers online
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FIGURE 3-5 Volkswagen of America home page
Identifying Web Presence Goals (cont’d.)
Not-for-profit organisations
Web presence effort key goals:
•Image enhancement and information dissemination
Successful site key elements
•Integrate information dissemination with fund-raising
•Provide two-way contact channel
American Civil Liberties Union (ACLU)
•Serves many different constituencies
Web sites used to stay in touch with existing stakeholders, identify new opportunities for serving them
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FIGURE 3-6 ACLU home page
Web Site Usability
Current Web presences
Few businesses accomplish all goals
Most fail to provide visitors sufficient interactive
contact opportunities
Improving Web presence
• Make site accessible to more people
• Make site easier to use
• Make site encourage visitors’ trust
• Make site develop feelings of loyalty toward the
organisation
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How the Web Is Different
Simple mid-1990s Web sites
Conveyed basic business information
No market research conducted
Web objectives achievement
Failed due to no understanding for Web presencebuilding
media
Web sites designed to create an organisation’s
presence:
Contain links to standard information set
Success dependent on how this information offered
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Meeting the Needs of Web Site Visitors
Successful Web businesses:
Realise every visitor is a potential customer (partner)
Web presence is an important concern
Know visitor characteristic variations
• Understand that the visitor is at the site for a
reason
Varied motivations of Web site visitors
Why visitors arrive at Web sites
• Learning about company products or services
• Buying products or services
• Obtaining warranty, service, repair policy
information
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Meeting the Needs of Web Site Visitors (cont’d.)
Varied motivations of Web site visitors (cont’d.)
Why visitors arrive at Web sites (cont’d.)
• Obtaining general company information
• Obtaining financial information
• Identifying people
• Obtaining contact information
• Following a link into the site while searching for
information about a related product, service, or
topic
Challenge to meet all motivations
• Visitors arrive with different needs, experience,
and expectation levels
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Meeting the Needs of Web Site Visitors (cont’d.)
Making Web sites accessible
Build interface flexibility options:
• Frame use
• Text-only version
• Selection of smaller graphic images
• Specification of streaming media connection type
• Choice among information attributes
Controversial Web site design issues
• Adobe Flash software use
– Some tasks lend themselves to animated Web pages
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FIGURE 3-7 Lee® Jeans FitFinder Flash animation
Meeting the Needs of Web Site Visitors (cont’d.)
Making Web sites accessible (cont’d.)
Offer multiple information formats
Consider goals in Web site construction
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FIGURE 3-8 Goals for business Web sites
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Trust and Loyalty
Creates relationship value
Good service leads to seller trust
Delivery, order handling, help selecting product, after-sale support
Satisfactory service builds customer loyalty
Customer service in electronic commerce sites
Problem
•Lack integration between call centers and Web sites
•Poor e-mail responsiveness
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Rating Electronic Commerce Web Sites
Companies routinely review electronic commerce Web sites for:
Usability, customer service, other factors
Sell the gathered information directly to the companies operating the Web sites
•Include suggestions for improvements
BizRate.com posts ratings
Provides comparison shopping service
Compiles ratings by conducting surveys of sites’ customers
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Usability Testing
Importance
Helps meet Web site goals
Avoids Web site frustration
•Customers leave site without buying anything
Simple site usability changes
•Include telephone contact information
•Staff a call center
Learn about visitor needs by conducting focus groups
Usability testing cost
•Low compared to Web site design costs
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Customer-Centric Web Site Design
Important part of successful electronic business operation
Focus on meeting all site visitors’ needs
Customer-centric approach
Putting customer at center of all site designs
•Follow guidelines and recommendations
•Make visitors’ Web experiences more efficient, effective, memorable
Webby Awards site
Examples of good Web site design
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Connecting with Customers
Important element of a corporate Web presence
Identify and reach out to customers
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The Nature of Communication on the Web
Communication modes
Personal contact (prospecting) model
• Employees individually search for, qualify, contact
potential customers
Mass media
• Deliver messages by broadcasting
Addressable media
• Advertising efforts directed to known addressee
Internet medium
Occupies central space in medium choice continuum
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FIGURE 3-9 Business communication modes
Summary
HC3152 Ebusiness Selling on the Web代写