E-Bay Part

(a) A

Marketing theorists believe that in order for a business to be successful they should be market driven, that they should define their target market and customers and then design the products or services offered to satisfy those needs, (Haberberg & Rieple, 2008). Targeting a market involves further subdividing and breaking the market into segments, buyers who are linked by some common characteristics, (Haberberg & Rieple, 2008, pg 19) and then concentrate your efforts onto a few key segments. Segments can be defined as a group of individuals, for business to consumers (B2C) markets, or groups of organisations in business to business (B2B) markets, (Haberberg & Rieple,2008,pg158). Typically an organisation would target one or the other segment however in the case of EBay it operates for both B2C and B2B, it boosts being a global trading platform where practically anyone can trade anything. The auction website is not only a platform for selling used goods for individuals and small firms, it has also attracted the attention of large multinational companies who view E-Bay as an alternative distribution channel where they can sell excess and unwanted stock. The online auction site however is not only a site for business purposes it is also a place where individuals can sell one off items to one another with no business purposes, so it also operates for consumer to consumer (C2C) trading.

EBay.com differentiation strategy

EBay pursues a cost leadership, differentiation, and growth strategy. A differentiation strategy that the company possesses is the quality service security that the online website offers, which is very impressive. EBay monitors many if not all of the listings posted on the site through the service of thousands of employees. Another impressive tool that EBay has was the first to implement as part of their differentiation strategy was the ability of quality control by offering peer review. Buyers and sellers both have the opportunity to rate how the transaction went. Whether the item was received as described and the shipment was fast, causing a positive rating, or the item was not as described or

not received at all, and all buyers should beware resulting in a negative rating, or whether the transaction was just ok, resulting in a neutral rating. Some of eBays features to their cost leadership and differentiation strategy consist of offering all types of items, including innovative products. The ability of M-Commerce is a big plus for the online giant. By having the ability of a mobile application, users can use eBay on the go through their phones, PDAs, and laptops. Being user friendly and simple is the way eBay will stay on top of the competition. Also, having the ability of online verification against fraud and counterfeit products makes eBay a number one source for buyers and sellers to stay loyal to the company by having the confidence in the company as they keep up with the industry standards.

eBay increases its value proposition with a differentiation strategy, acquiring entities that facilitate of transactions for its users, i.e. acting as the middleware. For example, eBay acquired PayPal in 2002 to create a proprietary system that seamlessly linked buyers and sellers (Daniels et al., 2007, p. 403). eBays virtual value chain creates value via five activities: gathering, organizing, selecting, synthesizing, and distributing information (Rayport & Sviokla, 1995, p. 1). Within its core competency, eBay gathers and organizes information about what is being sold by sellers into a database that can be queried by buyers which can then select what to bid on. In addition, based on the query, eBay synthesizes the requested information, ensuring that it distributes to buyer the data he or she is requesting even if the query is imprecise. For example, if you search for shos in eBay, it will ask you if you meant shoes. eBay also gathers, organizes, synthesizes and distributes information about its users, called a peer review. For example, if a seller is not providing exactly the product as advertised, the buyer can provide a bad rating and a written complaint, which stays with that seller forever. It provides the same capability for sellers to complain about its buyers. This provides value to users because it quantifies the trustworthiness of users and facilitates transactions between total strangers. Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2007). International business, environments and operations (11th ed). Saddle River, N.J.: Prentice Hall. Gopalkrishnan, J. & Gupta, V.K. (2007). eBay: The worlds largest online marketplace- a case study. Retrieved February 12, 2010 from http://dspace.iimk.ac.in/bitstream/2259/510/1/543-549.pdf. Rayport, J. & Sviokla, J. (1995). Exploiting the virtual value chain. Harvard Business Review, 73(6), 75-85. Retrieved January 23, 2010 from Business Source Complete database.

Market Segmentation

New eBay users: These people are fairly new eBay users to the online auctions. They may have been purchasers for a while, but they are just getting into the selling aspect of auctions. Having a service that will package the items sold will be a valued service, making it easier for the person to transition into an online auction seller. Advanced online sellers: This is a market segment of active sellers on eBay. Offering a packaging and shipping service that is inexpensive and convenient will be quite appealing to a seller who would like to increase the number of items they sell on eBay but cannot because of the time it takes to package and ship the items. Most seasoned sellers would be more than happy to pay several dollars to have someone package items for them. Others: This market segment is a catch all category of non-auction customers who desire to ship packages. Often these people are either sending an item to a friend or business, or a maybe returning a mail order purchase. This category of people has similar demographics to a Mail Boxes Plus customer except they might have cost or environmental sensitivities.

Target Market Segment Strategy

AuctionShipper will use a grassroots approach to segmenting the market. AuctionShipper will be active in the different usergroups and bulletin boards that are quite active within the eBay community. By being active on these communication systems specific to eBay, AuctionShipper will generate awareness among the perspective customers. AuctionShipper will also segment its customers through local advertising that will be aimed more at the beginner users who are less active on the bulletin boards, etc.