EC S5 Flashcards
Please define revenue model by giving two statements.
Revenue Models
Lay out the process by which a company actually makes money by
Specifying how it is going charge for the product or service It provides.
Please define Business model and what are the differences between revenue model?
Business model
- Describes how a business positions itself within the value chain of its industry &
- How it intends to sustain itself, that is to generate revenue (costumer selection, products, pricing)
- The revenue model of selling goods and services on the web is
- Based on mail order catalogue revenue model that predates the web.
Explain Mail order or the catalog model and also the web catalog revenue model.
Mail order or catalog model
- Over 100 yrs old
- Seller establishes a brand image & uses the strength
Web catalog revenue model
- Taking the catalog model to the web
- Firm replaces or supplements print catalog distribution with information on the web site
- Customers place orders through the web site or telephone.
Explain what the digital content revenue model does and tell something about Lexis.com
Firms that own intellectual property:
Have embraced the web as new and highly efficient distribution mechanism e.g.
Lexis.com
A legal research tool
Provides full-text search of court cases, laws, patent databases and tax regulations
Law firms have to subscribe to & install dedicated computer systems to gain access information
Define the Advertising Supported Revenue Model by giving 4 statements.
Advertising-Supported Revenue Models
- Used by some network televisions
- Broadcasters provide free programming to an audience along with advertising messages
- Advertising revenue sufficient to support network operations as well as purchase of the programs
- Used by companies like: About.com / HowStuffWorks.com
What are the things that hamper the success of Web advertising revenue model? Give 4 Statements
- Lack of consensus on how to measure and charge for site visitor views
- Lack of single acceptable measurements e.g. Visitors, number of click throughs, etc.
- Stickiness of Web Site: Ability to keep visitors and attract repeat visitors
- Very few Web sites have sufficient visitors to interest large advertisers
Explain theAdvertising-Subscription Mixed Revenue Models by giving 4 Statements. What companies use it ?
- Has been used for many years by print newspapers & magazines
- Subscribers pay a fee & accept some level of advertising i.e.
- -> Much less advertising than advertising supported sites
- Used by: **The New York Times and The Wall Street Journal **
Explain Fee-For-Transaction Revenue Model by giving 3 statements. Also explain the terms Disintermediation and Reintermediation.
- Businesses offer services and charge a fee on number or size of transactions processed e.g.
- Offer web site visitors information they need about the transaction
- Personal services formerly offered by human agents
Disintermediation:
Removal of an intermediary from value chain
Reintermediation:
Introduction of a new intermediary
Explain Fee for Service Revene Models:
Fee based on value of service provided:
- Companies offer service on the web
a fee is charged for the services:
- Services
- Concerts and films
- Professional services
When Channel Conflicts can happen and what are channel cooperations?
Channel conflict:
- Occurs whenever sales activities on a company’s website interfere with existing sales outlets
- Also called cannibalization
- (Whenever you have a physical store and online distribution)
Channel cooperation:
- Cooperation between members of a distribution channel as a result of harmonious marketing objectives and strategies.
Explain the term Strategic Alliances and Channel Distribution Management
Strategic Alliance
- When two or more companies join forces to undertake an activity over a long period of time #
- Some form strategic alliances:
- > To sell on the web - E.g.: Giving customers space on your site to sell your products
- Joining of web sites with channel distribution management companies.
Channel distribution managers: (READ ABOUT DISTRIBUTION CHANNEL)
- Also called fulfilment managers or category managers
- Companies that take over responsibility for a particular product line within a retail store.
Answer the following question how you can create an effective webpresence:
What are the stakeholders of a firm?
What is a webpresence for a firm?
- An organisation’s presence is:
- The public image it conveys to its stakeholders
- Stakeholders of a firm:
- Include: It’s customers, suppliers, employees, stockholders, neighbours and the general public
To achieve web presence goals what objectives can businesses come up with?
- Attracting visitors to the web site
- Making the site interesting enough that visitors stay and explore
- Convincing visitors to follow the site’s links to obtain information
- Creating an impression consistent with the organization’s desired image
- Building a trusting relationship with visitors
- Reinforcing positive images that the visitors might already have about the organization
What are the keys successes for Profit Driven Organisation websites, Non for Profit Websites ?
Profit-Driven Organisations
Toyota site:
- A good example of an effective web presence
- Provides links to
- Detailed information
Non-for-Profit Organisation:
Key goal for the web sites
Information dissemination
Key element on any successful electronic commerce web site
Combination of information dissemination and two-way contact channel
Give 7 statement how you can improve Web usability and motivate visitors to come to your site.
- Learning about products or services that the company offers
- Buying products or services that the company offers
- Obtaining information about warranty, service or repair policies for products they purchased.
- Obtaining general information about the company or organisation.
- Obtaining financial information for making an investment or credit granting decision
- Identifying the people who manage the company organisation
- Obtaining contact information for a person or department in the organisation
