1A presentation at K. N. Toosi University of Technology | Spring 2015

Course of Internet Marketing At KNTU by Dr. M. Hosseini

A case study presented by: M. Baba, R. Keshmir, A. Simayee

Introduction of eBay

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• The World's Online Marketplace for the sale of goods and services by a diverse community of individuals and businesses.

• provide a global trading platform where practically anyone can trade practically anything.

Introduction of eBay

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AntiquesArtBusiness & IndustrialCollectiblesElectronics & ComputersHomeJewelry & WatchesMovies & TelevisionMusic Toys & HobbiesTravelEverything Else

Musical InstrumentsSportsTickets

Introduction of eBay

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• 112 million active users• +200 million items for sale in 50,000 categories• 9 Petabytes of data storage• 44 million lines of code• 2 billion pictures• 10,000 application servers• 2 billion page views each day• 250 million queries each day• An estimated 430,000 people in the United States make all or most of their living by selling on eBay

Introduction of eBay

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Sold for USD 14 – A laser pointer that was broken

Introduction of eBay

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Giga-Yacht, Sold in 2005 for $140 million

Introduction of eBay

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Introduction of eBay

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• Comissition fee• Sale •Advertising

Revenue model

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Revenue model

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Types of auction (Dynamic Pricing)

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Auction Process and Software Support

Phase 1: Searching and comparing prices• Mega-searching and comparisons Search utilities return all auctions selling an item

• Automated search services Notify buyers when items they are interested in are

available

Phase 2: Getting started at an auction• Registration and profiling (previous transaction records)• Listing and promoting – tools available for bulk listings• Pricing – set start price, bid increment and reserve price

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Auction Process and Software Support

Phase 3: The actual bidding• Bid watching and multiple biddings• Auto-sniping - enter a higher bid during last

seconds

Phase 4: Post-auction follow-up• Post auction notifications for winners• Shipping and postage• Payment - Electronic transfer, Escrow service,

Credit-card payment

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forward auction

An auction in which a seller offers a product to many potential buyers

Starting from a low price, bidding increases until no bidder is willing to bid higher

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Sealed first-price auction(blind auction)

In this type of auction all bidders simultaneously submit sealed bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted

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Vickrey auction(sealed-bid second-price auction)

Secret bidding process; the highest bidder pays the amount of the second highest bid.

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Reserve Auctions

Reserve auctions are for sellers who don't want their items to sell for less than a certain price

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Multiple Item ("Dutch") Auctions

These are auctions where a seller is selling more than one of a certain item. Dutch auctions can be done by bidding. Buyers bid a price and say how many items they want, and then everyone pays the lowest price

that was bid by one of the winning bidders..

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Dutch (Aalsmeer) flower auction

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Benefits Uses of E-Auctions

Benefits of E-Auctions to Buyers• Opportunities to find unique items and collectibles• Lower prices• Entertainment• Anonymity

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Benefits Uses of E-Auctions

Benefits to Sellers• Increased revenues• Optimal price setting• Removal of expensive intermediaries• Better customer relationships• Lower transaction costs• Lower administrative costs

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• For buyers:SelectionValueConvenienceEntertainment

• For sellers:Access to broad marketsliquid marketAbility to maximize pricesOpportunity to increase sales

Attracting and keeping customers

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eBay is Sales Channel Across Full Product Lifecycle

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Grow Your eBay Business with Free Expert Help

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Consumers have a “store in their pocket”

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4Ps Overview

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• PayPal is an online transaction business allowing payments and financial transfers to be made through the internet• Products on sale at Ebay include millions of collectibles, décor, appliances, computers, furnishings, equipment vehicles and other miscellaneous items are listed, bought, or sold, daily• Skype is an economical

communication tool ownedby Ebay.

Products

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• eBay, Inc. recently changed some of its pricing policies, dictating different listing fees from frequent and occasional sellers

• Sellers are charged when an item is listed on eBay a nonrefundable Insertion Fee is charged, which ranges between 30 cents and $3.30, depending on the seller's opening bid on the item

• A final sale price fee is charged to a seller at the end of an auction. This fee generally ranges from 1.25% to 5% of the final sale price

Price

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• New eBay users can find answers to procedural questions by utilizing the company‟s Answer Center located

• eBay provides an international site visibility feature which allows some listings created on eBay.com to be posted on international sites (such as the U.K. site). Buyers on these sites will see the listings exactly as you originally post them on the U.S. site.

• eBays Seller Information Center aids participants by offering information on getting started, growth strategies and shipping

Place

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Promotion• There are eBay Coupons, eBay

discounts, eBay Promotional codes

• The eBay Bucks Rewards Program gives those who use PayPal on eBay 2% back on qualifying purchases participants

• eBay Radio provides traders and eBay community members with the latest in news and views from around the eBay world and covers major eBay events like the annual eBay Live Conference.

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E – Competitor

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E – Competitor

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E – Competitor

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Revenue of eBay vs Amazon

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

2009 2010 2011 2012 2013

eBay

Amazon

Reve

nue

(mill

ion)

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Net Income of eBay and Amazon

-500000

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

2009 2010 2011 2012 2013

Ebay Amazon

Net

Inco

me

in K

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Maximizing Convenience

Maximizing Value

CommoditiesUniqueness

Differences between eBay & Amazon

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SWOT ANALYSIS

Strengths

• Global Reach • Recognizable Brand Name• Wide Variety of Products• Well-known brand• Integrated value chain• Vast experience

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Weaknesses

• Product Description Lacking • Supply dependency• Reliance on technology• Illegal activities on site• Information asymmetry

SWOT ANALYSIS

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Opportunities

• Critical Foreign Market Not Penetrated• Growth Through Acquisition • Emerging markets• Mobile penetration• Online spending

SWOT ANALYSIS

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Threats

• Fraud• Increased Competition• Old and New Technology• Processing fees• International alliance• Amazon.com

SWOT ANALYSIS

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% of shoppers who worry about …

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SEO ANALYSIS

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SEO ANALYSIS

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Porter’s Five Forces

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Bargaining Power of Customers

• High Bargaining Power

• Other Options

• Online or Retail Stores

• Price Comparison

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Threat of New Entrants

• High

• Low entry costs

• Depend on individual interest

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Threat of Substitutes

• Low Threat

• eBay is more convenient

• Substitutes cannot have much variety

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Bargaining Power of Suppliers

• High

• Low fees and commission

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Rivalry Among Competitors

• High

• Shopping Outlets or Online Retailers

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Objectives and strategy

Increasing …

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Objectives and strategy

• Acquisition

• Activation

• Activity

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Approaches to Improve Performance in Different Areas

Objectives and strategy

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First Approach:

Category growth

Objectives and strategy

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Second Approach:

Formats for Interaction

Objectives and strategy

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Objectives and strategy

• Marketplace Growth by Delivering Specific Sites localized:– Australia Austria Belgium– Canada Singapore South Korea– Spain France Germany– Hong Kong India Ireland– Sweden Switzerland Italy– Malaysia Netherlands New Zealand– Philippines United Kingdom United States

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Value Chain

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LinkingCategoriesRecommendationsPayPal

Value Chain – Network | Prime Activities

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Linking Buyers to the Right Sellers/Suppliers with the Help of Information Systems

Value Chain – Network | Prime Activities

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Providing a Numerous Number of Categories it Makes Listing and Shopping Easier for Users

Value Chain – Network | Prime Activities

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• Showing Recommendations or Similar Items so that Users Can Compare Before Buying or Selling

Value Chain – Network | Prime Activities

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• Acquisition of half.com and PayPal

Value Chain – Network | Prime Activities

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Organizational InfrastructureHuman ResourcesTechnology Procurement

Value Chain – Network | Support Activities

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Results

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Results

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