E-Commerce,The Second Wave
Sixth Annual Edition
Zhongmin lu
zhongmin99@yahoo.com
Objectives
In this chapter,you will learn about:
? What electronic commerce is
? Why business models have given way
to revenue models
Creating an E-Business/Commerce
? Business Model
? GOPST
? SWOT
Business models
? What is a business model
? the method of doing business by which a
company can sustain itself -- that is,
generate revenue
? business models can be either very
simple,or rather complex.
? Internet commerce will give rise to new
kinds of business models,
Business models
? Why Business Models are Important to Study
? it is getting harder to make money,and make
enough to have profit
? it is getting harder to do this year after year after
year
? the Competitive Environment is getting tougher
? business is getting more complicated
? you always have to keep improving
? the speed with which things are going is almost
too much for most companies
Taxonomy of business models
? Brokerage Model
? Advertising Model
? Infomediary Model
? Merchant Model
? Manufacturer Model
? Affiliate Model
? Community Model
? Subscription Model
? Utility Model
Brokerage Model
Brokers are market-makers,they
bring buyers and sellers together
and facilitate transactions,
? Marketplace Exchange
? Buy/Sell Fulfillment
? Demand Collection System
? Auction Broker
? Transaction Broker
? Virtual Marketplace
Ref,http://digitalenterprise.org/models/models.html
offers a full range of services
covering the transaction
process,from market
assessment to negotiation and
fulfillment,Exchanges operate
independently or are backed by
an industry consortium
takes customer orders to
buy or sell a product or
service,including terms
like price and delivery,
the patented "name-your-
price" model pioneered by
Priceline.com,Prospective
buyer makes a final
(binding) bid for a specified
good or service,and the
broker arranges fulfillment,
conducts auctions for sellers
(individuals or merchants),Broker
charges the seller a listing fee and
commission scaled with the value
of the transaction,Auctions vary
widely in terms of the offering and
bidding rules
provides a third-party
payment mechanism for
buyers and sellers to settle a
transaction,
or virtual mall,a hosting service
for online merchants that
charges setup,monthly listing,
and/or transaction fees,May
also provide automated
transaction and relationship
marketing services,
Advertising Model
The web advertising model is an extension
of the traditional media broadcast
model.
? Portal
? Classifieds
? User Registration
? Query-based Paid Placement
? Contextual Advertising / Behavioral Marketing
? Content-Targeted Advertising
? Intromercials
? ultromercials
Ref,http://digitalenterprise.org/models/models.html
usually a search engine that may
include varied content or services,A
high volume of user traffic makes
advertising profitable and permits
further diversification of site services,
list items for sale or
wanted for purchase,
Listing fees are common,
but there also may be a
membership fee,
content-based sites that are
free to access but require users
to register and provide
demographic data,Registration
allows inter-session tracking of
user surfing habits and thereby
generates data of potential
value in targeted advertising
campaigns,
sells favorable link positioning
(i.e.,sponsored links) or
advertising keyed to
particular search terms in a
user query
freeware developers who bundle adware
with their product,For example,a
browser extension that automates
authentication and form fill-ins,also
delivers advertising links or pop-ups as
the user surfs the web,Contextual
advertisers can sell targeted advertising
based on an individual user's surfing
activity,
pioneered by Google,it extends the
precision of search advertising to
the rest of the web,Google
identifies the meaning of a web
page and then automatically
delivers relevant ads when a user
visits that page
animated full-screen ads
placed at the entry of a
site before a user
reaches the intended
content
interactive online ads
that require the user to
respond intermittently
in order to wade
through the message
before reaching the
intended content,
Infomediary Model
Data about consumers and their consumption
habits are valuable,especially when that
information is carefully analyzed and used
to target marketing campaigns,
Independently collected data about
producers and their products are useful to
consumers when considering a purchase,
? Advertising Networks
? Audience Measurement Services
? Incentive Marketing
? Metamediary
Ref,http://digitalenterprise.org/models/models.html
feed banner ads to a network of
member sites,thereby enabling
advertisers to deploy large
marketing campaigns,Ad networks
collect data about web users that
can be used to analyze marketing
effectiveness.
online audience
market research
agencies,
customer loyalty program that
provides incentives to
customers such as
redeemable points or coupons
for making purchases from
associated retailers,Data
collected about users is sold
for targeted advertising,
facilitates transactions
between buyer and sellers by
providing comprehensive
information and ancillary
services,without being
involved in the actual
exchange of goods or services
between the parties,
Merchant Model
Wholesalers and retailers of goods and
services,Sales may be made based
on list prices or through auction.
? Virtual Merchant
? Catalog Merchant
? Click and Mortar
? Bit Vendor
or e-tailer,is a retail
merchant that operates
solely over the web
mail-order business with a
web-based catalog,
Combines mail,telephone
and online ordering,
traditional brick-and-mortar
retail establishment with
web storefront.
a merchant that deals
strictly in digital products
and services and,in its
purest form,conducts both
sales and distribution over
the web
Manufacturer (Direct) Model
The manufacturer or "direct model",it is
predicated on the power of the web
to allow a manufacturer to reach
buyers directly and thereby compress
the distribution channel.
? Purchase
? Brand Integrated Content
Ref,http://digitalenterprise.org/models/models.html
the sale of a product in
which the right of
ownership is transferred
to the buyer,
in contrast to the sponsored-
content approach (i.e.,the
advertising model),brand-
integrated content is created
by the manufacturer itself for
the sole basis of product
placement,
Affiliate Model
The affiliates provide purchase-point click-
through to the merchant,It is a pay-for-
performance model -- if an affiliate does not
generate sales,it represents no cost to the
merchant,
? Banner Exchange
? trades banner placement among a
network of affiliated sites,
? Pay-per-click
? site that pays affiliates for a user click-
through.
? Revenue Sharing
? offers a percent-of-sale commission based
on a user click-through in which the user
subsequently purchases a product,
Community Model
The viability of the community model is
based on user loyalty,Users have a
high investment in both time and
emotion,Revenue can be based on the
sale of ancillary products and services
or voluntary contributions; or revenue
may be tied to contextual advertising
and subscriptions for premium
services,
? Open Source
? Social Networking Services
Ref,http://digitalenterprise.org/models/models.html
software developed collaboratively by a
global community of programmers who
share code openly,Instead of licensing
code for a fee,open source relies on
revenue generated from related
services like systems integration,
product support,tutorials and user
documentation,
sites that provide individuals with
the ability to connect to other
individuals along a defined common
interest (professional,hobby,
romance),Social networking
services can provide opportunities
for contextual advertising and
subscriptions for premium services,
Subscription Model
Users are charged a periodic -- daily,
monthly or annual -- fee to subscribe
to a service,
? Content Services
? Person-to-Person Networking Services
? Trust Services
? Internet Services Providers
provide text,audio,or
video content to users
who subscribe for a fee
to gain access to the
service
are conduits for the
distribution of user-
submitted information,such
as individuals searching for
former schoolmates
come in the form of
membership associations
that abide by an explicit
code of conduct,and in
which members pay a
subscription fee,
offer network connectivity
and related services on a
monthly subscription,
Utility Model
The utility or "on-demand" model is based
on metering usage,or a "pay as you
go" approach,Unlike subscriber
services,metered services are based on
actual usage rates,
? Metered Usage
? measures and bills users based on
actual usage of a service,
? Metered Subscriptions
? allows subscribers to purchase access
to content in metered portions (e.g.,
numbers of pages viewed)
Ref,http://digitalenterprise.org/models/models.html
Summary of all the e-Business
Models
?Product
? Consumer Product
?The Web Catalog Model
?Through a Broker,or Portal
? Industrial Product
?Through a Broker,or Portal
?Through an Industry Association
Portal
?Through a Third-Party Intermediary
Ref,http://www.witiger.com/
Summary of all the e-Business
Models
? Service
? Consumer Service
? Advertiser pays,viewer sees content free
model
? Subscription based revenue models
? Advertising-Subscription Mixed Model
? Fee-for-Transaction/Services Models
? Industrial Service
? Subscription based revenue models
? Fee-for-Transaction/Services Models
? Through an Industry Association Portal
? Through a Third-Party Intermediary
GOPST
? Goal
? Objective(s)
? Plan(s)
? Strategy(ies) - the 4th most
important component on the list
? Tactics
GOPST
explained GOALS
? Goals are the ultimate thing you want to
achieve
? Usually a Goal is a single thing,but in some
cases it can be two things,
? Goal are the statements that a company
uses to motivate employees and statements
used to judge and measure challenges that
you face.
? Examples:
? To be the largest on-line cosmetics retail site on
the planet
GOPST
explained OBJECTIVES
? Every successful online campaign
starts with clear objectives,Each
objective should be attainable and tie-
in to off-line marketing activities,
? measurable objectives such as
? to be the largest cosmetics retailer for
Asia
? to be the largest cosmetics retailer for
Europe
? to be the largest cosmetics retailer for
North America
It may seem like a joke,but it
is not funny
? another example of a well worded
Objective
? By Q2 2004 we will have acquired 40% of
the marketshare in Western China
GOPST
explained PLANS
? Plans are the ordered sequences of several
strategies with a time element and additional
information identifying supporting resources
(human resources,technical resources,
inventory,etc.).
? Plans can include such concepts as
? generating leads,
? increasing sales,
? increasing store traffic,
? reducing customer service costs or
? improving brand awareness,
GOPST explained STRATEGIES
? Strategies--Strategies are the collection of
various tactics (organized and structured
sequences of actions),
? Examples:
? Develop online giveaways to drive consumers to
our product,
? By having on-line contests with prizes given away
by other companies,you associate your brand
with other circumstances,thereby increasing your
brand depth
? Build links from the web sites of famous
cosmetics brands and have reciprocal links,
GOPST
explained TACTICS
? Tactics are the specifics of strategies",These
are the specific ways and options you do
things in order to carry out various
strategies,
? Tactics are the who,what,when and how of
the broad-stroke strategy."
? Examples:
? Establish ongoing monthly contests giving away
sample product to 10 lucky winners.
? To enter,consumers must complete a data sheet,
providing demographic information,
? Winners will be announced in the product
category of the Web site to ensure consumers see
our product line,
IN CLASS GROUP ACTIVITY
Write a GOPST for an imaginary situation
1,Pick someone to write down the thoughts
of the group
2,put everybody's name on the paper,
spell the last name clearly
3,write down one single Goal
4,write down 2,or 3 or 4 Objectives
5,write down some Plans to achieve those
Objectives
Sixth Annual Edition
Zhongmin lu
zhongmin99@yahoo.com
Objectives
In this chapter,you will learn about:
? What electronic commerce is
? Why business models have given way
to revenue models
Creating an E-Business/Commerce
? Business Model
? GOPST
? SWOT
Business models
? What is a business model
? the method of doing business by which a
company can sustain itself -- that is,
generate revenue
? business models can be either very
simple,or rather complex.
? Internet commerce will give rise to new
kinds of business models,
Business models
? Why Business Models are Important to Study
? it is getting harder to make money,and make
enough to have profit
? it is getting harder to do this year after year after
year
? the Competitive Environment is getting tougher
? business is getting more complicated
? you always have to keep improving
? the speed with which things are going is almost
too much for most companies
Taxonomy of business models
? Brokerage Model
? Advertising Model
? Infomediary Model
? Merchant Model
? Manufacturer Model
? Affiliate Model
? Community Model
? Subscription Model
? Utility Model
Brokerage Model
Brokers are market-makers,they
bring buyers and sellers together
and facilitate transactions,
? Marketplace Exchange
? Buy/Sell Fulfillment
? Demand Collection System
? Auction Broker
? Transaction Broker
? Virtual Marketplace
Ref,http://digitalenterprise.org/models/models.html
offers a full range of services
covering the transaction
process,from market
assessment to negotiation and
fulfillment,Exchanges operate
independently or are backed by
an industry consortium
takes customer orders to
buy or sell a product or
service,including terms
like price and delivery,
the patented "name-your-
price" model pioneered by
Priceline.com,Prospective
buyer makes a final
(binding) bid for a specified
good or service,and the
broker arranges fulfillment,
conducts auctions for sellers
(individuals or merchants),Broker
charges the seller a listing fee and
commission scaled with the value
of the transaction,Auctions vary
widely in terms of the offering and
bidding rules
provides a third-party
payment mechanism for
buyers and sellers to settle a
transaction,
or virtual mall,a hosting service
for online merchants that
charges setup,monthly listing,
and/or transaction fees,May
also provide automated
transaction and relationship
marketing services,
Advertising Model
The web advertising model is an extension
of the traditional media broadcast
model.
? Portal
? Classifieds
? User Registration
? Query-based Paid Placement
? Contextual Advertising / Behavioral Marketing
? Content-Targeted Advertising
? Intromercials
? ultromercials
Ref,http://digitalenterprise.org/models/models.html
usually a search engine that may
include varied content or services,A
high volume of user traffic makes
advertising profitable and permits
further diversification of site services,
list items for sale or
wanted for purchase,
Listing fees are common,
but there also may be a
membership fee,
content-based sites that are
free to access but require users
to register and provide
demographic data,Registration
allows inter-session tracking of
user surfing habits and thereby
generates data of potential
value in targeted advertising
campaigns,
sells favorable link positioning
(i.e.,sponsored links) or
advertising keyed to
particular search terms in a
user query
freeware developers who bundle adware
with their product,For example,a
browser extension that automates
authentication and form fill-ins,also
delivers advertising links or pop-ups as
the user surfs the web,Contextual
advertisers can sell targeted advertising
based on an individual user's surfing
activity,
pioneered by Google,it extends the
precision of search advertising to
the rest of the web,Google
identifies the meaning of a web
page and then automatically
delivers relevant ads when a user
visits that page
animated full-screen ads
placed at the entry of a
site before a user
reaches the intended
content
interactive online ads
that require the user to
respond intermittently
in order to wade
through the message
before reaching the
intended content,
Infomediary Model
Data about consumers and their consumption
habits are valuable,especially when that
information is carefully analyzed and used
to target marketing campaigns,
Independently collected data about
producers and their products are useful to
consumers when considering a purchase,
? Advertising Networks
? Audience Measurement Services
? Incentive Marketing
? Metamediary
Ref,http://digitalenterprise.org/models/models.html
feed banner ads to a network of
member sites,thereby enabling
advertisers to deploy large
marketing campaigns,Ad networks
collect data about web users that
can be used to analyze marketing
effectiveness.
online audience
market research
agencies,
customer loyalty program that
provides incentives to
customers such as
redeemable points or coupons
for making purchases from
associated retailers,Data
collected about users is sold
for targeted advertising,
facilitates transactions
between buyer and sellers by
providing comprehensive
information and ancillary
services,without being
involved in the actual
exchange of goods or services
between the parties,
Merchant Model
Wholesalers and retailers of goods and
services,Sales may be made based
on list prices or through auction.
? Virtual Merchant
? Catalog Merchant
? Click and Mortar
? Bit Vendor
or e-tailer,is a retail
merchant that operates
solely over the web
mail-order business with a
web-based catalog,
Combines mail,telephone
and online ordering,
traditional brick-and-mortar
retail establishment with
web storefront.
a merchant that deals
strictly in digital products
and services and,in its
purest form,conducts both
sales and distribution over
the web
Manufacturer (Direct) Model
The manufacturer or "direct model",it is
predicated on the power of the web
to allow a manufacturer to reach
buyers directly and thereby compress
the distribution channel.
? Purchase
? Brand Integrated Content
Ref,http://digitalenterprise.org/models/models.html
the sale of a product in
which the right of
ownership is transferred
to the buyer,
in contrast to the sponsored-
content approach (i.e.,the
advertising model),brand-
integrated content is created
by the manufacturer itself for
the sole basis of product
placement,
Affiliate Model
The affiliates provide purchase-point click-
through to the merchant,It is a pay-for-
performance model -- if an affiliate does not
generate sales,it represents no cost to the
merchant,
? Banner Exchange
? trades banner placement among a
network of affiliated sites,
? Pay-per-click
? site that pays affiliates for a user click-
through.
? Revenue Sharing
? offers a percent-of-sale commission based
on a user click-through in which the user
subsequently purchases a product,
Community Model
The viability of the community model is
based on user loyalty,Users have a
high investment in both time and
emotion,Revenue can be based on the
sale of ancillary products and services
or voluntary contributions; or revenue
may be tied to contextual advertising
and subscriptions for premium
services,
? Open Source
? Social Networking Services
Ref,http://digitalenterprise.org/models/models.html
software developed collaboratively by a
global community of programmers who
share code openly,Instead of licensing
code for a fee,open source relies on
revenue generated from related
services like systems integration,
product support,tutorials and user
documentation,
sites that provide individuals with
the ability to connect to other
individuals along a defined common
interest (professional,hobby,
romance),Social networking
services can provide opportunities
for contextual advertising and
subscriptions for premium services,
Subscription Model
Users are charged a periodic -- daily,
monthly or annual -- fee to subscribe
to a service,
? Content Services
? Person-to-Person Networking Services
? Trust Services
? Internet Services Providers
provide text,audio,or
video content to users
who subscribe for a fee
to gain access to the
service
are conduits for the
distribution of user-
submitted information,such
as individuals searching for
former schoolmates
come in the form of
membership associations
that abide by an explicit
code of conduct,and in
which members pay a
subscription fee,
offer network connectivity
and related services on a
monthly subscription,
Utility Model
The utility or "on-demand" model is based
on metering usage,or a "pay as you
go" approach,Unlike subscriber
services,metered services are based on
actual usage rates,
? Metered Usage
? measures and bills users based on
actual usage of a service,
? Metered Subscriptions
? allows subscribers to purchase access
to content in metered portions (e.g.,
numbers of pages viewed)
Ref,http://digitalenterprise.org/models/models.html
Summary of all the e-Business
Models
?Product
? Consumer Product
?The Web Catalog Model
?Through a Broker,or Portal
? Industrial Product
?Through a Broker,or Portal
?Through an Industry Association
Portal
?Through a Third-Party Intermediary
Ref,http://www.witiger.com/
Summary of all the e-Business
Models
? Service
? Consumer Service
? Advertiser pays,viewer sees content free
model
? Subscription based revenue models
? Advertising-Subscription Mixed Model
? Fee-for-Transaction/Services Models
? Industrial Service
? Subscription based revenue models
? Fee-for-Transaction/Services Models
? Through an Industry Association Portal
? Through a Third-Party Intermediary
GOPST
? Goal
? Objective(s)
? Plan(s)
? Strategy(ies) - the 4th most
important component on the list
? Tactics
GOPST
explained GOALS
? Goals are the ultimate thing you want to
achieve
? Usually a Goal is a single thing,but in some
cases it can be two things,
? Goal are the statements that a company
uses to motivate employees and statements
used to judge and measure challenges that
you face.
? Examples:
? To be the largest on-line cosmetics retail site on
the planet
GOPST
explained OBJECTIVES
? Every successful online campaign
starts with clear objectives,Each
objective should be attainable and tie-
in to off-line marketing activities,
? measurable objectives such as
? to be the largest cosmetics retailer for
Asia
? to be the largest cosmetics retailer for
Europe
? to be the largest cosmetics retailer for
North America
It may seem like a joke,but it
is not funny
? another example of a well worded
Objective
? By Q2 2004 we will have acquired 40% of
the marketshare in Western China
GOPST
explained PLANS
? Plans are the ordered sequences of several
strategies with a time element and additional
information identifying supporting resources
(human resources,technical resources,
inventory,etc.).
? Plans can include such concepts as
? generating leads,
? increasing sales,
? increasing store traffic,
? reducing customer service costs or
? improving brand awareness,
GOPST explained STRATEGIES
? Strategies--Strategies are the collection of
various tactics (organized and structured
sequences of actions),
? Examples:
? Develop online giveaways to drive consumers to
our product,
? By having on-line contests with prizes given away
by other companies,you associate your brand
with other circumstances,thereby increasing your
brand depth
? Build links from the web sites of famous
cosmetics brands and have reciprocal links,
GOPST
explained TACTICS
? Tactics are the specifics of strategies",These
are the specific ways and options you do
things in order to carry out various
strategies,
? Tactics are the who,what,when and how of
the broad-stroke strategy."
? Examples:
? Establish ongoing monthly contests giving away
sample product to 10 lucky winners.
? To enter,consumers must complete a data sheet,
providing demographic information,
? Winners will be announced in the product
category of the Web site to ensure consumers see
our product line,
IN CLASS GROUP ACTIVITY
Write a GOPST for an imaginary situation
1,Pick someone to write down the thoughts
of the group
2,put everybody's name on the paper,
spell the last name clearly
3,write down one single Goal
4,write down 2,or 3 or 4 Objectives
5,write down some Plans to achieve those
Objectives
