Chapter 3

Retailing in E-Commerce:
Products and Services
Prentice Hall, 2002

Learning Objectives
Define and describe the primary business
models of electronic retailing (e-tailing)
Discuss various e-tail markets, such as
those for books, music, and cars
Identify the principles of click-andmortar strategies for traditional retailers
Describe how online travel and tourism
operate
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Learning Objectives (cont.)

Discuss the online employment market,
including its drivers and benefits
Describe online real estate, insurance,
and stock trading
Discuss cyberbanking and online
personal finance
Describe on-demand delivery by egrocers
Prentice Hall, 2003

Learning Objectives (cont.)

Describe the delivery of digital products
and online entertainment
Discuss various e-tail consumer aids,
including comparison-shopping aids
Identify the critical success factors for
direct marketing and e-tailing
Describe reintermediation, channel
conflicts, and personalization in e-tailing
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Amazon.com: King of E-Tailing

The Problem
Amazon.com has recognized that it must
continually enhance its electronic store
by expanding product selection and
improving the customer experience

The Solution
Amazon.com now offers specialty stores
Professional and technical store
Expanded book editorial content
Increased product selection
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Amazon.com (cont.)
Some key features of the
Amazon.com are:
Easy browsing and searching
Useful product information
Low prices
One-Click order technology

Features that make the online shopping

experience more enjoyable
Gift ideas
E-cards
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Amazon.com (cont.)
Various marketplace services
Amazon Auctions
zShops service hosts electronic storefronts for
a monthly fee

Customer relationship management

Creates interesting and informative front-end
Highly automated and efficient back-end
support
Personalized service
Diversification through business alliances
7
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Amazon.com (cont.)
The Results
Financial performanceannual sales for
Amazon.com have trended upward, from
$15.7 million in 1996 to $4 billion in 2002
Offers several features for international
customers
Declared its first profit for the 2001 first
quarter
Yet the companys financial success is by
no means assured
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E-Tailing and B2C Market Growth

A retailer is a sales intermediary, a
seller that operates between
manufacturers and customers
Electronic retailing (e-tailing)retailing
conducted online, over the Internet
Catalog sales free a retailer from the need
for a physical store
Manufacturer sells directly to the
customer, cutting out the intermediary
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Size and Growth of the B2C Market

Statistics for volume of B2C EC sales
come from many sources:
emarketer.com
jmm.com

Statistics on e-tailing can be found at:

Cyberdialogue.com
Business2.com

Substantial deviations in the reported

data due to how the numbers are derived
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What Sells Well on the Internet?

Computers and
electronics
Sporting goods
Office supplies
Books and music
Toys

Health and beauty

Entertainment
Apparel
Cars
Services
Others

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Characteristics of
Successful E-Tailing
Brand recognition
and guarantees
Guarantee provided
by highly reliable or
well-known vendors
Digitized products
Inexpensive items
Frequently
purchased

Commodities with
standard
specifications
Well-known
packaged items
that cannot be
opened even in a
traditional store

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E-Tailing Business Models

E-tailing business models can be
classified in several ways:
By the scope of items handled
General-purpose
Specialty e-tailing

By scope of the sales region covered

Global
Regional

Two main models

Direct selling model
Distribution channel
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Classification by Revenue Model

Product sales models
Charge customers directly for products or services

Subscription models
Charge monthly or annual subscription fee for service

Transaction-fee models
Charge service fee based on the level of
transaction offered

Advertising-supported models
Charge fee to advertisers instead of customers

Sponsorship models
Companies sponsor the business through
donations (usually supplemental income)

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Classification by
Distribution Channel
Direct marketingmanufacturers sell
directly from company sites to
individual customers
Pure-play e-tailershave no physical
stores, only an online sales presence
Click-and-mortar retailerstraditional
retailers with a supplementary Web
site
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Direct Marketing by Manufacturers

or Mail-Order Companies
Direct marketingbroadly, marketing that takes
place without intermediaries between
manufacturers and buyers; in the context of this
book, marketing done online between the seller
and the buyer
Disintermediationremoval of organizations
or business process layers responsible for
certain intermediary steps in a given supply
chain
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Exhibit 3.1: Disintermediation in

the B2C Supply Chain

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17

Direct Marketing by Manufacturers

or Mail-Order Companies (cont.)
Parties in direct marketing have a
greater opportunity to influence each
other
Make-to-order onlinedirect sales by
manufacturers are gaining popularity
due to the ability to customize products
or services
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Lands End: How a Mail-Order

Company Moved Online
Successful B2C e-tailers are mailorder companies once based solely on
paper catalogs
Logistics system were already in place
Lands End served over 6.2 million
customers in 2000
Internet sales:
1999 were 5% of companys total sales
2000 were 10%
2003 are 20% (projected)
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Lands End (cont.)

Landsend.com offers all its catalog
products online
Web site offers:
Allows women customers to build and
store a 3D model of their body
Male customers use a feature called
Oxford Express
Personal shopping accounts
Order status tracking
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Lands End (cont.)

The company has:
Affiliates network that pays 5% commission
for every sale that comes from a referral
B2B store (landsend.com/corpsales)
Allows online customers to shop with the
assistance of a real personal shopper
Global presence with localized sites

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Virtual (Pure-Play) E-Tailers

Virtual e-tailers sell over the Internet
without a physical sales channel
General purpose e-tailers (Amazon.com)
Broad range of products
Large number of consumers

Specialty or niche e-tailers (CatToys.com)

One specific product area
High demand items in the area
Effective practices for customer appeal
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Buying Cars Online:

Build to Order
Traditional systembuild-to-stock:
Manufacturers conduct market research to
estimate which features and options will sell well
Make the cars they wish to sell
Cars are sold from stock at a loss when there is
insufficient demand for a particular vehicle

Auto giants intend to transform themselves

from build-to-stock to
build-to-order companies
Cutting inventory requirements in half
Giving customers exactly what they want

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Buying Cars Online:

Build to Order (cont.)
Using a virtual car at jaguar.com
Consumers custom configure their cars
features and components, see it online,
price it, have it delivered to a nearby dealer

Web site helps with the research process

The configuration is transmitted to the
production floor:
Reducing delivery time
Contributing to increased customer
satisfaction
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Cattoys.com: A Specialty E-Tailer

Cattoys.com is designed to appeal to cat
enthusiasts
No banner ads
Easy to navigate
Updated weekly
Displays products in clear categories
Retail prices comparable to pet stores
Prices kept low through aggressive cost
control
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Cattoys.com: A Specialty E-Tailer (cont.)

CatToys.com hosts its site on Yahoo!
Allows it to use sophisticated technology
Cookies for the shopping-cart process
Payment security
Access to a large audience.

Concentrate on its core competencies:

Selecting the right cat toys
Marketing them effectively

Example of a low-volume specialized store

that attracts people with specific shopping
needs
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Click-and-Mortar Retailers
Brick-and-mortar retailersretailers who do
business in the non-Internet, physical world in
traditional brick-and-mortar stores
Click-and-mortar retailersbrick-and-mortar
retailers with a transactional Web site from
which to conduct business
Traditional retailing frequently involves a single
distribution channel, the physical storemay
also operate a mail-order business
Multichannel storefirm that operates both
physical stores and an online e-tail site
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Other Business Models

Electronic mall
Transaction brokers
Information portals
Communities portal
Content creator or
disseminators

Viral marketing
Market makers
Make-to-order
Service providers

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Travel and Tourism

Services Online
The Internet is an ideal place to plan,
explore, and arrange almost any trip
and save money
Travel-related information available at
many sites including:
Expedia.com
Travelocity.com
Travelweb.com
Eurovacations.com
Lonelyplanet.com

Orbitz.com
Asiatravel.com
Trip.com
Priceline.com

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Travel and Tourism Services (cont.)

Services provided:
Outlet for travel
Information and
accessories and
bookings
books
Travel tips
Experts opinions
Electronic Travel
Major international
magazine
and travel news
Fare comparisons
Driving maps and
Currency conversion
directions
calculators
Chat rooms
Fare tracker
Frequent flier deals
Worldwide business
Online travel auctions
and places locator
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Travel and Tourism Services (cont.)

Special services
Very low airfares and discount
accommodations
Last-minute trips can also be booked
Special vacation destinations

Sites that offer medical advice and

services for travelers:
World Health Organization (who.int)
Governments (cdc.gov/travel)
Private organizations (Healthcenter.com)
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Travel and Tourism Services (cont.)

Wireless services
Customers with WAP cell phones can
check their flight status, update frequent
flyer miles, and book flights

Direct marketing
Build customer profiles and target specific
customers with tailored offers

Alliances and consortia

Increase sales or reduce purchasing costs
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Travel and Tourism Services (cont.)

Benefits
Free information is tremendous
Free information is accessible anytime
Substantial discounts

Limitations
Not all people use the Internet
It may take a long time to find what you want
People are still reluctant to provide credit
card numbers

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Impacts of EC on the Travel Industry

Impacts of EC on the travel industry into 10
categories including:
Product promotion, new products, new business
models

Only the value-added activities of travel

agencies will not be automated
Performed by a new type of organization
Will serve certain targeted markets and customers

Entering the market will be:

Travel superstores that will provide
Innovative individuals operating from their homes

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Corporate Travel
Many large corporations receive additional
services from large travel agencies
Online optimization tools provided by travel
companies (rosenbluth.com)
Travel authorization software that checks
availability of funds and compliance with
corporate guidelines

This is a huge and rapidly growing market

Oracles e-Travel provides software to
automate and manage online booking
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Corporate Travel (cont.)

American Express,Microsoft and MCI have
developed AXI system that displays:
Airline seat charts
Maps showing hotels
Information on nearby health clubs
Weather information
Creates profiles for travelers and
their preferences
Attempts to satisfy both travelers and
corporate travel managers

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Intelligent Agents in Travel Services

Step 1: visit an online travel site and
enter
Desired destination
Dates
Available budget
Special requirements
Desired entertainment

Step 2: computer dispatches an

intelligent agent that shops around
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Intelligent Agents in
Travel Services (cont.)
Step 3: agent attempts to match your
requirements with what is available,
negotiates with vendors
Step 4: agent returns within minutes
with suitable alternatives, modifies as
per your wishes, books the vacation
Voice communication with agent may
be possible by 2005
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The Employment Placement

and the Job Market
Job markets
Employers are looking for employees
with specific skills, and individuals are
looking for jobs
Very volatile market
Moved to the Internet
Millions of job seekers, hundreds of
thousands of jobs
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The Internet Job Market

The Internet offers a perfect
environment; it is especially effective
for technology-oriented jobs
Job seekers
Job offerers
Recruiting firms
Government agencies and institutions
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Matching Workers with

Jobs in the Philippines
Philippine Department of Labor created a
Web site that matches people with jobs
as a free service
For those who do not have computers or
Internet access, the government makes
computer terminals (kiosks) available
Government employees help those
applicants who do not know how to use the
system
Job seekers can find a job that best suits
their qualifications

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Matching Workers with

Jobs in the Philippines (cont.)
At the heart of the system is its
matchmaking capabilities
This job-matching feature differentiates
this site from other online job sites
Everything is done electronically, so job
seekers can see the match results in
seconds
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Benefits of the Electronic Job Market

For job seekers
Find very detailed and timely information on a
large number of jobs world-wide
Quickly communicate with potential employers
Post resumes for large-volume distribution
Search for jobs quickly from any place at any
time
Obtain several support services at no cost
Assess their market value
Find out how to use their voice in an interview
Can access newsgroups that are dedicated to
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finding jobs

Benefits of the
Electronic Job Market (cont.s)
For employers
Advertise to a large number of job
seekers
Save on advertisement costs
Lower the cost of processing (using
electronic application forms)
Provide greater (equal opportunity) for
job seekers
Find highly skilled employees
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Exhibit 3.5
Virtual Job Employment Agent

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Limitations of the Electronic Job Market

Many people do not use the Internet
Companies may use both traditional advertising
approaches and the Internet
Clear trend: more and more of the job market
are going to the Internet

Security and Privacy

Resumes and other online communications are
usually not encrypted
Possibility that someone at your current place of
employment may find out that you are job
hunting
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Limitations of the
Electronic Job Market (cont.)
Electronic job market may also create
high turnover costs for employers by
accelerating employees movement to
better jobs
Finding candidates online is more
complicated:
There is a large number of resumes available
online
Some sites offer prescreening of candidates to
help alleviate this problem (jobtrak.com)
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Intelligent Agents in the

Electronic Job Market
For Job Seekers
Jobsleuth.com offers a free service that uses
intelligent agents
To search the Internets top job sites and
databases for job postings based on users
profiles
Users can create as many as five different profiles
based on

Careermosaic.com
Users receive a daily e-mail containing job
opportunities from over a dozen top job sites
around the Internet interests.
Saves the users a tremendous amount of time

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Intelligent Agents in the

Electronic Job Market (cont.)
For employers
Resumix.com (now part of Yahoo!) has a
special intelligent-agent powered search
engine helps employers find resumes that
match specific job descriptions
Its Knowledge Base interprets a candidates
resume, determining skills based on context
and matching those skills to the position
criteria
The Knowledge Base would select only the
candidates with relevant skills
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Real Estate
You can view many properties on the
screen
You can sort and organize properties
You can find detailed information about the
properties
You can search, compare and apply for
loans

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50

Real Estate (cont.)

In some locations, real estate databases
are only available to realtors over private
networks in their offices
Builders use virtual reality technology on
their Web sites to demonstrate threedimensional floor plans to home buyers
Virtual models enable buyers to walk
through three-dimensional mock-ups of
homes
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Real Estate Applications

Advice to consumers on buying or selling a
home
assist2sell.com

International Real Estate Directory and News is

a comprehensive real estate Web site
ired.com

National listing of properties for sale

homesinamerica.com

Commercial real estate listings

commercialproperty.com
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Real Estate Applications (cont.)

Searching residential real estate in multiple
databases
homegain.com
realestate.yahoo.com

National Association of Realtors, has links

to property listings in all major US cities
realtor.com

Real estate related maps

mapquest.com
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Real Estate Applications (cont.)

Information on current mortgage rates
bankrate.com
eloan.com

Mortgage comparisons, calculations, and other

financing information; mortgage application
eloan.com
quickenloans.quicken.com

Online lenders can approve loans online

arcsystems.com
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Real Estate Applications (cont.)

Automated closing of real estate transactions
datatrac.net

Home seller sites provide a place for persons

who want to sell their homes privately,
without using a real estate agent
owners.com

Rental properties
homestore.net

Several services are available, including a

virtual walk-through of some listings
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Real Estate Applications (cont.)

Online real estate is supporting rather than
replacing existing agents
Real estate agents are still charging high
commissions
Several Web sites have started to offer
services at lower commissions
assist2sell.com

To find mortgage interest rates online use

lendingtree.com
eloan.com
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Insurance Online
Insuranceauto, home, life, and
health at a substantial discount
Insureate.com
Order.com
Quotesmith.com

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Online Stock Trading

Costs between $5 and $29 per transaction
(vs. $10 - $35 in traditional brokerage)
No waiting on busy telephone lines
No oral communication, less chance for errors
Place orders from anywhere, any time, day or
night
No biased broker to push you
Considerable amount of free information
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Exhibit 3.6
Online Electronic Stock Trading

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Investment Information
For current financial news
cnn.com,

hoovers.com, bloomberg.com

For municipal bond pricing

bloomberg.com

For overall market information and many

links
cyberinvest.com

For free Guru advice see

upside.com
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Investment Information (cont.)

For stock screening and evaluation:
multexinvestor.com
money.cnn.com

For articles from the Journal of the American

Association of Individual Investors
aaii.com

For reports the latest findings and pricing of

IPOs
hoovers.com/ipo

For chart lovers

bigcharts.com

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Investment Information (cont.)

For mutual funds evaluation and other
interesting investment information
morningstar.com

For earning estimates and much more

firstcall.com

For almost anything you need

finance.yahoo.com

Online trading is expanding to include

Mutual funds, commodities, financial derivatives
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Banking & Personal

Finance Online (cont.)
Electronic
banking
Electronicbanking
banking(e-banking)various
(e-banking)various
activities
conductedconducted
from homefrom
or the
road or
using
banking activities
home
an
connection;
also known
as:
theInternet
road using
an Internet
connection;
also
Cyberbanking
known
as:

Online
banking
Cyberbanking

Electronic
banking
Online banking

Virtual banking
Home banking
Virtual banking

Home banking

Saves time
and money for users
Electronic
banking

Offers an inexpensive alternative to branch

Saves time and money for users
banking

Offers
an inexpensive
alternative
to branch
Many
traditional
banks around
the world
offer
banking e-banking services
diversified

63
Many
traditional
banks
around
the
world
offer
Prentice Hall, 2003
main.hangseng.com

Capabilities of Home Banking

Get current account
balances any time
Obtain charge and
credit card
statements
Pay bills
Download account
transactions
Transfer money
between accounts

Balance accounts
Send e-mail to the
bank
Expand the meaning
of bankers hours
Handle finances
when traveling
Additional services
Free phone banking
Waive checking fees

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International and
Multiple-Currency Banking
Some international retail purchasing can be done
by credit card
Other transactions may require international
banking support
Hong Kong Banks HEXAGON provides e-banking in Asia
Tradecard and MasterCard developed a multiplecurrency system for global transactions (tradecard.com)
A multidealer foreign exchange service that enables
faster and cheaper foreign exchange transactions
(fxall.com)

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Implementation Issues in
Online Financial Transactions
Using bank intranets
Banks provide large business customers with
personalized service by allowing them
access to the banks intranet to access
accounts, historical transactions, intranetbased decision-support applications

Imaging systemsallow customers to

view images of all:
Incoming checks
Invoices
Other related online correspondence
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Online Security at
Bank of America
Safeguards provided by Bank of America:
1. Encryption and digital certification
verificationassures users that they are
connected to the B of A
2. Information flows through a direct Web
server, then goes through an internal firewall
to the application server
3. The bank maintains accurate information and
corrections are made quickly
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Online Security at
Bank of America (cont.)
4. Information is shared among the
companys family of partners only for
legitimate business purposes
5. The company uses cookies to learn
about its customers; customers can
control both the collection and use of the
information
6. The bank provides suggestions on how
users can increase security ( Use a
browser with 128-bit encryption)
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Online Security at
Bank of America (cont.)

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Personal Finance Online

Bill paying and
e-checks
Tracking bank
accounts etc.
Portfolio
management
Investment tracking
Stock quotes and
prices (past and
current)

Budget
organization
Record keeping
Tax computations
Retirement goals,
planning and
budgeting

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Online Billing and Bill Paying

Automatic transfer of mortgages
This method has existed for several years
The payer authorizes its bank to pay the
mortgage, including tax escrow payments

Automatic transfer of funds to pay

monthly utility bills
Paying bills from online banking account

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Online Billing and Bill Paying (cont.)

A merchant-to-customer direct billing
A merchant posts bills on its Web site
Customers can view and pay their bill

Using an intermediary
A third party consolidates all bills related to
each customer in one site in a standard
format
Collects a certain commission
Makes it convenient to complete transactions

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Online Billing and Bill Paying (cont.)

Person-to-person direct payment
Paypal.com (now an eBay company)enables
you to send funds to another individual over
the Internet

Online billing and bill-paying can be classified

into B2C, B2B, or C2C.
Opportunities exist in B2B servicescan save
businesses about 50 percent of billing costs
In Hong Kong, CitiCorp links suppliers, buyers,
and banks on one platform, enabling
automatic payments
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On-Demand Delivery Service (ODDS)

On-demand delivery service (ODDS)express
delivery made fairly quickly after an online
order is received
On-Demand Delivery Services (ODDS)
May own a fleet of delivery vehicles for regular
deliveries and delivery within short time period

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The Case of E-Grocers

E-grocera grocer that will take orders online
and provide regular deliveries on a daily or other
regular schedule or will deliver items within a
very short period of time
All e-grocers offer consumers the ability to order
items online and have them delivered to their
house
Some e-grocers offer free regular unattended
weekly delivery based on a monthly subscription
model

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The Case of E-Grocers (cont.)

Others offer on-demand deliveries with a
surcharge or additional delivery charge
added
One e-tail grocer sells only nonperishable
items shipped via common carrier
Many offer additional services
Dry cleaning pickup and delivery
Dont run out automatic reordering
Fresh flower delivery
Movie rentals
And more

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Exhibit 3.7
On-Demand Delivery Services Model

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Who Are the Online Grocery Shoppers?

Shopping avoiders
Necessity userslimited by their ability to
shop offiline
New technologists
Time-starved consumers
Consumers who gain a sense of self-worth
from online shopping
Older individuals who enjoy shopping in
any type of store
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Who Are the

Online Grocery Shoppers? (cont.)
Repeat customers with an ongoing
relationship with the grocer
Parknshop.com in Hong Kong offers a
personal shopping list that helps
customers easily order repetitive items
Tesco.com in the United Kingdom is
another successful e-grocer
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Who Are the

Online Grocery Shoppers? (cont.)
Offers grocers an additional channel
to increase their sales volume and
serve customers
Increases their publicity by
maintaining an Internet presence
Despite the promise that on-demand
delivery seems to hold, virtual egrocers have not been successful in
this competitive market
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Digital Delivery
Digital (soft) goods
Music, movies, videos, software,
newspapers, magazines, graphics, etc.
Can be delivered in hard or soft form
Computer program on CD-ROM with
owners manual and warranty card
Download from Web site after payment

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Napster Experience:
Person-to-Person Sharing Tool
Enabled individual users to download music
files from each others computers
Court ruled that as a manager of file
exchanges, Napster must observe copyright
laws
Napster began charging customers for use of
its file-sharing service

Napster entered into an agreement with

Bertelsmann AG (now owns Napster)
The latest version of Napsters file-swapping
software features a buy button that links to
CDNow, a Bertelsmann-owned Web site that
sells traditional, physical music CDs

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New Developments in Digital Delivery

Custom-publishing music CD sites
collection of personal favorites
Disintermediation of traditional print media
Journals and magazines
Newspapers (e.g., Wall Street Journal)

Comprehensive portals
Links to many different sellers
Shopping comparison sites
Comparison tools are available
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Shopping Portals (cont.)

Shopping portalsniche oriented
Specialize in a certain line of products
Some collect referral fee only
Others have formal relationships with affiliates

Shopbots and agentstools that scout the Web

for specific search criteria requested by
consumers
Mysimon.com - best prices on multiple items
AutoBytel.com cars
Zdnet.com/computershopper computers
Office.com office supplies
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Business Rating Sites &

Trust Verification Sites
Sites that rate e-tailers
Bizrate.comcompiles results provided by a
network of shoppers
Gomez.comconsumer identifies relative
importance of different criteria

Sites that evaluate and verify

trustworthiness and integrity of e-tailers
TRUSTe seal of assurance
BBBOnLine
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Other Shopping Tools

Escrow services3rd party to assure
quality
Communities of consumersoffer
advice and opinions on products
Other software agents and
comparison sites are presented in
Exhibit 3.9
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Successful Click-and-Mortar Strategies

Click-and-mortar hybrid strategies
Speak with one voice
Empower the customer
Leverage the channels
Return item purchased online at physical store
Order via the Web at the physical store items
not available there

Large, efficient established retailers are able

to create the optimum value proposition for
their customers by providing a complete
offering of services
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Transformation to Click-and-Mortar
at CircuitCity
Educates customers about features and
capabilities of products
Customers can perform powerful searches
to find most appropriate products
Offers extensive amount of information on
electronics etc., organized very flexibly
Online purchases are smooth, secure and
seamless
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Alliance of Virtual with Traditional

Retailers: Amazon and Toys R Us
Toys R Us had limited logistics
capabilities including distribution centers
Amazon failed in the toy market lacking
supplier relationships with toy
manufacturers
Alliance allows each partner to leverage
each others core strengths
Innovative model still working out
problems
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Problems with E-Tailing &

Lessons Learned
Profitability
Lose money on every sale as they try to
grow to a profitable size and scale
Underlying cost and revenue models were
not sound
Long-run success requires financial viability

Manage new risk exposure

Local companies contend with local
customers and local regulations
National firms have more constituents
Global firms deal with numerous cultural
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Problems with E-Tailing &

Lessons Learned (cont.)
Brandingdrive to establish brand can
lead to excessive spending
Starting with insufficient funds
Keep it interesting
Static design is a turn-off
Dynamic sites with rich databases of
information appeal most to customers
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A Blooming Success
Ambassador.com.hk sells attractively
packaged customized designer flower
baskets, cakes, gourmet gift baskets
Expanded the business by adding functions
such as online paymentsSuccess factors
that helped Ambassadors online business
blossom:
Extensive experience in the business
Analysis that floral gift products are suitable
for Internet sales
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A Blooming Success (cont.)

Back-end operations for the online floral gift shop
were already in place
Multichannel retailing strategy
Initial pilot implementation that resulted in orders
Plans and budgets prepared for experimentation
Decision to outsource the implementation from
scratch
Integration of online store functions with other
business models and IT systems

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Disintermediation & Reintermediaries

Disintermediationmanufacturer
sells directly to consumer
Reintermedieariesnew intermediary
roles in the digital environment offer
new ways to:
Reach new customers
Bring value to customers
Generate revenues
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Intermediarys New Role

Role will shift to one that emphasizes
value-added services such as:
Assisting customers in comparison
shopping from multiple sources
Providing total solutions by combining
services from several vendors
Providing certifications and trusted thirdparty control and evaluation systems

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Reintermediaries
Reintermediariesintermediaries that have
restructured their roles in the purchase process
Kbb.compricing information for consumers
Edmunds.cominformation about the dealers
true costs

Lead services that

Direct buyers to member dealers
Offer direct sales of new cars
autobytel.com
carsdirect.com (Amazon.coms partner)
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Cybermediation and
Hypermediation
Cybermediation (electronic
intermediation)use of software
(intelligent) agents to facilitate
intermediation
Hypermediationextensive use of both human
and electronic intermediation to provide
assistance in all phases of an
e-commerce venture
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Conflict and Personalization

Channel conflictsituation in which an online
marketing channel upsets the traditional channels
due to real or perceived damage from
competition
Personalizationcustom designed marketing plan
Tailored to buying patterns
Appeal to sense of value
Excellent customer service
Mass customization

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Managerial Issues
Should we grab a first-mover advantage or
wait and learn?
What should our strategic position be?
Are we financially viable?
Should we recruit out of town?
Are there international legal issues regarding
online recruiting?
Do we have ethics and privacy guidelines?
How will intermediaries act in cyberspace?
Should we set up alliances?
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Summary
E-tailing business models
The major e-tail markets
Click-and-mortar strategy
How online travel/tourism services
operate
The online job market,its drivers,and
benefits
The electronic real estate market
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Summary (cont.)
Online stocks and bonds
Cyberbanking and personal finance
On-demand delivery service
Delivery of digital products
Aiding consumer purchase decisions
Critical success factors
Disintermediation and reintermediation
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