book here: Chapter 3 http://robertdaigle.com/wp-content/uploads/2011/10/20105_ElectronicCommerce_9th_0538469242.pdf Exercise 3 You are a Web business consultant and have been retained by Bob Drudge, the owner of...danjco
book here: Chapter 3 http://robertdaigle.com/wp-content/uploads/2011/10/20105_ElectronicCommerce_9th_0538469242.pdf Exercise 3 You are a Web business consultant and have been retained by Bob Drudge, the owner of refdesk.com, to explore revenue-generating alternatives. Currently, the site is using an advertising-supported revenue model. Bob wants you to consider each of the other revenue models and the potential of strategic alliances that might make sense for his site. ----------------------------------------------------- Case 1. 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 20 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 UK, 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 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 in-country 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 room-booking, 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 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: 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 timelines and currency of information in the printed travel guides. 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.
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