How do firms make money selling digital goods online?

We review research on revenue models used by online firms who offer digital goods. Such goods are non-rival, have near zero marginal cost of production and distribution, low marginal cost of consumer search, and low transaction costs. Additionally, firms can easily observe and measure consumer behavior. We start by asking what consumers can offer in exchange for digital goods. We suggest that consumers can offer their money, personal information, or time. Firms, in turn, can generate revenue by selling digital content, brokering consumer information, or showing advertising. We discuss the firm’s trade-off in choosing between the different revenue streams, such as offering paid content or free content while relying on advertising revenues. We then turn to specific challenges firms face when choosing a revenue model based on either content, information, or advertising. Additionally, we discuss nascent revenue models that combine different revenue streams such as crowdfunding (content and information) or blogs (information and advertising). We conclude with a discussion of opportunities for future research including implications for firms’ revenue models from the increasing importance of the mobile Internet.     

Why do consumers purchase goods and services in the informal economy?

To evaluate critically the dominant discourse that consumers acquiring goods and services in the informal economy are rational economic actors seeking a lower price, the results of a 2007 Eurobarometer survey involving 26,659 face-to-face interviews in 27 European Union member states form the basis for analysis. The finding is that achieving a lower price is the sole motive for just 44% of informal economy purchases, one of several rationales in 28% of transactions, and not a rationale in 28% of acquisitions. Consumers also use the informal economy to circumvent the shortcomings of the formal economy in terms of the availability, speed, and quality of goods and services provision, as well as for social and redistributive reasons, with multilevel mixed-effects logit regression analysis revealing how the prevalence of these rationales significantly varies across populations. The paper concludes by discussing the theoretical and policy implications of the findings.     

Shopping for fun or shopping to buy: Is it different online and offline?

Consumers can shop both online and offline, either for fun or for needs. We investigate the consequences of shopping for fun or for need on word-of-mouth (WOM), intentional loyalty, and price consciousness directly comparing the offline and online settings. We find differences in the relationships among the considered variables, with the offline context being characterized by a simplified structure of causalities, greater maturity, and fewer but stronger ties among the considered constructs, compared with the online context. Furthermore, the content of WOM changes: consumers share experiential issues when they shop for fun, and efficiency issues when their shopping is goal-oriented     

Long- vs. short-term performance perspectives of Western European,Japanese, and U.S. countries: where do they lie?

This paper examines the differences between Eastern and Western companies regarding long- vs. short-term orientations. Utilizing Hofstede’s long-term orientation index, this study scrutinizes both long- and short-term performance measurements for companies from Western Europe, Japan, and the United States. The findings suggest that Western European companies place an equally higher priority on both long- and short-term measures of performance compared to companies from Japan and the United States. Additionally, Japanese companies were postulated by the literature to employ a long-term orientation toward company performance greater than U.S. companies. However, our results do not support this statement, as U.S. and Japanese companies were not statistically significantly different.     

Guilt online vs. offline: What are its consequences on consumer behavior?

Although various consumption episodes, types of products, and dimensions of guilt have been examined in previous studies, the existing literature has not addressed whether guilt could arise differently depending on the purchase channel (online versus in-store). This research thus investigates the effect of the purchase channel on consumer's guilt and the consequences of that guilt on consumer's anticipated satisfaction. Two experiments conducted in different contexts show that perceived value moderates the relationship between the purchase channel and guilt. Further, we demonstrate that perceived value is also a moderator of the mediating effect of guilt in the influence of the purchase channel on anticipated satisfaction.     

Building loyalty with online financial services customers: Is there a gender difference?

This study proposes a research model of the determinants of customer loyalty in an online financial services context. The study examines the online service quality dimensions that influence e-trust and e-satisfaction, which in turn influence e-loyalty. The research assesses also the moderator role of gender in e-loyalty development. Using data collected from 376 users of a click-and-brick financial institution in Canada, the study finds that: (1) e-loyalty is positively related to e-satisfaction and e-trust; (2) e-satisfaction and e-trust are positively associated to perceived website efficiency and information quality; (3) gender does not moderate relationships between online service quality, e-satisfaction, e-trust, and e-loyalty; (4) women report higher levels of online service quality, e-satisfaction, e-trust, and e-loyalty than men. The study emphasises the role of website efficiency and information quality in developing loyalty for online financial services providers. Indeed, it suggests that online financial institutions do not need to segment their online market based on gender.     

The persuasive impact of reported group opinions on individuals low vs. high in need for cognition: Rationalization vs. biased elaboration?

A laboratory experiment examined the extent to which the reported opinions of others influence persuasion in individuals low vs. high in need for cognition (NFC). Reported opinions influenced the attitudes of high‐ and low‐NFC respondents in the direction of the majority position. However, for high‐NFC respondents, the effect was entirely mediated by the evaluation of topic‐relevant arguments (i.e., biased elaboration). On the other hand, the influence of reported opinions on the attitudes of low‐NFC respondents was not mediated by the argument ratings. Instead, their evaluations of the topic‐relevant arguments were actually mediated by their attitudes toward the proposal (i.e., rationalization). These results are discussed in terms of the multiple‐roles postulate of the elaboration‐likelihood model (ELM) and the “consensus implies correctness” inference of the heuristic–systematic model (HSM). © 2000 John Wiley & Sons, Inc.     

IPR protection vs. innovation subsidy: What is the choice for the emerging South?

In this paper, we use a classical variety-expanding growth model to analyze the policy or institutional-arrangement choice for the Southern government who faces the tradeoff between imitating Northern innovation without cost and encouraging domestic innovation. We assume that the Southern government fully respects the principle of non-discrimination and hence treats both imitations, i.e., imitation of Northern innovation and imitation of domestic innovation, equally. For a given state of the economy, we explicitly and uniquely establish an optimal degree of intellectual property rights (IPR) protection for the South. Then, we find that there is a complementary relationship between optimal IPR protection and the innovation subsidy policy, which implies that they form an effective policy mix, hence offering a useful insight for avoiding ineffective policy conflicts widely occurred in real-world economies.     

辉瑞vs.礼来:大个子为何不如小个子?

销售和研发人员数倍于礼来的辉瑞,为什么在业绩上却反而稍逊一筹杰米·雷迪终于圆了做自由职业者的梦——1年前,他被礼来公司开除,至今仍赋闲在家,起因只是他出了一本书,这是他做梦也想不到的。在那本书中,雷迪披露了他在礼来的对手——辉瑞公司销售伟哥期间的种种“黑幕”,但丝毫不涉及礼来。     

Measuring expectations: forecast vs. ideal expectations. Does it really matter?

Consumer's participation in service delivery is so central to cognition that it affects consumer's quality evaluations. The study presented in this paper investigates the ways that visitor expectations change as a result of first hand experience with a service in the context of a major art exhibition. The research design allowed for two operational definitions of expectations, namely forecast and ideal expectations, in order to investigate differences between respondents’ pre- and post-experiences with a service. A total of 550 respondent visitors were interviewed during a major art exhibition, using two questionnaires delivered to two sub samples of respondents. The primary questionnaire was designed to capture recalled expectations after visitation while the parallel questionnaire captured forecast expectations prior to visitation and perceptions in the post-experience phase. The findings suggest that forecast expectations were different to ideal expectations in both qualitative and quantitative ways and that these differences had important implications for perceptions of service quality. These differences can be explained, at least in part, by the way that expectations are formed and by the way that expectations are shaped by the actual visitation experience. For market researchers, the question of when and how to measure expectations has important implications for research design.     

Reward strategy: Time for a more realistic reconceptualization and reinterpretation?

This article focuses on organizations' continued struggles to design and implement successful and credible reward strategies. We argue that a major and neglected factor that accounts for this is how reward strategies are designed and executed with insufficient attention given to employee preferences for different types of reward. We argue that this is both a problem of process in the way reward systems are designed and a problem of how models of reward strategy are built. Developing more effective reward strategies requires a better understanding of holistic rewards and greater attention to line management roles in their implementation. © 2010 Wiley Periodicals, Inc.     

“Yes,we do. Why not use augmented reality?” customer responses to experiential presentations of AR-based applications

Augmented reality (AR) is regarded as a visually transformative technology that enables consumers to gain immersive and enjoyable information about experience products/services during the purchasing process. Based on the stimulus-organism-response (S–O-R) paradigm, this study investigates how experiential AR applications (apps) influence customers' experiential value, in turn enhancing continued usage intention. Furthermore, perceived customer support plays an even more important role in enhancing customers’ continued usage intention. This study obtained data through an online survey of 437 customers of the YouCam Makeup app in Taiwan. We used SmartPLS software to analyze the data and test the hypotheses. The findings suggest that the features of an experiential AR app have a greater positive impact on hedonic value than utilitarian value; in turn, only hedonic value has a positive impact on continued usage intention. The results further demonstrate that the effect of hedonic value on continued usage intention is positively moderated by perceived customer support.     

Selling digital services abroad: How do extrinsic attributes influence foreign consumers’ purchase intentions?

This article investigates, through the country-of-origin effect and value-in-use lenses, how the implementation of digital services creates opportunities for cultural industries to expand internationally. We argue that intrinsic attributes of cultural content such as the capacity to entertain are difficult to parameterize because they are somewhat experiential and subjective. This means that extrinsic cues are essential to foreign consumers when making a decision to purchase digital services. We specifically evaluate the influence of Britishness, cultural distance, exoticness, brand image, and flag-brand congruence on the purchase intentions of consumers in foreign markets. This study employs a unique consumer dataset with information on the internationalization of British cultural digital services. The depth and breadth of the survey data collected through collaboration with a UK media industry partner with a globally recognised brand is significantly richer than data used in previous studies. In particular, the study exploits a survey with 5,200 usable data points from consumers residing in fourteen geographically dispersed countries. Findings support theoretical predictions that Britishness, cultural distance, exoticness, brand image and flag-brand congruence are positively linked to the purchasing decisions. Theoretical and managerial implications are discussed.     

Ethics vs. IT Ethics: Do Undergraduate Students Perceive a Difference?

Do undergraduate students perceive that it is more acceptable to ?cheat’ using information technology (IT) than it is to cheat without the use of IT? Do business discipline-related majors cheat more than non-business discipline-related majors? Do undergraduate students perceive it to be more acceptable for them personally to cheat than for others to cheat? Questionnaires were administered to undergraduate students at five geographical academic locations in the spring, 2006 and fall 2006 and spring, 2007. A total of 708 usable questionnaires were returned including 532 from students majoring in business-related disciplines and 139 from students majoring in non-business related disciplines (37 were undecided). It appears that in terms of intellectual property violations, undergraduate students in general find cheating using IT more acceptable than cheating without the use of IT. It also appears that undergraduate students perceive that it is relatively more acceptable for them to personally cheat when using IT than for others to cheat when using IT, although this is reversed when IT is not involved. No significant differences on these issues were found between undergraduate students having business discipline-related majors and those having non-business discipline-related majors.     

Speaking vs. listening? Balance conversation attributes of voice assistants for better voice marketing

Artificial Intelligence (AI) is shaping marketing in an unprecedented way. Empowered by AI, voice assistants are increasingly capable of speaking and listening like humans, offering a great opportunity for a new marketing approach - voice marketing. This research examines how conversation attributes of voice assistants determine consumer trust and intention to engage in voice shopping. Using a sequential mixed-method design, three studies consistently show that consumers perceive the speaking attribute of voice assistants as more human-like than the listening attribute. We find that such incongruency between the two conversation attributes can undermine consumers' trust in voice assistants, leading to reduced willingness to accept product recommendations from voice assistants and shop via voice assistants, which would hamper the development of voice marketing. Accordingly, this research suggests that AI giants with strong technological strength and capital support should distribute more resources to advance the underlying technologies enabling human-like listening (e.g., natural language understanding and voice recognition). But for AI startups with limited financing ability and technical talents, they may consider appropriately reducing investments in the underlying technologies enabling human-like speaking (e.g., natural language generation and voice synthesis) to enhance the congruency level between the conversation attributes of voice assistants.     

The EMF uncertainty problem related to mobile phones: where do consumers place their trust?

This paper addresses the uncertainty problem, i.e. cases characterized by lack of knowledge or scientific uncertainty. In such situations, it can be hard for consumers to ‘voice’ or practise consumer power. One field characterized by the uncertainty problem is electromagnetic radiation. An explicit goal of this study has been to articulate Norwegian consumers' practices, attitudes and beliefs regarding electromagnetic radiation from mobile phones to public authorities and consumer policy makers. The study was based on 1000 telephone interviews collected in 2008. Today, experts disagree on the potential health effects of radiation from electromagnetic fields (EMF), as well as standards for safe limits of exposure to mobile phones, base stations and wireless telecommunication systems. In addition, complicated technology and extremely rapid product development and diffusion leave consumers' security considerations to their own beliefs and trust. Whether or not electromagnetic radiation from mobile phones constitutes a health hazard will not be addressed in this paper. Rather, it will focus on how consumers react to this situation of uncertainty. The material reveals four main ways in which consumers can solve what we have named the EMF uncertainty problem: the confident and comfortable way, the sceptical and cautious way, the responsible and good citizen way, and finally, the neglecting way. The paper also discusses the precautionary principle related to EMF. Who should be precautionary: the public authorities, the mobile phone industry or the consumers themselves? We believe that a consistent governmental precautionary policy in combination with consumers taking their own precautionary measures is a viable solution. In this way, all consumers would be addressed and aided when navigating this field of uncertainty.     

Corporate social and environmental responsibility in services: Will consumers pay for it?

Two studies investigate consumer awareness of and response toward socially and environmentally responsible practices in the hospitality industry. Results suggest that consumers exhibit more positive response toward establishments exhibiting higher levels of social responsibility, although many are uninformed of the extent to which the organizations they patronize engage in such practices. Most consumers are willing to incur a modest price increase while patronizing an organization that behaves in an environmentally and socially responsible fashion, but that willingness declines dramatically as the price premium escalates. Consumers with high involvement in and positive attitudes toward corporate social responsibility practices are most willing to pay a premium.     

U.S. intelligence system: model for corporate chiefs?

A fully dedicated intelligence support function for senior management is no longer a luxury but a necessity. Companies can enhance their intelligence capabilities by using the government model as a rough blueprint to structure such a program.     

Arguments for and against financial literacy education: where to go from here?

Currently, everyone is brandishing financial literacy education as the answer to the global personal financial crisis. However, there are a few advocates against financial literacy education. There is contention whether financial literacy education actually leads to effective financial behaviours. The purpose of this theoretical article is to state the various arguments for and against financial literacy education and suggest possible guidelines for interventions by governments and institutions in an effort to increase financial well‐being. There are no easy answers to this complex problem and financial illiteracy should not be presented as the sole culprit. Basic financial literacy education is needed to manage day‐to‐day finances; however, specialist areas such as investments and retirement planning should be left to professionals. It is suggested that financial literacy education should focus not only on cognitive factors but also on non‐cognitive and affective factors that might override rational decision making.