How Visa, Using Card Fees, Dominates a Market

Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. Skip to next paragraph Your Money Guides Credit and Debit Cards » Enlarge This Image Monica Almeida/The New York Times Mitch Goldstone, in his digital photo-processing shop in Irvine, Calif., is part of a suit against Visa and MasterCard. Frontline LogoThe Card Game series is a joint reporting project with the PBS program "Frontline." Multimedia Becoming the Debit KingGraphic Becoming the Debit King Toward a Cashless SocietyGraphic Toward a Cashless Society Related You're the Boss: Does Visa Play Fair? More Articles in This Series Readers’ Comments "Smart retailers take advantage and offer a 'discount' on debit purchases. Sharing the savings with the customers is a great incentive." Tom, Texas * Read Full Comment » It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake. When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code. The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal-Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States. Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud. How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers. Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers. Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards. At least initially, MasterCard and other rivals promoted PIN debit instead. As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded — not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier. In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back. “What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?” Visa has managed to dominate the debit landscape despite more than a decade of litigation and antitrust investigations into high fees and anticompetitive behavior, including a settlement in 2003 in which Visa paid $2 billion that some predicted would inject more competition into the debit industry. Yet today, Visa has a commanding lead in signature debit in the United States, with a 73 percent share. Its share of the domestic PIN debit market is smaller but growing, at 42 percent, making Visa the biggest PIN network, according to The Nilson Report, an industry newsletter. The Risk of Refusing Critics complain that Visa does not fight fair, and that it used its market power to force merchants to accept higher costs for debit cards. Merchants say they cannot refuse Visa cards because it would result in lower sales. “A dollar is no longer a dollar in this country,” said Mallory Duncan, senior vice president of the National Retail Federation, a trade association. “It’s a Visa dollar. It’s only worth 99 cents because they take a piece of every one.” Visa officials say its critics are griping about debit products that have transformed the nation’s payment system, adding convenience for consumers and higher sales for merchants, while cutting the hassle and expense of dealing with cash and checks. In recent years, New York cabbies and McDonald’s restaurants are among those reporting higher sales as a result of accepting plastic. “At times we have a perspective problem,” said William M. Sheedy, Visa’s president for the Americas. “Debit has become so mainstream, some of the people who have benefited have lost sight of what their business model was, what their cost structure was.” Visa officials said the costs of debit for merchants had not gone down because the cards now provided greater value than they did five or 10 years ago. The costs must not be too onerous, they say, because merchant acceptance has doubled in the last decade. The fees are “not a cost-based calculation, but a value-based calculation,” said Elizabeth Buse, Visa’s global head of product. As for Visa’s market share, company officials maintain that it is rather small when considered within the larger context of all payments, where, for now at least, cash remains king. While Visa may be among the best-known brands in the world, how it operates is a mystery to many consumers. Visa does not distribute credit or debit cards, nor does it provide credit so consumers can buy flat-screen televisions or a Starbucks latte. Those tasks are left to the banks, which owned Visa until it went public in 2008. Instead, Visa provides an electronic network that acts like a tollbooth, processing the transaction between merchants and banks and collecting a fee that averages 5 or 6 cents every time. For the financial year ended in June, Visa handled 40 billion transactions. Banks that issue Visa cards also pay a separate licensing fee, based on payment volume. MasterCard, which is roughly half the size of Visa, uses a similar model. “It’s a penny here or there,” said Moshe Katri, an analyst who tracks the payments industry for Cowen and Company. “But when you have a billion transactions or more, it adds up.” With debit transactions forecast to overtake cash purchases by 2012, the model has investors swooning: Visa’s stock traded at $88.14 on Monday, near a 52-week high, while shares of MasterCard, at $256.84 each, have soared by more than 450 percent since the company went public in 2006. While there is little controversy about the fees that Visa collects, some merchants are infuriated by a separate, larger fee, called interchange, that Visa makes them pay each time a debit or credit card is swiped. The fees, roughly 1 to 3 percent of each purchase, are forwarded to the cardholder’s bank to cover costs and promote the issuance of more Visa cards. The banks have used interchange fees as a growing profit center and to pay for cardholder perks like rewards programs. Interchange revenue has increased to $45 billion today, from $20 billion in 2002, driven in part by the surge in debit card use. Some merchants say there should be no interchange fees on debit purchases, because the money comes directly out of a checking account and does not include the risks and losses associated with credit cards. Regardless, merchants say they inevitably pass on that cost to consumers; the National Retail Federation says the interchange fees cost households an average of $427 in 2008. While the cost per transaction may seem small, at Best Buy, the biggest stand-alone electronics chain, “these skyrocketing fees add up to hundreds of millions of dollars every year,” said Dee O’Malley, director of financial services. “Every additional dollar we are forced to pay credit card companies is another dollar we can’t use to hire employees, or pass along to our customers in the form of savings.” Weighing Rules on Merchants The Justice Department is investigating if rules imposed by payment networks, including Visa, on merchants regarding “various payment forms” are anticompetitive, a spokeswoman said. Several bills have been introduced in Congress seeking to give merchants more ability to negotiate interchange, which is largely unregulated. While interchange remains legal despite repeated challenges, a group of merchants is pursuing yet another class-action suit, this time in federal court in Brooklyn, against Visa and MasterCard that seeks to upend the system for setting fees. “Visa and MasterCard have morphed into a giant cookie jar for banks at the expense of consumers,” said Mitch Goldstone, a plaintiff in the case. Fees were not an issue when debit cards first gained traction in the 1980s. The small networks that operated automated teller machines, like STAR, Pulse, MAC and NYCE, issued debit cards that required a PIN. MasterCard had its own PIN debit network, called Maestro. Merchants were not charged a fee for accepting PIN debit cards, and sometimes they even got a small payment because it saved banks the cost of processing a paper check. That changed after Visa entered the debit market. In the 1990s, Visa promoted a debit card that let consumers access their checking account on the same network that processed its credit cards, which required a signature. To persuade the banks to issue more of its debit cards, Visa charged merchants for these transactions and passed the money to the issuing banks. By 1999, Visa was setting fees of $1.35 on a $100 purchase, while Maestro and other regional PIN networks charged less than a dime, Federal Reserve data shows. Visa says the fee was justified because signature debit was so much more useful than PIN debit; at the time, roughly 15 percent of merchants had keypads for entering a PIN. Merchants said they had no choice but to continue taking the debit cards, despite the higher fees, because Visa’s rules required them to honor its debit cards if they chose to accept Visa’s credit cards. A Seven-Year Battle Wal-Mart, Circuit City, Sears and a number of major merchants eventually sued. After seven years of litigation, Visa and MasterCard agreed to end the “honor all cards” rule between credit and debit and to pay the retailers a settlement of around $3 billion, one of the largest in American corporate history. Visa paid $2 billion, and MasterCard the remainder. Since then, only a handful of retailers have stopped accepting Visa debit cards, an indication that the crux of the lawsuit was “much ado about nothing,” Mr. Sheedy says. And while some merchants said they thought the lawsuit would pave the way to a new era of competition, a curious thing happened instead: while Visa temporarily lowered its fees for signature debit, it raised the price on PIN debit transactions and passed the funds on to card-issuing banks, and its competitors soon followed. The current class-action lawsuit joined by Mr. Goldstone contends that Visa’s PIN debit network, called Interlink, is offering banks higher fees as an incentive to issue debit cards that are exclusively routed over this network. Interlink, which has raised its PIN debit fees for small merchants to 90 cents for each $100 transaction, from 20 cents in 2002, is often the most expensive, especially for small merchants, Fed data shows. One large retailer, who requested anonymity to preserve its relationship with Visa, provided data that showed Interlink’s share of PIN purchases rose to 47 percent in 2009, from 20 percent in 2002, even as its fees steadily increased ahead of most other networks — to 49 cents per $100 transaction in 2009, from 38 cents in 2006. Visa officials say its PIN debit network is taking off despite rising costs because it offers merchants, banks and consumers a level of efficiency and security that regional networks cannot match. “We are motivated as a company to try to drive value to each one of those participants so that they accept the card, issue more cards, use the card,” Mr. Sheedy said. At checkout counters, meanwhile, consumers are quietly tugged in one direction or the other. Safeway, 7-Eleven and CVS drugstores automatically prompt consumers to do a less costly PIN debit transaction. The banks, however, still steer consumers toward the more expensive form of signature debit. Wells Fargo and Chase are among those that offer bonus points only on debit purchases completed with a signature. Visa says it does not care how consumers use their debit card, as long as it is a Visa. But for now at least, the company says the only way to ensure that a purchase is routed over the Visa network is to sign. “When you use your Visa card, you have a chance to win a trip to the Olympic Winter Games,” a new Visa commercial promises. The commercial does not explain the rules, but the fine print on Visa’s Web site does: nearly all Visa purchases are eligible — as long as the cardholder does not enter a PIN. Source : http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?pagewanted=all Copyright 2010 The New York Times Company

The Stages of Building Business Credit: Where Are You?

Melanie Benson Strick is now a million dollar lifestyle success coach. But when she started her coaching and info marketing business, SuccessConnections, it never even occurred to her to build business credit. “The first two years of my business I had no idea how much money it would take to become profitable. Flying by the seat of my pants I used two strategies: borrow from my credit cards and borrow from my father. Unfortunately it wasn’t until I was up to my ears in debt that I knew about other forms of capital, and by then it was too late.” Benson Strick says there is an upside to learning from the school of hard knocks: “The positive by-product of looking for a capital infusion was that I became proactive about revenue projections. I learned how to identify what was going out, what was projected to come in, and create strong strategies to payoff the debt, including using low-interest credit cards. There is no way you can stick your head in the sand and become financially profitable,” she advises. According to the Small Business Administration more than three out of five small enterprises will borrow to start or grow their ventures, frequently using credit cards, home equity loans and loans from friends and family to get started. Like Benson Strick, many entrepreneurs wait until their business is already up and running to start building business credit. But if you start earlier – the very moment you launch your enterprise – you’ll increase your chances for success significantly. And it is worth it. Business credit can reverse your business’s cash cycle and increase profitability. After working with hundreds of business owners, we have found that small businesses are usually at one of four stages when it comes to building business credit: Stage One: Bogus Business Credit At Stage One, you’ve probably bootstrapped it and used personal credit cards, loans from “friends, family, and fools,” equity from your home, or even your life savings to fund your venture. Chances are, there is very little separation between you, your business, and your credit. The vast majority of businesses at this stage are operating as sole proprietors. This is the by far the most common and most dangerous stage of business credit. You are completely mixing business and personal credit, and that means: * You can have major headaches at tax time, not to mention forking over extra money to Uncle Sam by failing to take full advantage of available deductions. * You have no asset protection whatsoever. If your business tanks or is sued, you can lose everything personally and professionally. * Your personal credit score will sink due to the level of debt you’re carrying to fund your business. You may also see the interest rates on your credit cards and other accounts skyrocket. Clearly, you want to move through this stage as quickly as possible. Better yet, skip it altogether. Stage Two: Beginning Business Credit At Stage Two, you begin separating your business credit from your personal credit. You have a corporate structure in place, and you start applying for credit in the name of your business, not your own. By keeping business debts off your personal credit report, they don’t affect your credit scores. While you may not be getting a hefty line of credit from your bank, you are establishing “trade” accounts with retailers or suppliers where you can buy what you need and pay for it later. Most of these vendors will lean on your business credit history, without even looking at your personal credit. Whenever possible, you select vendors who report your payment history to the business credit agencies. This helps you start building a positive business credit score. Stage Two is a massive leap from Stage One. It helps protect your personal credit rating, which in turn allows you to continue to get more credit than you could at Stage One. You help maintain your personal credit scores and don’t run the risk of being turned down for business or personal loans due to the business debt you’re carrying. A small business can chug along at Stage Two for quite a while -- as long as the bills get paid on time. But Stage Two is not the destination. If you’re serious about your business, you’ll want to move to Stage Three. Stage Three: Building Business Credit Stage Three is where your business establishes a strong and stable credit identity. At this stage, you have successfully managed at least five or six trade accounts that report to the major business credit agencies, and you have at least one or two business credit cards that are reported to your business credit reports only – not your personal ones. As a successful Stage Three business owner, you use an accounting system that allows you to generate financial statements as needed, and you understand where your business stands financially at any given time. You are now able to approach banks for unsecured business lines of credit, loans, and leases. To avoid bank rejections and dings on your personal credit, you strategically approach only those banks likely to approve you. At Stage Three, you’ll find yourself with opportunities to borrow or lease without having to rely on your personal credit. Does that mean you’ll never be asked for a personal guarantee or to have your personal credit checked for a business loan? No. Lenders will try to get every bit of extra protection they can. But the stronger your business and corporate credit rating, the more negotiating power you have to strike deals at the most favorable terms. Stage Four: Robust Business Credit Your business is no longer just about you, the owner(s), when you reach Stage Four. It is a “real” business, with strong revenues and a solid track record. Some businesses get here very quickly, but others can be operating for years and not break through. At Stage Four: * Your business credit ratings are strong, and you actively monitor them. * You have solid revenues and well-prepared, audited financials. * You use business credit exclusively (not personal credit), and you have business lines of credit and corporate credit cards with major financial institutions. You may have even negotiated away personal guarantees on some of the credit cards (when you have more than 25 employees and $2 million in revenue). * Your business plan is well-prepared and persuasive. At this Stage, you may decide to look for outside investors -- private investors, angels or venture capitalists (VCs) -- to help take your company to the next level. If you’ve built a strong foundation, you’ll find yourself negotiating much better terms if you choose to bring in outside capital. Even if you don’t plan to borrow, it is essential that building business credit becomes a part of your business from the start. Planning ahead is crucial. As former president John F. Kennedy said, “The time to repair the roof is when the sun is shining.” Get your free xbanker report Gerri Detweiler is considered one of the country’s top credit experts. She has been interviewed for thousands of radio, television and print news stories including USA Today, The Wall Street Journal, The New York Times, Dateline NBC and many others. She has testified before Congress several times and worked on reform of the national credit reporting laws. She is the co-founder of TheXBanker.com. Source : Copyright © 2011 StartupNation, LLC

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Betting on Business Innovation with Rich Internet Applications?

Business Management Magazine October 01, 2009 Download as a PDF

Innovation is a must for any organization. Many are attempting to create solutions that break down the walls separating business processes from the flow of information. They are being lead by a constant drumbeat demanding more effective interactions with customers, partners, and employees. What they have found is that their legacy applications do just the opposite.
Ultimately executives are asking, “How do we create something that doesn’t just give us a flashier interface but offers substantial benefits?” “How do we create a compellingly different way for people to work, play, and even live?” At a rapidly increasing rate, these organizations are turning to a technology that is revolutionizing business interaction, rich Internet applications.
The promise of rich Internet applications is alluring, but like the Sirens of past it is imperative to avoid the rocky shores that surround them. Many efforts fall short of expectations, deadlines, and budget. Like other IT projects, they fail because of poor planning, management, and expectations.
Other efforts fail in a different way. Not because they didn’t deliver against the schedule or budget, but because they neglected to create the innovation RIAs can provide. This is often because these projects were approached with the same mindset used to develop the legacy applications.
When RIA projects fall flat, the finger of blame is often pointed towards the technology. If companies buy into this and abandon the technology, they forego a very powerful asset. The advantage of RIA is real. With informed executive oversight, experience, and discipline, it can deliver the kind of breakthrough organizations need to stay ahead. The rest of this article is dedicated to helping executives map out a route to RIA success. It summarizes top mistakes and offers best practices that will help avoid the pitfalls.
Establish Clear Business Goals
Not having clear business goals is something that can hurt any project. RIA projects are no different. In fact, it is probably even more important with RIA because the wow factor makes it easy to get sidetracked on flashy features. Answering a few questions like “What measurable business value will this create?” and “Who will specifically benefit from this?” helps tremendously. Making sure that every team member knows the answers to these questions will help them prioritize their efforts.
Embracing experience driven design is critical to capitalizing on RIA. Ignore this and you will surely miss out. Even worse you may be setting yourself up for another stiff dose of negative ROI.
Rather than starting from a list of assumed necessary features, experience driven design begins by understanding the needs of the users you are trying to please. The iterative approach fosters interaction between the application team and the users who matter most. If executed effectively, you can avoid creating a merely superficial application or hearing the dreaded words “Well that is what I asked for but its not what I need.”
Too many times experience driven design is practiced in name only or is pushed to the back burner. Perhaps it seems too fluffy to some. Or perhaps it appears like an easy corner to cut when faced with a tight budget or timeline. Regardless of the reason, the business results rarely vary and are usually unpleasant.
One of the main keys to successfully implementing experience driven design is releasing early and often. A great strategy is to start with basic sketches. From there, the fidelity of the design concepts can be increased until a clickable prototype is reached.
Though it may seem like it is slowing things down, obtaining user input can be done efficiently at each design iteration point. When implemented correctly, it helps to focus priorities and avoid costly wrong turns.
When starting out don’t try to answer every edge case. Identify core interaction points and tackle those first. This avoids getting stuck in the mud and helps drive costs down.
Even seasoned experience architects can push the envelope of what’s technically possible. In some respects this is what you want them to be doing. However, the application eventually needs to be developed and perform when it is deployed. Having the technical architects involved in the experience design phase provides a critically important system of checks and balances.
Status Quo
While this may almost be a cliché, not doing so it is the classic innovation killer. Let the experience designer confront preconceived notions. This can result in innovation and competitive advantage not found in the initial vision.
Some of the greatest strengths of rich Internet applications can also cause great difficulties. For example, the ability to readily connect to a host of different data sources is a powerful one. However, many have not developed an effective services layer to support this kind of interaction.
This is often taken for granted at great cost. In the end, RIAs are dependant on the data going in and out of it. It is not sufficient to think that the necessary services can be cobbled together on an ad hoc basis. If these are constantly in flux or ill defined, it will cause significant problems in development and QA. Time spent ensuring quality in this area will save many hours of delay and finger pointing.
RIAs can rapidly show superficially impressive results. The unfortunate thing is that management often confuses this with having a solid application and their expectations become skewed. A snappy proof of concept isn’t something that will hold up to commercial use. Developing a sustainable RIA requires sound architecture practices like any other business solution.
Most RIA technologies have application frameworks or architectural models associated with them. These frameworks offer a proven approach to development. This delivers an inherent use of best practices and easier maintenance down the road.
The deliverables of RIA projects usually require interaction from a greater variety of specialized skill sets. The ability to effectively tie these together is no easy task. Like other efforts, the amount of time and skill required to complete the project is likely to be underestimated. Do a gap analysis. Without the correct resources or availability, proceeding will have limited odds of success.
This is an area foreign to many businesses. Generally, this group will consist of an experience architect and at least one designer. The experience architect can glean critical user needs and combine that with business goals. From there, they will work with the technical team to translate that into a final application. Finally, designers provide will the polished look and feel while refining subtle user interactions.
Front End Architecture and Development
The front-end architect is responsible for assessing technical and business requirements and determining overall application structure. Additionally, they ensure the creation of a highly scalable and maintainable end product. While working closely with the engineering lead, they will define a development approach that will allow the team to work effectively.
While many organizations have a strong understanding of their backend systems such as databases, LDAP, or ERP, few have expert knowledge in extending them effectively for use with RIAs. As mentioned earlier, this is a critical part of RIA development. The right expertise here will not only increase RIA success but will allow for greater flexibility in future projects.
Keeping multiple teams on task, on budget, and in scope is challenging. Project managers provide objective insight and coordination across disciplines while mitigating risk. Yet, this is an area that is routinely underinvested in and is a top contributor to project failure.
Many organizations task technical leads with project manager responsibilities. Doing this merely injects risk and mediocrity to a project and saves neither time nor money.
Parting Thoughts
RIA’s offer outstanding capabilities and are an excellent platform for driving business innovation. They can break down walls, create compelling new ways to interact, and act as a robust differentiator. Despite best intentions, many of these projects do not deliver the expected result. This is usually due to a lack of experience, understanding, or proper investment in the necessary skill sets.
As rich Internet application development is relatively new, organizations are just now taking the steps to build these skills internally. While this is important, many make the mistake handing mission critical applications to resources learning on the job. This may be beneficial to the individuals building their skill sets, but it does not bode well for the end result.
Utilizing the experience and talent of organizations specialized in this arena can be highly valuable. They can work with executives to develop an effective RIA strategy. From there, these organizations can deploy a veteran team while integrating internal resources. This mitigates a significant amount of risk while considerably increasing return on investment.

"Rich Internet applications have emerged in the past couple years are inexpensively breaking down barriers between different kinds of computer data to yield information for police, businesses and others."
Denver Business Journal

2011 © Universal Mind. All Rights Reserved

Tips memanfaatkan pendekatan e-commerce untuk menjual produk dan jasa

Seringkali apabila kita berpikir tentang toko online,kita memikirkan kompleksitas yang akan dihadapi. Keranjang belanja, merchant account, sistem pembayaran, integrasi dengan sistem, suto-responder dan virtual terminal hanya beberapa aspek dari sistem belanja online yang membikin anda pusing. Sistem yang tampak membingungkan ini sudah cukup membuat enterpreneur/pengusaha yang sibuk akan menjauh dari sistem berjualan di internet.
Beberapa tahun lalu, masih sangat sedikit pilihan untuk menjual barang anda melalui internet. Anda harus memiliki reputasi yang baik untuk mendapat merchant account. Dana dari merchant account akan disalurkan melalui sebuah rekening dan terdapat biaya/ potongan untuk setiap akun rekening. Beberapa bank bahkan memberikan potongan untuk setiap transaksi di rekening anda. Ada juga biaya merchant yang dobel yaitu biaya payment gateway dan payment processor Bahkan meskipun dengan penjualan nol dalam sebulan, anda tetap akan dikenakan biaya per bulan untuk biaya gateway, hosting, shopping cart dan beberapa biaya lainnya. Selain biaya tetap tersebut, anda juga harus membayar persentase potongan untuk setiap penjualan. Untungnya, tahun-tahun terakhir ini, semuanya menjadi lebih sederhana dan lebih murah.
Apabila anda mencari sistem pembayaran sebagai perseorangan, bisnis kecil, komunitas atau grup atau perusahaan, anda dapat memulai mencari pilihan sistem belanja mudah yang tersedia saat ini. Dengan sistem pengecekan akun standard dan layanan pembayaran third-party, maka anda sudah dapat menerima pembayaran melalui email. Anda dapat menulis singkat informasi email dan menaruh link pada email anda untuk digunakan oleh customer anda dalam melakukan pembayaran. Mungkin anda ingin menggunakannya sebagai donasi bagi organisasi anda, cukup gunakan link tersebut dan para donatur akan dengan mudah melakukan pengiriman dana. Namun untuk anda yang ingin tampil lebih profesional dan memudahkan customer anda,  buatlah sebuah website , blog atau halaman social media, karena dengan ini anda dapat menyediakan informasi lebih lengkap mengenai proses pembayaran. Dengan blog, website atau social media, anda dapat menciptakan prosedur pembayaran yang lebih bagus. Anda dapat menyertakan artikel yang informatid berupa audio, video untuk penyajian informasi lebih lengkap bagi pelanggan anda sebelum melakukan pembayaran.
Mungkin saat ini anda berpilik, "Ini seharusnya bisa dilakukan, bisakan saya melakukan ini?. Ok, ini beberapa tips bagi yang anda yang ingin melakukan prosedur commerce dengan mudah:

• Tentukan apa yang ingin anda jual dan berapa anda menghargainya. Lakukan riset online di pasaran apabila anda masih belum yakin dengan harga yang anda miliki.
• Tulis deskripsi sekitar 200 kata atau kurang mengenai produk atau layanan anda. Pastikan anda menuliskan dengan baik mengenai fitur dan keuntungan dari produk yang anda tawarkan.
• Gunakan template sederhana untuk menciptakan sebuah website , blog atau social media untuk menempatkan link pembayaran untuk produk anda atau layanan anda. Selalu ingat untuk menciptakan halaman "Thank You" yang akan muncul saat customer selesai melakukan pembelian. Apabila anda menjual barang yang berupa file/digital goods, tempatkan download link atau instruksi untuk mendownload di halaman ini.
• Buka sebuat akun third-party yang dapat memproses pembayaran bagi customer anda. Terdapat banyak pilihan. Pastikan menggunakan layanan yang fiturnya cocok dengan kebutuhan anda.
• Tambahkan detail produk atau layanan pada akun payment processor anda, Sebuah link email atau html embed code akan tercipta di langkah ini.
• Lakukan pengetesan pada link atau web code untuk memastikan ini berjalan sesuai yang anda inginkan dan berjalan normal.
• Sekarang anda telah siap untuk mengambil informasi dan menaruh pada website anda atau mengirimkannya melalui email.
• Tugas selanjutnya adalah memonitor penjualan anda dan meningkatkan layanan pada customer anda. Dan nikmati hasil penjualan anda dengan sistem e-commerce ini.

Kini anda telah membaca gambaran singkat bagaimana memanfaatkan sistem commerce untuk menjual jasa produk atau layanan/service. Bagi anda yang ingin memiliki toko online sendiri atau tidak ingin telalu pusing dengan prosedur online yang terasa cukup rumit, Visigraphic dapat membantu anda membuat sebuah shopping cart online bagi penjualan produk anda atau jasa anda. Hubungi Visigraphic untuk bagi anda yang ingin menjual produk melalui toko online. Klik disini untuk menghubungi Visigraphic                                                                                                                                                                                                                   Copyright © 2010 Visigraphic - Indonesia Website Development. All Rights Reserved.
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The Strategic Role of Marketing

In the Harvard Business School Press book Marketing as Strategy, London Business School's Nirmalya Kumar argues that marketing must help drive organizational change. Q&A.

Management has forgotten, or never realized, the ability of the marketing function to help drive organizational change, says Nirmalya Kumar in his new book, Marketing as Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation, published by Harvard Business School Press.
In this interview, Kumar discusses how the burden is on marketers themselves to rise above the tactical level and drive organization-wide initiatives to deliver value to customers.
Manda Salls: You make the point that marketers are often (and increasingly) treated as a function rather than as part of the strategic team. Why does this happen? Have CEOs lost their faith in marketers?
Nirmalya Kumar: CEOs have lost faith in marketing primarily for two reasons. First, shareholders and analysts are pressuring corporations and their CEOs to deliver against short-term profit and revenue objectives. CEOs are unsure of returns from marketing expenditures and marketers have acquired a reputation as a "spend" function rather than a "save and make" function. The belief is that a finance person managing a brand would probably take more time to determine how much to spend to support it and how to measure the effects of the spending than a marketer, who would just ask for more money. Marketing initiatives must have a substantial, demonstrated, top- or bottom-line effect to excite the CEO.
Second, marketers are too often seen as specialists and tacticians talking about the "Four Ps" (product, place, price, and promotion) rather than strategists who help CEOs lead organization-wide initiatives that have strategic, cross-functional, and bottom-line impact. With all its specialization, marketing has not aspired to lead major transformational projects that involve cross-functional, multinational teams sponsored by the CEO. Other functions have been better at rallying around transforming initiatives such as Total Quality Management (TQM) and reengineering led by operations; Economic Value Added (EVA) and Mergers and Acquisitions (M&A) guided by finance; and the Balanced Scorecard driven by accounting. The result is that one encounters the positions of chief operating officer, chief technology officer, and chief financial officer much more frequently than the chief marketing officer in companies.
Q: How can marketers begin to improve their value to a company? Are marketing executives short-selling themselves?
A: Given the above, to improve value to the company, marketers must engage CEOs and the top leadership in meeting the two marketplace challenges that all companies face: enhancing customer loyalty and reducing downward pressure on prices. To meet this, companies are looking for growth-related initiatives like expanding to new and growing channels of distribution, selling solutions instead of products, and pursuing radical rather than incremental innovation.

Marketing initiatives must have a substantial, demonstrated, top- or bottom-line effect to excite the CEO.

Marketing executives have the skills to lead such initiatives if they are willing to take the leadership role and be more cross-functional in their thinking. None of these initiatives can be successfully implemented by the marketing function alone.
Q: As markets become global, how important is it for marketers to tailor products and marketing strategies for each region? How does this weigh against the importance of a unified market strategy for a product?
A: Overall, with more open media and economies, consumers are to some extent moving closer together in needs. Yet, differences remain. One needs to balance the economies of scale and higher profits that come from global products and programs versus the increased sales and penetration of markets that result from tailored marketing strategies.
The challenge is to be elemental—find which aspects of marketing are really scale-sensitive versus those elements where local adaptation truly increases value for customers. Unfortunately, in practice this is very hard to implement, as local managers tend to believe everything is unique about their markets while corporate headquarters tend to see the world as more global than it is. Thus there is, and will always be, a tension between designing programs and products that are global versus local. Increasing understanding through market research that allows the examination of this issue in a more "objective" manner and moving managers across countries to enhance communication are two methods used by companies to grapple with this challenge.
Q: From the low-carb craze to product lines aimed at men, new brands seem to be multiplying exponentially. What problems can brand proliferation cause companies? How can a company determine if it has too many brands?
A: There are four problems caused by brand proliferation and if a company observes these then it knows it has too many brands.
First, the larger the number of brands in the company's portfolio, the greater the overlap of brands on target segments, positioning, price, distribution channels, and product lines. The overlapping results in cannibalization of sales and duplication of effort. If managed poorly, many of the brands in the portfolio may end up competing with each other rather than with the brands of competitors.
Second, a larger brand portfolio means lower sales volumes for the individual brands as the total market divides among them. Without scale economies in product development, supply chain, and marketing, firms cannot support each brand at competitive levels. Third, the rise of powerful mass merchants such as B&Q, Carrefour, and Wal-Mart has triggered brand consolidation perhaps more than anything else. Retailers' tremendous negotiating power, especially against weaker brands, forces manufacturers to critically evaluate their brand portfolios.
Finally, marginal brands end up consuming a disproportionate amount of a company's time and resources, and exacerbate tensions between the narrowly focused brand and country managers.

Local managers tend to believe everything is unique about their markets while corporate headquarters tend to see the world as more global than it is.

Q: In your book, you talk about the changes technology has brought to distribution channels, and the risks and rewards of being an adopter of new technology. What would you recommend to companies that are considering a channel migration?
A: A well-articulated strategic logic for entering a new or emerging channel of distribution is the bedrock of any channel migration decision. The following six questions are helpful in evaluating the opportunity presented by the new distribution channel:

1. How attractive is the value proposition that the new distribution channel gives our target segments?
2. Is the proportion of our target segment attracted to the new channel large enough to demand our attention?
3. Do we have a differentiated value proposition or an operational advantage in serving customers through the new channel?
4. Is our cost structure and value network optimized to serve customers through the new channel?
5. What can and will competition do with the new channel?
6. How will the new distribution channel change consumer channel preferences and strategies of existing channel members?

In light of the answers to these question, becoming either an early adopter or a follower first requires that a company balances the potential for additional sales and margins against the risk of upsetting its existing distribution structure.
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Manda Salls is Web editor for Baker Library.

Market-Driving Checklist

by Nirmalya Kumar
Market-Driving Mind-Set

Does our top management continuously reinforce the need for market-driving ideas?

Do we actively seek to cannibalize our own products?

Is the pursuit of competing emerging technologies permitted?

Are new ideas routinely imported from the outside?

Are time and resources allocated for curiosity-driven explorations?

Market-Driving Culture

Do we tolerate failures when people are attempting something really new?

Are processes in place to capture learning from failures?

Are people encouraged to share their failures publicly?

Do we constrain innovation through too much respect for hierarchy?

Are organizational rules and norms enforced too rigidly?

Do we tolerate mavericks and allow space for champions to flourish?

Market-Driving People

Do we hire people who will increase the genetic pool of our company?

Do we mix people on teams to generate creative abrasion?

Are novices included on important projects to question assumptions?

Do we think our people are entrepreneurial?

Are exceptional innovation achievements and efforts recognized and rewarded?

Market-Driving Processes

Do we allow for long payback horizons for innovation projects?

Do we accept alternative routes to obtain funding and approval for market-driving ideas?

Do we have processes that move ideas from the bottom to the top without obstruction?

Do we run competitions to generate radical new concepts?

Do we ensure that radical ideas do not lose resources to incremental ideas?

Excerpted with the permission of Harvard Business School Press from Marketing as Strategy: Understanding the CEO's Agenda for Driving Growth and Innovation by Nirmalya Kumar. Copyright 2004 Nirmalya Kumar; All rights reserved.