Chapter 5 Customer/Consumer- Focused E-Commerce. Copyright © 2003, Addison-Wesley Attracting customers Unique product or service Low price Convenience.

Chapter 5

Customer/Consumer-Focused

E-Commerce

Copyright © 2003, Addison-Wesley

Attracting customers

Unique product or service Low price Convenience Customer services Free stuff One good hook, by itself, is not

enough


Figure 5.1 Some sites offer free services.

Note buttons to left of Yahoo!


Back to Business Basics

Brand name still counts Amazon

vs. Barnes & Noble, and Borders Bricks-and-clicks strategy

vs. WalMart Brand name

Implies stability, connotes reputation Reduces perceived risk of fraud Minimizes returns hassle

Bricks-and clicks business partners


Figure 5.2 Maytag on the Sears website.

Note: This page was accessed through Sears.com


Finding/Attracting Potential Customers

Advertising Banner ads Targeted e-mail Untargeted e-mail

Risk – spam, reverse denial of service attacks

Search engine Target – be in top 20 following search Metatags


Figure 5.4 The metatag entries for a textbook’s Web page.


Creating Repeat Customers

Window shoppers generate zero revenue may help/hurt reputation

Good Web site necessary, not sufficient Good Web site must offer customer

value Personalized catalog Customer relationship management


Figure 5.5 A personalized Web page.

No, this customer was not recently married. CRM software does not always work as advertised.


Customer Relationship Management (CRM)

Customer acquisition/retention tool Sales and marketing support Data collected at all contact points Stored in data warehouse

Data analysis and data mining Ultimate objective is lock-in (sustained

repeat customer) Customer has (in)vested interest not to

change


Sustainable Competitive Advantage

B2C front-end easy to copy Efficiency gains easier to protect

Value chain integration Supply chain integration

Customization Tailored products; personalized services

One-to-one relationship marketing CRM Risk – privacy intrusion


B2C Revenue Sources

Selling digital/information products Software, music, images, electronic games Immune from diminishing returns Low distribution cost Danger – protecting intellectual property

Selling physical products Intense price competition Cost-control, customization, lock-in are key

to profitability


Selling services

Revenue models Contractual price

Low volume transactions, high dollar value Negotiated off-line, executed on-line

Commodity/product price High volume transactions, low dollar value

Fees


Selling services

Revenue models: Fees Per transaction – E-Trade Percentage fee – eBay, Expedia (Dis)Intermediation fee

EC Referral/brokerage fee – Realtor.com (Dis)Aggregation fee – American Express ONE

EB “Shipping and handling” fee – FTD Administrative overhead/recharge fee


Figure 5.8 A local florist’s Web site.


Usage Charges and Subscription Fees

Evolving model may resemble TV Free, over-the-air channels Fee for basic cable/sat service Additional fee for premium services Per-event fee for pay-per-view


Payment Services

Credit cards Visa, MasterCard, American Express

Escrow services (PayPal) Internet bill presentment and payment

Service provider aggregation model Customer aggregation model

E-cash and digital cash (not yet popular!) Pay for micro-transactions (intermediation

“tax”)


Figure 5.13 The Visa network.

Visa Central

Issuing Bank Acquiring Bank

Cardholder Cardholder Merchant Merchant


Information Services

Objective Provide enough value to capture

visitors Higher advertising and referral fees More usage fees

Search engines – Google Portals – AOL, MSN, Yahoo Bots, such as shopping bots –

Orbitz (questionable future?)


Not-for-Profit/Community Web Sites

Virtual communities Single focus Information, support, interaction Health support groups

Government-to-consumer (G2C) sites Information Services

Chapter 5 Customer/Consumer- Focused E-Commerce. Copyright © 2003, Addison-Wesley Attracting customers Unique product or service Low price Convenience.

Documents

addisonwesley figure

profitability slide

yahoo slide

addisonwesley usage

personalized web page

free services

low dollar value fees

sufficient good web