Chapter 6: Web Communities

E4. Midland University, like most metropolitan universities, faces a chronic shortage of parking spaces on campus. Each stakeholder group in the typical university community (these groups include students, faculty, administrators, staff, and visitors) believes its members should have the top priority for parking spaces. You have been assigned to a university task force to study the problem. You decide that an annual online auction of parking spaces conducted on the university’s intranet could provide a solution. In about 300 words, describe the elements of an annual online auction for parking spaces at Midland University. Be sure to include provisions for disabled persons and for those university employees who do not have regular access to computers in their typical work environment (such as janitors, physical plant maintenance workers, or gardeners).

                I believe that implementing a Reverse Auction for parking spaces at Midland University would be the best option. Reverse Auction works well in this situation because the products being sold have more than 1 quantity and are all the same. Also, since there are a number of stakeholder groups bidding for this product, this would be the fairest way to sell. It allows the buyer to buy the product at their desired price rather than have everyone compete and drive prices to where some individuals cannot afford it.

                First, I think the parking spaces should be broken up in Lots based off the groups. For example, parking spaces for students would be called the “Student Lot” and staff would have a “Staff Lot.” This way, each group gets the same amount of parking spaces and do not have to compete with each other on bidding. Of course, the University should keep a couple non-specified Lots for those who are unable to win a reserved parking space for the year.

                In conducting the Reverse Auction, each Lot will commence the auction at the same time. Half of the parking spaces from each lot will be held online while the other half will be conducted through form submission. This way, individuals who do not have access to a computer may also bid. All parking spaces will begin with a specified price and since it is a Reverse Auction, the price will drop in increments such as $50 every 30 minutes. Each bidder may bid at the current price or indicate a bid they are willing to pay. The auction ends when the number of people bidding equals the number of spaces available. All winning bidders then pay the final posted price even if a winner bid higher. However, those who bid a price below the final posted price will not win. Also, if there is ever a tie, the bidder who bid first wins.

Chapter 5: B2B Strategies

1.      Become familiar with RFID technology and its potential uses in Harley- Davidson’s supply chain using the information presented in this chapter and information you obtain through the Online Companion links, your favorite search engine, and your library. In about 400 words, evaluate the advantages and disadvantages for Harley- Davidson of replacing its bar codes and scanners technology with RFID.

HARLEY DAVIDSON—RFID Evaluation

Radio Frequency Identification Devices (RFIDs) are small chips used to track inventory through radio transmissions and are powered by radio signals similar to that of a cell phone. This technology is fairly new, but quiet advanced in comparison to bar codes. Unlike bar codes, RFIDs do not have to be visible for scanning. They can be scanned through boxes, over product materials, and from far ranges.

Using RFID technology can greatly benefit Harley Davidson. RFIDs can track inventory much faster and in real-time due to its scanning capabilities. This helps to manage inventory by making sure that items are stocked accordingly. It also improves processing time in terms of ordering needed supplies. Last, since RFIDs have read and write capabilities unlike barcodes, mistakes are less likely and maintaining accuracy is consistent.

However, RFIDs do have its flaws. Since its technology is just beginning to rise in popularity, the cost of implementing RFID in a company like Harley Davidson would be high. Harley Davidson would need to support not only their own massive inventory, but also deal with hundreds of suppliers in providing RFIDs and scanners.  There is also the issue of reliability. Since scanning capabilities rely on radio signals, just as a cellphone could lose signal, so can an RFID. Also, in terms of signals, there is always the possibility of security. Implementing a secure network could be costly.

3.      Develop and present a timetable for the adoption of RFID technology with specific recommendations on where Harley- Davidson should first implement it. For example, RFID tags could be installed in motorcycles as they leave final assembly, in various parts before they are shipped from suppliers, or in subassemblies as they are created at various Harley- Davidson manufacturing operations. Justify the time delays you propose in the adoption of RFID at each stage of the supply chain.

I recommend that Harley Davidson first implement the RFID technology with its Franklin Distribution Center in Wisconsin. This center is responsible for more than 22,000 parts and 36,000 locations. By implementing the technology with this center first, it not only familiarizes Harley Davidson’s main distribution center, but it also allows them to educate the 36,000 locations that they manage.  I would estimate the training to be completed within 1-3 years. Delays could be due to the amount of locations needing training as well as transition time needed from the familiarity of bar codes to RFIDs. During the same time, I recommend that the Harley Davidson Dealer Systems located in Ohio work with the Franklin Distribution Center for training and inventory success. With H-D Dealer Systems responsible for providing technical tools, training, and support to U.S. dealers, expanding the technology within the Harley Davidson chain would be much quicker.  After training and implementing the RFIDs within the two centers, I recommend that the RFIDs be distributed to the five Harley Davidson U.S. Operations facilities. Here, RFIDs can be placed during final assembly.  The transition to the new assembly procedure could pose delays, but I estimate that within 2 years, RFID procedures will be established making the implementation of RFIDs with Harley Davidson total from 3-5 years. 

Source: www.harley-davidson.com

Chapter 4: Marketing

E1. Visit FTD.com to examine how that company implements occasion segmentation. Write a report of approximately 200 words in which you describe two clear examples of occasion segmentation on the site and explain why an online florist would mix occasion segmentation with product segmentation rather than use one or the other separately.

When first entering FTD.com, the first thing I notice is a colorful bouquet of flowers and large text that says, “Make their BIRTHDAY beautiful.” That alone, shows occasion segmentation because it links a “specific time or occasion” to their product. Other than that homepage ad, FTD.com also has a drop down button and sidebar buttons options for specific holidays or occasions. Each occasion have gift suggestions such as flowers, food, and teddy bears, which associate best with that occasion. These examples of occasion segmentation allow viewers to associate their occasion interest to specific products.

However, I believe an online florist would benefit more in mixing occasion segmentation with product segmentation. With florist, the product focus is the flowers. The focus is not a birthday, an anniversary, or a holiday, it’s the product itself. In using occasion segmentation on its own, viewers would only associate flowers to an occasion, thus only making profit when an occasion arises. If product segmentation is implemented as well, a viewer first assumes that the product is a beautiful bouquet of flowers meant for anything and anyone.  

C2. Montana Mountain Biking

1.       Review the five stages of customer loyalty shown in Figure 4- 4 and prepare a report of about 200 words in which you classify MMB’s customers. Estimate the percentage of MMB customers who fall into each of the five categories. Support your classification with logic and evidence from the case narrative.

According to the five stages of customer loyalty, I believe MMB’s customers lye mostly in the commitment category. If I were to estimate their customer percentage in regards to all the stages, I would assume these percentages:

Awareness:         20%

Exploration:        15%

Familiarity:          15%

Commitment:      65%

Separation:           0%

I estimated MMB’s commitment rate at 65% because the narrative stated that out of their current customers 80% were repeat riders. This also meant the other 20% would have to be in the familiarity group because they were now experiencing MMB, making it more likely for them to try MMB again. However, there current customers cannot fill up all the stages so I decreased the percentage in proportionate to what I assumed the other stages rates were. I came up with 20% as their Awareness rate because with the amount of advertising MMB spent in magazine ads, I would assume many people have seen them to associate their name to Mountain Biking. Also, it was stated that the MMB logo was well-known in the upper Mid-West, thus having more awareness rating. I then left the remaining 15% to Exploration because of the new website traffic as well as email inquiries. Last, I did not enter any Separation rates because it seemed as though many customers who chose MMB were determined to stick with MMB.   

2.       In a report of about 200 words, recommend an e- mail marketing strategy for MMB. In your recommendation, consider the results of MMB’s earlier print mail advertising campaign, your answer to the first requirement, and the potential offered by permission marketing.

I would suggest combining content and advertising as far as email marketing for MMB. With the popularity of the MMB photos in mind, I think it would be best to include them in a newsletter. This way, MMB not only shares photos and experiences that interest the recipient, but also allows the recipient to associate them to MMB. Below the newsletter, MMB should provide a mountain biking tour registration link as well as a link to the website. Creating this newsletter with the links would allow more traffic for potential customers.

If MMB were to stick with their print advertising, they would spend more printing the ads then they would in gaining profit from those ads. With email marketing, there would be no cost in printing because everything is done online. This would save advertising cost as well as provide a low-risk of lost in terms of return revenue. However, if MMB opted for just permission marketing where only recipients who were already interested asked for emails, MMB’s efforts to expand their market would be limited. Using the email marketing strategy I suggested would bring in potential customers of a wider interest such as the photos not just mountain biking tours.  

4.       Prepare a report of about 500 words in which you outline an affiliate marketing strategy for MMB. Include a description of the types of Web sites that MMB should attempt to recruit as affiliates, and present at least five examples of specific sites that would be good referral sources.

MMB Affiliate Marketing Strategy

An affiliate is a web site, which promotes another company’s product(s) in order to get click-through sale revenue. Since MMB mainly sells one product, which is Mountain Biking Expeditions, MMB could serve as an affiliate site to related products. Products which relate to MMB would be Mountain Bike Gear, Apparel, and Accessories. 

The best way to set up an affiliate is to join their program then add the linked product images to MMB’s website. MMB should also provide products with good reviews in order to have higher click-through sales. I would also suggest having monthly MMB product picks that can be added to an MMB newsletter. This way, MMB can market directly to interested customers as well as the usual website traffic.

                Five affiliates I would suggest are REI, Sports Authority, Dick’s Sporting Goods, JensonUSA and Great Outdoors. All of these companies sell related products and most of them also promote outdoor activities where there products can be used. This is beneficial for MMB because not only can MMB gain revenue from affiliate sales, but also create a partnered advertising format.

                From all the affiliate suggestions, I highly recommend that MMB affiliate with REI or Great Outdoors. REI is a popular outdoor products chain and I believe associating with such a well-known company would help boost MMB’s popularity as well. Plus, REI has a large inventory of cycling products, which would allow more options for customers.  

Although the Great Outdoors is neither as popular nor have as large an inventory as REI, they do have the benefit of promoting MMB towards their viewers. Great Outdoors not only sells Outdoor Gear, but they are also an Outdoor Resources and News Website. They link information such as tour events, pictures of tours, and tips when taking a bike tour. MMB associating with Great Outdoors would help establish them on their website and perhaps link future tour photos and news to MMB.      

Chapter 3: Revenue Models & Web Presence

E2. Evaluate the usability of two Web sites that sell large- screen LCD high- definition televisions. A list of links to companies that sell this type of product is included in the Online Companion for this exercise, but you may use other sites if you wish. In your evaluation, compare the sites on how easy it is to learn about the product and purchase the product. Your report should include a section of about 200 words in which you describe the criteria you used in your evaluation, a section of about 300 words that summarizes your findings, and a section of about 100 words in which you present your conclusion.

LCD HDTV Website Evaluation: BestBuy.com vs. hhgreg.com

In evaluating these two websites, I used Dr. Nielson’s five components in testing usability. The five components are the following:

1.       Learnability—learning the design to easily accomplish basic tasks for the first time

2.       Efficiency—quickly perform tasks

3.       Memorability—easy to remember tasks when returning to the site

4.       Errors—amount of errors a made and whether it is easy to fix those errors

5.       Satisfaction—pleased with the use of the design

When first entering BestBuy.com, navigating was very easy to learn because it’s right at the header in big, distinguishing text. The main buttons have a drop-down menu, which helps to narrow the user’s options. Although, it took me about (3) clicks before I could even get to the TV listings with the amount of narrowing options. Once I got the listing though, it was fairly easy to find the best options with all the search tools they provide. They have a “sort by” drop-down that list the user’s options by Price, Brand, Best Sellers, and New Arrivals. To the left, there are also narrowing selections such as Size, Features, Resolution, and several other specifications. The list itself is very well organized as well. Each product contains an image, the price (red sale price distinction), and a brief description of the item.

When I returned to the site the next day, it was just as easy to start my TV search as the first time around. I did not personally encounter any errors, but judging from the application they use in order show graphics and video, some users may face accessibility options if the so not have a flash application installed to their browser. However, it can easily be fixed by approving a free flash installation.

Overall, I would say that my experience with BestBuy.com was satisfactory. The website design was consistent, attractive, and well-organized. Searching for an LCD HDTV was as easy as typing it into the search bar, clicking through the menu options, or even using their very own TV Finder application. If I did purchase a TV from them, I would feel safe as well because the site is trusted by (2) certified companies, cybertrust and TRUSTe. In the end, the site succeeds in selling to the customer.

When first entering hhgreg.com, navigating was a lot easier than BestBuy.com, but that was mostly due to the fact that they had less of an inventory. Their navigation was also located at the header and each product type had a button. Each button also had drop-down menus to narrow the search. It was a lot faster to get to a TV listing with hhgreg.com with only (2) click options. However, the listing was not nearly as organized as BestBuy.com. They did not provide a sort option and only had (3) narrowing options, which was by Category, Brand, and Price. Also, while the listing had the same format with picture, price, and description, the option of availability and shipping was not as advanced as BestBuy.com. BestBuy.com gave real-time location and delivery date estimates while hhgreg.com only had a check mark of whether Pickup and Shipping were possible for the product. The user would then have to directly call the store located near them to get specific inventory info and shipping costs.

Overall, although hhgreg.com has a simpler design with an easily memorable navigation and minimal possibility for error, the website did not compare to BestBuy.com. The overall layout was aligned to the left so that there was a lot of white space to the right, which made it look unattractive and unprofessional. The colors were consistent, but it was an amateur design for a company promoting technology. However, it was secured by McAfee, which is a well-known company, but certified by a lesser known Network Solutions. I wouldn’t feel as uncomfortable purchasing a TV on their site as I would with BestBuy.com. Although, searching for an LCD HDTV was just as easy as BestBuy.com. In the end, I would have to say my experience with hhgreg.com was less satisfying than using BestBuy.com.

C2. Prepare a comprehensive report for Mario in which you outline and analyze the possible revenue models that ASIB might use for its Web site. You should address the two journals as separate issues. Your report should provide the basis for a presentation to the ASIB executive board and should include specific recommendations where possible.

ASIB Revenue Model Analysis

Attention: Mario

I understand that EBSCO has approached ASIB and proposed to manage the distribution of ASIB’s Annals of International  Business Journal. I believe taking this opportunity would be beneficial to ASIB. In terms of Revenue Models, this would be considered a digital content revenue model. ASIB would essentially be selling their Journal issues to EBSCO’s library, which academic and business institutions can subscribe to.  In doing so, ASIB would not only increase subscription traffic because of the popularity of EBSCO’s database, but also cut back on publication costs.

Looking at the numbers, printing alone would save $24,800. The cost to print yearly issues for all 600 subscribers of the Annals of International Business Journal cost $28,800. If ASIB were to take EBSCO’s offer, ASIB would only spend $4,000 a year ($1,000 * 4 issues) to produce PDF files of their journal. Managing these online journals would be just as cost-effective. Rather than have $35,000 a year worth of managing and maintenance cost, ASIB would decrease that cost down to $6,000 ($500 per month) saving ASIB $29,000 a year.

Choosing the digital content revenue would increase ASIB’s net profit four times more than what ASIB currently makes a year. With EBSCO proposing to pay ASIB $10,000 per year for access to their journal as well as $50 per subscriber, ASIB would be making an extra $40,000 a year ($10,000 + ($50 * 600 subscribers)).  If we add that cost to the $260,000 ASIB usually makes within a year in revenue. ASIB would have a total of $300,000 in revenue. However, since publishing cost is less with EBSCO, ASIB would only have to deduct $15,000 ($4,000 printing + 6,000 maintenance, + $5,000 publication editing) as oppose to their usual $204,800 publication cost. With the $15,000 deduction, ASIB would make a profit of $285,000. In comparison to the print publication profit of $55,200, ASIB would make an extra $229,800 in profit choosing the digital content revenue.  Taking all this into consideration, I highly recommend that ASIB accept EBSCO’s proposal.

As far as increasing revenue for ASIB’s International Business Today, I would propose for ASIB to take on the advertising-subscription mixed revenue model. With companies already expressing interest in establishing ads on ASIB’s website, ASIB could potentially increase advertising revenue by almost double. ASIB’s current advertising revenue is at $20,000 per year, but as estimated, at least $3,000 per month of revenue can come from web site advertising. This would increase ASIB’s total revenue by $16,000 ($20,000 + ($3,000 * 12)).

However, I understand that ASIB is concerned about losing subscribers using this model. My suggestion is that ASIB lower their online subscription rate in comparison to their print subscription. This way, people are more drawn to subscribe online than with print. If ASIB continues to post their best articles with the ads, the profit from the ads would make up for the lower subscription cost. Also, in using this technique, ASIB should advertise that when subscribing, less or no ads would be shown. This would definitely gain more subscribers. If successful, the total revenue along with the Annals of International Business Journal taking on the digital content revenue model would be $316,000.