Ebay Marketing Strategies And Values Marketing Essay

eBay, by its very nature gives a central location for folks to purchase and promote distinctive objects, and to fulfill different customers with related pursuits. Being the pioneer of the net public sale trade, it began out underneath the model title Public sale Internet with the picture of auctioning collectibles. This picture was shortly shed and Public sale Internet shortly moved into a various vary of upscale markets the place the Common Gross sales Value(ASP) is greater. The corporate earned its income’s from levying transaction charges relying on the dimensions of the transaction, therefore growing the ASP was an vital level of consideration for the corporate’s profitability. Public sale Internet gave technique to eBay, and shortly sufficient eBay’s market capitalization surpassed that of even Amazon.com, which made it probably the most helpful web retailer in its glory days. The product is the corporate itself, which facilitates On-line Public sale around the clock, day-after-day, 7 days every week and 52 weeks a yr.

Key phrases: On-line market, etailing, C2C, On-line Mall, on-line public sale.

2) eBay’s founding values and technique:

Ebay group values are astoundingly easy of their nature, and it's unimaginable that the corporate focuses on buying and selling hundreds of thousands of on mere belief and religion amidst its group members. Its values could also be summarized under :

“We imagine persons are good natured

We imagine everybody has the capability to contribute

We imagine that an sincere, clear and open surroundings can carry forth the perfect in folks.

We respect and acknowledge everybody as a person.

We encourage you to deal with others as you’d prefer to be handled by others”

These set of core values encourage open, sincere and optimistic communication between its members. These group values suggest that the whole technique lies in creating “belief” amidst its members, and thereby construct e-loyalty to the market platform i.e eBay.

three) eBay’s advertising and marketing and Company technique:

For the primary few years, the corporate didn't spend a dime on advertising and marketing, relying as an alternative on viral, phrase of mouth advertising and marketing and its potential to piggyback on its competitor’s ceaseless efforts to retain market recognition. Nonetheless, the corporate later shifted focus to creating a powerful model and scaling ‘outwards’ (versus scaling up) when increasingly rivals entered the e-commerce section.

eBay has based mostly its development on quite a lot of methods corresponding to :

Establishing an insurmountable buyer base

To draw new customers, eBay tied up with over 60 web sites together with America On-line. This gave eBay entry to the most important person base on the web whereas concurrently stopping AOL to enter the public sale space. eBay additionally included vendor to particular person buying and selling, whereas addressing the quick rising fragmented small enterprise market by making a function referred to as enterprise trade. eBay has presently entered right into a three way partnership with Fb, agreed to a strategic partnership with Yahoo and Google as an unique third celebration supplier of graphical and textual content based mostly promoting respectively.

Focus on native and worldwide commerce

eBay has actively acquired native e-commerce firms which ship a particular regional taste to the customers who can search for merchandise that are laborious to ship, corresponding to cars or vintage furnishings, domestically. The corporate has additionally constructed a worldwide presence with customers in additional than 150 nations.

The next diagram gives an summary of eBay’s acquisitions until 2007.

Fig. 1: eBay acquisitions.

Increasing the buying and selling platform

With the entry of quite a few rivals into the e-commerce section, some like Amazon and Yahoo!, which had in depth, established person bases, eBay prolonged its core enterprise into different enticing niches. eBay married offline and on-line auctions, which allowed customers to position actual time bids for objects on offline public sale home flooring. This itself was revolutionary. At the moment, eBay is increasing into cell commerce. The eBay app for iPhone was downloaded seven million occasions by January 2010. Shoppers are more and more procuring by way of their cell phones with greater than $600 million price of gross sales transacted via cell functions in 2009.

Creating and maintaing a powerful group affinity.

The corporate ardently believes in fostering a optimistic, direct interplay between patrons and sellers with related curiosity. This technique has enabled to firm to create loyal, energetic group of customers. They keenly observe person habits to establish rising developments in order to develop enterprise for brand new services.

As acknowledged by former president Meg Whitman, “Our person group is the perfect R&D lab on the planet. What we do is present an environment friendly buying and selling platform, and we let the customers determine easy methods to use it. They lead us into product extensions. We don’t have a staff of parents sitting in a convention room asking, “O.Ok., what’s the subsequent place we’re going?” We let the customers establish and discover these pockets of inefficiency.”

Fig 2: Progress in listings and customers

Consistently enhancing and evolving web site performance and options

As eBay’s technique is to be as hands-off as doable in regard to transactions, the corporate has to offer for a simple, clear and dependable system for customers to handle the method by themselves. Promoting and Shopping for on eBay are made simple for customers. Sellers want to offer an correct description of the merchandise up for public sale, present appropriate pictures, and resolve the period of public sale.

four) Buyer Worth Proposition:

eBay gives a bunch of advantages to its customers. However primarily, in former president of eBay inc. Meg Whitman’s phrases, “It gives a discussion board that’s an environment friendly marketplace for patrons and sellers to attach, for merchandise that don’t have an environment friendly distribution system.”

eBay views itself as a platform to assist varied e-commerce buyer-seller actions, facilitated by companies that smoothen the search, choose and sale transaction course of.

Monetary funds have been made seamless by way of their acquirement of PayPal (presently, probably the most most well-liked on-line fee mechanisms) and BillMeLater.

Distribution of purchased and bought items are built-in with native distribution channels, tremendously helped by acquisitions of comparable e-commerce nation home market firms (ex. Bazee.com, an indian e-commerce on-line public sale web site was acquired by eBay when it set its sights to enter the indian on-line market in 2004)

It's extra of a social community than a retailing platform. Based on knowledge, customers spend a mean of 47 minutes looking via varied merchandise in show, as in comparison with catalog e-commerce websites the place knowledge evaluation signifies a mean of 18 minutes of person browse time. It is because customers can dynamically work together with different customers (the corporate has a 30% stake in Skype, a video chat service), submit feedback, learn and submit opinions about sellers, flick through a various vary of eclectic merchandise (eBay initially started as a collectibles public sale web site, with a pen being auctioned for $14 as its first sale). This suggestions mechanism is additional strengthened by giving awards to probably the most real eBayer.

Safety from Fraud:

The corporate works tremendously laborious to beat fraud, and offers with such situations immediately. Fraud can embody counterfeit items being marketed to unsuspecting eBayers and redistribution of stolen items. Nonetheless, it must be identified that theft and fraud are issues with people, not eBay.

eBay summarizes the core messages to outline its proposition as follows:

For Consumers : Choice, Worth, Comfort, Leisure

For Sellers : Entry to broad markets, environment friendly advertising and marketing and distribution prices, potential to maximise costs, alternative to extend gross sales.

5) Enterprise and Income mannequin:

Your complete basis of eBay is predicated on the concept virtually something that may be purchased and bought could be facilitated via this Web retailer.

eBay has constructed a web-based C2C buying and selling social community on the Web, utilizing the World Vast Internet. Sellers and patrons are introduced collectively in a means the place sellers are allowed to record objects on the market, patrons to position their bids on objects of curiosity and all eBay customers to peruse via listed objects in a completely automated, searchable (utilizing their best-match search algorithm) means. The objects are organized by utility teams, the place every kind of public sale has its personal class.

eBay has streamlined in addition to globalized conventional C2C commerce, which has traditionally been carried out via types corresponding to collectibles reveals, flea markets, storage gross sales and so forth with their internet interface. This gives a conducive surroundings for straightforward exploration for patrons and allows the sellers to shortly record an merchandise on the market inside minutes of registering.

Fig three : Use case diagram for eBay.

Bidding and looking on auctions is freed from cost, however sellers are debited two sorts of charges:

1) Each time an merchandise is listed on eBay, a nonrefundable Insertion Charge is charged which ranges from 30 cents to $three.30, various upon the vendor’s opening bid on the merchandise.

2) A payment is debited for additional choices to advertise the merchandise, like daring itemizing or highlighting.

A Remaining Worth (remaining sale value) payment is charged on the finish of the public sale. The payment typically ranges from 1.25% to five% of the ultimate sale value.

Fig four : Income per person variation over time

eBay intimates each purchaser and vendor by way of e-mail on the finish of the public sale if a bid exceeds the vendor’s minimal value, and the vendor and purchaser end the transaction independently of eBay. The binding contract of the public sale is between the profitable bidder and the vendor solely. eBay collects its remaining worth payment unbiased of fee and cargo.

The next desk lists the adequacies of eBay’s enterprise mannequin :

Fig 5 : Financial Viability of eBay’s Enterprise Mannequin

The eBay enterprise and income mannequin is touted as probably the most profitable of the dotcom period.

Fig 6: eBay product search screenshot.

Fig 7 : eBay screenshot of a product itemizing.

6) Competitors:

eBay went public in September 1998 at $18 a share. By early march 1999, the inventory was buying and selling at roughly $282 per share. At the moment, eBay has a market capitalization of $28 Billion with its inventory buying and selling at roughly $21 a share. It faces stiff competitors from its overshadowing competitor, Amazon.com which has a market capitalization of $53 billion with its inventory buying and selling at roughly $118 per share. ComScore, the Web monitoring agency, ranks Amazon.com 12th with a site visitors of 77.9 million guests, and eBay.com with a site visitors rank of 14 having 77.5 million guests in Might 2010.

Because the e-commerce enterprise has a low entry barrier, eBay additionally faces threats from current effectively established firms with sufficient capital (living proof : Google, Microsoft, Yahoo!) to enter this market. Given community externalities and the relative ease one firm can duplicate one other firm’s improvements on-line, the principle tact rivals can deploy is to decrease the worth of their service, which is strictly what Amazon and Yahoo have executed. eBay must hold an eye fixed out for present rivals in addition to future doable competitors, whereas concurrently evolving and innovating its personal methods to take care of its chief standing within the e-commerce section.

7) Prime Administration:

Pierre Omidyar Founder and Chairman

2)Chris Agarpao was employed as eBay’s first worker and Jeffrey Skoll was employed as the primary president of the corporate in 1996. In November 1996 ‡ Meg Whitman President and CEO in 1997

three)Present CEO : John Donahoe.

Conclusions and Findings

eBay follows a particularly hands-off enterprise mannequin, appearing merely as an overseer and conducive surroundings for commerce supplier. It earns its revenue as charges from the amount of commerce that occurs on its C2C buying and selling platform. Therefore, it has minimal expense on advertising and marketing these items because it doesn’t immediately promote them.

As we've seen, the eBay enterprise and income mannequin is touted as probably the most profitable of the dotcom period. Whereas most firms perished within the dotcom bust, eBay was one of many few to outlive because of its simplistic, pure play methods.

Its aggressive scaling out (i.e horizontal integration) and decomposing group cells on the premise of performance have allowed it to stay lean, environment friendly and worthwhile. Because it relies on its customers to establish inefficiencies in its enterprise mannequin, it doesn’t require a heavy funding into its R&D division.

Its worth proposition to prospects i.e its patrons and sellers is predicated on the its choices of Choice, Worth, Comfort, Leisure for the client and entry to broad markets, environment friendly advertising and marketing and distribution prices, potential to maximise costs, alternative to extend gross sales for its Sellers.

Though eBay began out on an exponential development graph initially, because of elevated competitors eBay faces in latest occasions it has needed to expertise a decline in development. Its prime competitor is the net e book retailer Amazon.com which exceeds eBay in market capitalization at present.

Nonetheless, the basics of eBay are sound and their buying and selling platform remains to be their mainstay prime product. Future development lies in sustaining its aggressive edge by always innovating and bettering its buying and selling platform, in addition to diverging into companies associated to its market place. It has already embarked upon this by the acquisition of varied companies which facilitate its buying and selling platform like PayPal, Skype and so forth.

Appendix 1A

Figures and diagrams

Determine Serial No.


Web page no.


Acquisitions of varied firms by eBay until 2007



Progress in product listings and no. of customers over time.



Use Case Diagram ; describes interplay between vendor, purchaser and eBay companies.



Variation of Common income per person over time.



Financial Viability of eBay’s enterprise mannequin.



Product search display shot



Screenshot of product itemizing on eBay