Business Model For Ebay Marketing Essay

Business Model For Ebay marketing EssayInnovation is non a single hardly a total process of be sub processes. It is not just the conception of a natural idea, nor the trick of a new device, nor the development of a new foodstuff simply all of these things acting in an integrated fashion (Myers and Marquis, 1969). Innovation give the bounce as well be explained with the following equationInnovation = hypothetical conception + technical invention + commercial exploitation.EBay is the online put onment comp all among person-to-person and is one of the few profitable internet companies. EBay lay outively crapd a new rail line influence never before possible with cost-efficient one-to-one trading in an auction format. Individuals custom 4,300 categories in eBay to barter for and sell points of wide range, from collectibles and antiques to electronics and toys. Sellers pay a nominal fee for placing an item up for sale, and eBay receives a transaction fee ranging fr om 1.25% to 5% of the final sale price on any item shift. The secureer and the seller clobber pop the logistics of the transport (e.g. shipping, payment) between themselves, and eBay never takes possession of the item be sold, or the payment for the item removing the need for inventory, transportation and other bash costs.Business ModelBusiness baffle defines how a firm ordain define and promote its brand (plans to operate), produce and distribute its product (generate revenue) and manufacture or attract its market (compete). The success of course depends on selecting the distract business model. Business models convert new technologies to economic value. For some start-ups, old(prenominal) business models ar not always applicable so a new model must be devised. In some cases, the immensity of business model far exceeds the founding of the product or attend to itself.Role of the Business ModelTechnical InputsBusiness Model sparing OutputsA business model bases on a multitude of business subjects including economics, entrepreneurship, finance, marketing, operations, and strategy. The business model itself is an important determinant of profits to be get from an innovation. A mediocre innovation with a great business model whitethorn be more profitable than a great innovation with a mediocre business model.EBays business model was based on creating and chief(prenominal)taining a person-to-person trading community, providing millions of auctions, and hundreds of thousands of new items every day from which bidders may choose. After implementing their model, EBay has been able to induce strategic partnerships, continue making modern changes and progressions, and supervise its internal and outside(a) environments for possible future opportunities which have do them the worlds biggerst online auction corporation. Since the site provides plenty of reasons to stay for all-night plosive of era and revisit on a regular basis, eBay has become hugely triple-crown. The longstanding they stay on eBay, there is more chance to complete a transaction and generate revenue for eBay. The other reason for eBays success is their highest bidder wins dash auction mechanism as a means of earning profit from charging a premium for mediating between purchasers and sellers as a third party. In victimisation this mechanism, a history of prices exists (price points), creating increased inter-play between competitors in the marketplace. EBays business model recognizes these specific elements as a signalize to its success. They argon (as given in the case study)It is the largest online trading meeting place with a huge mass of buyers and sellers, and change range of items listed for saleIts compelling and entertaining environment with strong value and established rules hence facilitating communicating between buyers and sellers.It has programs such as unafraid harbor to aid in disputes and to punish drug users who violate eBayCost effective and convenient tradingStrong community affinityAn intuitive user interface that was easy to understand, arranged by topics, and fully automatedThe open of eBays vision was to create the environment and provide users ways to interact. Rather than determination various ways of making money, eBay has focused on creating a community of users by which they ended up making lots of money. According to a survey, the average eBay user spends an average of one hour, 26 minutes and eightsome seconds on eBay (http//www.marketingcharts.com/direct/ebay-aol-benefit-from-increased-us-web-usage-12765/). In contrast, visitants to catalogue stores and other commercial websites big businessman spend only ten or twenty minutes there.EBay is maintaining their military strength since they are continuously up(p) to become better. When compared to amazon.com and other sites, eBay turned out to be far better since their expenses are low and doesnt hold any stocks corresponding the others do .Creating New Markets Through Service InnovationFor decades, since the evolution of internet, the magnificence of services has grown steadily to the spherical economy whereas the importance of goods has declined. Naturally, companies are constantly seeking to provide better services, regardless of whether they are in a pure service business or in a manufacturing industry that must increasingly rely on its service operations for continued profitability. However, most improvements to service activities are incremental. Stores stay open longer producers establish websites with e-commerce functions airlines, casinos and supermarket chains introduce loyalty card programs. These improvements are reusable and indeed necessary, but their returns are somewhat limited. Only rarely does a company develop a service that creates an entirely new market reshaping the market providing company with unforeseen profits for a longer period of time. EBay is one of these rare companies. It has created new markets through its unique model of innovation. For example, in the online auction concept, eBay was not the first-year but it gradually became the dominant player. In the early 1980s, CompuServe (nee MicroNET) and The Source were sponsoring auctions. Specifically, Comp-U-Card Online/Comp-U-Store held weekly auctions for consumer goods like the brand-new Sony Walkman in 1983, and CompuServes first eBay-style automated online auctions were held in 1982. Due to limited use of the internet technologies and need of awareness, these companies were not much(prenominal) success. Later when the trend changed, new technologies developed, and online business grew, eBay introduced its business totally focussed on service which led them to create successful new markets domestically and globally.Ansoffs growth matrix identifying opportunities for growth for eBayCurrentProducts/ servicesNewProducts/ servicesCurrentMarketsNewMarkets1. Market penetration strategyAttempt to get existing user s to spend more3. Product development strategyWirelessDevelop sectors such as introduce car sales, boat, sales etc.Fixed-price shopsPaypal payment systemProviding focusing on sales2. Market development strategyAttract new vendors such as large corporationsDevelop international sites in satisfying markets such as Germany, Japan4. Diversification strategySkype VOIPEnabling communication among communityEBay is one of the most successful e-commerce website in the World large Web. The strategic direction of the company is market penetration. The main aim of a market penetration strategy is to increase the market share by using the current products within the existing markets. This composite the actions and programs to be through in order to enhance the current core competencies or build a new one. In the case of e-Bay, the company focuses on improving the quality of their service in order to improve the reputation of the company compared to its direct and indirect competitors. EBay i s focusing on the improvement of its service by using updated and high-tech Information System, which will overhaul to improve the visitor log, improve the quality of service and the security and safety of its online users. Beside that EBay has continued to enclose and connect people. The most important points in their innovation are acquisitions of PayPal in 2002 an online financial service, and Skype in 2005 an internet communication company. With these acquisitions, EBay provides customers with the most convenient methods so that buyers fecal matter make low cost contact with sellers easily and make all transaction swiftly. Although there are several disputes that EBay is doing a corporeal value chain, its characterization proofs that EBay performs a virtual value chain. It provides platform for trading on the internet in virtual market where it operates and the value of goods sold in this site is determined by auctioning of buyers. It performs as a self-regulating global economy.Lesson to a new internet business from eBayFigure from www.ebay.comOn a normal e-commerce site, customer does some shopping, picks out one or more items, and heads to the checkout area as quickly as possible. simply in eBay, members can do other thing than just buy or sell. They canPost feedback In business, feedbacks are crucial and help the company to improve their mistakes. Here, both consumers and sellers can post their feedbacks in the forum describing their deal of the product.Communicate with others in message boards Consumers such as old-timer hunters, collectors, and bargain hunters like talking about their common interests. This leads them to meet and apostrophize each other in the same spots on eBay, either in a weekly or prearranged chat, just to say hullo and share opinions.Post secondary information eBay sellers and buyers can create most Me pages to inform people about themselves. Sellers can open eBay Stores. This gets them personally involved with the s ales they open this site not only for business but it has become part of their daily lives.In other words, loyalty, the desire of decision a bargain, and the love of making some extra money are what keep eBay users returning on a regular basis, which makes eBay a pleasant and a successful venue. Its the human touch that means so much on the auction site.By implementing their business model, eBay employed three main tactics. First, they looked to build strategic partnerships. Second, they looked for customer feedback to constantly make changes and improvements. Finally, they monitored its internal and external environments for possible opportunities. By doing all of these sorts of things, eBay is being able to adapt to the changing ways and keeping their customers satisfied. To be successful eBay continue to mould and change their business model to satisfy its customers and keep the level of quality they employ to the highest degree as possible.eBay has created a one-stop-shopping experience that is drawing to large corporations, separate entrepreneurs, and individual buyers and sellers. They have created value through many facets of their business that appeal to their customers and differentiate them from the competition. The main ways that eBay differentiates themselves is throughVariety of products offeredWhen customers visit eBay they can search for virtually any product. EBay boasts a category variety not matched by any competitor with over 27,000.The eBay CommunityEBay wants their customers to feel like they are a part of a community. This community feel gives customers the experience that they are branch of something and cared about. By showing the customers that their feedback, opinions, and feelings are important eBay has gained awful ground with their customers.The eBay WebsiteEBay has created an auction and retail website that is unique and interesting. This creative site sets them apart(predicate) from their competitors. The site is set up wi th many facets that reach a broad(a) duo of visiting buyers and sellers. The site is also entertaining and easy to use making it very appealing for online shopping and trading.The eBay Brand NameEBay was the antecedent of the online auction industry. When customers think of online buying the immediately think of eBay. This has given them a competitive advantage that sets them apart from other online auctions.eBays Global ReachThe global reach of eBay is not achieved by any other online auction site. For large corporations international selling and buying is done everyday. Even for an individual buyer or seller, having the favourion of searching throughout 150 countries with a span of 94.9 million users is very appealing.ConclusioneBays compelling value proposition, their ability to create a new market using Internet technology, and their first-mover advantage, have been key factors that have contributed to the success of the brand, however, their ability to cultivate a distinct gumption of community has been the defining characteristic which differentiates them from other online auctions. As a result, eBay attracts a broader selection of buyers, which in turn attracts more sellers the ultimate network effect contributing to its strong lead and competitive advantage. Their focus on heavy(p) users and targeted promotions, have been instrumental in building a quality customer base, which has established eBay above other online auction communities. eBay has also faced hard challenges in scaling the organisation fast enough, as they could not opt for a go slow strategy.