B2C Model Paper
B2C Model Paper
This paper is a review of three companies currently utilizing the use of the B2C models. Business to consumer commerce (B2C) is any business organization that sells products and services to individual customers over the Internet (www.cio.com). B2C commerce is rapidly growing and expected to grow from a 38 billion dollar industry to a 184.5 billion dollar industry by 2004 (www.cio.com). Why is B2C becoming so popular? Business to consumer commerce provides an organization with the opportunity to sell it’s products and services without the expense of maintaining a physical store and storing a mass quantity of inventory, while allowing the company potential access to unlimited capital. Business to consumer companies do not have to integrate with their customers, they can easily place a catalog online allowing customers to choose products that fit their needs while allowing them to shop at their own convenience.
Although business to consumer commerce transactions take place at a virtual venue, B2C organizations utilize the same tools used by the brick and mortar companies to structure customer relationships. For example, marketing research has to be conducted to determine the target market. It is essential for B2C businesses to focus on customer service, order fulfillment and on the competition.
Every organization needs a business model and B2C organizations are no different. B2C companies may operate using one of three business models: auctions, online stores and online services. To explore the different opportunities and challenges offered by each model let’s review the web site of three companies currently using B2C models.
Amazon.com operates under all three B2C commerce models. Beginning it’s business in July of 1995, Amazon.com has grown from being the largest Internet site for purchasing books to a virtual shopping arena providing consumers with the ability to purchase anything they desire online (www.amazon.com). Amazon has cornered the online market with its personalized customer service, customized products and ability to offer a greater price premium. The company employs an online auctioning technique to gain a huge first mover advantage, appealing to the winner take all impact of the consumer.
Amazon.com appeals to several different facets of the consumer’s character. The Web site offers the customer the opportunity to shop virtually anywhere in the world. The customer can shop for books, music and videos nationally and internationally. A customer can become a business partner with Amazon by signing up as an associate. Becoming an associate gives them the opportunity to promote their business on Amazon’s web site giving them more ways to earn revenue and access to resources and tools to help make their business successful and profitable. Amazon’s web site gives the consumer more bang for their buck. The site offers discounted prices on products and services. It provides information on all services and products advertised on the site. The site is easily accessible and easy to use. Everything from bargains to featured partners is just a click away. Amazon.com promises safety to the consumer whether they are participating in an auction or using the conventional way to shop and guarantees all transactions. The consumer is given a full description of the safety mechanisms in place to protect their credit cards and personal information.
Nabisco’s Web site is designed much differently from Amazon’s site. Nabisco’s site is more representative of an online store model. The site exists only to exchange information about Nabisco products. The products are colorfully displayed along with sweepstake offerings and the ability to play games and win prizes. Nabisco is a subsidiary of Kraft foods and taking a closer look at the Kraft segment of the web site provides information pertaining to an array of Nabisco products. The information provided the consumer is related to Kraft products and what they are made of (ingredients) and how they can be used. Any additional organizational information needed has to be requested via form driven mail included within the site (www.nabisco.com).
Gateway’s web site consisted of two of the model types: online store and online services. Gateway provided a simple look at their products and services. The customer is presented with well-defined choices on the initial web page. The site offers additional links to partners that support Gateway products. Unlike Amazon’s diverse product line, Gateway provides services and products dealing only with computer hardware and software. The site appeals to the consumer’s thirst for great deals. If the consumer is a bargain hunter Gateway offers deals that are one day only, offered for only one week and deals that can only be taken advantage of when purchasing another Gateway vendor product or service. The site is of great value to consumers looking for convenience and to the consumer that knows little or nothing about purchasing a computer. The Gateway
site is a one stop-shopping site that provides all the tools and resources needed to support your Gateway related computer hardware and software. The site also provides a learning system to help the consumer learn more about their system, a tutorial program to guide them through setting up and using Gateway products. The Gateway site is very informative, but geared specifically towards one product…Gateway.
There are three different B2C business models. One is used to give the customer the ability to name their own price on a variety of products (auction). One is used to enable the customer to view a specific product and to entice the customer to by the product based on what is made of and prizes that can be obtained if a purchase of the product is made. The other model is used to promote and provide information on one product and it’s accessories. The common thread is site personalization. Each site is designed to meet the needs and interest of a particular consumer and each site promotes the goal of B2C commerce to create a rewarding online experience for the individual consumer by recognizing their individual preferences and making them easily accessible.
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