MIS207 Chapter 4
MIS207 Chapter 4
MIS207 Chapter 4
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Chapter Opening Case
Pinterest: A Picture is Worth a Thousand Words
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Learning Objectives
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Revenue Models
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1. Web Catalog Revenue Models
(Sales Revenue Model)
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1. Web Catalog Revenue Models (cont’d.)
§ Clothing retailers
– Display clothing photos categorized by type Prices, sizes, colors
§ General discounters
– Traditional discount retailers (Costco, Target, Wal-Mart)
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2. Digital Content Revenue Models
(Subscription Revenue Model)
§ Business content:
– Newspaper publisher subscriptions
– Sold digitized newspaper, magazine, and journal content subscriptions
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3. Advertising as a Revenue Models
§ 2 types:
– Advertising-supported revenue model
– Advertising-subscription mixed model
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3.1 Advertising-Supported Revenue Models
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FIGURE Three strategies for an advertising-supported revenue model
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3.2 Advertising-Subscription Mixed Models
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FIGURE Revenue models used by online editions of newspapers and magazines
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4.1 Fee-for-Transaction Revenue Models
§ Value chain
– Disintermediation: intermediary removed
– Reintermediation: new intermediary (fee-for-transaction Web site)
introduced
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4.1 Fee-for-Transaction Revenue Models
(cont’d.)
Examples
§ Online travel agents
§ Online banking and financial service
• Stockbrokers and Insurance brokers
• Event tickets: online agencies earn a fee on every ticket sold
– Shohoz.com, Ticketmaster, Tickets.com,
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4.2 Fee-for-Service Revenue Models
§ Professional services
– Medical, legal and other professional practices allow clients/ patients
to make appointment (consultation services) online
§ Consultancy
§ Online games
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5. Free for Many, Fee for a Few
§ Example:
– Any software (student version and professional version)
– Yahoo e-mail accounts, bakery: free cookies
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Class Discussion
§ Task-1
– Identify different categories of revenue models and give
an example of each from the context of Bangladesh.
§ Web catalog (sales revenue model)
§ Digital content (subscription revenue model)
§ Advertising-supported and
§ Advertising-subscription mixed
§ Fee-based (transactions)
§ Fee based (services)
§ Free for many, fee for a few
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Class Discussion
§ Task-2
– Prothom-alo is one of the most popular newspapers in Bangladesh
with millions of readers worldwide (including online and offline).
Ø Identify the business model and revenue model of prothom-alo newspaper
based on your learning.
§ Task-3
– North South Business Review is one of the leading online journals for
business research, which is published by NSU publication.
Ø What kind of revenue model would you like to suggest for this kind of online
content provider? Why?
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Revenue Models in Transition
§ Reasons-
– to meet the needs of new and changing Web users
– lengthy unprofitable growth phases
– to cover/maintain the operating cost
– to increase revenue
– to lead/capture the market
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1. Subscription to Advertising-Supported Model
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2. Advertising-Supported to Advertising-
Subscription Mixed Model
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2. Advertising-Supported to Fee-for-Services
Model
Xdrive
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Revenue Models in Transition (Multiple Changes)
Others
§ Encyclopedia Britannica
§ The New York times
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Class Discussion
Ø Task-4
Ø Give an examples of BD e-commerce website that went
through such kind of revenue model transition.
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Revenue Strategy Issues
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1. Channel Conflict and Cannibalization
§ Example:
– Levi Strauss & Company sells through DS & RS
– Began selling products through levi’s website (1998)
§ Retail stores complained to Levi’s about reduced sales because of
additional online outlets
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2. Strategic Alliances
§ Example:
– Yodlee (IT developing firms) and its’ client bank
– Amazon.com
§ Joined with Target, CDnow, ToysRUs
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3. Luxury Goods Strategies
§ Why?
– Consumers generally want to see in person or touch
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4. Overstock Sales Strategies
§ Problem of overstocks
– Products that did not sell as well as hoped
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Creating an Effective Web Presence
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Identifying Web Presence Goals
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Making Web presence consistent with brand
image
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Cass Discussion
§ Task-5
Ø How can a not-for-profit organization use (WP goal) a
website to enhance its operation throughout the world?
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Web Site Usability
§ Usability testing
§ Customer centric Web site design
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Web Site Usability
§ Task-6
Ø How can you make a website functional for customers who
are visually impaired?
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Home Work-1
– Product page: You have to offer at least 3 categories of products and (at least) 2
different types of products from each category (total 6 product description). Each
product should be displayed with detail product specifications, total cost,
discounted cost (if any), indicate stock out (if any)/ inventory level, and so on.
– Offer /Sell on page: Offer some products with huge discounts for special occasion
like New Year.
– (Product) Blog page: Discuss some products which are new to the customers
about the products' usability, benefits, and so on.
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Chapter Review (True/ False)
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