B2C Companies Research Articles

A Fuzzy AHP Approach for Evaluating Customer Value of B2C Companies

With the development of electronic information technique, electronic ecommerce grows rapidly, including B2C electronic commerce company. The evaluation of customer value in B2C electronic commerce company is a multiple-criteria decision making (MCDM) problem with many quantitative and qualitative attributes. This paper proposes fuzzy analytical hierarchy process (FAHP) approach to evaluate customer value in B2C electronic commerce company. In addition, a case study is presented to demonstrate how the approach can help in solving such problems in practice.

Identifying Causal Marketing-Mix Effects Using a Regression Discontinuity Design

We discuss how regression discontinuity designs arise naturally in settings where firms target marketing activity at consumers, and discuss how this aspect may be exploited for econometric inference of causal effects of marketing effort. Our main insight is to use commonly observed discreteness and kinks in the heuristics by which firms target such marketing activity to consumers for nonparametric identification. Such kinks, along with continuity restrictions that are typically satisfied in marketing and industrial organization applications, are sufficient for identification of local treatment effects. We review the theory of regression discontinuity estimation in the context of targeting, and explore its applicability to several marketing settings. We discuss identifiability of causal marketing effects using the design, and illustrate theoretically the conditions under which the RD estimator may be valid. Specifically, we argue that consideration of an underlying model of strategic consumer behavior reveals how identification hinges on model features such as the specification and value of structural parameters as well as belief structures. We present two empirical applications: the first, to measuring the effect of casino e-mail promotions targeted to customers based on ranges of their expected profitability; and the second, to measuring the effect of direct mail targeted by a B2C company to zip-codes based on thresholds of expected response. In both cases, we illustrate that exploiting the regression discontinuity design reveals negative effects of the marketing campaigns that would not have been uncovered using other approaches. Our results are nonparameteric, easy to compute, and fully control for the endogeneity induced by the targeting rule.

The Launching of Transactional Web Sites: Market Response to Announcements by Incumbent B2C Companies

Stock market responses to announcements of transactional Web site launches by business-to-consumer retail outlets are examined. In general, announcements by retail firms yielded positive average abnormal returns (AAR). More specifically, announcements by catalog firms yielded higher AAR than announcements by physical (brick-and-mortar) retail firms. Announcement of portal tenancy also leads to higher AAR for the subsample of firms making such announcements. Responses to announcements of plans to launch transactional Web sites are also explored. The implications of the results for multiple theoretical perspectives are discussed.

B2C Barriers and Strategies: A Case Study of Top B2C Companies in China

ABSTRACT Researchers have raised several concerns about developing Internet-based business-to-consumer (B2C) applications for developing markets such as China. Although both the economy and the Internet population have grown rapidly in China, the potential of the online market there has been questioned because of three important barriers–consumers' preference for face-to-face transactions, the lack of an efficient transportation infrastructure, and an underdeveloped credit payment system. Nonetheless, the Internet B2C sector has seen much growth in China and several companies have successfully incorporated the Internet into their business. This paper examines the strategies that leading Chinese Internet firms adopted to overcome these three barriers. Besides providing insights into e-commerce development in China, the results are useful for western firms attempting to market to consumers in China and other developing countries.

Characteristics of B2B adoption and planning of online marketing communications

This paper addresses the issue of whether there is a need for better online marketing communication planning and prioritisation methods, particularly for B2B companies. It describes the result of an empirical study among larger Danish companies. The work looks at differences between B2C and B2B companies, regarding the importance of offline and online marcom disciplines, online spending and usage of methods for online communication prioritisation. The paper concludes that due to high online spending, a less specialised priority of online disciplines and very limited usage of existing methods, B2B companies need to be on the lookout for new systematic methods for online communication planning.

Framework for fractal-based supply chain management of e-Biz companies

The high degree of uncertainty of customer demand makes it difficult for e-Biz companies to facilitate their profit maximization. The type of e-Biz company focused in this paper is a B2C (business-to-customer) which connects customers with product manufacturers through the Web interface. In this paper, the B2C company interacts with customers, multiple external manufacturers and a single transportation system. To deal with complicated interactions and relationships among customers, manufacturers and a transportation system, a comprehensive management system to support the B2C company is inevitable. This paper proposes a fractal-based framework for the management of e-Biz companies, where each member in the supply chain is modelled with a self-similar structure referred to as a ‘fractal’. The basic fractal unit (BFU) consists of five functional modules, including an observer, an analyser, a resolver, an organizer and a reporter. In this paper, functions of each module will be defined with UML (Unified Modelling Language). Then, the analysers and the resolvers (modules associated with decision-making) for each individual fractal will be specified with mathematical models. A profit model for the company-level fractal will then be formulated. Finally, a numerical example for an exemplary e-Biz company functioning B2C will be presented for the illustration of the proposed methodology.

Investigating the Impact of Web Site Value and Advertising on Firm Performance in Electronic Commerce

The failure of many B2C companies has triggered widespread concern about the future prospects of such firms. Surviving and newly formed companies are reevaluating their strategies and struggling to...

A framework for building brand equity online for pure‐play B2C retailers and services

Brand equity is an important asset that a B2C company can leverage to compete and prosper in its unique and intensely competitive environment. This paper provides a framework for building brand equity model. Based on this framework, some strategies are suggested to build brand equity online. Implications of the framework for research and practice are also discussed.

A Rude Awakening: Internet Shakeout in 2000

This study explores various value-drivers of business-to-consumer ("B2C") Internet companies' share prices both before and after the market correction in the spring of 2000. Although many market observers had predicted that the shakeout would eventually occur (e.g., Perkins and Perkins 1999), the ultimate and previously unanswered challenge lay identifying which stocks would fall and which ones would survive the shakeout. We develop an empirical valuation model and provide evidence that the Internet stocks that this model suggests were relatively over-valued prior to the Internet stock market correction experienced relatively larger drops in their price-to-sales ratios when the shakeout occurred. This result is robust to the inclusion of competing explanatory variables suggested by the economics literature related to industry rationalizations. We examine the ability of a valuation model comprised of both financial (accounting) variables and nonfinancial web traffic metrics to explain Internet companies' market values during each of 1999 and 2000. Our findings suggest that the reach and stickiness web traffic performance measures are value-relevant to the share prices of Internet companies in each of 1999 and 2000. Our findings of significance for the year 2000 contradict the recent claims of some analysts that web traffic measures are no longer important. We also explore the valuation role of our proxy for B2C companies' current rate of "cash burn" and find that this proxy is a significant value-driver in each of 1999 and 2000, but with differential valuation implications for each period. Our results suggest that the market was favorably disposed towards Internet companies' aggressive cash expenditures in 1999, but appeared to adopt a more critical view of Internet companies' cash burn rates in 2000. Our results further suggest that investors adopted a more skeptical attitude towards expenditures on intangible investments as the Internet sector began to mature. We find that investors appear to implicitly capitalize product development (R&D) and advertising expenses (customer acquisition costs) during the earlier period when the market was more optimistic about the prospects of B2C companies. However, only product development costs are implicitly capitalized into value, on average, subsequent to the shakeout in the spring of 2000. Finally, we provide statistical evidence to support the conjecture that different parameter vectors characterize the estimated market valuation models for each of 1999 and 2000. Overall, our study provides a preliminary view of the shakeout and maturation of one of the most important New Economy industries to emerge to date-the Internet.

A Rude Awakening: Internet Shakeout in 2000

This study explores the major value-drivers of business-to-consumer (B2C) Internet companies' share prices both before and after the bursting of the Internet in the spring of 2000. Although many market observers had predicted that the would eventually burst (e.g., Perkins and Perkins 1999), the ultimate and previously unanswered challenge lay identifying which stocks would fall and which ones would survive the shakeout. We develop an empirical valuation model and provide evidence that the Internet stocks that this model suggests were relatively over-valued prior to the Internet stock market correction experienced relatively larger drops in their price-to-sales ratios when the burst. This result is robust to the inclusion of competing explanatory variables suggested by the economics literature related to industry rationalizations.We also investigate a number of additional issues related to the rapidly changing Internet world. First, we provide descriptive evidence of the correlation between monthly stock returns and contemporaneous and lagged Nielsen/Netratings web traffic metrics (both levels and changes). We then undertake a factor analysis on the set of Nielsen/Netratings raw web metrics with a view to synthesizing the data into a parsimonious set of orthogonal web performance measures. Our factor analysis results in the extraction of three factors that capture the most relevant dimensions of website performance: (1) reach, (2) stickiness, and (3) customer loyalty. Our findings suggest that all three web performance measures are value-relevant to the share prices of Internet companies in each of 1999 and 2000. Our findings of significance for the year 2000 contradict the recent claims of some analysts that web traffic measures are no longer important. We also explore the valuation role of our proxy for B2C companies' ability to sustain their current rate of cash burn and find that this proxy is a significant value-driver in each of 1999 and 2000. Finally, our results suggest that investors adopted a more skeptical attitude towards expenditures on intangible investments as the Internet sector began to mature. Consistent with the results of prior studies in other knowledge asset based industries, we find that investors appear to implicitly capitalize product development (R&D) and advertising expenses (customer acquisition costs) during the bubble period when the market was more optimistic about the prospects of B2C companies. However, neither marketing expenses nor product development costs are implicitly capitalized into value, on average, subsequent to the shakeout in the spring of 2000. Overall, our study provides a preliminary view of the shakeout and maturation of one of the most important New Economy industries to emerge to date - the Internet.