Q50919 Write a note on Business model used in B2C.

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Answer:

B2C ecommerce in which business organization seek to reach individual consumer uses variety of e-business model as shown in figure:

Business Model	Variations	Examples	Description	Revenue  is generated through
Portal	Horizontal/ General	Google.com Yahoo.com AOL.com MSN.com	Offers an integrated package of services and content such as search, news, e-mail, chat, music downloads, video streaming and calendars. Seeks to be a user’s home base	Advertising, subscription fees, transaction fees.
	Vertical / Specialized (Vortal)	moneycontrol.co m	Offers services and products to specialized market space	Advertising, subscription  fees, transaction fees
E-tailer	Virtual Merchant	Amazon.com	Online version of retailer can shop at any hour of the day or night without leaving home or office	Sales of goods
	Clicks and Mortar	Walmart.com	Online distribution channel for company that also has physical stores.	Sales of goods
	Catalog merchant	LandsEnd.com	Online version of direct mail catalog	Sales of goods
	Online Mall	Fashionmall.com	Online version of mall	Sales  of  goods, transaction fees
	Manufacturer direct	Dell.com	Online sales made directly by manufacturer	Sales of goods
Content Provider		dainikbhaskar.co m, epatrika.com, CNN.com NDTV.com	Information and entertainment providers such as newspapers, sports sites, and other online sources that offer customers up to date news and special interest, how to guidance, and tips and/or information sales	Advertising, subscription fees, affiliate referral fees
Transactio n Broker		E-Trade.com Expedia.com Monster.com	Processors of online sales transactions, such as stock brokers and travel agents, that increase customers productivity by helping them get things done faster and more cheaply	Transaction fees
Market Creator	Auctions and other forms of dynamic pricing	eBay.com baazi.com olx.com	Web-based business that use internet technology to create markets that bring buyers and sellers together.	Transaction fees
Service Provider		xDrive.com whatsitworthtoyo u.com myCFO.com	Companies that make money by selling users a service, rather than a product	Sales of services
Communit y Provider		About.com iVillage.com BlackPlanet.com Facebook	Sites where individuals with particular interest, hobbies, and common experiences can come together and compare notes	Advertising, subscription, affiliate  referral fees

1.   Portal Business Model

Portals are a website which offers integrated package of content and services for example email, instant messaging, search, advertisement, video streaming, shopping, music, calendar, games etc. Some of the example of portal are AOL.com, yahoo.com, google.com, msn.com. The high volume of traffic makes it attractive to advertisers and generate income for the portal owners. There is great completion for website traffic and consumer are invariable offered number of incentive to choose a particular portal and remain it for the future use. Portals do not sell anything directly but use as a tool for attracting people for variety of paid services. Portal generate revenue from charging advertiser for placing their advertisement, collecting referral fees for guiding customers to other site and charging for premium services.

Vortal are verticals portal, specialized portal that is design and developed to attract a particular specialized market segments. for example moneycontrol.com is a vortal developed to provide a service in the area of financial market. Vortal may be setup to attract traffic from user with similar interest, experiences or similar habits. The success of vortal is determine by the ability to attract well define user rather than volume of traffic. This is of particular interest to advertiser who want to address more specific target audience with specialized message and this will result premium charges to the owner.

2.    E-Tailers (Online Retail Stores)

Online retail store called retailers are very popular in B2C category the joint book shop amazon.com, Walmart, fashion mall, Dell are some of the example in this category they offer variety of businessvariants like virtual merchant like click and mortar, like catalog merchant direct selling etc. They work in virtual market without any ties to physical location in order to serve customers. Some of the players has appointed some intermediate player to serve their customers on their behalf. E-tailers have several key advantages over their counter parts in conventional market places. One of the most important advantage is that a well design consumer portal can deliver multiple revenue opportunity through selling of product, supply in house, co-marketing and selling product from competitors and delivering targeted advertising,

E-tailer can established an upper hand over conventional retailers by providing a consumer portal that enables it to reach new customer without investing in costly new retails outlets. Amazon.com is a one of the largest book store developed in nineties offers various benefits to its customer. Like greater selection, conveyances is of use, information search and retrieval capabilities, ease of access from multiple location, competitive pricing, price comparison capabilities and personalization. The key component of amazonoffering includes browsing, searching, reviews and content, recommendation and personalization, one click technology for fast checkout service, secure credit card payment, availability and fulfillment interactivity with other customer and high level of customer service. These offering has resulted amazon.com to become first mover in the etailing sector an was able to built a brand name that quickly become recognized in key market.

The acceptance of retailing in the area of book amazon has expanded its services to other area which includes video, CDs, gift, toy, healthcare product, gardening tools, electronic and digital products etc. amazon has developed corporate partnership with various portals, internet service providers and internet marketing companies to extend its reach ability.

Some of the activity which are included in common e-tailers are discussed below:

1. Catalog Management: Catalog is a detailed list of goods and services available on the website. It includes photographs, description, specification, size, colour etc in the form of database. E- tailers must integrate product and service information from multiple vendor in to a signal comprehensive catalog that is simple to navigate and present products in a attracted manner.
2. Parametric Search: Customer often search for the product categories (Bathing Soap) rather than product name (Lux or Dove). Parametric searching allows a buyer with the capability of searching product category incrementally to determine product selection that is specifically as per their need.
3. Personalization (Profiling): Consumer site should identify visitors uniquely wherever possible in order to collect personal information of individual about the type of product they search their liking and ultimate buy along with their overall surfing behavior on the site.
4. Advertising and Targeted Marketing: If we utilize the interest and buying habits of visitors known to us effectively with the help of advertisement and promotional banner. E-tailers can dramatically increase the instance of impulse buying. The use of targeted emails and special promotion schemes can increase traffic on the e-tailrs site.
5. Shipping Cart: -tailers must provide a facility of virtual shopping cart that allow a customer to collect and manage product of their interest before actually checking out. This will enable a retailer to know about the liking of the customer.
6. Payment Processing: The site must include variety of form of payment processing to enable user to make purchases using credit card, online payment method and payment voucher etc.

3.   Content provider

Information content is one of the critical applications of internet which provide information as required by the user. This comes under the all type of intellectual property which refers to all form of human expression that can be put into a tangible medium like CD, text or web. Content provider distribute informationcontent like news, music, photo, art work, video over the internet and the user has to pay for the content which he had used. The revenue is generated through advertisement, membership fee or affiliated fee. To generate subscription a business organization has to offer high value content to the user. Amajority of thewebsite do not run subscription basis because of omni presence of information and the low switching cost for customers. If one organization offered content by subscription only the rival organization could easily offer free access to the same information and operate a different pricing model.

4.   Brokerage Model

Brokers are intermediaries who brings buyers and seller together for transaction purpose the largest industry using this model financial services, travel services, job placement services. Some of the example in this category are naukri.com which provide interaction of prospective employee and employer, sharekhan.com which provide share trading between buyer and seller, jeevansathi.com which provide interaction between prospective candidates for marriage, monster.com offer job searcher national market place for their talent and offer employers a national resource for talent both employer and job seeker attracted by the conveyance and currency of information etc. transaction broker charge money each time transaction occur but this money considerable less as compare to traditional broker.

Market Creator: Market creator provide a digital platform where buyer and sellers can meet display products search for products and established a price for product. They act as a middle man for the buyer and seller and charge money for their position. Ebay is auction site, create a digital environment for buyer and seller to meet agree on a price and transact. This is different from transaction broker who actually carried out the retranslation for their customer acting as a agent in a larger market it ebay buyer and seller are their own agent. Each sale on ebay net a company a fee.

Bidding and auctioning have been exclusively the domain of niche market where it is difficult to put objective value of the product being sold. Some of the example the established markets for bidding and auctioning include antique and refurbished nobility, custom define product, painting and other art work etc. the dynamic pricing of auctioning help professionals and business organization to get best price for their product and services. The successful bidding and auctioning application must support core functionality in order to provide basic feature and services that customer expect in auction environment. These functionality are discussed below:

1. Catalog Integration and Management: As we know that bidding and auctioning involves sell of access supply or unique good from multiple supplier therefore application must maintain a detailed catalog of individual and quantity goods for auction. This will help to integrate new items and new suppliers.
2. Chat: The evaluation of product presented in the auction is dynamic and subjective process. The chat facility provided in the bidding and auctioning site allow potential buyer to discuss the relative merit of the product available on the site or any other area of interest.
3. Bid Board: A simplified and well place bid board must be made available on the website. So that when ever consumers are ready to place a bid on a product or service they must be able to post their bid information on a public bid board. This will also keep other potential buyer up to date on the auction process.
4. Notification: Auction are driven by series of event like new item posted for bidding, new high bid receive, auction open, auction close etc. to ensure that all potential buyer have access to up to date information about the auction. A well define notification component must be included in the website. This notification component will deliver up to date email, sms to the various participating bidders.

The market opportunity for market creator is very vast, it requires financial resources and marketing plan to attract sufficient seller and buyer to the market place.

5.   Service Provider

Service provider offer services online intern charge a fee. Some of the service provider also generate revenue through advertisement or by collecting personal information that is useful to direct marketing for example selling of domain name registration and space on server. Some website provide online tips for share trading and charge money. The basic proposition of service provider is that they offer consumer a valuable convenient time saving, low cost alternatives as compare to traditional service provider.

6.   Community provider

Social media has rapidly become an important part of many peoples’ lives, not just as a way to keep up to date with friends and family, but also for profession8a6l networks, exploring fields of research, shopping,

sharing content and fostering online communities with shared interests. It has also become a crucialaspect of a businesses’ online presence; now a firm can connect with consumers and tailor their online relationships with customers, other brands, and with employees.

Community providers are very popular entities these days. Internet has made such a site for like minded individual to meet and converse easily without the limitation of geography. Community providers are the site that creates a digital platform where people of similar interest can transact, communicate with like minded people, receive interest related information. community site like oxygen.com, about.com, makes money through affiliate relationship with retailer and from advertising. According to Robba benzamin as discussed in blueprint to a digital economing five requirement of successful online community building are:

1. Shared Space: In Real world community often tied to some particular geographical location. As internet attract global audience community builder must make efforts to build shared space for the community where members can call their own and identify with the common value of the group. A website can act as shared space on net to build common interest and investment in the community.
2. Shared Value: Community members must have some sense of common appreciation and values in order to established a foundation for discussion and productive interaction.
3. Shared Language: Language is the way we communicate. Unless we speak same language we can’t talk. If we can’t talk we are not going to get to much out of each other.
4. Shared Experience: Community are based around a common experience which members shared for example geociter, are website which organize customer webpage into community with common topic and similar virtual addresses in order to promote interaction and dialogue between user with similar interest.
5. Shared Purpose: Individual visiting a community site must have common purpose, in case of commerce oriented site the purpose is to discover new product, to find out user experience, to make transaction or to provide feedback. If other share these priority discussion are likely to be focused on and engaging.

There are many ecommerce business models currently used in the industry and more are being invented every day. The business organization are using various model in different category of transaction like B2B, B2C, C2C etc. They are also developing new business models and modifying existing business model. It might be possible a business model can be used in one or more transaction area.