Week-4 Business Models

8/10/2019 Week-4 Business Models

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ELECTRONICBUSINESS


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Abdusalam 2

Lecture-10 & 11 Introduction to E-Business Models

Many business models currently being implemented on the Web.

The Storefront Model Shopping Cart Technology

Online Shopping Malls The Auction Model

The Portal Model

Dynamic Pricing Model The Name-Your-Price Model

The Comparison Pricing Model The Demand Sensitive Pricing model


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Lecture-10 & 11 Bartering Model Rebate Model

Free offering model

Online Lending Models

Recruiting on the Web

Online News Services

Online Travel Services

Online Entertainment

Online Automotive Sites

Click-and-Mortar Businesses


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Introduction E-Business Models

A companies policy, operations, technology and ideologydefine its business model

Entrepreneurs starting e-business, need to be aware ofthese models and how to implement them effectively.


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Storefront Model

An electronic storefront is a Web site that represents a single store. Storefront model enables merchants to sell products on the Web

transaction processing, security, online payment, informationstorage

An e-commerce storefront should include online catalog of products, order processing, secure payment,

timely order fulfillment. www.officedepot.com

E-commerce allows companies to conduct business 24-by-7, all dayeveryday, worldwide
http://www.officedepot.com/http://www.officedepot.com/


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Storefront Model(Contd) Some of the most successful e-businesses are using Store

front model.

Many of the leading storefront model companies are B2Ccompanies. For example,

www.ticketmaster.com

www.more.com
http://www.ticketmaster.com/http://www.more.com/http://www.more.com/http://www.ticketmaster.com/


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Shopping Cart Technology

An order-processing technology allows customers to accumulate listsof items they wish to buy as they continue to shop.

The shopping cart is supported by the product catalog, merchant server, database technology

The most widely recognizedexample of an e-business that usesshopping cart technology is www.amazon.com

Many companies combine a number of purchasing methods to give theircustomers a wide array of options.
http://www.amazon.com/http://www.amazon.com/http://www.amazon.com/


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Online Shopping Malls

Online Mall A collection of online retailers that offer their products and

services on a single site.

In an online mall, consumers can use the malls shopping carttechnology to purchase items from many stores in a single

transaction. Online malls act as shopping portals directing traffic to the leading

shopping retailers for a specific product. Online malls offer speed and added convenience to a customers

shopping experience. www.mall.com
http://www.mall.com/http://www.mall.com/


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Auction Model

The e-world provides opportunities to sell unwanted products throughbidding.

You can sell any product that you do not require, to people who requireit located anywhere around the world.

Online auction sites act as forums through which netizens can log-on

and assume the role of either bidder or seller.

Auction sites collect a commission on every successful auction. Auction site is capable of bringing together sellers and buyers.

Buyers bid for the listed products and the highest bidder gets toclaim the product.

www.eBay.com
http://www.ebay.com/http://www.ebay.com/


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Auction Model (Contd) In a typical auction, the seller puts an item up for sale. Multiple buyers bid for

the item, and one or more of the highest bidders buy the goods at a pricedetermined at the conclusion of the bidding.

Forward Auction Used by sellers to sell their items to many potential buyers. Sellers and buyers can be individuals, organizations etc. Items are commonly placed at a special site for auction Buyers can continuously bid for the items they are interested in.

Eventually the highest bidder wins the item. www.sothebys.com
http://www.sothebys.com/http://www.sothebys.com/


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Auction Model(Contd) Reserve Auction

The minimum price a seller will accept in a given auction. One buyer, usually an organization, wants to buy a product or a service. The buyer posts a request for quotation (RFQ) on its Web site or on a

third-party Web site. The RFQ contains detailed information on the desired purchase. Study the RFQ and submit bids, and the lowest bid wins the auction.

One example of reverse auction is www.liquidprice.com

Bidprice

Bidprice

Time Time

Forward Auction

Reverse Auction
http://www.liquidprice.com/http://www.liquidprice.com/


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Portal Model

Portal model often offer news, sports, & weather, as well as theability to search the web.

Portal sites give visitors the chance to find almost everything theyare looking for in one place.

Horizontal portals

Portals that aggregate information on a broad range of topics. Yahoo!, AltaVista, Google
http://www.yahoo.com/http://www.av.com/http://www.google.com/http://www.google.com/http://www.av.com/http://www.yahoo.com/


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Portal Model (Contd) Vertical portals

Portals that offer more specific information within a singlearea of interest.

www.webmd.com,

www.usa.gov, www.lexis.com
http://www.webmd.com/http://www.usa.gov/http://www.lexis.com/http://www.lexis.com/http://www.usa.gov/http://www.webmd.com/


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Dynamic Pricing Models

The Web has changed the way products are priced &purchased Companies enabled customers to name their price for travel,

homes, automobiles, and consumer goods. Name-your-price model

Name-your-price for products and services. Empowers customers by allowing them to choose their price for

products and services.

www.priceline.com
http://www.priceline.com/http://www.priceline.com/


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Dynamic Pricing Models(contd) Comparison pricing model

Comparison pricing Web sites used to find the lowest price fora given item

Allow customer to poll a variety of merchants and find a desireproduct or service at the lowest price.

www.hotwire.com Demand-sensitive pricing model

Group buying reduces price as volume sales increase

Empower buyers to shop in large groups to achieve a group rate.

www.mercata.com
http://www.hotwire.com/http://www.mercata.com/http://www.mercata.com/http://www.hotwire.com/


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Dynamic Pricing Models(contd) Bartering Model

Individuals and business trade unneeded items for items theydesire.

www.ubarter.com, www.isolve.com Rebate Model

Rebate can help to attract customers to your site.

Sites offer rebates on product at leading online retailers inreturn for commission

Companies offer everyday low prices and special to keepcustomers coming back.

www.eBates.com
http://www.ubarter.com/http://www.isolve.com/http://www.ebates.com/http://www.ebates.com/http://www.isolve.com/http://www.ubarter.com/


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A deduction taken from a set payment or charge. As a rebate is given afterpayment of the full amount has been made, it differs from a discount which isdeducted in advance of the payment.

A special payment from the manufacturer to the customer to reduce excess inventories. Alsocalled a "Customer Incentive."

For the consumer a discount is better then a rebate for one reason, taxes.

When a consumer gets a rebate offer they still have to pay taxes on the full purchase price.On the other hand, retailers are suppose to charge taxes only on the purchase price (though

many still charge you taxes on the full price and pocket the difference).

So let's say you bought something for 100.00 retail price w/5% tax and you got a 25.00discount. You would get 25.00 off and pay 5% on 75.00 for a total of 78.75.

Now then if you got a rebate you would pay 100.00 retail + 5% for 105.00 and your rebateis 25.00 so you paid 80.00 for a 1.25 difference. And if you want to take it further you cansay that you will spend 5% of that on taxes, 1.25, so in the end you lost 2.50 whencompared to the discount.

A rebate is an amount paid by way of reduction, return, or refund on what has

already been paid or contributed. It is type of sales promotion marketers useprimarily as incentives or supplements to product sales. The mail-in rebate (MIR)is the most common.


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A rebateis an amount paid by way of reduction, return, or refund on whathasalready beenpaid or contributed. It is a type of sales promotionmarketersuseprimarily as incentivesor supplementsto product sales. The mail-in rebate(MIR) is themost common. A MIR entitles the buyer to mail in a coupon, areceiptand barcodein order to receive a check for a particular amount,depending on the particular product, time, and often place of purchase. Rebatesare offered by either the retailer or the manufacturer of the chosen product.Large stores often work in conjunction with manufacturers, usually requiring twoor even three separate rebates for each item. Manufacturer rebates are

sometimes valid only at a single store. Rebate forms and special receipts aresometimes printed by the cash registerat time of purchase on a separate receiptor available online for download. In some cases, the rebate may be availableimmediately, in which case it is referred to as an instant rebate.

An instant rebateor sometimes instant savingsis a marketingstrategy or gimmickin which a product is either advertised at a specificprice, or at a discounted price, where the discount is appliedat the timeof purchase. For example, the store may advertise a widgetfor $9.99,

but with a $5 instant rebate, the price is $4.99. Or the product may beadvertised as $4.99 with a $5 instant rebate. Instant rebates are different from a "standard" rebate. Under normal

circumstances, a rebateis given to a customer who mails in a couponalong with proof of purchase, and is mailed a check by the manufactureror the rebate processor. In the case of an instant rebate, the rebate isprovided immediately, at the instantof purchase.
http://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Incentivehttp://en.wikipedia.org/wiki/Supplementhttp://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Incentivehttp://en.wikipedia.org/wiki/Supplementhttp://en.wikipedia.org/wiki/Couponhttp://en.wikipedia.org/wiki/Receipthttp://en.wikipedia.org/wiki/Barcodehttp://en.wikipedia.org/wiki/Couponhttp://en.wikipedia.org/wiki/Receipthttp://en.wikipedia.org/wiki/Barcodehttp://en.wikipedia.org/wiki/Cash_registerhttp://en.wikipedia.org/wiki/Cash_registerhttp://en.wikipedia.org/wiki/Instant_rebatehttp://en.wikipedia.org/wiki/Instant_rebatehttp://en.wikipedia.org/wiki/Gimmickhttp://en.wikipedia.org/wiki/Gimmickhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Gimmickhttp://en.wikipedia.org/wiki/Widget_(economics)http://en.wikipedia.org/wiki/Widget_(economics)http://en.wikipedia.org/wiki/Rebate_(marketing)http://en.wikipedia.org/wiki/Rebate_(marketing)http://en.wikipedia.org/wiki/Rebate_(marketing)http://en.wikipedia.org/wiki/Widget_(economics)http://en.wikipedia.org/wiki/Gimmickhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Instant_rebatehttp://en.wikipedia.org/wiki/Cash_registerhttp://en.wikipedia.org/wiki/Barcodehttp://en.wikipedia.org/wiki/Receipthttp://en.wikipedia.org/wiki/Couponhttp://en.wikipedia.org/wiki/Supplementhttp://en.wikipedia.org/wiki/Incentivehttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Sales_promotion


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Dynamic Pricing Models(contd) Free offering model

Sites offer their products for free.

Many of these sites form partnership with companies to exchangeproduct and services

Free products and services generate high traffic

www.hsx.com www.iWon.com

www.freemerchant.com,

www.FreeSamples.com
http://www.hsx.com/http://www.iwon.com/http://www.freemerchant.com/http://www.freesamples.com/http://www.freesamples.com/http://www.freemerchant.com/http://www.iwon.com/http://www.hsx.com/


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Online Lending Models

Getting a Loan Online Many online lenders offer lower rates to attract customers.

Online lending services include free quotes, calculators andtutorials to help you make borrowing decisions.

Examples:

E-LOAN

eCredit.com

Mortgagebot.com
http://www.eloan.com/http://www.ecredit.com/http://www.mortgagebot.com/http://www.mortgagebot.com/http://www.ecredit.com/http://www.eloan.com/http://www.eloan.com/http://www.eloan.com/


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Recruiting on the Web

Recruiting and job searching can be done effectively on the web. Resume tutorials, cover letter help, and free job searching available

on the Web Employers can find new employees from a global pool of applicants

Examples:

Guru.com Dice.com Refer.com Sixfigurejobs.com Monster.com
http://www.dice.com/http://www.dice.com/http://www.refer.com/http://www.sixfigurejobs.com/http://www.monster.com/http://www.monster.com/http://www.sixfigurejobs.com/http://www.refer.com/http://www.dice.com/http://www.dice.com/


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Online News Services

Internet and Web offer a 24-by-7 news source It is important to check the information source as rumors are

often passed online

Independent and freelance content creators compete with largescale industry players

CNN.com

ESPN.com

Drudge Report

Boston.com

Salon.com
http://www.cnn.com/http://www.espn.go.com/http://www.drudgereport.com/http://www.boston.com/http://www.salon.com/http://www.salon.com/http://www.boston.com/http://www.drudgereport.com/http://www.espn.go.com/http://www.cnn.com/


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Online Travel Services

Customers now have the power to bypass a travel agent Discounts and low fares available online Name-your-price for tickets, hotels and car rentals Last minute fares often lower online Examples:

Expedia.com Travelocity Cheaptickets.com www.sidestep.com
http://www.expedia.com/http://www.travelocity.com/http://www.cheaptickets.com/http://www.sidestep.com/http://www.sidestep.com/http://www.sidestep.com/http://www.cheaptickets.com/http://www.travelocity.com/http://www.expedia.com/


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Online Entertainment

The Web is a form of entertainment Interactive Television will use the Internet to offer

interactivity to the world

Examples:

IMDB

Farmclub.com

MP3.com
http://www.imdb.com/http://www.farmclub.com/http://www.mp3.com/http://www.mp3.com/http://www.farmclub.com/http://www.imdb.com/


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Online Automotive Sites

Consumers access automobile information empowering them tomake an informed buying decision

Dealers use the Web to showcase vehicles

Online auto auctions give buyers more options

Examples:

Auto.com

Autoparts.com

Autobytel.com
http://www.auto.com/http://www.autoparts.com/http://www.autobytel.com/http://www.autobytel.com/http://www.autoparts.com/http://www.auto.com/


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Click-and-Mortar Businesses

Brick-and-mortar Companies that operate solely offline with traditional business practices

Click-and-mortar Companies operating with both an online and offline presence

Examples: www.bn.com

Barnes & Noble (B & N) booksellers online and offline

www.circuitcity.com Offer electronics, appliances Allowing customers to order online and pickup at their local store.

Bestbuy.com
http://www.bn.com/http://www.circuitcity.com/http://www.bestbuy.com/http://www.bestbuy.com/http://www.circuitcity.com/http://www.bn.com/

Week-4 Business Models

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