Revenue Model
• Subscription Fees
• Advertising
• Fee for buying goods
• Sponsorship
• Providing platforms to businesses
S.W.O.T
Strengths
• Reputation
• Cheap advertising to generate large business interest (more than Facebook and YouTube)
• Taking advantage of current marketing trends
• Global coverage
Weaknesses
• Parental control
• Fake identities
Opportunities
• More use
• Advertising opportunity for businesses
Threats
• Competition
• "Deep Think" issue
• China/Japan – may develop their own platforms
Thursday, November 29, 2007
Porters Diamond explained
Rivalry / Competitors – good to analyse competitors to market segmentation and differentiation, follow trends, learn by mistakes, large and small companies now all as one in the internet, the competition grows.
Power of suppliers – if you have monopoly, unique industries, for example Oyster card.
Power of buyers – Switching costs are low, example travel agents were illuminated through BA being able to sell direct to the consumer. Dell has also set up an on-line business as they illuminated physical stores. Example for the Music industry – artists are now going direct to buyers.
Substitutes – investing on-line, e-books, DVD’s, Videos (YouTube – actual videos)
Barriers to Entry – Investment costs, sales force not needed, Channels, has to be sector specific.
Power of suppliers – if you have monopoly, unique industries, for example Oyster card.
Power of buyers – Switching costs are low, example travel agents were illuminated through BA being able to sell direct to the consumer. Dell has also set up an on-line business as they illuminated physical stores. Example for the Music industry – artists are now going direct to buyers.
Substitutes – investing on-line, e-books, DVD’s, Videos (YouTube – actual videos)
Barriers to Entry – Investment costs, sales force not needed, Channels, has to be sector specific.
Understanding Consumer Buying Behaviour
Q. What is the consumer buying behaviour? Who buys, who initiates, what is the best routing to get to your customer?
Consumer Behaviour (CB)
1. Segments
· Geographic (location, where are the customers)
Multi language, you have to identify the different countries.
· Demographic (age, income, gender, education)
Younger people tend to search on the Internet more before committing to anything,
older people (over 45’s) tend not to, and over 65’s tend not to use a computer at all.
· Behavioural (usage, do they have a modem/broadband?)
Identifying the type of customer, you have to have the text only option, for people with
disabilities.
· Psychographic / Lifestyle
Understanding your customer base.
2. Sell
· Who is the User? Decider? Influencer? Buyer? Gatekeeper?
Example... DOG FOOD, the user is the Dog, the decider is the owner, the Influencer will be
Pedigree (from ad on TV), the Buyer will be the owner or a friend and the Gatekeeper is
the shop its brought from.
Consumer Decision Making Process
Problem recognition
· Real need
· Generated need
Knowing Your Users
· Core/Fundamental Users – which your entire business relies on.
· Disadvantaged/Disability Users – men are more than likely to be colour blind than
women, at least 25%. Flashing sites have been known to cause epileptic fits – Olympic
Rings did just that.
· Graphics and text should be able to change for your user, TEXT option is vital, you should
also have sound adjustment.
· Being able to identify why does the customer want to use your website?
· Having a website that is relevant to your industry? Mars for example is most well known
for chocolate, if you go to their site it is very corporate and Blue.
· Userability - Vista for instance is not very user friendly, it is highly technical.
· Connection Speed – example... Friday at 4pm, the whole system seems to slow down on
Facebook.com. Pages and links must be available at lower speeds.
· Customers tend to have short attention span, 2 – 4 seconds. This is why it is vital to be
able to get to your products within 3 – 4 clicks. If you are trying to promote / sell
something this must happen within the first 2 – 4 seconds.
Consumer Behaviour (CB)
1. Segments
· Geographic (location, where are the customers)
Multi language, you have to identify the different countries.
· Demographic (age, income, gender, education)
Younger people tend to search on the Internet more before committing to anything,
older people (over 45’s) tend not to, and over 65’s tend not to use a computer at all.
· Behavioural (usage, do they have a modem/broadband?)
Identifying the type of customer, you have to have the text only option, for people with
disabilities.
· Psychographic / Lifestyle
Understanding your customer base.
2. Sell
· Who is the User? Decider? Influencer? Buyer? Gatekeeper?
Example... DOG FOOD, the user is the Dog, the decider is the owner, the Influencer will be
Pedigree (from ad on TV), the Buyer will be the owner or a friend and the Gatekeeper is
the shop its brought from.
Consumer Decision Making Process
Problem recognition
· Real need
· Generated need
Knowing Your Users
· Core/Fundamental Users – which your entire business relies on.
· Disadvantaged/Disability Users – men are more than likely to be colour blind than
women, at least 25%. Flashing sites have been known to cause epileptic fits – Olympic
Rings did just that.
· Graphics and text should be able to change for your user, TEXT option is vital, you should
also have sound adjustment.
· Being able to identify why does the customer want to use your website?
· Having a website that is relevant to your industry? Mars for example is most well known
for chocolate, if you go to their site it is very corporate and Blue.
· Userability - Vista for instance is not very user friendly, it is highly technical.
· Connection Speed – example... Friday at 4pm, the whole system seems to slow down on
Facebook.com. Pages and links must be available at lower speeds.
· Customers tend to have short attention span, 2 – 4 seconds. This is why it is vital to be
able to get to your products within 3 – 4 clicks. If you are trying to promote / sell
something this must happen within the first 2 – 4 seconds.
Value Added Services
Value added services are a very powerful side to most businesses, for example:
- Mobile Phone: Not only do you use your mobile phone for voice calls and SMS but it is also a very good way to advertise. External companies can text you offers, as well as your own service provider.
- Email: Primarily used to send and receive messages, but can also be used for newsletters.
- Telephones: Initially used for telephone calls and conference calls, now being used for Virtual Meetings and VOP (Voice over IP).
- Government: Has now launched e-government, enabling you to pay council tax and rates on line.
- Gaming/Entertainment: Have a number of on-line sites now, growing by the year, expected to generate huge volumes over the next 10 years, especially in Asia.
- Learning: e-learning is now available for on-line further education.
Tuesday, November 27, 2007
Handbagtree.co.uk - Business Plan
Handbagtree.co.uk is a fashion website offering discounted authentic designer handbags, shoes and accessories. While selling designer goods will be its primary function, handbagtree.co.uk will also be an informational website providing style advice and information on current trends. A special feature of the site will be that it can be tailored to the visitors demographic. As an example, a career woman in her forties that wants advice on what to wear that is trendy and appropriate for her age can click on the “Forty & Fabulous” link, or, a teenager that likes to dress grunge can click on the "Trendy Teenager” link for style advice. Another feature of the site will be to recommend other brand name clothing labels, also a way to generate revenue and advertising, so the visitor can shop for the item recommended. The idea is to compliment the items purchased on our website with an outfit from recommended websites.
S.W.O.T.
Strengths - Price, Advice, Uniqueness
Weaknesses - Impulse buyers, Seasonal stock
Opportunities - Expand to other markets, low overheads, standardised pricing
Threat - competition, potential to vastly expand too quickly
Wednesday, November 21, 2007
The World According to Google
Google Inc. was founded by Larry Page and Sergey Brin, 2 computer science students from Stanford University, America in 1998. They found a rich investor, gave it a name "Googol" initially (which means 1 followed by a hundred zeros) then changed it to Google. Google offers quick and effective search results.
Google were unique to their superiors, they were the first company that were able to offer a relevance aspect to searches and they were able to relate 2 words together in order to give you more much relevant articles.
Their revenue model was initially through advertising, paid for by businesses who wanted to be seen at the top of Google searches. On the right hand side of the Google page you see a selection of companies who pay Google by “click”, so only if someone clicks the company advertisement will Google get a fee.
Potential problems:
· Universities are finding students don’t research enough anymore and are downloading documents directly from Google.
· Authors are unhappy with Google books, since they feel it decreases book sales. Google have said they respect copyright and limit the display.
· Google confidential – Google track and code every computer who has visited the site, they also keep all searched records carried out by each computer. This information is kept on file for years and some people are not happy.
· Click-fraud – Some paying customers of Google who advertise on the right hand side of the page have had experience in click-fraud, some feel competitors may set out to click continuously on your advertisement to make you pay more. Google are continuously updating their software in order to track all clicks, thus making it harder for this to happen.
Currently, through rapid ideas and growing power, Google offers Google desktop, Google earth and Google TV to name a few, Google also owns Facebook.
Google is one of the most profitable companies ever; they floated on the stock market in 2004 making all employees millionaires overnight. The 2 founders are currently worth $8 billion each.
Monday, November 12, 2007
The Power of eBay
eBay started in Silicon Valley by Pierre Odymar, headquarters are here in Victoria, London.
eBay is effectively a “giant jumble sale”, also known to some as a “cult”. Remarkable bargains, with great customer service.
Revenue model – eBay make money through transaction fees and commission. Its the ideal business concept, no upfront costs, no costs of goods, no inventory,
Way of keeping trust with honest, reliable customers is through feedback option. It works very well, feedback for buyers and sellers; you are then scored for a rating.
Potential problems:
Taxes “Black Economy eBay” - tax collectors and excise agents are looking to tax eBay somehow. As a result eBay sends out a message to all customers to remind them to pay their taxes.
FACTS:
· £18 billion global sales
· Trade £2 billion worth of goods per year
· 59% largest economy last year (1 behind Kuwait)
· Global audience of 100 million
· 30p fee for each auction, then a percentage of the sale price
· 100 million registered users
· ½ billion revenue per year
· 10 ,000 people make a living by trading on eBay
eBay is effectively a “giant jumble sale”, also known to some as a “cult”. Remarkable bargains, with great customer service.
Revenue model – eBay make money through transaction fees and commission. Its the ideal business concept, no upfront costs, no costs of goods, no inventory,
Way of keeping trust with honest, reliable customers is through feedback option. It works very well, feedback for buyers and sellers; you are then scored for a rating.
Potential problems:
Taxes “Black Economy eBay” - tax collectors and excise agents are looking to tax eBay somehow. As a result eBay sends out a message to all customers to remind them to pay their taxes.
FACTS:
· £18 billion global sales
· Trade £2 billion worth of goods per year
· 59% largest economy last year (1 behind Kuwait)
· Global audience of 100 million
· 30p fee for each auction, then a percentage of the sale price
· 100 million registered users
· ½ billion revenue per year
· 10 ,000 people make a living by trading on eBay
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