Page 188 - Electronic Commerce

Selling on the Web

Summary

In this chapter, you learned that businesses are using six main approaches to generate revenue
on the Web, including: the Web catalog, digital content sales, advertising-supported, advertising-
subscription mixed, fee-for-transaction, and fee-for-service models. You learned how these 163
models work and what kinds of businesses use which models (or combinations of these mod-
els). You also learned that some companies have changed revenue models as they learned
more about their customers and the business environment in which their Web sites operate.
Changes in technology have also driven shifts in some companies’ choice of revenue models.
Companies sometimes face the challenges of channel conflict and cannibalization either
within their own organizations or with the companies that have traditionally provided sales distri-
bution to consumers for them. In accordance with the network model of organization that you
learned about in Chapter 1, companies doing business online sometimes form strategic alliances
with other companies to obtain their skills in Web site operation.
By understanding how the Web differs from other media and by designing a Web site to
capitalize on those differences, companies can create an effective Web presence that delivers
value to visitors. Every organization must anticipate that visitors to its Web site arrive with a
variety of expectations, prior knowledge, and skill levels, and are connected to the Internet
through a variety of different technologies. Knowing how these factors can affect the visitor’s
ability to navigate the site and extract information from the site can help organizations design
better, more usable Web sites. Enlisting the help of users when building test versions of the Web
site is also a good way to create a Web site that represents the organization well.
Firms must understand the nature of communication on the Web so they can use it to iden-
tify and reach the largest possible number of customers and qualified prospects. Using a many-
to-one communication model enables Web sites to effectively reach potential customers.

Key Terms
account aggregation fee-for-transaction revenue model
addressable media mail-order
advertising-subscription mixed revenue model many-to-many communications
advertising-supported revenue model many-to-one communication model
bill presentment marketing channel
cannibalization mass media
catalog model one-to-many communication model
channel conflict one-to-one communication model
channel cooperation paywall
communication modes personal contact
customer-centric personal shopper
demographic information portal
digital content revenue model presence
Digital Rights Management (DRM) prospecting
disintermediation reintermediation
fee-for-service revenue models stakeholders

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