Marketing Research Report On E-Bay

Primary Data Collection Methods

Question:

Discuss About The Techniques Value Analysis And Engineering?

E-Bay is one of the largest multinational e-commerce companies which were founded in the year 1995 by Pierre Omidyer with its headquarters at San Jose, California. E-bay is world’s ninth largest e-commerce companies by revenue and is one of the front runners who have changed the online shopping landscape. E-bay started its operation s in Australia in the year 1999 and since then has swayed the market by storm. People perceive E-Bay as a reliable company which provides great quality products at a reasonable price with fast delivery. The company employees more than 12,000 employees and earned a revenue of US $8.97 Billion in the year 2016(eBay, 2017). Another astonishing part about E-bay is that it started with selling used products but later it forayed in the market by selling new products. E-Bay works with a marketplace model rather than inventory model in online selling, this helps the company in saving the costs by holding no inventory and thus it helps the company to keep a close tab on the suppliers. One of the high points of E-Bay is its sellers, it has a good qualifying criteria set up for its sellers who are listed on the website (Daim, Brand & Lin, 2013)

The purpose of the report here is to focus on the research methods used to identify the target market of E-Bay and provide insight on the current value analysis of the company, further, an analysis of the current marketing strategies adopted by the company will be conducted along the marketing and promotional plan for E-bay. The report will also help to analyse the brand value of the company and the perception it has in the minds of its Australian customers.

Marketing research is the process of collecting and gathering data about the companies in order to assess the target market, find the underlying customer value about the company, gather relevant information about the competitors and use the data collected to design the future value proposition for the company. Marketing research helps in targeting the right set of customers with the right marketing strategy and deliver them the product and services they desire the most. It basically sets the tune of the company in consensus with the needs of the consumers (Churchill & Lacobucci, 2006). In order to collect the data, there are primarily two types of methods which can be used:

Secondary Data Collection Methods

This can be understood as the process of gathering new information which is highly specific and in accordance with the objective of the research methodology. The goals which are identified by the organization are further broken down to fit in the research process to achieve the intended outcomes. Surveys, focus groups and questionnaire are a good primary source of collecting the data. The process of collecting primary data is lengthy, time consuming and costly, but at the same time it helps in achieving fresh insight about the company product or the services (Belk, 2007)

Questionnaire are an excellent method of collecting primary data, but it is often difficult to design at the very first go before creating an acceptable questionnaire which would lead to highly specific results. Questionnaire is both open ended and closed ended; both types of questionnaire have their relative importance. If the company is looking for specific information, bullet points they go for closed ended questionnaire and when the company wants detailed view points of the customers and are interested in detailed information, they go for open ended questionnaire. It can be both mailed to the sample population or can be collected personally by the sample population (Kuhfeld, 2005)

Interview is another method of primary data collection which is used to develop an understanding of the underlying reasons and motivation for people’s attitudes, preferences and behaviour. Interviews have with it an option of either conducting them on one to one basis or in a group, another advantage of interviewing is that it can be conducted in any environment wherever the candidate is comfortable; it does away with the environmental bias. The interview can be structured, unstructured and semi-structured depending upon the objective of the research (Sekaran & Bougie, 2016)

Another contemporary mode of primary data collection which is highly targeted, specific and information oriented is Focus group interviews. It is the type of interview which is conducted by a good trained moderator in a highly non –structured but natural manner with a small number of respondents. It is the moderator who leads the discussion and tries to collect the information relevant to the objective. The prime purpose of the focus group is to gather insight by listening to a group of people from having highly target talk about the specific issues of interest (Bryman & Bell, 2015)

All these methods are a collective source of information to provide information about its target market and how customers perceive E-bay and product offerings. It helps E-Bay to design strategies in and around its customer base.

Value Proposition of E-Bay

Secondary research methods or data collection method is the one in which the information is already collected and is available online for the use of the companies. It is an already prepared data and is available for the access of the companies (Hair & Lukas, 2014). It helps in aiding the current research process and saves a lot of time and money for the organization. There are two sources of secondary data collection; internal database and external database. Internal database can be achieved from the already existing customer database, sales records and financial information. The source of external database is trade journals, professional associations, government publications, commercial data and national and international enterprise.  E-Bay used both internal and external data to understand the target market, their preference, likes and dislikes etc. Online reviews of the customers on the website are a good source of internal secondary data collection (Hair, 2015)

Collectively both Primary and Secondary source of data collection provides in depth insight to E-Bay to assess its target market, its value proposition, the attitude, behaviour and perception of the consumers and the result of its marketing strategies.

E-Bay as one of the largest Multinational e-commerce companies has set itself apart than its competitors. E-Bay focuses on benefitting the society and facilitates transactions in the marketplace; it basically provides platforms for the sellers and buyers across the globe. The company was formed initially to facilitate the sale of used products, but after understanding the pulse of the market they moved into the conventional mode of selling new products on its website Customers perception of E-Bay is that of a e-commerce company which is characterized by :

Good quality of Products: E-Bay ensures and maintains a good quality of product by carefully selecting the suppliers who are listed on its portal. It also has special incentives for sellers who are being rated exceptionally good by the customers based on the reviews.

Wide range of Products: E-Bay tries to offer depth in its existing product line and keep adding new sellers on the board with wide range of products.

Excellent service quality: E-Bay believes in having customer centric approach and it treats all the customers same irrespective of their ticket size. The mission of E-Bay is to create an online environment of delightful shopping.

Adhering to the SLA in timeline: E-Bay has set up a Service Level Agreement with the sellers listed on the platform and does its best to adhere to timelines it has promised to its buyers.

Value Chain Analysis

Value chain analysis can be understood as a strategic tool which helps to identify the business activities which are important to create value and competitive advantage to the business (Miles, 2015) the diagram below shows the framework of Value chain analysis:

It refers to the ways in which E-Bay acquires and stores the raw materials used for the business.  E-Bay acquires servers for its data and support, materials for office supplies and other technological products which help in business operations. E-Bay achieves economies of scale owing to its massive business operations and it is one of the major sources of its inbound logistic. E-Bay also makes strategic relationship with its suppliers to tighten its inbound logistics (Mudambi & Puck, 2016)

E-Bay is an e-commerce company and hence its operations move around technology. The range of e bay technologies and services are divided in three platforms:

Marketplace: It refers to the online marketplace and it has more than 700 million listing on its portal at any given time.

Stat Hub: It is a platform which facilitates the buying and selling of tickets to the concerts, games, theatre shows and so on.

Classifieds: It is a collection of brands which is listed on the portal.

The complete range of business operations of E-Bay Australia are:

• Registering the sellers on the website
• Bidding by buyers for a product offered
• Successful bid by the buyer
• Buyer paying to the bank via Paypal and other options
• Notification to e-bay by the bank on the buyer purchase.
• Notification to the seller by e-bay on the amount transfer
• Delivery of product from seller to buyer
• Acknowledgement to e-bay by the buyer
• Passing seller account to the bank by e-bay
• Seller getting paid by the bank

Outbound logistics in the case of E-Bay refers to its practise of delivering the products to its customers. E-Bay does not deal with the retailers and wholesalers due to its business model. The responsibility lies on the seller to ship the product to the consumers. The company does not have a logistic team of its own and is hence dependent on the third party vendors. This it has to keep a close tab on the third party vendor. Recently the company got in partnership with Uber Rush for efficient shipment of the products.

The marketing and sales expense of E-Bay has reduced significantly in the last few years. In the year 2015 there was a decrease by 7% in the expenses in comparison to the FY 2014. The company had a solid advantage over its competitors when PayPal was with E-Bay, but after the separation the company is on its own and relies on the tools of social media for its marketing and sales promotion.

E-Bay has a +1800 number which users can call 24*7 to address their concerns, query or grievances to the customer care department. The customer care team is well trained to handle and manage the concerns of the customers and are well versed with the concept of service quality. At the same time, E-Bay encourages sellers to give great customer services in order to manage a positive reputation for the company.

E-Bay’s Business Operations

These are the activities which help as support system for the primary activities performed by E-Bay

 E-Bay is an online marketplace connecting buyers and sellers and hence its firm infrastructure consists of a central customer data warehouse to store all the information. It also uses cloud technology to store the information on the customers and seller data.

 E-Bay offers unique benefits to its employees. E-Bay believes in the reasoning that if you keep the employees happy they will treat the customers happy. By offering various incentives and fringe benefits to the employees an environment of Harmony is created at the workplace.

 E-Bay keeps investing on its cloud platforms and spends lavishly on its servers. A huge amount of money is spent to keep the servers safe and prevent any digital theft and so on. The business of E-Bay is technology dependent and hence it spends sizeable revenue towards the tech development of its infrastructure.

 E-Bay does not have followed an inventory based model and hence it does not use warehouse to store inventory. It though keeps a tab on the sellers listed on its platform through an efficient supplier chain selection to take care of its other procurement needs.

E-Bay is a well-established name in the Australia market and has earned a reputation of a reliable e-commerce platform since its inception in the year 1995. The company has maintained its position in the Australian market by providing efficient services to its customers with assured quality. E-Bay focuses on building communities through its portal, unlike other competitors which are focussed on the product. Other competitors like Alibaba and Amazon are now entering into the market of selling used products, moving on the lines of E-Bay. It has established some marketing objectives for itself which E-Bay wants to achieve by its promotional mix strategies. The marketing objectives identified by E-Bay are:

In order to achieve the following objective, it is extremely important to understand the segmentation, targeting and positioning of E-Bay in accordance to its marketing mix

It primarily comprises of 8 modes of communication for the target customer or its audience

Advertising: It is paid form of non-personal communication targeted to the audience. Different channels used can be online and offline such as social media, TV, print, web etc. (Andrews & Shimp, 2017)

Sales Promotion: It is kind of a short term incentive offered to the customers to boost the sales (Fill & Turnbull, 2016)

Marketing and Sales Strategies

Events & Experiences: These are company created; owned, designed and executed events which facilitate brand interaction with the customers (Kitchen & Burgmann, 2015)

Public Relations: It is direct communication to the customers, government, and companies etc. in order to protect and build the image of the company (Blakeman, 2017)

Direct Marketing: Email, newsletters online promotions, is the form of direct marketing used.

Interactive Marketing: Interactive marketing is one of the new forms of marketing companies use these days; they build conversation in and around the company and drive engagement through it (Chen & XIe, 2008)

Word of Mouth Marketing: It is a form of communication between people who promote the company after having a good experience (Mangold & Faulds, 2009)

Personal Selling: Personnel selling are not applicable to E-Bay, but it refers to face to face interaction for the selling.

A Marketing communication plan is developed combining all or some of these modes of communication, in the present era , online tools of marketing more sense primarily because of 2 reasons:

The target audience is available online

The business model promotes online communication.

The total population if Australia is 24 Million (2016) and its online population is 20 Million. According to the target group defined E-Bay wants to reach to 80 percent of its online audience, which comes to roughly 16 million reach within a year. The reach volume is decided on the basis of E-Bay’s penetration in Australia and the futuristic marketing strategy. In order to reach an online population of 16 million the company has to use Facebook, twitter, Instagram, mobile marketing, affiliate marketing, blogging and other online shopping channels (Tsetsi & Rains, 2017)

In a recent study conducted on the Australian online market, it was noticed that people are spending an increasing amount of time on the internet and they use online tool for socializing, gathering information and shopping. Also, with the increasing penetration of Smartphones it makes more sense for E-Bay to do mobile targeting to its target customers. One of the recent studies claimed that an individual on an average interacts with his phone 2000 times in a day, thus it makes more sense to target them on the go (Turban, Whiteside, King and Cutland, 2017)

Conclusion

E-Bay is one of the earliest online e-commerce companies which made a mark for itself in the shopping space; it had a very unique model in the beginning which facilitated shopping through auction and bidding process. Later the company moved to selling new products in order to gain a larger market share and also because it understood the pulse of its business audience. Currently E-Bay is doing a fantastic job, its revenue is increasing and it is relying more and more on the online tools of marketing for its sales promotion. In the report a detailed marketing communication plan for E-Bay has been mentioned which typically explains the rationale for using each of the available platform in the most efficient manner. E-Bay Australia is looking for deeper penetration in the age group of 22-34, as company’s product categories are better suited for this age group. The company has to focus on online reputation management to maintain and build its brand image in the market and give a tough fight to its biggest competitor Amazon

References

Andrews, J. C., & Shimp, T. A. (2017). Advertising, promotion, and other aspects of integrated marketing communications. Nelson Education.

Belk, R. W. (Ed.). (2007). Handbook of qualitative research methods in marketing. Edward Elgar Publishing.

Blakeman, R. (2017). Integrated marketing communication: creative strategy from idea to implementation. Rowman & Littlefield.

Bryman, A., & Bell, E. (2015). Business research methods. Oxford University Press, USA.

Chen, Y., & Xie, J. (2008). Online consumer review: Word-of-mouth as a new element of marketing communication mix. Management science, 54(3), 477-491.

Churchill, G. A., & Iacobucci, D. (2006). Marketing research: methodological foundations. New York: Dryden Press.

Daim, T., Brand, M., & Lin, L. (2013). Service platform development: comparison of two e-services platforms. In Implementation and Integration of Information Systems in the Service Sector (pp. 297-316). IGI Global.

eBay Inc. (2017). eBay Inc. blog.

Fill, C., & Turnbull, S. L. (2016). Marketing communications: brands, experiences and participation.

Hair Jr, J. F., & Lukas, B. (2014). Marketing research (Vol. 2). McGraw-Hill Education Australia.

Hair, J. F. (2015). Essentials of business research methods. ME Sharpe.

Kitchen, P. J., & Burgmann, I. (2015). Integrated marketing communication: Making it work at a strategic level. Journal of Business Strategy, 36(4), 34-39.

Kuhfeld, W. F. (2005). Marketing research methods in SAS. Experimental Design, Choice, Conjoint, and Graphical Techniques. Cary, NC, SAS-Institute TS-722.

Mangold, W. G., & Faulds, D. J. (2009). Social media: The new hybrid element of the promotion mix. Business horizons, 52(4), 357-365.

Miles, L. D. (2015). Techniques of value analysis and engineering. Miles Value Foundation.

Mudambi, R., & Puck, J. (2016). A global value chain analysis of the ‘regional strategy’perspective. Journal of Management Studies, 53(6), 1076-1093.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.

Tsetsi, E., & Rains, S. A. (2017). Smartphone Internet access and use: Extending the digital divide and usage gap. Mobile Media & Communication

Turban, E., Whiteside, J., King, D., & Outland, J. (2017). Marketing and Advertising in E-Commerce. In Introduction to Electronic Commerce and Social Commerce (pp. 261-291). Springer International Publishing.

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