III. Website Design

Report
The importance of website design to a business’ online success was dealt with next. The website has to clearly communicate the goals and objectives of the business. To this end, it must decide on the strategy or combination of strategies that are most in keeping with the business’ objectives: an information web site provides information about the business, its products and its services; an interactive web site contains the same information and adds interactive features such as an e-newsletter or a customer discussion forum; a transactional web site sells products and services, and typically includes information and interactive features; a collaborative web site allows business partners to collaborate.

Website designers must know their users. As a business medium, the internet is different from traditional telephone and in-person procedures. Users arrive at websites with a short attention span and a task in mind that they want to accomplish by scanning. They might have limited access (modems won’t load graphics). Designers should also know if their users are core (upon whom the entire business depends), trained, typical, or casual. The website should also comply with guidelines for disabled access (10-20% of population): visual impairments require appropriate font size or read-out options; hearing impairments require a text-only option; a simple interface with consistent navigation caters to cognitive disorders; too much flickering can bring on seizures; mobility impairments require a limitation in the number of clicks.

Understanding consumer behaviour is crucial to website design. Population segment is a component of this, in which geographic location, demographics and psychographics play their parts. The website must also determine who its users are: deciders, influencers, buyers, gatekeepers or a multiple of these. The consumer decision-making process follows a sequence of steps, i.e. problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. The more designers are able to appreciate consumer behaviour and translate their understandings into their website designs, the greater their potential for coming up with a successful website.

The functionality of the website is a critical factor as well. Navigation, consistency, performance, appearance, quality assurance, interactivity, security and scalability are all essential here. The website should be engaging, well-presented, and user-friendly, and it shoudl comply with the 3-click rule.

Reflection
I find myself looking at websites with new eyes now! While i am more critical of their quality, i also appreciate the expertise that goes into making a website effective. If i were designing a website for my own business, i realize that i would have to be vigilant in putting myself in the place of my customers in order to check that the message i want them to receive is the one they would actually be receiving. I would have to anticipate customer expectations, so that the website i am designing is accordingly informative, transactional, interactive or collaborative. This is where repeated testing and assessment of a business’ website prior to launching could pay off in the long run.

I recognize myself, too, in the consumer behaviour patterns that characterize the way customers make use of websites, e.g. my attention span is short, and i want immediate access to the information or service i am seeking. Because customers who shop or look for information online now have the luxury of staying in one location, such that the cost and inconvenience of switching to another supplier or location is minimized, businesses are under increasing pressure to upgrade and update the information and services they are offering online. Their websites must be as effective as possible so that they hold customers’ attention and attract their business.

In Principles of Marketing (2008), Kotler discusses the elements that go into designing a customer-driven marketing strategy (pp.184-5). Market segmentation divides a market into smaller groups of buyers with distinct needs, characteristics, or behaviours; market targeting is the process of evaluating and selecting one or more segments to enter; differentiation means actually differentiating the offering to create superior customer value; and positioning means arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of consumers.

Businesses do well to make use of these strategies when it comes to website design. Since no company is able to appeal to all customers in the marketplace, they must identify the target segments they can most profitably serve and design websites that that are specifically tailored to them. They must focus on the differentiation and positioning strategies that appeal most to the buyers who make up those segments and incorporate those strategies into their website design.

Evidently, designing an effective website is no small challenge!

II. E-Business Models

Report
This topic focused on E-Business and Revenue Models. We began by considering the framework, Input-Processes-Output, and how E-Business is evident in the “input” and E-Commerce in the “output” phases. Successful E-Business requires effective message and information distribution systems, multi-media content, networks, databases, marketing strategies, e-payments and security, strategic alliances, knowledge management, and compliance with government regulations and public policy. It may establish intranets (between the company and its employees) and extranets (between the company and its suppliers/customers).

Business models include peer-to-peer (P2P) file-sharing networks such as kazaa and napster; business-to-employee (B2E) models that offer services, libraries, training, etc. to employees; government-to-business (G2B) and government-to-consumer (G2C) models, such as filing taxes online. The most important business models are business-to-business (B2B), used by companies like Dell and BT; business-to-consumer models (B2C), used by Amazon; consumer-to-consumer (C2C), used by companies that auction, such as eBay, and for social networking; and consumer-to-business (C2B), which may be used for reverse auctioning.

Business models may be classified further as online direct marketing, e-tendering, name-your-own-price, bartering online, affiliate marketing, online auctions, find-the-best-price, information brokers, membership, supply-chain improvers, value-chain service providers, product customization, e-marketplaces, i-exchange, e-co-ops, etc.. There are many names for what amounts to the same thing – different forms of marketing!

In setting up a business, determining where money will come from is one of the most important considerations. The revenue models that are most often used, or used in combinations include 1) sales (goods and services); 2) transaction fees; 3) subscriptions; 4) advertising; and 5) affiliate fees (for collections or referrals).

Lastminute.com, which first used the internet to introduce an innovative service, selling distressed inventories (hotel rooms, airline and theatre tickets), was presented as a case study then. As information brokers and participants in the affiliate market, the business falls into the B2B model; the value-added service it provides to customers is C2B. Airlines and other business provide revenue, and customers probably also pay a fee. Essentially, they are a travel agency! At this point in time, however, more recently developed businesses such as Opodo offer improved services, and lastminute is challenged to update their platform and increase the quality of their web service.

Reflection
Entering the world of E-Business, the variety of business and revenue model applications on-line is phenomenal! I’m impressed by the initiative and the creativity that i’m encountering as i meander through the web. At the same time, i find myself acutely aware of the demanding levels of competition that are evident, and by the way that economic, legal, societal and technological factors are propelling businesses towards increasing innovation and use of E-business models in order to survive. In the words of Turban in Electronic Commerce 2006, “Because the pace of change and the level of uncertainty are expected to accelerate, organizations are operating under increasing pressures to produce more products, faster, and with fewer resources” (p.13). This means that companies are under pressures not only to lower costs and close unprofitable facilities, but to innovate by creating new products, customizing or providing outstanding customer service.

I’m finding that these ideas connect most closely with my course in International Marketing. Frank Bradley, in International Marketing Strategy (2005), illustrates the shift, among managers, customers and society in general, from the scarcity paradigm of the industrial age, where the focus was on managing and allocating scarce resources, risk and efficiencies, to a paradigm of abundance, “where considerations such as growth, adding value, creating wealth and exceeding customer expectations, not just meeting them, have become the centre of the firm’s attention” (p.37). Knowledge and its manifestation in technology, he goes on to say, are the principal sources of value and power in the modern economy. Certainly, the advances in EC over the past decade are evidence of this.

One of Turban’s ideas that i found attractive was his description of the way the model of competition in the internet economy “is more like a web of interrelationships than the hierarchical, command-and-control model of the industrial economy” (p.62). Calling this the “internet ecosystem,” he compares it to an ecosystem in nature that is self-organizing and notes that some of the old rules of competition no longer apply.

Following these remarks, Turban provides a reference, meansbusiness.com/learntdig.asp, where one is supposed to be able to access further discussions. Interested in his point, i entered the address into my browser, only to find the following notice:

MeansBusiness closed at the end of July. The business has not been able to attain critical mass and recently we were informed that our largest content provider would not extend a new agreement. As a result we were unable to renew or pursue clients and have closed the business.

I am so sorry to have to deliver this news to you. When I started MeansBusiness seven years ago, I had a vision of providing content in a new and innovative manner. Not being able to fulfill that vision for my clients, especially after so much work, is a personal tragedy for me. I hope that this untimely conclusion of our service does not hamper you or your future plans.

David Wilcox

Clearly an example of the fragility of technological venture!

As i consider my new learnings, i also keep myself alert to how they might be of use in a context like the Philippines, especially in a mega-city like Manila, my particular interest, where the urban poor have no claim to land and little access to resources. What application might they have to the generation of livelihood (microfinance), to networking around social justice issues, to the raising of finance, nationally and internationally, for improved health and education? In doing a little research, i’ve come across some interesting websites. Globalgiving.com, for example, is a well-developed site that connects donors to over 450 grassroots projects around the world, much like eBay’s approach to online commerce. 4 of the projects listed are located in the Philippines: microfinance to rice farmers, retrofit for 2-stroke tricycles, rehabilitation for the disabled, and a clean water project. iConnect Online, an initiative of the International Institute for Communication and Development, seeks to provide a knowledge sharing forum for the application of information and communication technologies (ICT) in development.

Could a small karenderia (cafe) setup, for example, use a B2B model to cater the snacks or lunches of local businesses, i wonder??

I. Introduction to E-Business and E-Commerce

Report
Our first topic in E-Business and E-Commerce was a general introduction to the subject matter. To begin with, E-Business is a broad term of which E-commerce is a part. Though the terms are often used interchangeably, E-commerce involves transactions, i.e. the buying of goods and services, while E-business includes this as well as servicing customers, collaborating with business partners, commercial trading, exchanging information, mobile technology, conducting electronic transactions within an organization, etc..

Businesses make use of EC to varying degrees. Dot.com’s were the first EC entrepreneurs, while brick-and-mortar companies took about 10 years to begin employing EC strategies. Now, there are a great number of companies online; some are pure EC and others are partial users. The dimensions of EC include the product, process and delivery agent or intermediary. For partial EC, one of more of these dimensions may remain physical while another/others is/are converted to digital. Small businesses are still hesitant to jump into EC.

E-business is bringing change to all industries, as it serves a whole variety of purposes: customer complaints and requests, intranets within companies, updates, newsletters, e-education, e-marketing, e-mail, virtual meeting, dynamic pricing, online banking, e-government, gaming, entertainment, online auctions, etc..

Reflection
E-Commerce offers innovative ways of meeting the challenges of running a successful business. I was surprised to learn that actual EC volume is as low as 5% today, and, no doubt, this will continue to grow as experts predict (750 to 999 million by 2008, according to Electronic Commerce 2006, p.12). Even that volume, however, leaves the greatest part of the world’s population without access to this technology or reluctant to make use of it.

Since Asia is in my area of interest, i noted the BBC’s article “China ‘yet to embrace e-commerce’” (Nov.27,2005) as a case in point here (http://news.bbc.co.uk/1/hi/business/4446278.stm). This article observes that, “while internet usage is developing rapidly in China, growth in e-commerce has been much slower. The survey also found that one-third of internet users do not use e-mail, preferring instant messaging instead.” Instant messaging is certainly the preferred mode of communication in the Philippines, too, where i’ve been working for the past ten years, and i suspect that this preference will, in the long run, slow down the penetration of EC there. I am interested, though, in learning how some of these barriers might be overcome and whether there is any potential for EC in microfinance, for example.

My own predominant use of the Internet until now has been for e-mailing, research and news updates. While i had heard vaguely about Dell and its unique approaches to product retail, i had no idea about the magnitude of its success and the creative extent of its use of EC. Having spent time this week researching a variety of websites, i am amazed at the products and services that are available, and i can appreciate the value of learning to analyze the business models that are being applied in each case. Related to this, “Wikipedia” provides a discussion on “Electronic commerce” that notes potentials, problems and aspects of customer experiences additional to those listed in Electronic Commerce 2006 (http://en.wikipedia.org/wiki/E-commerce). In my opinion, it is an interesting read.

I come now to the conclusion of my first ever blog entry! I appreciate the way this course already is empowering me to add my voice to the cyberspace community. In querying whether blogging has as yet made any inroads in the Philippine context, i came upon the article “Toral: Blog away” in the February 3, 2005 edition of Sun Star Cebu. There, Janette Toral remarks, “Blogging is gradually hitting the mainstream. In a country that fosters freedom of expression, blogs allow you to articulate your thoughts and get insights that are not limited to traditional media. The academe should utilize the power of blogs to encourage reading and to develop their students’ capability to express themselves” (http://www.sunstar.com.ph/static/ceb/2005/02/03/bus/toral.blog.away.html). A teacher by profession myself, i affirm this as a step toward generating future use of and confidence in EC.