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Chapter 2

C2. Portable Fun Instruments

Yash Gupta is the founder and president of Portable Fun Instruments (PFI), a company that has

had great success in the handheld game market. Its first products were dedicated handheld

devices that each offered a specific game, such as backgammon, checkers, or chess. As the

power of microprocessors for handheld devices grew, and the size and cost of those microprocessors shrank, PFI was able to build better and more complex games into its devices.

Today, PFI offers a wide variety of dedicated handheld devices on which users can play

card games, adventure games, and sports simulations, and solve various kinds of puzzles. Most

of the elements in the game displays are graphics, not words. This helps PFI sell the devices in

many different markets around the world without having to build separate interfaces for each

language. PFI’s game devices have retail prices that range between $20 and $40, but the

retailers and distributors buy them from PFI for prices that range between $4 and $18.

PFI is profitable because Yash has worked hard to keep development and production costs

low. Most of the programming is done in Bangalore, India, and the devices are built in production facilities located in Xixiang, China, and Penang, Malaysia. Although Yash has been

successful in controlling production costs, he worries about continuing to operate the company

with a long-term strategy that requires PFI to build a new physical device for each sale. The

large retail chains that have become PFI’s main customers are always asking for discounts and

reduced prices on new orders, and production costs are creeping upward even though the facilities are located in some of the lowest-cost areas in the world.

Yash wants to explore the potential PFI has for moving its games to other platforms. PFI

has translated some of its games to run on smart phones, but the results have been disappointing. Until recently, most smart phone users have been businesspeople who use their smart

phones for e-mail, appointments, address books, travel expenses, and other data-management

functions. These users are not avid game players, and sales of PFI’s games for these platforms

have not been strong.

Some of PFI’s marketing team members have been telling Yash about the success of

Apple’s iPhone and the online store for software that runs on that phone (called Applications for

iPhone). Apple shares the revenue earned from software sales on its site with the developers of

that software. Other team members have mentioned Google’s Android operating system for

smart phones built by a variety of manufacturers. Software for those phones sells in the Android

Marketplace, which operates in much the same way as Apple’s software store, sharing revenue

with software providers.

Yash has hired you as a consultant to investigate the Apple iPhone and Android Marketplace as options for selling versions of PFI’s games that will work on smart phones.

Required:

1. Use the links in the Web Links for this case, your favorite search engine, and resources in

your library to learn more about Android and Apple as program delivery systems for smart

phones. Prepare a 300-word executive summary for Yash that describes each delivery

system you identify and outlines the current or likely near-term availability of each system

for content providers such as PFI.

2. Prepare a report for Yash and the PFI executive team in which you outline and analyze

the strengths and weaknesses of each content delivery system you have identified. Your

report should conclude with a specific recommendation regarding the suitability of each

content delivery system for PFI’s games. This report should be about 300 words in length.

Chapter 3

C1. Lonely Planet

In 1972, Tony and Maureen Wheeler were newlyweds who decided to have one last adventurous travel experience before settling down. Their trip was an overland trek from London to

Australia through Asia. So many other travelers asked them about their experiences that they

sat down at their kitchen table and wrote a book titled Across Asia on the Cheap. They published the book themselves and were surprised by how many copies they sold. More than three

decades and 60 million books later, their publishing enterprise has turned out to be one of the

most successful in history.

The Wheelers’publishing company, Lonely Planet, has grown rapidly, with typical annual

sales increases of 15 percent or more. In 2007, BBC Worldwide purchased a 75 percent ownership interest in the company and purchased the rest of the company’s stock in 2011. Lonely

Planet TV now produces a variety of travel and documentary programs that appear on cable

networks throughout the world. As a BBC subsidiary, the company does not release sales figures, but industry analysts estimate current annual revenues to be about $110 million. Lonely

Planet publishes more than 600 titles and holds a 20 percent share of the travel guide market.

The company has more than 450 employees in its U.K., U.S., French, and Australian offices

performing editorial, production, graphic design, and marketing tasks. Travel guide content is

written by a network of more than 200 contract authors in more than 20 countries. These

authors are knowledgeable about everything from visa regulations to hotel prices to the names

of the hottest new entertainment spots. The combined expertise of the in-house staff and the incountry authors has kept Lonely Planet ahead of its competitors for many years.

Lonely Planet also offers travel services that include a phone card, hotel and hostel roombooking, airplane tickets, European rail travel reservations and tickets, package tours, and travel

insurance. These services are sold by telephone and on the Lonely Planet Web site.

The Web site has won numerous awards, including the Society of American Travel Writers

Silver Award and a spot on Time magazine’s“Fifty Best Web Sites”list. The site was launched

in 1994 and includes an online store in which Lonely Planet publications are sold. However, the

site’s main draws are its comprehensive collection of information about travel destinations and

its online discussion area, the Thorn Tree, which has nearly a half million registered users. The

company has had trouble turning any of this information into a source of revenue generation.

Despite its excellent Web site and its use of new technologies, most of Lonely Planet’s

revenues are still generated by book sales. The typical production cycle of a travel guide is

about eight months long. This is the time it takes to commission authors, conduct research,

work through several drafts of writing and editing, select photos, create the physical book, and

print it. This production cycle causes new books to be almost a year out of date by the time they

are published. Only the most popular titles are revised annually. Other titles are on two-, three-,

or four-year revision cycles. The time delay in publication means that many details in the guides

are outdated or wrong; restaurants and hotels close (or move), exchange rates and visa regulations change, and once-hot night spots are abandoned by fickle clientele.

Lonely Planet publications are well researched and of high quality, but the writers do not

work continually because the books are not published continually. The Web site often has information that is more current than the published travel guides.

The site’s online shop does offer some custom guides, which are parts of its existing travel

guides packaged in different ways, and it does let customers buy specific chapters from its

books, but it still is largely focused on selling books, although the site does offer PDF files that

can be downloaded to mobile devices. Lonely Planet has adopted some new technologies, but

has not used them to change its revenue model in any major way or to make basic changes in

the production of its main product, the travel guides.

Required:

1. Review the company’s offerings for Apple iPhone and iPad products and for Android

smart phones (Trippy). Evaluate those products and identify opportunities for other

products or services that the company could offer for mobile devices that would take

advantage of Internet technologies (including wireless technologies for mobile devices)

and address customers’concerns about the timeliness and currency of information in

the printed travel guides.

2. Prepare a report in which you analyze the marketing channel conflicts and cannibalization

issues that Lonely Planet faces as it is currently operating. Suggest solutions that might

reduce the revenue losses or operational frictions that result from these issues.

Chapter 4

C1. Oxfam

For more than 60 years, Oxfam has worked through and with its donors, staff, project partners,

and project participants to overcome poverty and injustice around the world. Early in World

War II, Greece was occupied by the German army. Allied forces created a naval blockade

around Greece to prevent further German expansion; however, the blockade caused Greek

civilians to suffer severe shortages of food and medicine. In response to this humanitarian crisis,

a number of Famine Relief Committees were formed by people in Great Britain to ship emergency supplies through the Allied blockade.

Most of these committees ceased operations after the war ended and the Greek crisis

subsided; however, one of them, the Oxford Committee for Famine Relief, saw a continuing

humanitarian need throughout post-war Europe and expanded its operations to provide aid there

and in later years, the rest of the world. The Committee eventually became known by its abbreviated telegraph address, Oxfam, and the name was formally adopted in 1965.

Oxfam’s growth was due to many dedicated volunteers and donors who continued and

expanded their financial support of the organization. In the 1960s, Oxfam began to generate

significant revenues from its retail stores. These shops, located throughout Great Britain, accept

donations of goods and handcrafted items from overseas for resale. Today, those stores number more than 800 and are staffed by more than 20,000 volunteers. The British organization has

joined with 15 other charitable organizations to become an international confederation devoted

to ending poverty and injustice with operations in 98 countries and annual program expenditures

of more than $900 million. Oxfam often deals with humanitarian disasters that are beyond the

scope of its resources. In these cases, the organization provides aid by mobilizing an international lobbying staff that has contacts with key aid agencies based in other countries, governments in the affected area, and the United Nations.

In 1996, Oxfam opened a Web site to provide information about its efforts to supporters and

potential donors. The Web site included detailed reports on Oxfam’s work, past and present,

and allows site visitors to make donations to the organization. Although Oxfam gladly accepts

any donations, it encourages supporters to commit to a continuing relationship by making regular donations. In exchange, it provides regular updates about its activities on the Web site and

through an e-mailed monthly newsletter. The Web site includes a sign-up page for the e-mail

newsletter, which goes out to several hundred thousand supporters. When supporters sign up

for the newsletter, they can choose to receive other e-mails from Oxfam. The supporters who

have opted in constitute the Oxfam opt-in e-mail list.

Oxfam has been involved in relief work in Sudan since the 1970s, when it provided help to

Ugandan refugees in the southern part of the country. In its recent work there, it has set up

sanitary facilities and provided clean drinking water in camps that house thousands of displaced

people fleeing pro-government Arab militias. The need in Sudan rapidly exceeded Oxfam’s

capacity and it decided to use e-mail to mobilize support for the project.

Oxfam planned an e-mail campaign that would send three e-mails in HTML format to supporters on its existing opt-in e-mail list over a six-week period. The first e-mail included a photo

of children in one of the camps. The text of the e-mail message described Oxfam’s efforts to

provide clean water to the displaced people living in the Sudanese camps. The e-mail included

links in two places that took recipients to a Web page that had been created specifically to

receive visitors responding to that e-mail message. The Web page allowed visitors to make a

donation and asked them to provide their e-mail addresses, which would be used to send

updates on the Sudan project. A second e-mail was sent two weeks later to addresses on the

list that had not yet responded. This second e-mail included a video file that played automatically when the e-mail was opened. The video conveyed the message that Oxfam had delivered

$300,000 in aid to the camps but that more help was urgently needed in the region. This second

e-mail included three links that led to the Web page created for the first e-mail. Two weeks later,

a final e-mail was sent to addresses on the list that had not responded to either of the first two

e-mails. This third e-mail included an audio recording in which Oxfam’s executive director made

a plea for the cause. The e-mail also included text that provided examples of which aid items

could be provided for specific donation amounts.

Oxfam’s three-part e-mail campaign was considered a success by direct marketing standards. The first e-mail was opened by 32 percent of recipients and had a click-through rate of

8 percent. The second e-mail had similar, but somewhat higher, results (33 percent opened,

10 percent clicked-through). Ninety percent of those who opened the e-mail watched the video.

The third e-mail continued the slightly increasing trends for opening and attention (34 percent

opened, and 94 percent listened to the audio), but the click-through rate was much higher than

the previous two e-mails (14 percent). Also, the dollar amount of donations increased with each

subsequent e-mailing. The e-mail campaign raised more than $450,000 in its six-week period.

Oxfam coordinated this e-mail effort with other awareness activities it was conducting in the

same time period. The organization sent letters to supporters who had not provided e-mail

addresses and ran ads in two newspapers (The Independent and The Guardian) that carried

messages similar to those in the e-mails.

Required:

2. For this campaign, Oxfam chose to use e-mails that contained HTML, audio, and video

elements rather than using plain-text e-mails. In about 100 words, describe the advantages and disadvantages of using formats other than plain-text in this type of e-mail campaign. Be sure to identify any specific trade-offs that Oxfam faced in deciding not to use

plain-text e-mail.

5. If Oxfam were to undertake a similar emergency fund-raising effort today, it might use

social media. In about 300 words, describe how Oxfam could use Facebook, Google+,

and Twitter in combination with its existing online resources to enhance or replace the

e-mail campaign described in the case.