CU -SEM-VI - E- TOURISM

personal seeking whereby boasting about your experience to others to feel good about yourself, interpersonal escape is whereby you escape the stressful environment you are in and avoid interactions with others, and interpersonal seeking is being with individuals with similar interest and to meet new people. Snepenger et al (2006) Another seven elements of tourist motivations were identified by Dann (1981) and his motivation elements included; travelling as a response to what is desired, destination pull in response to a motivational push, motivation as a fantasy whereby engaging in activities that are deemed unacceptable in their culture and home environment, motivation as a classified purpose such as visiting family and relatives, motivational typologies, motivation and tourist experience, and motivation as an auto-definition and meaning such as the way in which a tourist will explain their situations and respond to them. The Travel Career Ladder is another travel motivation and it consists of five elements developed by P.Pearce (1988) these five travel motivation elements vary from motivations of relaxation, stimulation, relationship, self-esteem, to development and fulfilment. A tourist motivation is an ever-changing process and moving up the ladder while progressing through the various life-cycle changes. The model Pearce developed showed that motivations are divided into two categories. The need may be self-centred for instance relaxation may be done solo and the holiday maker seeks a quiet restful time alone, or the need is directed at others for instance it can be relaxation with other individuals and springing from the need for external excitement and desire for novelty. More examples of self-centred needs and needs directed at others are; self directed needs springs from the concern for own safety, relationship can be self-directed which means giving love and affection and maintaining relationships, self-esteem and development maybe self-directed like development of skills, special interests, competence and mastery, fulfilment is another example of self-directed needs, as if fulfils and understands oneself more and experience peace. While needs directed at others can be directed toward others arising out of the concern for other’s safety, or it can be directed at others by means of receiving affection and to be with group membership and it may be directed at others like prestige, and glamour of travelling. Seaton (1997) criticized Pearce’s travel motivations. For instance, as Pearce argued that stimulation may be understood alone a dimension of risk and safety of oneself or of others, it may be argued that there is a distinctive difference between these two motivations. A concern about the safety of others might mean placing yourself at risk to help others from danger. The willingness to do this relies on the certainty of a person’s psychological maturity. It has been suggested by Pearce & Lee (2005) that in the Travel Career Ladder framework, the term career indicates that many individuals orderly move through a series of stage or 101 CU IDOL SELF LEARNING MATERIAL (SLM)

their travel motivational patterns are predictable. As some may influentially say to the Travel Career Ladder, others may remain at a particular level, mostly depending on opportunities and other limitations such as health and financial situations. Typologies of Tourist Behaviour Cohen (1972), in his early studies, draws attention to the fact that all tourists are seeking some element of novelty and strangeness while, at the same time, most also need to retain something familiar. How tourists combine the demands for novelty with familiarity can in turn be used to derive a typology. Cohen (1972) the sociologist, identified four types of tourists: The organizational Mass tourist who buys tourists packages or all inclusive tours in order to visit classical mass tourism destinations, where everything is predetermined before hand and has a low degree of participation and involvement in the travel search for information. There is no sense of adventure or exploration. He/she belongs to an institutionalized type of tourism where the contact with the organizers of tourism industry is a constant. The individual mass tourist is similar to the organizational mass tourist, however this one is flexibility on his/her decisions and want to participate more in the process. The tourist strongly depends on the tourism industry but want to try some new things out of the closed and predetermined packages. The explorer is more adventurous, he wants to find his/her own experience participating actively in this decision choice. He arrange most of the elements of the travel by himself/herself, however sometimes he/she has to turn to a travel agency or tourism professionals to get some comfort or security amenities. The drifter looks for intensive experiences and he want to feel immerse in local communities. He/she completely abandon his relations with the institutions of tourism systems planning everything by him. He practiced a non-institutionalized type of tourism. With this classification of tourists Cohen established an interesting link between the need of living unique experiences and the need of the perception of security. The more secure a tourist wants to feel, the more he will trust on tourism specialist and thus he will live less unique experiences (more standardized). Stanley Plog (1974 cited Plog 1991) developed a similar psychobiological model designed to explain what type of people prefer what type of destination according to its psychographics characteristics. To the author, tourist population could be divided into a continuum of personalities distributed along the Gauss curve; from psychometrics, individual travellers whom look for the unexplored, in one extreme to allocentrics, mass tourism tourists, in the other. After Cohen and Plog, researchers such us Dalen (1989), Smith (1989) or Urry (2002) for instances; they have attempted to create new categories of tourists based on their subject of 102 CU IDOL SELF LEARNING MATERIAL (SLM)

research. It has to be pointed out that all the models proposed until now they are just descriptive and not relevant to the general tourism demand. They are just focused in one area of study and not in the bigger dimension where the tourist is immerse. In addition, they also fail in the same thing: they do not take into account the factors which determine the different types of tourists (Sharpley, 1999). These factors might be grouped into demographic and socioeconomic factors such as age, life cycle, gender and income; and structural social factors such as the existence of non-tourists and capitalist tourism (Sharpley, 1999). Therefore, every person goes through different stages in life, and depending on the age, familiar circumstances or income tourist will change from one typology to another. Moreover, in these classifications it is not always the tourist who can decide what tourist is going to be, but it is the society who is going to classify you (Swarbrooke and Horner, 2007 To better plan and market tourist destinations, a better understanding of motivation is crucial. Travel motivation theories can help us understand what motivation is, and what elements must be considered to understand it, and then interpret the different findings to understand the motivation of a certain type of tourist. What motivates a person to travel may vary from one seeking adventure to one visiting a family to feel a sense of belonging or whether they are affected by the Push motive or the Pull motive. Therefore, it is difficult to differentiate the different individual motives of travel and people often may not constitute to the real reason of travel. However, understanding travel motivation and typologies of tourist has enabled and explained why certain tourism destinations are more developed and successful than others. All the theories explained above are used as tool to gain knowledge about what is driving tourists to travel and why are they choosing the places they are travelling too. Travel motivations fundamental in tourism and is important for development. The motivation that indicates a tourist’s behaviour can show how people set their goals on the destination of their choice and it will reveal how these goals reflect their choice and their travel behaviour. Last but not least, after undertaking this research, understanding the motivations and the typologies of a tourist is the key success to the tourism industry. 6.3 BUSINESS MODELS - The term business model refers to a company's plan for making a profit. It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses. Business models are important for both new and established businesses. They help new, developing companies attract investment, recruit talent, and motivate management and staff. 103 CU IDOL SELF LEARNING MATERIAL (SLM)

Established businesses should regularly update their business model or they'll fail to anticipate trends and challenges ahead. Business models also help investors evaluate companies that interest them and employees understand the future of a company they may aspire to join. A business model is a high-level plan for profitably operating a business in a specific marketplace. A primary component of the business model is the value proposition. This is a description of the goods or services that a company offers and why they are desirable to customers or clients, ideally stated in a way that differentiates the product or service from its competitors. A new enterprise's business model should also cover projected startup costs and financing sources, the target customer base for the business, marketing strategy, a review of the competition, and projections of revenues and expenses. The plan may also define opportunities in which the business can partner with other established companies. For example, the business model for an advertising business may identify benefits from an arrangement for referrals to and from a printing company. Successful businesses have business models that allow them to fulfill client needs at a competitive price and a sustainable cost. Over time, many businesses revise their business models from time to time to reflect changing business environments and market demands. When evaluating a company as a possible investment, the investor should find out exactly how it makes its money. This means looking through the company's business model. Admittedly, the business model may not tell you everything about a company's prospects. But the investor who understands the business model can make better sense of the financial data. Evaluating Successful Business Models A common mistake many companies make when they create their business models is to underestimate the costs of funding the business until it becomes profitable. Counting costs to the introduction of a product is not enough. A company has to keep the business running until its revenues exceed its expenses. One way analysts and investors evaluate the success of a business model is by looking at the company's gross profit. Gross profit is a company's total revenue minus the cost of goods sold (COGS). Comparing a company's gross profit to that of its main competitor or its industry sheds light on the efficiency and effectiveness of its business model. Gross profit alone can be misleading, however. Analysts also want to see cash flow or net income. That is gross profit minus operating expenses and is an indication of just how much real profit the business is generating. 104 CU IDOL SELF LEARNING MATERIAL (SLM)

The two primary levers of a company's business model are pricing and costs. A company can raise prices, and it can find inventory at reduced costs. Both actions increase gross profit. Many analysts consider gross profit to be more important in evaluating a business plan. A good gross profit suggests a sound business plan. If expenses are out of control, the management team could be at fault, and the problems are correctable. As this suggests, many analysts believe that companies that run on the best business models can run themselves. 6.3.1 BUSINESS TO BUSINESS (B2B) – Business to business or B2B is a business model when a company sells its products and services to another company’s customer for further processing and then reselling it. In simple words, one business sells its product/service to another business. The reason B2B is different from business to customer (B2C), where a business sells its product/service directly to the customer who consumer. Characteristics of Business-to-Business Multiple Decision-Makers Since business to business usually happens in the supply chain, where one company supplies products and services to the other company. That relationship among companies tends to last for years. Therefore, companies in B2B don’t make their decision in haste. They follow the standard protocol and proper documentation, visitation, evaluation, and inspection of products, negotiation, and contract signing. When everyone agrees like visiting officer, evaluation and inspection officer, and the management checkmark their concerned lists, and then they sign the contract. Longer Decision Cycle As we know that there are multiple decision-makers are involved, and they have to perform their duties. Sometimes it takes months and years to close the deal. Customer-Specific Discounts Since the nature of the relationship between business to business is long term, and so many stakeholders are involved. Sometimes, only one full-time customer is sufficient for the companies. Companies want the B2B relationship to work for a longer time because it is good for both of them. Therefore, they give special discounts and rates to their business customers. 105 CU IDOL SELF LEARNING MATERIAL (SLM)

Conflict with Direct Sales Channels When we talk about direct sales to the customers or B2C type, then it involves a lot of issues. The relation between the business and the customer is limited, short terms, and uncertain. If the customer doesn’t like the product, price, or color, then he would move on to the store. B2B relationship is free of such conflicts. International Markets B2B is not confined to the geographical borderlines. Companies are doing business globally, both in physically and digitally as well. Oil and gas is a very good example of it. How governments and companies work with one another. B2B Vs B2C Business to customer (B2C) is where businesses directly sell their products and services to the ultimate consumer. In B2B, businesses sell their product/service to the other business for further processing and then reselling. The difference is that customers consume the product in the B2C, and they consume, add value, and resell the product/service in B2B. Types of B2B Models There are many types of business that uses the B2B model like human resource management, salary payroll, taxes, construction companies, research and developments, marketing, call center, advertisements, web development, and design. You can find other businesses that use the B2B eCommerce and what category of product or service they deal through the internet. Here are some of the following types of B2B; Customer-Centric Model The customer-centric model is where the company prefers to establish a long term profitable relationship with the customers even after the sale. The value of the customer remains the same; it doesn’t change after the transaction. When customers are the main focus of the business, then they would have a great influence over the branding and other operations of the company. Amazon and Flipkart are the two major examples of e-commerce businesses, and they follow the customer-centric model. It took them years to develop reliable and trustworthy relations with their customers, and they are also loyal to their brand. 106 CU IDOL SELF LEARNING MATERIAL (SLM)

Buyer Centric Model Buyer centric is a type of model where different companies set higher purchase prices for buyers. Then the marketers and sellers of different companies approach buyers with different offers and packages, that how their quotation would serve them better. In the end, the buyer would compare all the quotes and offers, and choose one of the offers most relevant to his budget Walmart is the best example of the buyer-centric model because it has a shopping mall across the world. Every branch of Walmart has different and multiple suppliers. However, different suppliers approach the company and bid, and the best bidder becomes the supplier of the company. Intermediary Centric Model Intermediary centric is a B2B type of model where buyers and sellers get together at a common shared platform to complete the transaction. It establishes a shared common platform to attract buyers and sellers. At every complete transaction, intermediary would get its share of the commission. Customers can’t check out all the products in the digital market. But this intermediary provided platform is a great place to check out all the products. OLX and eBay are two major examples of such intermediary eCommerce platforms where buyer and seller meet, check out the product/service being offered. Earning of the platform is either through commission after a successful transaction or through advertisement. The Direct Connection B2B Model The direct connection is also a type of B2B model where the company is directly connected to all of the partners and stakeholders for sharing and transferring of all the electronic documents. In simple words, a third-party IT organization is connected to your business, and it would manage all the business operations of your company like mapping, tech support, translation, and tracking of all the documents. Once your platform starts getting bigger, managing partners and stakeholders would become the top priority to manage their communication and resolve their issues. Network B2B Model 107 CU IDOL SELF LEARNING MATERIAL (SLM)

Network B2B model is when your direct model has multiple problems and complexities, then the network jumps in and resolves it. This type of business model used to be functioning before the arrival of the internet. By using this model, you can create a single connection to the service providers to use the protocol like FTP over VPN, RosettaNet, FTPS, AS2, and SFTP. Hybrid B2B Model Hybrid B2B model is a combination of two models; direct connection and network B2B model. The purpose of this model is to save the transaction fee of a service provider, and the company would connect with the maximum transaction client. When you use this model, then your company would have the advantage of the service provider, and to work with many low volume trading partners. Managed B2B Model Managed B2B model is when your company outsource or hire an outside service provider to manage its entire B2B processes. The most obvious advantage of outsourcing is lower cost and simplicity. This model works only if the service provider of your company shares documents through the ERP (enterprise resource planning) system. Managed B2B model would perform activities like translation, mapping, tech support, document tracking, and data center operations. Advantages of Business to Business Model Some of the advantages of the business to business model are given below; Stability Unlike business to customer (B2C) model where businesses and customers keep on their relations from one buyer or seller to the next buyer or seller. On the other hand, B2B (between buyer and seller) is a very stable relationship that goes for years. Loyalty Before signing any contract in the B2B model, buyers and sellers both go at a length to plan their budget, revenues, and rates. When both parties close the deal, then they rely on one another in terms of supplies and payments. Business to business supplier market is not big and limited parties are loyal to one another. 108 CU IDOL SELF LEARNING MATERIAL (SLM)

Fewer Expenses In a business to business relationship, both parties spend a lot of time planning and working on the details. Therefore, it leaves no room for mistakes and errors. As a result, everything works out as plan without costing any extra expenses. Easier Calculation Most importantly, you can buy the product or service through online auction at a much lower price. Therefore, it becomes so easier for them to calculate the sales because the figures are based on the facts. Disadvantages of Business to Business Model Fewer Customers In the B2B market, you won’t find a plethora of buyers and sellers just like you see it in the B2C market. Although the market is small with fewer buyers and sellers, but their orders are big. Time Consuming Since the orders of business to business clients are big, and their relations are of a long term in nature. But the process of finding and building with B2B clients is so lengthy that you can’t go and buy products and services just like in the B2C market. Formalities It also involves a lot of formalities like documentation, quotations, negotiations, and meetings. Sometimes, you have to bribe and make under the table deals in order to sign the contracts. Examples of B2B E-commerce Companies Alibaba B2B Business Services Alibaba is a Chinese world-leading e-commerce, retail, internet and technology company. It has supplying partners worldwide. Those suppliers are business companies, and Alibaba is also an e-commerce company. Therefore, it’s a perfect example of a B2B model. 109 CU IDOL SELF LEARNING MATERIAL (SLM)

Slack B2B Model Slack is a windows tool that brings multiple separate tools working and functioning at a singles platform. For communication, and sharing of files and documents, many B2B companies use slack. Skype B2B platform Skype is an online tool and application which provides the service of free audio/video calls, text messaging, and file sharing. Many businesses use Skype for communication and file sharing. WeWork b2b platform WeWork is a world-leading co-work spacing company. Many businesses rent the workspaces of WeWork to run their daily business operations. WeWork is also a very good example of a B2B model. 6.3.2 BUSINESS TO CONSUMER (B2C) - B2C or business to consumer means when a business sells its products and services directly to the end consumers without any intermediary. The businesses and companies that approach customers directly and don’t employ middlemen are B2C companies and businesses. Ecommerce and online shopping have promoted the B2C, where manufacturers and retailers market their products and services directly to the end customers by using the internet. Michael Aldrich is the first person who made use of the B2C concept at his TV show in 1979, where he targeted his end consumers by using TV. Having a meal at the hotel, watching a movie at a cinema, shopping malls used to fall in the category of business to consumers. But the internet has given a whole new perspective and definition to the B2C phenomenon. B2C is the art of selling your product and services directly to the customers, without any third party or a middleman. Business to consumer market comprises of online retailers who approach their customers through the internet and online. Business to consumer market poses a serious threat to the conventional type of retail middlemen businesses who are accustomed to add their mark up. 110 CU IDOL SELF LEARNING MATERIAL (SLM)

Daraz, eBay, Amazon, and Priceline are some of the pioneers of B2C business who broke the barriers and laid the foundation of the new era. B2C is a type of business model that relies on its customers’ feedback so that they’d return for the shopping. Unlike business to business where you don’t need to worry about the service quality or the marketing campaign, it doesn’t involve customers’ emotional response. Difference between B2C and B2B Model B2B or business to business means that one business or a company buys products or services as a raw material from the other company. The business further reuses the product or service and then resells it to the end consumers. B2B buying is formal and it involves a lot of documentations and clarifications, such types of deals are usually for the long term. B2C selling and purchases are usually quick because it involves only one person. The price and other terms and conditions also vary in both of these types of B2C and B2B models. Types of Business to Consumer Models Businesses and companies use different types of models to approach customers, business to consumer model offers five types of models and they are as follows; Direct Sellers Direct sellers are very casual types of models where people purchase products and services online. Small businesses, manufacturers and producers could be the direct sellers that market their products and services by using the online outlet.Amway, Mary Kay, Avon Product, and Pampered Chef are some of the examples of direct sellers. Online Intermediaries Online intermediaries comprise of different online platforms that redirect the traffic to the retail site. Such platforms don’t own or manufacture anything, the only thing they have is the traffic. Newly established online stores display their products ads on such platforms, and they work as an intermediary for such retail stores. Etsy, Expedia, and Trivago are some of the famous platforms that work as online intermediaries. 111 CU IDOL SELF LEARNING MATERIAL (SLM)

Advertising-Based Models Advertising based models comprise of those sites that offer something free content. Even though offering free content costs them a lot, but it helps them to increase the traffic on their website. Once they have huge traffic on their blog or site, then they can their platform into an online intermediary. Nowadays, most bloggers and website owners are using their platforms for ads. Community-Based Models Social and professional networking sites offer people a free platform to establish their social and professional networks based on their interests. Businesses use such platforms to directly target their required market or demographic. Facebook, Instagram, LinkedIn, and Twitter are some of the very common examples of community-based models. Fee-Based Models Fee-based models are such platforms that directly charge their customers by offering them the content of their choice or an unlimited on their platform for sometimes. Once the offer expires, you have to pay again to get unlimited access. Advantages of Business to Consumer B2B and B2C are completely two different models; however, every model has some specific characteristics. Some of the advantages of business to consumer model are as follows; Increased Awareness According to an estimate, as on January 2020 more than 4.5 billion people use the internet across the world. The market over the internet doesn’t have any boundary, companies, and businesses are using the internet and multiple platforms to target their customers directly. They’re doing it by spreading information about their product when people have the awareness and knowledge, then they’d demand it. 112 CU IDOL SELF LEARNING MATERIAL (SLM)

Better Interaction When buyers and sellers directly communicate with one another, then it’s highly likely that the seller would satisfy the buyer’s needs and requirements, because now the seller knows the exact requirements of the buyer. Instead when there are multiple layers of middlemen are involved. Better Service When businesses directly contact consumers, then they have to be very cautious about their product, delivery, and other services. All of these things combined to impact the perception of customers. If a customer has a better experience with the service, then it’s probable that he’d come again. Refined Messaging The messages businesses send to their consumers are very precise. Marketing team of businesses and companies work on their messages what they have to send to their customers so that the message shouldn’t be out of the context. It should mean what it’s planned to mean it. Disadvantages of Business to Consumer Some of the limitations and disadvantages of the B2C model are as follows; Competition You must have observed one thing while online shopping that there are so many online platforms. In other words, e-commerce and online shopping fields where there so many retailers who targeting their end consumers, are highly competitive. You won’t find any niche or field without competition. One can easily enter in the e-commerce field and target its market, but attaining maximum market share is very difficult. Or even staying in the competition is very hard for a new business. Infrastructure 113 CU IDOL SELF LEARNING MATERIAL (SLM)

Although e-commerce provides businesses an opportunity to reach people globally, but the tricky question is what do they have the infrastructure to deliver their product or service? Country’s borders, taxes, political and other legal issues are involved that inhibit the business to reach the doorsteps of their customers globally. Companies and businesses that are running their business operations across the world, they have made multiple deals with various governments of different countries. Limited Interactions Although buyers and sellers meet and contact directly, but their connection is limited to the images and written content only; the buyer has to make a decision based on the information provided by the seller. Buyer himself can’t check and feel the textures, shape, size, and quality of the product; he’s completely reliant on the seller’s words. Security When buyer is completely reliant on the seller’s promise, then it raises a serious question on the buyer’s security. There are many platforms involved in the fraudulent activities, they aren’t providing the quality products or services what they claim to do so. The customer doesn’t have any leverage in the end. B2C Challenges In B2C, marketers have to consistently work on their platform to make it interesting and flashier, so the customers keep visiting the seller’s site. They also have to keep their website optimized with different search engines. If the site isn’t well optimized, then it won’t rank up in the searches, which means the customers won’t be to visit your platform for shopping. SEO rules and policies of different search engines keep on changing with time; therefore, you need professional digital marketers whose job only searches engine optimization. Maintenance and SEO cost accumulates to make it very costly. At the end, it all comes down to the capital, the more money and resources your business has to hire professionals. It’s highly probable that you’d gather a larger market share. Online security is one of the biggest challenges that online and e-businesses face today. Customers are reluctant to share their confidential debit and credit card details online unless your platform is safe. To counter such issues, platforms like PayPal, Payoneer, and Venmo that provide the service of online payment processing. 114 CU IDOL SELF LEARNING MATERIAL (SLM)

Future of B2C If we study the graph of online shopping and eCommerce trends, then there’s been an exponential increase in this field for the past decade. We can assume that e-commerce or business to consumer market is going to stay with us. We’ll witness revolutionary changes soon. 6.3.3 CONSUMER TO BUSINESS (C2B) C2B (Consumer to Business) is a business model where the end consumers create products/services ideas and value which are directly consumed by businesses to create more value and improvements. It is diametrically opposite to the popular concept of B2C (Business to Consumer) where the companies make goods and services available to the end consumers. In C2B, the companies typically pay for the product or service. However, it can assume different forms like an idea generated by an individual (like an innovative business practice) which may be used and implemented by an organization. Another possible form of C2B is where a consumer specifies a need and the various businesses compete or bid to fulfil that need. Importance of C2B (Consumer to Business) Model C2B model though an inverted business type has become very important since the rise of internet and smartphones. large group of customers can interact with each other and the business directly through social media and customer service pages. The value from customer feedback, comment, suggestion can directly be consumed by business which can be converted to an actionable insight. This is one of the advantages of the C2B. Many a times, business ask for direct feedback and even ask for issues with the product. The information collected is directly used for product development and improvement. But it is very important to manage the C2B model well. Sometimes it can become very difficult to handle the feedback and comments which can lead to less research and development and more reliance on the customer comments. This can be an issue in long term when the consumer behavior changes. Feedback analysis and C2B should be not be very heavily coupled because not all consumers might be expressing their concern or ideas online. It is important to properly understand the customer through research and proper channels to take and ask for ideas. Components of C2B (Consumer to Business) 115 CU IDOL SELF LEARNING MATERIAL (SLM)

There are 3 main components Product or Service This is the main component which drives the business or on which the entire business is based. This produced by the end customer and taken to the business in C2B. In case of Consumer to business model, the product may undergo more value addition and changes once it goes further in the process. Consumer Consumer is the one who consumes the product or the service produced by a business or a company. In C2B, Consumer creates a product or an idea and takes it beyond personal usage and act as catalyst for future growth of business Business The business is the producer or manufacturer of the product or service consumed by the end customer generally but in c2b, the business buys or consumes the product created by the customer to create more value and updates on top of it. C2B (Consumer to Business) examples 1. One of the good example is where an instant noodle brand asked for suggestions to improve the noodles and add more flavors. After the suggestions, they selected the top entries and created actual products and launched in market. 2. Another example is where smartphone companies take direct feedbacks from customers and influencers before launch on the performance of the product. 6.4 SUMMARY  A business model is a company's core strategy for profitably doing business. Models generally include information like products or services the business plans to sell, target markets, and any anticipated expenses.  There are dozens of types of business models including retailers, manufacturers, fee-for- service, or freemium providers. The two levers of a business model are pricing and costs. 116 CU IDOL SELF LEARNING MATERIAL (SLM)

When evaluating a business model as an investor, consider whether the product being offer matches a true need in the market.  The business model aids in the company's consumer base targeting. It aids in the development of marketing plans and income and expense projections, taking into account the various business models and clientele. Every investor should look at the business model to learn more about the company's competitive advantage. Investors can better understand financial data if they understand the business strategy. Investors can better understand the company's goods, business model strategies, and prospects by evaluating the business model.  A business model is a company's plan for conducting a profitable operation. It contains information about the company's goods, target markets and prospects. Reviewing the business models before investing in any company allows investors to gain a real and fair understanding of the firm's past and prospects. Investors can gain a better understanding of financial data by understanding company models. 6.5 KEYWORDS  E-tourism: e-tourism refers to a phenomenon and research area in which the adoption of information and communication technology (ICT) by tourists and businesses transforms the processes and the value chains in the tourism industry.  Typology: study of or analysis or classification based on types or categories  Business model: A plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing  Influencer: : one who exerts influence : a person who inspires or guides the actions of others  COGS: Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. 117 CU IDOL SELF LEARNING MATERIAL (SLM)

6.6 LEARNING ACTIVITY 1. Explain the term Typology. __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 2.What do you mean by Business model? _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ 6.7 UNIT END QUESTIONS 118 A. Descriptive Questions Short Questions: 1. Explain Typologies of Tourist Behaviour 2. Give few factors of travel motivation 3. Explain the term Business model 4. Evaluate some Successful Business Models 5. Which are the two primary levers of a company's business model? Long Questions: 1. What are the Characteristics of Business-to-Business? 2. State different Types of B2B Models 3. List some Advantages and disadvantages of Business to Business Model 4. State Types of Business to Consumer Models 5. State Importance of C2B (Consumer to Business) Model CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 1. Maslow’s theory involves ________ needs forming a hierarchy a. One b. Three c. Five d. Seven 3. The term_______________ refers to a company's plan for making a profit. a. business model b. Office model c. House model d. Professional model 4. _____________ is a Chinese world-leading e-commerce, retail, internet and technology company. a. Benzo b. Alibaba c. Chow-mein d. Dull zen 119 CU IDOL SELF LEARNING MATERIAL (SLM)

5. __________________ or business to consumer means when a business sells its products and services directly to the end consumers without any intermediary. a. C2B b. B2B c. C2C d. B2C 6. In _________, the companies typically pay for the product or service. a. C2B b. B2C c. C2C d. B2B Answers: A-c, B-a, C-b, D-d, E-a 6.8 REFERENCES  100+ Business Models Book by Four Week MBA  Business Strategy Essentials You Always Wanted To Know (Second Edition) (Self- Learning Management Series) Paperback – 1 January 2020 by Vibrant Publishers (Author), Callie Daum (Author)  SHAPERS OF BUSINESS INSTITUTIONS: How Harsh Mariwala ‘Groomed’ Marico Hardcover – 10 February 2021 by R. Gopalakrishnan (Author), M. Suresh Rao (Author)  BUSINESS ADVENTURES Paperback – 12 November 2014 by John Brooks (Author) 120 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT – 7 TYPOLOGIES OF E-TOURISM-II STRUCTURE 7.0 Learning Objectives 7.1 Introduction 7.2 Meaning and significance 7.3 Business models - 7.3.1 Consumer to consumer (C2C) 7.3.2 Business to Employees (B2E) 7.3.3 & Business to Government (B2G) 7.4 Summary 7.5 Keywords 7.6 Learning Activity 7.7 Unit End Questions 7.8 References 7.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Understand the concept of E-tourism  Identify different business models  State the significance of typologies  List some importance of typologies 7.1 INTRODUCTION Today, tourism is one of the largest and dynamically developing sectors of external economic activities. Its high growth and development rates, considerable volumes of foreign currency inflows, infrastructure development, and introduction of new management and educational experience actively affect various sectors of economy, which positively contribute to the 121 CU IDOL SELF LEARNING MATERIAL (SLM)

social and economic development of the country as a whole. Most highly developed western countries, such as Switzerland, Austria and France have accumulated a big deal of their social and economic welfare on profits from tourism. According to recent statistics, tourism providesabout 10% of the world’s income and employs almost one tenth of the world’s workforce. All considered, tourism’s actual and potential economic impact is astounding. Many people emphasize the positive aspects of tourism as a source of foreign exchange, a way to balance foreign trade, an “industry without chimney”- in short, manna from heaven. For decades tourism industry growth has been a major contributor to increased economic activity throughout the world. It has created jobs in both large and small communities and is a major industry in many places. It is the dominant economic activity in some communities. The slogan ‘Athithi Devo Bhava’ which means ‘guests are like God’ truly represents the fact that Indians have been highly hospitable people and this trend is still present in modern India. A guest is considered as highly revered person. Intricate arrangements are generally made for a guest who visits somebody’s home for a holiday or other reasons. The family plans well for the comfortable stay of a guest. Moreover, best crockery and bed sheets are kept in store room just for the usage of the guests 7.2 MEANING AND SIGNIFICANCE Tourism refers to that activity which is conducted for a short period of time, more than 24 hours and less than 1 year, for a non-remunerative purpose. Based on the UNWTO definition on tourism, tourism could be categorized as: • Domestic Tourism: Domestic tourism involves trips made by local residents within their own countries. Example: An American, who lives in New York, takes a business trip to Los Angeles. • International Tourism: International Tourism involves trips between 2 countries. To a certain country, a visit by residents of that country to another country is an outbound tourism; a visit to that country by residents of another country is an inbound tourism. Example: Trips between Hong Kong and Japan. Hong Kong as 122 CU IDOL SELF LEARNING MATERIAL (SLM)

the point of origin/point of destination: Visits made by Hong Kong residents to Japan are Hong Kong’s outbound tourism; Visits made by Japanese to Hong Kong are Hong Kong’s inbound tourism. International tourists are those who travel to a country other than the one in which they normally live. Why Tourism? Over the decades, tourism has experienced continued growth and deepening diversification to become one of the fastest growing economic sectors in the world. Modern tourism is closely linked to development and encompasses growing number of new destinations. These dynamics have turned tourism into a key driver for socio- economic progress. Today, the business volume of tourism equals or even surpasses that of oil exports, food products or automobiles. Tourism has become one of the major players in international commerce, and represents at the same time one of the main income sources for many developing countries. This growth goes hand in hand with an increasing diversification and competition among destinations. This global spread of tourism in industrialized and developed states has produced economic and employment benefits in many related sectors - from construction to agriculture or telecommunications Typology of Tourism Impacts The impacts of tourism can be sorted into six general categories: 1. Economic 2. Environmental 3. Social and Cultural Understanding that tourism development may result in many and complex impacts suggests that local elected officials, the tourism industry and community residents need to work cooperatively and carefully to plan for its growth and development. Planning can help create an industry that enhances a community with minimal costs and disruptions in other aspects of community life. Having broad community involvement and embracing different perspectives during planning helps identify and resolve concerns that would otherwise create problems later. Economic Impact 123 CU IDOL SELF LEARNING MATERIAL (SLM)

Tourism increases employment opportunities. Additional jobs, ranging from low-wage entrylevel to high-paying professional positions in management and technical fields, generate income and raises standard of living. Particularly in rural areas, the diversification created by tourism helps communities that are possibly dependent on only one industry. As tourism grows, additional opportunities are created for investment, development and infrastructure spending. Tourism often induces improvements in public utilities such as water, sewer, sidewalks, lighting, parking, public restrooms, litter control and landscaping. Such improvements benefit tourists and residents alike. Likewise, tourism encourages improvements in transport infrastructure resulting in upgraded roads, airports, public transportation and non-traditional transportation (e.g., trails). Tourism encourages new elements to join the retail mix, increasing opportunities for shopping and adding healthy competitiveness. It often increases a community’s tax revenues. Lodging and sales taxes most notably increase but additional tax revenues include air travel and other transportation taxes, business taxes and fuel taxes. New jobs generate more income tax revenues. When considering the economic impacts of tourism, it is essential to understand that tourism businesses often include a significant number of low-paying jobs, often at minimum wage or less. These jobs are often seasonal causing under-employment or unemployment during off-seasons. Labour may be imported, rather than hired locally, especially if particular skills or expertise is required, or if local labour is unavailable. Some tourism-related businesses are volatile and high-risk ventures that are unsustainable. Greater demand for goods, services, land and housing may increase prices that in turn will increase the cost of living. Tourism businesses may claim land that could have higher- value or other uses. Additionally, non-local owners and corporations may export profits out of the community. The community may have to generate funds (possibly through increased taxes) to maintain roads and transportation systems that have become more heavily used. Similarly, if additional infrastructure (water, sewer, power, fuel, medical, etc.) is required, additional taxes may also be needed to pay for them. Environmental Impact Areas with high-value natural resources like oceans, lakes, waterfalls, mountains, unique flora and fauna and great scenic beauty attract tourists and new residents (in-migrants) who seek emotional and spiritual connections with nature. Because these people value nature, selected natural environments are preserved, protected and kept from further ecological decline. Lands that could be developed can generate income by accommodating the recreational activities of visitors. Tourist income often makes it possible to preserve and restore historic buildings and monuments. Improvements in the area’s appearance through cleanup or repairs and the addition of public art such as murals, water fountains and monuments (part of making a community ready for tourism) benefit visitors and residents 124 CU IDOL SELF LEARNING MATERIAL (SLM)

alike. Tourism is generally considered a “clean” industry, one that is based on hotels, restaurants, shops and attractions, instead of factories. Social and Cultural Impact The social and cultural ramifications of tourism warrant careful consideration, as impacts can either become assets or detriments to communities. Influxes of tourists bring diverse values to the community and influence behaviours and family life. Individuals and the collective community might try to please tourists or adopt tourist behaviours. Interactions between residents and tourists can impact creative expression by providing new opportunities (positive) or by stifling individuality. Increased tourism can push a community to adopt a different moral conduct such as improved understanding between sexes (positive) or increased illicit drug use (negative). Safety and health facilities and staffing tend to increase but also the safety problems such as crime and accidents increase. Traditional ceremonies may be renewed and revived by tourist interest or lost in alternative activities 7.3 BUSINESS MODELS - Every business or companies makes a plan for generating profit. They create a model for identifying products and services to sell, the market they want to target and also take into account anticipated expenses. This is known as business models. Even if the business is already established or even if it is a new business, plan needs to be made. Businesses need to regularly update their plans and strategy as they need to take into accounts the challenges and trends for the future models. Importance of Business Models: The business model helps to target the customer base for the company. It helps in making marketing strategies, projection of revenues and expenses taking into account the type of Business models and clienteles. Every investor needs to review the business model in order to get knowledge about the company’s competitive edge. Understanding the business model helps the investors to have a better sense of financial data. 125 CU IDOL SELF LEARNING MATERIAL (SLM)

Evaluating the business model helps the investors to get the overall view about the company’s products, its business strategies and future prospects. Example of a Business Model For example, let’s take a company A which rents and sells video games. So the company is into the business of video games. Company used to make a profit of 5 million after spending 3 million on their inventories for video games. So, total gross profit margin is 2 million. The Internet arrived in the market and the company now has to alter its business model by taking into consideration the internet in order to survive in the market. So as a result the cost of holding inventory and distribution cost also gets reduced. Since expenses reduce profit increases. 7.3.1 CONSUMER TO CONSUMER (C2C) – Consumer to consumer is a business model that enables commerce between individual consumers that are not part of a business. C2C can be goods or services that are exchanged between two individuals. Generally, two individuals are brought together to do business with each other through a platform that acts as an intermediary based on the consumer-to-consumer model. In this era of technology and internet, there has been a significant rise in the use of the consumer-to- consumer business model. Examples of consumers to consumer platforms and transactions The most classic example of consumer-to-consumer transactions would be the classifieds section of a newspaper. Before the use of smartphones and the internet, people often sold new or used items or offered services in the classifieds section of the newspaper. These were individuals who connected with other individuals to do business with them. Another example similar to the classified section is auctions. Auctions are often held by individuals who have created a product or own a product and they sell it to other consumers. However, in recent years there has been an immense increase in consumer-to-consumer platforms though the internet. With the rise of ecommerce and online shopping many websites and companies are taking advantage of the consumer-to-consumer business model. Websites such as Amazon, eBay, Kijiji and even Facebook marketplace, offer individuals a platform to connect with consumers and offer their products or services. Another area where ecommerce has rapidly grown is the smartphone app market. Mobile applications are taking over almost all other devices and procedures; from checking your 126 CU IDOL SELF LEARNING MATERIAL (SLM)

email to depositing a check to even ordering take out, it can all be done through an app on your phone. Similarly, many mobile applications are offering individuals a place to conduct their business with consumers. Applications such as Letgo, Offerup, and TrueFlip are all marketplaces for individuals to buy and sell their products and services. Many websites have since also launched mobile applications to allow easier interaction, better communication, and better user experience for their consumer-to-consumer platforms. These include Kijiji, Facebook marketplace and even Wish.Some other examples of consumer-to-consumer platforms are etsy, craigslist, Poshmark and even sites like fiverr. How do C2C transactions work? Consumer to consumer sites and platforms work by providing the platform for sellers and buyers to connect. Many of them work based off a classifieds system or some of them also offer a bidding/ auction feature. Sites and mobile applications such as Letgo, Kijiji and ebay are generally used by individuals for placing advertisements for their products and services. They even allow you to purchase new and second hand goods such as used textbooks or find services such as tutoring and babysitting. The sites provide you a secure way of communicating with others to buy or sell. Other sites such as etsy allow you purchase handmade goods, personalized products and allow sellers to customize their own seller’s website through etsy. This allows the seller to provide a tailored experience to the services or products that they provide. Once a buyer and seller connect most of these sites either provide a secure method of payment transfer or in cases such as Kijiji and Letgo consumers can set up and agree to payment methods themselves. It is recommended however to be careful with transactions that take place after using the sites that do not provide a secure payment method. Generally, these sites and applications are generally not liable for losses or they do not provide guarantees. Sites or applications can however mitigate disputes and those that offer secure payment can provide refunds as well. How do consumer to consumer (C2C) platforms earn revenue? Consumer to consumer platforms earn profits in a couple of different methods. Platforms generally earn revenue by charging a fee to sellers for listing their products, for adding on special features or for providing easy of payment. 127 CU IDOL SELF LEARNING MATERIAL (SLM)

Often you can pay a fee to promote or highlight your listings. These allow consumers to view your listing first or on top and thus they are more likely to purchase your product or service. In addition to this these sites or applications also feature many advertisements from companies, and they charge for the ad space. Factors that impact the C2C market Now that you know a little bit more about C2C firms and which types of businesses fall under the C2C model, you need to know what variables drive the C2C market. The following are some of the factors that impact the C2C market: Trust: One factor that can influence the success of the C2C market is trust. Because of its consumer-to-consumer model, those considering purchasing another consumer’s products must be confident that they are dealing with a legitimate company. To encourage potential business, C2C business owners could provide customer reviews and money-back guarantees. Quality control: Another potential factor influencing the success of the C2C market is varying levels of quality control on consumer-to-consumer purchases. Buyers must use their best judgment to determine whether a product is worth the advertising price. Payment: Consumers need assurance about who they are paying, therefore payment methods can have an impact on the C2C market. C2C business owners can mitigate the risks by seeking help from a professional money transfer provider to assure customers that their personal credit card information is secured. Marketing capabilities: C2Cs may not have access to more traditional modes of marketing their business, which is why this can affect their success within the C2C market. However, with paid advertising through the website-owner and organic marketing such as social media, C2Cs can find unique and cost-saving marketing methods that drive consumers to the online store. Social media: Social media can have a beneficial effect on the C2C market because it allows consumers to interact with one another in a casual setting. Buyers can DM or leave comments for the seller to get valuable product information in a timely manner. They can also follow consumer-owned businesses to learn about new products before those who do not follow the C2C on social media. 128 CU IDOL SELF LEARNING MATERIAL (SLM)

7.3.2 BUSINESS TO EMPLOYEES (B2E) - B2E (business-to-employee) is an approach, where the businesses establish the intra company tools to provide products and services to their employees. This approach is highly unconventional and quite different from the general B2B approach or the business to consumer approach. The B2E approach has its inception due to the constant shortage of IT workers. In a broader and vaster sense, B2E tries to encompass all those aspects that businesses do for attracting and retaining competent staff in a highly competitive market. Flexible working hours, bonuses, opportunities for education, aggressive recruiting are some strategies that a business incorporates as a part of the business-to-employee strategy. B2E Portal A B2E Strategy specifically refers to the B2E portal, which is more like a well-customized desktop and homepage for all the members of an entrepreneurial house. Even though this portal often seems like the ‘intranet,’ yet, it primarily differs as it focuses on the needs and desires of an employee. While the focus of the intranet is an organization, the focus of the B2E portal is the employee. The B2E portal is designed in such a manner that it holds every necessary feature that an employee expects on an intranet. It has some relevant features like the corporate directory and the customer support information. On top of that, it also comes with additional personal information as required by an employee and some refreshing games for the purpose of entertainment. The aim of a B2E portal is to increase the efficiency and the satisfaction of an employee, simultaneously. It also brings a sense of unity and community in the entrepreneurial house. Features of a B2E portal A B2E Portal comes with several features. Some of them are listed below. This portal always allows an entry from a single point. It has one URL that is used by every member of the business house for logging into the portal. These portals combine business-specific and employee-specific features simultaneously. The aim of these portals is to be well-customized and perfectly altered for suiting the requirements of the employees. The portals come with a feature for managing the online insurance policies. The various supply requests are also handled swiftly from these online portals. 129 CU IDOL SELF LEARNING MATERIAL (SLM)

Each of these portals comes loaded with lucrative and high-value offers for the employees. The corporate announcement is disseminated from these portals. The portals are equipped with a 401k management unit. Business houses may come up with their B2E portals. Again, they may also depend on the services of the popular B2E portal developers. Benefits of B2E models B2E models deal with the employee and organizational benefits cumulatively. Employee benefits are availed when the relevant organizational information, scoops from the staff bulletin and other specific information are disseminated to the employees. Again, at the entrepreneurial level, B2E assists in making better decisions, reduces the costs and also improves the business processes. Thus, if an organization is looking forward to comprehensive benefits for both the staff and the organization simultaneously, B2E business models can be a highly effective option. 7.3.3 BUSINESS TO GOVERNMENT (B2G) Business to Government (B2G) refers to when a business sells products, information, or services to federal, state, or local government agencies. With this business model, businesses must bid for contracts by submitting responses to a request for proposal (RFP) solicited by a government agency.Every year government agencies solicit contracts or tenders worth billions to businesses of varying sizes. In fact, the United States government spends nearly $7 trillion on government procurement every year, making up between 10%- 15% of the country's GDP. Understanding B2G: B2G refers to the business model where government agencies procure services, information, or products from outside contractors. Whether they're purchasing business phone systems from network providers or making use of time and attendance software, government agencies perform a B2G transaction every time they purchase services, software, or information from other businesses. The B2G business model provides a way for businesses to bid on government projects or market their products to government agencies that might need it. Essentially, if your business has something a government agency needs, you are able to perform a B2G transaction. 130 CU IDOL SELF LEARNING MATERIAL (SLM)

Examples of B2G Transactions: Businesses that specialize in construction frequently perform B2G transactions with government agencies. In this example, government agencies will solicit requests for proposals (RFPs) that detail the work needed for the construction of new buildings, park developments, libraries, schools, or road construction. When an agency approves the tender of a business, they enter a B2G relationship. Government agencies will often purchase a unified communications solution to remain in contact with colleagues and other government agencies. Government offices perform a B2G transaction when they purchase this service from other businesses. A database development company can provide a system for local government offices to locate tax forms for investment income, equipment depreciation, and commercial purchases. In this example, businesses of varying sizes can market their software development services to government agencies. Maintenance services are a great example of B2G transactions. To maintain public buildings and open spaces, government agencies may solicit the services from outside contractors. For example, an agency could hire a gardening service to maintain its public parks. Examples of B2G Companies: Riskpulse. Riskpulse provides a risk management and supply chain solution to government agencies. The solution effectively helps reduce operational costs, minimize disruptions, while estimating the chances of delivering early, late, or within a specific delivery window. Riskpulse is used in different industries, including healthcare, transportation, energy, and defense. Senseware. Senseware provides a full-stack IoT platform with hardware, cloud-data, and software solutions. Senseware works to capture real-time energy submetering, IAQ, and HVAC operational data. Government agencies make use of their solutions to better integrate, manage, and monitor building systems. Skycatch. Skycatch is an enterprise-grade aerial intelligence platform and an industry-leader for data imaging. Government agencies make use of Skycatch's onsite connectivity, powerful 131 CU IDOL SELF LEARNING MATERIAL (SLM)

Artificial Intelligence and Machine Learning algorithms, and powerful analysis tools to better plan projects. OpenGov. OpenGov provides an industry-leading cloud-based software for public sector budgeting, reporting, communications, and performance. OpenGov's multi-tenant Software-as-a- Service (SaaS) connects over 1000 government agencies, providing features like budget management, direct feedback, online forums, digital surveys, and performance reporting. What is the government procurement process? A government agency solicits a request for proposal (RFP) on a registered government site. A business will then create a presentation that will highlight the value of their business and what they can add to the project. Your proposal will then go through to the evaluation process. This process might take some time but if you do get the tender, you will be notified. Rejected proposals will also be explained. The agency will send you a note explaining where your proposal was lacking. How To Make B2G Sales As A Small Business: 1. Partner with established contractors. Government agencies prefer working with businesses that have prior experience working on government projects. This makes it hard for startups and small businesses who want to market their services and products. To combat this issue, businesses will often partner with contractors as a subcontractor. While this option is not as profitable, it's a great way to start building experience. In addition, continue to build your experience by working with other businesses and independent clients. As your resume improves, so will your credibility. While it's rare, government agencies might give your business a chance if they see you've worked on major projects and with established businesses. 2. Market your services or products. Directly reaching out to businesses is often discouraged. However, cold calling government agencies could be effective. For example, if you heard your local government is launching a new project to build three new public parks in your vicinity, you could see this new development as a great opportunity to reach out and start marketing your business. 132 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Make sure you meet all the project requirements. When a government agency releases the details of a new project, the agency will indicate what skills and expertise they require for the job. Don't respond to an RFP if you do not meet all or most of the requirements. 4. Register your business. When government agencies are on the lookout for a new contractor, they will solicit the opportunity on one or more government sites such as the General Services Administration (GSA), Global Tenders, and the NYS Contract Reporter. For an added advantage, make sure your business is registered on all the necessary platforms. 7.4 SUMMARY  Consumer to consumer (C2C) markets provide an innovative way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other.  Other types of markets include business to business (B2B) and business to customer (B2C).  B2G, or business to government, is the provision of goods and services to government agencies at the federal, state, and local levels. Most contracts are granted in response to a request for proposal (RFP) from an agency. Businesses bid for contracts by submitting responses to RFPs.  B2E (business-to-employee) B2E (business-to-employee) is an approach, where the businesses establish the intracompany tools to provide products and services to their employees. This approach is highly unconventional and quite different from the general B2B approach or the business to consumer approach. 133 CU IDOL SELF LEARNING MATERIAL (SLM)

7.5 KEYWORDS  Government procurement process: Government procurement is the process by which the government acquires the goods and services it needs by purchasing from commercial businesses.  Request for proposal: A request for proposal (RFP) is a project announcement posted publicly by an organization indicating that bids for contractors to complete the project are sought.  Consumer data platform: A Customer Data Platform (CDP) is a type of software. Specifically, it’s a kind of database software: one that creates persistent, unified records of all your customers, their attributes, and their data  Portal: A website serving as a guide or point of entry to the World Wide Web and usually including a search engine or a collection of links to other sites arranged especially by topic.  Transaction: An instance of buying or selling something 7.6 LEARNING ACTIVITY 1. Explain the term Consumer. __________________________________________________________________________ __________________________________________________________________________ _________________________________________________________________________ 2. Explain the term Business ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 134 CU IDOL SELF LEARNING MATERIAL (SLM)

7.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions: 1. Give some Examples of B2G Transactions 2. Explain B2E Portal 3. State the Importance of Business Models 4. State two Examples of a Business Model 5. Mention few Examples of consumers to consumer platforms and transactions Long Questions: 1. How To Make B2G Sales as A Small Business: 2. What is the government procurement process? 3. Describe some Features of a B2E portal 4. What are the Benefits of B2E models? 5. List three Factors that impact the C2C market B. Multiple Choice Questions 1. _________________tourism involves trips made by local residents within their own countries. a. Domestic b. International c. Local d. Regional 135 CU IDOL SELF LEARNING MATERIAL (SLM)

2. _____________ Tourism involves trips between 2 countries. a. Domestic b. International c. Local d. Regional 3. Understanding the business model helps the ______________to have a better sense of financial data. a. Government b. Investor c. General public d. Income tax officer 3. ______________is an approach, where the businesses establish the intra company tools to provide products and services to their employees. a. C2C b. B2B c. B2C d. B2E 5. ____________________ refers to when a business sells products, information, or services to federal, state, or local government agencies. a. B2B b. C2C c. B2G d. B2E Answers: A-a, B-b, C-b, D-d, E-c 136 CU IDOL SELF LEARNING MATERIAL (SLM)

7.8 REFERENCES  Cook, R.A., L.J. Yale, and J.J. Marqua,( 1999), Tourism: The Business of Travel, New Jersey: Prentice Hall. Hall C.M. and Stephen, J. Page, (2002),  The Geography of Tourism and Recreation. Environment, Place & Space, London: Routledge. Hudman, E.L. and D.E. Hawkins, (1989),  Tourism in Contemporary Society: An Introductory Text, New Jersey: Prentice Hall. Lundberg, D.E., (1990),  The Tourist Business. New York: Van Nostrand Reinhold. Nabi G., (2000),  Socio-Economic Impact of Tourism, Jaipur: Pointer. Punia, B.K., (1994),  Tourism Management-Problem & Prospects: Delhi, Ashish. Seth, P.N., (1997),  Successful Tourism Management, New Delhi: Sterlin 137 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT – 8 PAYMENT GATEWAY STRUCTURE 8.0 Learning Objectives 8.1 Introduction 8.2 Meaning and significance 8.3 Billing and Settlement Plan (BSP) 8.4 Summary 8.5 Keywords 8.6 Learning Activity 8.7 Unit End Questions 8.8 References 8.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Understand the concept of payment gateway  Identify different payment methods  State the significance of Billing  List some importance settlement plans 8.1 INTRODUCTION A payment gateway is technology merchants use to accept debit and card payments from customers. It refers to the physical card readers you see in brick-and-mortar stores. It also refers to the online portals used to collect online payments. The payment gateway is the consumer-facing interface that collects payments. In physical stores, it’s the point-of-sale (POS) terminal where the card is swiped or a phone is tapped. In ecommerce stores, it’s the checkout page where customers enter their credit card information. Or in the case of PayPal, where the customer enters log-in information. 138 CU IDOL SELF LEARNING MATERIAL (SLM)

8.2 MEANING AND SIGNIFICANCE The payment gateway is only one piece of the puzzle required to accept payments digitally. The front-end technology sends customer information to the merchant’s acquiring bank (business bank account) for processing. Technology continues to evolve and improve the way we handle transactions. Terminals once accepted cards with magnetic strips then required the purchaser to sign a piece of payment. Chip technology removed the signature part of the equation. Now, customers enter a personal identification number (PIN) in the terminal. Today’s near-field communication (NFC) technology makes contactless payment possible. You no longer have to carry the plastic card as long as the data is stored in your phone or smartwatch. The architecture of the payment gateway varies depending on whether it is used in-store or online. Online payment gateways use APIs to communicate between websites and payment processing networks. In-store gateways use a POS terminal to connect to the payment processing network. The connection occurs either through a phone line or over the internet. The entire three-step process takes place in a matter of seconds. Encryption The encryption process encodes information that’s transmitted between a browser and a server. This privatizes the data for exclusive use between the two parties. Request The payment process gets approval from the bank or credit card company to proceed with the transaction. If the request is rejected, the transaction is denied and doesn’t continue. Fulfillment Once the gateway gets authorization, the website and interface proceed to the next action. Beyond collecting payments, payment gateways can also: Screen orders Calculate taxes Use geolocation to handle location-specific actions. Different Types of Payment Gateways Payment gateways generally fall into one of three categories. Redirects 139 CU IDOL SELF LEARNING MATERIAL (SLM)

If a gateway takes a customer to a third-party payment page to finish the transaction, it is known as a redirect. It’s a simple way for the retailer to handle accepting online payments. Use a redirect payment gateway to get the safety and security of a major platform. However, it translates to an additional step for customers and less control over the merchant’s process.Checkout on Site, Payment Off-Site This is how Stripe works. The front-end checkout (what the customer sees) occurs on your ecommerce site. But, the actual payment processing occurs behind the scenes through Stripe’s back end. This approach ensures that your customer’s card data is collected on a third-party site. Your site never handles sensitive information. With SSL on your site, the connection between your site and the payment gateway is always encrypted. As with redirected payment gateways, you do have some advantages. There’s no additional step for your customers. The data is secure elsewhere, and you don’t have to worry about much. You won’t control the user’s experience from start to finish, so you’ll be at the mercy of the off-site gateway. On-Site Payments Generally reserved for large-scale businesses that can invest in the necessary security and encryption, this method takes care of everything on its servers. All the checkout and payment processing happens on your site. With this approach, you’ll have complete control over the entire customer experience. But, with that comes the additional responsibility of protecting sensitive transaction data from hackers. If the information is leaked because of a data breach, your company could be liable. Examples of a Payment Gateway If you’re searching for the right payment service provider to help you process payments, you have plenty of options. PayPal Send Money Pay Online or Set Up a Merchant Account PayPal 1024x526 1 One of the most popular payment gateways worldwide, PayPal’s redirect payment gateway is a great option. PayPal includes a free payment gateway they host for you. If you want 140 CU IDOL SELF LEARNING MATERIAL (SLM)

more customization features, you can pay $25 a month. These features give you more control over the customer experience. Both services include fraud protection security at no additional charge. You know your payment gateway is safe and can handle threats that may come up. With PayPal, you’ll pay 2.9% + 30 cents per transaction in transaction fees. There are no monthly fees (unless you opt for the additional features.) If you set up your account to accept international payments, you can accept multi-currency payments. You’ll be able to house multiple currencies in a single account – and handle currency conversion, too. Amazon Pay Amazon Pay Amazon Pay is similar to PayPal. It allows people to log in to their Amazon account and use their stored payment methods to pay. If you use this online payment gateway, you can accept payments from a variety of issuing banks. Amazon Pay charges 2.9% plus 30 cents per transaction on all domestic transactions. The international transaction rate increases to 3.9%. Apple Pay Apple Pay This payment gateway focuses on mobile payments. With it, merchants can accept payments from customers using Touch ID and Face ID. Customers can maintain a digital wallet on their mobile phones.Apple Pay charges a processing fee of 3%. There are no additional fees or hidden fees for merchant accounts. Google Pay Google Pay Screenshot This payment gateway is Android’s answer to Apple Pay. In addition to working with Android devices, it also works with iOS and the web. You can make online payments, in- person payments, and person-to-person payments. This credit card processor is different. It substitutes your actual credit card details with a virtual one. This offers added security. In addition to payment services, Google Pay also includes a gift card and loyalty program management. 141 CU IDOL SELF LEARNING MATERIAL (SLM)

Google does not charge customers fees when using a debit card to make payment. Customers are charged a 2.9% fee when using a credit card. Google may charge a merchant account a merchant fee of up to 4% for in-store payments. That means customers could pay up to 6% extra just for using their credit card through Google Pay. Square Sell Online Build a Free Online Store or eCommerce Website Square 1024x566 1 Square is a payment gateway provider, credit card processing company, and ecommerce platform well known for the card readers that attach to your smartphone. They are great for businesses that need to accept online payments and in-person payments. A drawback to Square is that they charge a premium for manually entered transactions. You’ll pay 2.75% for swiped transactions and 3.5% plus 15 cents for manually entered credit card transactions. Stripe Stripe Stripe is another popular payment gateway. They focus on mobile ecommerce, platform- based payments, non-profits, and software as a service (SaaS). Authorize.net authorize.net Merchants who want to simplify their payment acceptance options may wish to use Authorize.net. They offer an all-in-one payment provider option. With it, you can accept PayPal, Apple Pay, most major credit cards, and more. Authorize.net offers echeck payments, too. It is one of the best omnichannel payment solutions on the market today. Their transaction fees are in line with PayPal and Amazon Pay, charging 2.9% plus 30 cents per transaction. Payment Gateway vs. Payment Processor You may hear the term payment gateway used interchangeably with “payment processor.” Though the two are similar, there are some crucial differences between them. 142 CU IDOL SELF LEARNING MATERIAL (SLM)

Payment processors analyze and transmit the traction data. It sends relevant information to the issuing bank. This includes the debit card number that links to a bank account. The payment gateway not only processes the payment. It also authorizes the funds’ transfer between the two parties. Many payment gateway providers are both a payment gateway and a payment processor. When you swipe or tap your card, that’s the processor. Like a payment gateway, it can include both hardware and software components – or just software components. That’s why the two are often confused. Limitations of Payment Gateways From the payment gateway examples above, it’s clear that none of the platforms are created equally. Choosing the ones you want to use means you’ll need to understand and accept limitations. Many limitations are simply part of the way payment gateways work. Most Payment Gateways Only Accept a Few Payment Options You won’t find a solution that accepts all types of cards and payments. They advertise how universal their gateways are. But, they won’t mention that they cannot accept payments from certain card issues or a specific payment portal. International Customers May Not Have a Payment Solution PayPal isn’t the most popular option around the world. Other countries may have preferred methods they use. Some Security Flaws There are still consumers out there who don’t like to place online orders because of security concerns. High-quality payment gateways offer strong security and maintain PCI compliance. However, there are always vulnerabilities. Take, for instance, mobile payment issues. You may control most of the security at the transaction itself, which is good. But, you don’t control who has access to the customer’s device. TLS encryption keeps credit card details secure during processing. However, the data may be at risk once it’s on the server. 143 CU IDOL SELF LEARNING MATERIAL (SLM)

Malware that reads passwords and makes its way into user accounts can still send transactions that look authentic. Why You Need Multiple Payment Processing Options You can reduce and possibly eliminate some of these weaknesses by offering more than one payment gateway. By using multiple payment gateways, you maximize options for your customers… which ultimately makes it easier for you to accept card payments. Let Customers Choose Your customers should be able to choose what they want to use, and when they want to use it. A payment gateway that processes Visa and Mastercard will cover the majority of your customers. But there are customers with alternative cards like Discover and American Express. And even though they may have a Visa, they may want to pay with their Discover card account. The goal is to make things as easy as possible, even if it means more merchant account fees. No matter which merchant account you use, you’re only processing one transaction per customer at a time. All the money makes its way into your business bank account. Provide a Second Option Many people don’t have credit cards. That’s why it makes sense to offer something like PayPal, Venmo, or Apple Pay, too. Support as many options as possible, so customers can make purchases with whatever payment method they want. Choosing Your Secure Payment Gateway To make sure you’re working with a trustworthy, secure payment gateway, ask yourself: What Do Your Customers Use? What are your customers already using to make credit card payment transactions online? By stacking multiple payment gateways with various payment types, you’ll be able to mitigate security risks while also running into fewer problems overall. 144 CU IDOL SELF LEARNING MATERIAL (SLM)

How Much Does it Cost to Accept Credit Card Payments? Transaction fees are common and relatively similar across the board. Some will charge a monthly fee, while others won’t. You’ll need to be sure that what you’re paying is something that you can afford. How Secure is the Encryption? If the company isn’t PCI compliant, skip them. The Payment Card Industry Data Security Standard (PCI DSS) is a collection of standards designed to uphold security for all digital and electronic transactions. Before you decide to make any payment gateway work, always make sure they maintain compliance. Do They Have a Good Reputation? In the ecommerce business, reputation is everything. If they aren’t known for: Stellar customer service Strong security to protect cardholder data Quality Then you don’t need to associate your business with them. Your Payment Gateway is Never Set in Stone If you start working with one and decide the company isn’t what you expected it to be, you can always change to another. Switching may mean investing in new POS equipment, but for a strictly ecommerce store, that’s nothing to worry about. Start small with just two or three options, and add or change them as needed 8.3 BILLING AND SETTLEMENT PLAN (BSP) BSP (Billing and Settlement Plan) is a universal settlement system that replaces individual schemes of relations between agents and carriers. It is designed for the effective interaction of participants through the consolidation of information and financial flows. The advantage of the BSP is the work with the electronic ticket of the standard sample. 145 CU IDOL SELF LEARNING MATERIAL (SLM)

Nowadays, more than a hundred countries are using the BSP system in order to simplify settlements. A distinctive feature is the use of the single ticket by all member countries. The presence of a magnetic tape in such a document allows people to avoid a hassle when working with paper documents. The introduction of a magnetic mechanism facilitates the work of airlines and eliminates the inconvenience of passengers. The mechanism of the BSP system At the first stage, the connection to the Agents system is made. Before carrying out this procedure, the airline must be checked for compliance with financial criteria and requirements, which must be confirmed by relevant documents. All employees must be aware of the company’s entry into the system and they are required to review the regulatory materials. At the next stage, the contract is signed, and the agent receives a ticket issuance. During the third stage, the system is introduced and the cycle is launched, during which the payment is made monthly, and each month is divided into 4 parts. The next stages are associated with agent training and the introduction of a settlement system. For airlines, there several benefits including spending less time when dealing with paperwork; facilitation of the ticket processing technology; convenience (the existence of a single ticket for all participating companies); no need to provide sales reports, due to the fact that all reports are generated automatically; providing an automated procurement procedure; control softness over the use of ticket forms and reducing the cost of their registration. The system offers airlines and other agents a modern and technologically advanced way for selling tickets. This way of providing services significantly reduces the cost of the airline. Moreover, there are numerous positive moments for the client, in particular: simplified ticket purchase procedure; high level of professionalism of the company that allows the client to be confident; security and the right of legal support if there are any problems related to the purchase of a single BSP system ticket. So, the main feature of the settlement systems in the market is the use of common standard ticket forms. When the BSP system is operating in the country, the airlines participating in 146 CU IDOL SELF LEARNING MATERIAL (SLM)

the BSP system stop selling their services through an agent network with their own transportation documents. 8.4 SUMMARY  BSP (Billing and Settlement Plan) is a worldwide settlement system which replaces individual schemes of relations between agents and carriers. It’s made for the effective interaction of participants through the consolidation of financial and information flows.  The benefit of this BSP is the use the digital ticket of the normal sample.  A payment gateway is a technology used by merchants to accept debit or credit card purchases from customers. The term includes not only the physical card-reading devices found in brick-and-mortar retail stores but also the payment processing portals found in online stores.  However, brick-and-mortar payment gateways in recent years have begun accepting phone-based payments using QR codes or Near Field Communication (NFC) technology. 8.5 KEYWORDS  QR code: A machine-readable code consisting of an array of black and white squares, typically used for storing URLs or other information for reading by the camera on a smartphone  Card reading: An electronic device that can read the information on a credit card, etc.: To pay, just hold your card up to the card reader. a device in a computer, etc. that can move data from another device on which it has been stored  Scheme: A large-scale systematic plan or arrangement for attaining a particular object or putting a particular idea into effect.  Carriers: An individual or organization engaged in transporting passengers or goods for hire. 147 CU IDOL SELF LEARNING MATERIAL (SLM)

 Digital ticket: A digital ticket is a virtual instance of a ticket which represents the digitization of rights to claim goods or services. 8.6 LEARNING ACTIVITY 1. What do toy mean by payment gateway? __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 2. Explain the term Billing. __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 8.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions: 1. What do you mean by payment gateway? 2. State the process of payment gateway 3. Beyond collecting payments, what does payment gateways do? 4. Give some Limitations of Payment Gateways 5. List some features of BSP. Long Questions: 148 1. Give few Examples of a Payment Gateway 2. differentiate between Payment Gateway vs. Payment Processor 3. How to Choose a proper Secure Payment Gateway? 4. Explain the mechanism of the BSP system CU IDOL SELF LEARNING MATERIAL (SLM)

5. State few advantages of BSP B. Multiple Choice Questions 1. A ___________is technology merchants use to accept debit and card payments from customers. a. payment gateway b. Service gateway c. Function gateway d. Option gateway 2. ____________ is a worldwide settlement system which replaces individual schemes of relations between agents and carriers. a. BSP b. ASP c. CSP d. DSP 3. There are still consumers out there who don’t like to place online orders because of _________________concerns. a. Personal b. Office c. Security d. Opinion 4. The ___________process encodes information that’s transmitted between a browser and a server. a. Computer b. Encryption c. Service d. Wikipedia 149 CU IDOL SELF LEARNING MATERIAL (SLM)

5. customers enter a _____________in the terminal. a. Phone number b. PAN number c. Aadhar number d. personal identification number (PIN) Answers: A-a, B-a, C-c, D-b, E-d 8.8 REFERENCES  Payment Gateway: A Complete Guide - 2021 Edition by Gerardus Blokdyk  Choosing the Right Payment Gateway. A GROWTH HACKING GUIDE BY AVINASH CHANDRA.  E Payment Gateway: A Complete Guide - 2020 Edition by Gerardus Blokdyk 150 CU IDOL SELF LEARNING MATERIAL (SLM)