Seminar 4 Review

For this seminar, we had a new venue, a lab with faster and better computers! Of course, that was of no significance as we didn't have to use them.

Anyway, the seminar started off with the presentations all the groups had made on a new information system for the Jurong Bird Park (JBP). The assignment was to come up with an efficient system to help non-English speakers fully experience the sights of JBP. We came up with a three-phase system which comprised of using the IVRS system, SMPP protocol and A2DP Bluetooth profile to provide the customers with information they need in their language of preference. Other groups also came up with some good ideas. Later after all the presentations, the professor held a discussion with the class. He walked us through the life cycle of the system. During the discussion I found out how many loopholes existed in every concept presented earlier. I also realized that this was the prefect way to actually develop an efficient and effective concept of a system. Also to note was the fact that none of the presentation really looked at the behavioural side of the system. For example, most of us who talked about Bluetooth never realized (or forgot) that many of the targeted customers might have Bluetooth but may not know how to operate it or switch it on and accept the files. I will keep that in mind for my future assignments.

Another important that we discussed was the concept of "Paid Listings" or alternatively known as "Paid Inclusion".

"Paid inclusion is a search engine marketing product where the search engine company charges fees related to inclusion of websites in their search index. Paid inclusion products are provided by most search engine companies, the most notable exception being Google."

Source: Wikipedia

Hold on! Except Google? That’s right. Google went their own way when it came to adopting this concept. They came up with "Google Ads". What happens with Paid Inclusion is that the website which pays to get listed is added to the results one gets when a search is done. Google Ads, on the other hand are these same websites but they are listed separately from the actual results thereby leaving the order of results unaffected because of these listings. Is there any doubt why Google is said to be the best!

This brought us to the different methods employed by mainly service based companies to obtain the revenue. Besides a fixed cost or subscription based service like the value added services offered by mobile communication operators, there is an alternative in the form of 'pay-per use'. Although this seems a cheaper option for users, as professor pointed out, it also brings uncertainty to the users about the cost charged. They will always be uncomfortable in opting for a service which does not have fixed charges. Another type that was mentioned, which I didn't knew even existed, was commission based system. What this meant was that the company would charge the user of the service only if it was successful in delivering what the service promised. For example, as the professor mentioned, for a service which monitors free parking slots in car parks, it would be a fair deal on the part of both the user and the company if the user was only charged when it was able to provide the user with a location with a free slot. It would not charge the user if it could not find any free slots in any of the car parks. This seems like a deal a user would readily accept.

We also back to discuss the financial strategies of Amazon.com. The professor explained how Amazon handled its cashflow. When a book is bought on Amazon, the customer is charged immediately. But even though Amazon buys and ships the book from the publisher or warehouse operator immediately, it only needs to pay every 30 or 60 days. For those 30 to 60 days, Amazon holds this money and invests it in short term investments and earns over it. The professor also pointed out that the Popular Bookstore within the Campus is preferred over Amazon by students because of two reasons. One, the shipping charges of a single book if a student orders it on Amazon is very high. And two, Popular sells what the students require for their courses in the university. So it is very convenient for us to go there and buy the book we are looking for rather than pay the extra shipping charges and search for the right book on the site and get it a few days later. By keeping up with the demand of the students and the teachers in the university, it keeps its customers (i.e. us) loyal and keeps its revenue secure.

Next, we were introduced to something known as Commerce Spaces. It was a diagram illustrating the scope of interaction between a consumer and business and the government. A service or product can change hands in broadly four ways:

1. Business to Consumer (Users buying books from Amazon.com)
   
2. Business to Business (Companies selling primary or secondary goods for the production of finished goods)
   
3. Consumer to Consumer (Items being sold on eBay by users to each other)
   
4. Consumer to Business (Websites like Priceline which enable users to offer a price for travel packages which a company then accepts. So it’s a kind of 'reverse auction')

There is also the possibility of the involvement of government which constantly releases tenders which are then bid on by companies.

Before the seminar came to an end, the professor showed us the various elements that are characteristic of a business model and what each of them signified. I felt the most important out of the list was 'Customer Value' or 'Value Proposition' which highlighted the value the model would add and positions the product or service in the market.
And as Geoffrey Moore writes in his marketing book Crossing the Chasm, "Positioning is the single largest influence on the buying decision."

I liked this session a lot as the professor explained the theory using examples for each concept. I will now remember the theory because of the connections the professor made with some popular companies and services.