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.