eBay: The Market Place :)

eBay: The Customer Marketplace
Hello everyone…
…greetings from eBay‟s presenters :)
Let‟s get started…!!!

By: Meth Sambath & Chen Yeting

What You Will Know:
I – Introduction
A – What is eBay?
B – eBay Background
C – Objective of eBay

II – External Analysis
D – Consumer Analysis
E – Competitor Analysis
F – Technology Analysis

III – Internal Analysis
G – Target Market
H – Segmentation & Positioning
I – 4 Ps Overview
J – SWOT Analysis
K – Other Strategies

IV – Our Conclusion


A – What is eBay?
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eBay is the World‟s Largest Online Marketplace with
more than 116 million active users driving nearly $75
billion in sales volume in 2012. Each month, nearly 1/3
of all U.S. Internet users visit eBay. Because eBay is
all about exploration and discovery, consumers love
spending time on our site, engaging twice as long on
eBay compared to their nearest competitor.
It is now a multi-billion dollar business with operations
localized in over thirty countries such as:


B – eBay Background:
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AutionWeb was founded in San Jose, California, on September 3,
1995, by Iranian-American computer programmer Pierre Omidya at
the age of 28.
After writing the code for the site, Omidyar launched eBay from his
home in mid-1995.
The concept of an Internet marketplace caught on so quickly that by
the end of the year, eBay was getting a few thousand hits daily.
In 1997, the company received $6.7 million in funding from the venture
capital firm Benchmark Capital.
eBay went public in September 1998 at $18 per share. By early march
1999, the stock was trading approximately $282 per share!
By January 2002, eBay had 37 million customers and $129 million in
profit.
Based on a Case Study from IIMK in 2007, there are about 147 million
people use eBay now.


C – Objective of eBay:
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Pierre Omidyar founded eBay on a simple idea:
People are basically good.
The objective of eBay was to develop the work
ethics and culture of eBay as a fun, open and
trusting environment and to keep the organization
focused on the big picture objectives and key
priorities.
This fundamental belief created a completely new
kind of marketplace, forever transforming ecommerce.
In a letter to users, founder Omidyar characterized
eBay as a “grand experiment…creating an open
market that encourages honest dealings…to make it
easier to conduct business with strangers over the
Net.”
The overall eBay aims are to increase the gross
merchandise volume and net revenues from the
eBay marketplace.


D – Consumer Analysis:
 Community and Customer Involvement:
Everyone could be eBayer, you could be a seller or a
buyer:
- eBay was a marketplace for meeting and trading
through online auctions (B2C). Sellers posted items
and waited for bids. Upon completion of an auction,
eBay notified the seller and winning bidder via e-mail,
and provided them with each other‟s e-mail
addressed in order that shipping, handling, and
payment details might be worked out and sale
completed.
- Feedback system was created to enable members‟
evaluation of one another (any ratted feedback or
evaluation will last on your profile permanently), so
you better build a good reputation with eBay.
- An estimated 430,000 people in the United States
make all or most of their living by selling on eBay.
- Customer Services are also provided, many
community help boards are available.


E – Competitor Analysis:
There are so many competitors in the online auction market.
These are the main competitors of eBay:
 Amazon.com, Inc.
 Google Inc.
 Overstock.com


F – Technology Analysis:
 How to communicate with customers:
eBay Inc. acquired Skype in 2005 and significantly expanded its
customer base to more than 480 million registered users
worldwide. To focus on its core e-commerce and payments
businesses, eBay Inc. sold a majority stake in Skype in
November 2009, retaining a minority investment in the company.
 Payment Process:
On October 3, 2002, PayPal became a wholly owned subsidiary
of eBay. PayPal enables any business or consumer with email to
send and receive Internet payments securely, conveniently and
cost-effectively. PayPal's account-based network builds on the
existing financial infrastructure of bank accounts and credit cards
to create a global payment system.
In November 1996, eBay entered into its first third-party licensing
deal, with a company called Electronic Travel Auction to use
SmartMarket Technology to sell plane tickets and other travel
products.


Thank you Yeting :)


G – Target Market &Market Segment:
 Target Market:
- eBay has a very wide range of target marketing mainly
because of the wide range of product available at it‟s website.
Millions of items like collectibles, appliances, computers,
equipment and many more miscellaneous items are listed,
bought or even sold on a daily basis. In other word, eBay
generally target online auction and shopping communities.
 Market Segment:
At this point, by saying Market Segment, we focus on
how eBay sorts their products and consumers, rather then
geographic, Demographic, behavior and so on.
- From the entire wide range of items available, eBay originally
was set up to promote and sell antique and collectibles. This
causes eBay to focus more on this segment market. Another
key market segment for eBay would be the car and motor
enthusiast. This is because of the unexpected popularity with
the users, which is the second most visited segment on the
site. Due to this, eBay has been focusing more on these two
segments as their primary market target.


G – Target Market &Market Segment:
 KEY SEGEMENTS:
1 - Antiques & Collectibles:
- Started out to be selling collectibles and antiques with
auction-based online sales. These targeted markets are
usually antique lovers that are willing to bid very high for a
rare item. eBay has established them very well in the market,
which until today, antiques, and collectibles generates the
highest sales gross.
2 – Motor Lovers:
- Using credibility of leading car collector Kruse Inc., eBay
expanded its categorical offerings with eBay Motors. eBay
Motors became one of its most successful target segments
with $2,500M Global Gross Merchandise Sales in 2002.


H - Market Position:
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eBay's position in the ecommerce, retail, and
payments landscapes continues to change as
each of these sectors evolves.
eBay's initial $18 target price gave way to a
steady climb, reaching a high of just over $58
per share in 2004 before embarking on a
steady decline.
eBay handled more than $175 billion of
commerce volume in 2012 including all
merchandise sold and payments through
PayPal.
In recent quarters, however, year over year
growth has slowed, with an increasing
proportion of overall growth coming from its
payments business and an ongoing process of
reorganization and strategic change coming to
characterize the marketplace business. Some
of the declines and difficulties in this latter
sector are due to increasing competition from
competitors, most notably Amazon.com and
Google.
First
Quarter
2013


I – 4Ps Overview:
 Products:
- 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 owned by Ebay.
- Half.com, shopping.com, rent.com are owned by eBay
 Price:
- 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.


I – 4Ps Overview:
 Place:
- New eBay users can find answers to procedural questions by
utilizing the company‟s Answer Center located at
http://pages.ebay.com/community/answercenter/index.html
- 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
http://pages.ebay.com/sellerinformation/
 Promotion:
- There are eBay Coupons, eBay discounts, eBay Promotional
codes, and an eBay bargains page at DealTaker.com
- 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.


J – SWOT Analysis:
SWOT Analysis of eBay is carried out to get onto the finer and intricate details that
eBay has adopted in such a shorter span of time to achieve profits in millions and
is able to maintain a customer base that is again unbelievable. The strengths of
eBay could be identified:



eBay Strengths:

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eBay is the leading global brand for online auctions.
The company is a giant marketplace used by more than 100 million people to buy
and sell all manner of things to each other.
The brand has grown tremendously over the decade or so since its conception.
The company exploits the benefits of Customer Relationship Management (CRM).
Buyers and sellers register with the company and data is collected by eBay on
individuals.
Business-to-Consumer (B2C), then mixed with Consumer-to-Consumer (C2C)
The term „eBay' has become a generic term for online auctions.
Today it is common to hear that someone is „ebaying' or is an „eBayer,' or that
someone is going „to eBay.'

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 eBay Weaknesses:
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The organizations work tremendously hard to overcome fraud.
Fraud includes counterfeit goods being marketed to unsuspecting (and
suspecting!) eBayers.
Often the company deals with such activities very quickly and this may lead to
other forms of theft could include the redistribution of stolen goods.
It should be pointed out that fraud and theft are problems with individuals, not
eBay.
The weakness is that unscrupulous individuals can exploit the C2C business
model.

As with many technology companies, systems breakdowns could disturb the trading
activities of eBay. In the past both eBay and its payment brand Pay pal have
encountered shutdowns and outages. As technology improves such a weakness
is less and less of an issue 


 eBay Opportunities:
Opportunities that eBay had were tremendous and invincible. They are:
Acquisitions provide new business strategy opportunities. eBay‟s latest venture is
it has agreed to buy online telephone company Skype Technologies in a deal
reported to be worth $2.6 billion. Skype's software lets PC users talk to each
other for free and make cut-price calls to mobiles and landlines. eBay has been
buying up firms - including payment system PayPal - in an effort to increase the
number of services it offers to consumers and keep its profits growing.
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Market development: Aspirating consumers are growing segments in many
developing nations. Countries include China and India. There, consumers are
becoming richer and have more leisure time than previous generations.

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There are also still opportunities in current markets (Market Penetration). Western
Europe and the USA still have many potential consumers that have yet to
discover the benefits of online auctions.


 Threats for eBay :
Even a mammoth organization like eBay faces threats, which can be like
as below:

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As with many of the global Internet brands, success attracts
competition.

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International competitors competing in their domestic markets may
have the cultural experience that could give them a competitive

advantage over eBay, like China they have taobao.
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In fact eBay has found that it has met with other USA based Internet
companies when trading overseas. For example, Yahoo! Dominates
the Japanese market (eBay left Japan & Hong Kong market in 2002).

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Attack by illegal practices is a threat. As with weaknesses above, the
brand is attacked by unscrupulous individuals. For example e-mails
are sent to unsuspecting eBayers pretending to come from eBay.


K – Other Strategies:
 There are some more strategies that eBay has been using:
1. Establishing a larger user base:
- To attract new users, eBay established relationships with more than 60 websites,
including America online which gave eBay the largest access to the largest user
base on the internet and prevented AOL from entering the auction arena.
2. eBay concentrated on local and international trading:
- EBay has local sites in 53 U.S markets they deliver distinct regional flavors and
give users the convenience of shopping locally for difficult –to ship items such as
automobiles or antique furniture. The company also built a truly global presence
with users in more than 150 nations.
3. Maintaining a strong community affinity:
- The company believes that fostering direct interaction between buyers and
sellers with similar interest had enabled it to create loyal, active community of
users, As noted earlier this emphasis on community building has been present
since eBay‟s founding.


Our Conclusion:
…eBay’s strategy of providing a safe trading place on the internet, the eBay
community has flourished, by not only providing an efficient medium for
people to buy or sell items directly from or to a large member of people, it’s
a forum where buyers and sellers, develop reputations and in some cases, it

can change people’s lives…
Keep it up!


References:
1 – Case Study from Harvard Business School
- eBay (A): The market place, September 15, 2005
2 - Wikidpedia:
- http://en.wikipedia.org/wiki/EBay
3 – Smart Insights:
- http://www.smartinsights.com/ecommerce/ecommercestrategy/ebay-case-study-2/
- http://www.smartinsights.com/ecommerce/ecommercestrategy/ebay-case-study-2/
4 – Case Study in 2007, from Indian Institute of Management
Kozhikode
5 – Agile Enterprise Analytics
http://www.cs.duke.edu/smdb10/_files/toc_data/SMDB/keynote/keynot
e.pdf
6 – Marketing Teacher:
http://www.marketingteacher.com/case-study/ebay-case-study.html


Thank You For Your Attention 

감사합니다

谢谢
Xièxiè


eBay: The Market Place :)

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