Question- Discuss the types of B2C models in detail.

Ans.

B2C Models

The Business-to-Consumer model can save time and money by doing business electronically but customers must be provided with safe and secure as well as easy-to-use. A business which creates value for consumers and individuals is said to have a Business-to-Consumer model of operation. This is not to say that a B2C business serves only consumers. A B2C company might also serve other businesses but their major focus is on serving the consumers and individuals directly. The B2C, model of electronic commerce transaction is ideally suited for the following types of merchandise:

Items sold in packets that cannot be opened even in physical stores, e.g., Kodak film rolls;

Relatively cheap items where savings outweigh risks;

Items that can be experienced online, such as music, videos etc.;

Goods that can be easily transformed into digital format, such as books, music clips and videos, and software packages;

Items that follow standard specifications, like printer ribbons, ink cartridges etc.;

Highly rated branded items or items.with return security such as Dell and Compaq computers, electronic gadgets from Sony, etc.;

The B2C electronic commerce opportunity has been utilized by these types of businesses-channel enhancement, the on-line internet based stores, and small businesses trying to surpass entry barriers.

Types/classification of B2C models are as under:

1. Online Intermediaries : These are companies that facilitate transactions between buyers and sellers and receive a percentage. There are two types of online intermediaries: brokers and infomediaries.

(i) Brokers: A broker is a company that facilitates transactions between buyers and sellers. There are various types of Brokers:

Metamediary is a firm that offers customers access to a variety of stores and provides them with transaction services, such as financial services.

Bounty is an intermediary that offers a fee to locate a person, place, or idea.

Buy/Sell. Fulfillment is a corporation that helps consumers place buys and sell orders.

Virtual Mall is a company that helps consumers buys from a variety of stores.

Search Agent is a company that helps consumers compare different stores.

Shopping Facilitator is a company that helps consumers uses online shops easier and potentially in a user customized interface, by providing currency conversion language translation, and payment and delivery solutions.

Online intermediaries are online e-commerce platforms that help bring together the buyers and sellers; the platform themselves do not make the products or services listed on the site.

2. Online Based/Infomediaries-

(i) Advertising-Based B2C Model : The advertising-based B2C model is where online sites use content to bring visitors-could be a website, blog or forum- and earn revenue by displaying ads on the site.

In an advertising-based system, businesses' sites have ad inventory, which they sell to interested parties. There are two guiding philosophies for this practice: high-traffic or niche. Advertisers take a high-traffic approach when attempting to reach a larger audience. These advertisers are willing to pay a premium for a site that can deliver high numbers, for example advertisements on any website. When advertisers are trying to reach a smaller group of buyers, they take a niche approach. These buyers are well-defined, clearly identified, and desirable. The niche approach focuses on quality. High volume sites like news publications and tech websites such as The Huffington Post and Tech Crunch are great examples of advertising-based B2C companies.

(ii) Community-Based B2C Model : Social media platforms are great examples of online B2C businesses following the community-based model. In a community-based system, companies allows users worldwide to interact with each other on the basis of similar areas of interest. These firms make money by accumulating loyal users and targeting them with advertising. Take Facebook - it helps connect and build online communities among its users which then leverages to promote their products to earn money via the platform.

(iii) Fee-Based Models : A firm charges a subscription fee to view its content. There are varying degrees of content restriction and subscription types ranging from flat-fees to pay.

3. Direct Sellers : In this model, consumers purchase goods directly from the manufacturers via their online retailers. Example: Supreme's Online Store.

Direct Sellers are companies that provide products or services directly to customers are called direct sellers. There are two types of direct sellers:

(i) E-tailers : Upon receiving an order, the E-tailer ships products directly to the consumer or to a wholesaler or manufacturer.

(ii) Manufacturers : The manufacturer sells directly to consumers via the Internet. The goal is to remove intermediaries, through a process called dis- intermediation, and to establish direct customer relationships. Dis-intermediation  ́is not a new idea as catalog companies have been utilizing this method for years. There are a number of potential strategies that firms can adopt for disintermediation and Re-intermediation. New internet focused competitors can use a variety of strategies to attain competitive advantage in the short run, and maintain competitive parity in the long run.

4. Service-Based B2C Model : A company with a service-based B2C model functions exactly as its namesake-it helps provide services to its consumers. A service-based B2C company earns revenue by providing services. An example of service-based B2C is a lawn mowing business. The Service-based B2C companies are many and large since it requires a lesser initial investment and easier to scale up accordingly. Also, service-based B2C companies are easier to set up and run compared to product-based B2C businesses. The service-based B2C companies may have an online or physical presence or both, but it boils down to the service that the company provides.

5. Service-focussed Software-Based B2C Model : Netflix and Spotify are great examples of a "service-focussed" software-based B2C companies. Both help provide video and music services to consumers via the use of the software. These services are usually membership or subscription-based. The services can be easily deployed as required, making them largely scalable compared to software products. While these are a few of the major types of B2C models, there is one other field that can be categorized separately-the online B2C model.

6. Product-Based B2C Model : In the product-based B2C model, businesses sell products to consumers. The business may act as a supplier and sell customized products to individuals either via their own physical or online stores. An example of a product-based B2C company would be a shoe brand selling its shoes to its customers via its physical storefront. Adidas is a great example of a B2C shoe company that produces and sells its branded shoes to consumers and individuals via its online and physically located stores as well as on e-commerce sites. This model helps to emphasize the fact that the products themselves are generally physical (in nature), hence require a much higher initial investment compared to other B2C types.

7. Product focussed Software-Based B2C Model : Adobe and Microsoft are great examples of "product-focussed" software-based B2C companies. They provide software products for editing and creation of media and documents respectively to the consumers. B2C e-commerce is where businesses sell (and buy) goods to consumers and individuals. This is enabled through the use of online marketplaces and stores. B2C e-commerce is a major field in the B2C model and can be divided into two different sub-models. B2C or Business to Consumer is the type of business model where the businesses serve customers.

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