eBay Marketing Program

eBay Marketing eBay Marketing ProgramProgram

Natasha BunchNatasha Bunch

Andrea PieAndrea Pie

Frank RobertsFrank Roberts

James RuaneJames Ruane

Ben vonWurmbBen vonWurmb

Positioning StrategyPositioning Strategy

eBay EffortseBay Efforts::– 1) providing great bargains/deals1) providing great bargains/deals– 2) giving 100% on improving 2) giving 100% on improving

auctioning serviceauctioning service– 3) providing quality service and 3) providing quality service and

productsproducts Combination of StrategiesCombination of Strategies::

– Price/Quality RelationshipPrice/Quality Relationship– Reference to CompetitionReference to Competition

Advertising & Advertising & PromotionPromotion

Checklist for Marketing Communications Checklist for Marketing Communications PlanningPlanning Who

What

How

When

Where Why

Advertising & Advertising & PromotionPromotionWHO?WHO? Target Market includesTarget Market includes::

– Anyone interested in service BUT Anyone interested in service BUT – Power Sellers, Store OwnersPower Sellers, Store Owners– Individuals looking for deals or to save $Individuals looking for deals or to save $– At least 20 eBay transactions OR $100 At least 20 eBay transactions OR $100

shipping costs per monthshipping costs per month– Mid 20’s to 40’s Mid 20’s to 40’s – Income btw. $35,000 and $100,000Income btw. $35,000 and $100,000– Access to UPS drop stationsAccess to UPS drop stations– Internet UsersInternet Users

Advertising & Advertising & PromotionPromotionWHAT?WHAT? InformInform: eBay partnership with UPS for : eBay partnership with UPS for

discounted shipping (HOW?)discounted shipping (HOW?)

EducateEducate: (sellers) How to use new service: (sellers) How to use new service– Added step in selling processAdded step in selling process– Added portion to seller page for buyers to seeAdded portion to seller page for buyers to see

Example PagesExample Pages

As a seller, you can choose several optional features to help promote your listing. Please note that these fees are non-refundable.  

FREEUPS Discount Rate

$0.05Buy It Now

$0.10Scheduled Listings

$0.1010-Day DurationThe longest listing duration available

Double the insertion and listing upgrades fees (excluding Scheduled Listings and Home Page Featured).

List in Two Categories

$19.95Gallery Featured

$0.25Gallery

$0.10Listing Designer

$1.00Bold

$5.00Highlight

$19.95Featured Plus!

$99.95 (single quantity) or $199.95 (quantity of 2 or more)

Home Page Featured

Listing Upgrade FeeListing Upgrade

Selling Process

Payment Details

United States Shipping and handling, Original: ($45.00) US $40.50

UPS discount (U.S. Shipping only) You save 10% $4.50!

Payment Instructions

You can pay with Paypal or MO and is expected within 4 days. Items are shipped the day after payment is recieved. Positive feedback is left for all completed transactions. Thank You and have a Great Day!

Bidding

Sony Stereo Amplifier for Car (New)! Item # 3019201240

Bid Buy

Starting bid: US $100.00

Your maximum bid:

( Minimum bid: US $100.00 )

Place Bid

You will confirm on the next page eBay will bid incrementally on your behalf up to your maximum bid, which is kept secret from other eBay users. The eBay term for this is proxy bidding.

Buy It Now for US $250.00

Buy It Now

Buy It Now ends this listing. This option disappears once a bid is placed. Learn more

Your bid is a contract - Place a bid only if you're serious about buying the item. If you are the winning bidder, you will enter into a legally binding contract to purchase the item from the seller. Seller assumes all responsibility for listing this item. You should contact the seller to resolve any questions before bidding. Auction currency is U.S. dollars ( US $ ) unless otherwise noted.

How to Bid

1. Register to bid - if you haven't already. It's free!

2. Learn about this seller - read feedback comments left by others.

3. Know the details - read the item description and payment & shipping terms closely.

4. If you have questions - contact the seller ceflowk before you bid.

5. Place your bid!

eBay purchases are covered by the Fraud Protection Program.

Need help?

Buyers: Bidding and buying tips

Sellers: Manage your listing

Seller Page

Advertising & Advertising & PromotionPromotionHOW?HOW? Primary Target MarketPrimary Target Market

– Email to all membersEmail to all members– Personalized notices to Power Sellers Personalized notices to Power Sellers

and store owners (Example)and store owners (Example) Secondary Target (General Public)Secondary Target (General Public)

– Add into existing promotionsAdd into existing promotions– E.g., AOL, TV commercials, billboards, E.g., AOL, TV commercials, billboards,

search engines, word of mouth. search engines, word of mouth. (Example)(Example)

eBay’s Partnership with UPS

Start Saving on Shipping NOW!!!

From "eBay" <[email protected]>

Date Wednesday, April 16, 2003 2:06pm

To [email protected]

Subject Spring back into action

eBay Email

Advertising & Advertising & PromotionPromotionHOW?HOW? Primary Target MarketPrimary Target Market

– Email to all membersEmail to all members– Personalized notices to Power Sellers Personalized notices to Power Sellers

and store ownersand store owners Secondary Target (General Public)Secondary Target (General Public)

– Add into existing promotionsAdd into existing promotions– E.g., AOL, TV commercials, E.g., AOL, TV commercials,

billboards, search engines, word of billboards, search engines, word of mouth. (Example)mouth. (Example)

ANDNEW

CLICK HERE

Web Advertisement

Advertising & Advertising & PromotionPromotionWHERE?WHERE? Reach numerous geographic regionsReach numerous geographic regions

– Via email & internet adsVia email & internet ads

Specific cities/towns near UPS stationsSpecific cities/towns near UPS stations– Via TV commercials and/or billboardsVia TV commercials and/or billboards

Advertising & Advertising & PromotionPromotionWHEN?WHEN? Initially begin with United StatesInitially begin with United States

After measuring progress and After measuring progress and success, expandsuccess, expand

Advertising & Advertising & PromotionPromotionWHY?WHY? Positioning StrategyPositioning Strategy

– Provide great deals/bargains with Provide great deals/bargains with quality service, while focusing solely quality service, while focusing solely on our auctioning site to on our auctioning site to continuously improve and perfect continuously improve and perfect the eBay buying/selling community. the eBay buying/selling community.

Mutually BeneficialMutually Beneficial

eBay Inc.eBay Inc.– New source of profitNew source of profit– Creates definitive shipping Creates definitive shipping

UPSUPS– Larger customer baseLarger customer base

eBay userseBay users– Shipping discountsShipping discounts– Less confusionLess confusion

Financial ImplicationsFinancial Implications

eBayeBay– Keeps 10% discount on shipping Keeps 10% discount on shipping

UPSUPS– Offers 20% discount based on Offers 20% discount based on

guaranteed usageguaranteed usage UsersUsers

– Realize 10% shipping discountRealize 10% shipping discount– No possibility of overchargingNo possibility of overcharging

Power Seller LevelsPower Seller Levels

Power Power LevelLevel

Monthly Monthly Sales ($)Sales ($)

Shipping Shipping Discount Discount (%)(%)

BronzeBronze 1,0001,000 1111

SilverSilver 3,0003,000 1212

GoldGold 10,00010,000 1313

PlatinumPlatinum 25,00025,000 1414

TitaniumTitanium 150,000150,000 1515

Pricing StrategyPricing Strategy

Value-based Value-based pricingpricing– Uncertainty Uncertainty

reductionreduction– Relationship Relationship

enhancementenhancement– Cost leadershipCost leadership

Competitive AnalysisCompetitive Analysis

Auction sites varyAuction sites vary Product categoriesProduct categories Whether they carry inventoryWhether they carry inventory The bidding processThe bidding process Extra-services/feesExtra-services/fees Technical supportTechnical support FunctionalityFunctionality Sense of communitySense of community

StrengthsStrengths

Strong brand identityStrong brand identity eBay synonymous with online eBay synonymous with online

tradingtrading Dominates the marketDominates the market Easy to useEasy to use No inventory or costs associated No inventory or costs associated

with inventorywith inventory

WeaknessesWeaknesses

Shipping costs hinder online salesShipping costs hinder online sales eBay’s site is sometimes “down”eBay’s site is sometimes “down” Expansion of services geared Expansion of services geared

toward high volume sellers may toward high volume sellers may be alienating the individual sellersbe alienating the individual sellers

OpportunitiesOpportunities

Strategic alliancesStrategic alliances Foster community affinityFoster community affinity Enhance features and Enhance features and

functionalityfunctionality Expand value-added servicesExpand value-added services

ThreatsThreats

CompetitionCompetitiono Direct – Ubid.com, Yahoo Auctions, Direct – Ubid.com, Yahoo Auctions,

Amazon.com AuctionsAmazon.com Auctionso Indirect – Any online or offline Indirect – Any online or offline

retailerretailer Rising cost of technologyRising cost of technology Loss of market shareLoss of market share

DistributionDistribution

eBay- Website available to anyone eBay- Website available to anyone with internet accesswith internet access

UPSUPS– 200 countries worldwide200 countries worldwide– World’s largest package delivery World’s largest package delivery

companycompany– 4000 UPS Store/ Mail Box Etc. worldwide4000 UPS Store/ Mail Box Etc. worldwide– Box drops can be found almost anywhereBox drops can be found almost anywhere– Retail centers Retail centers

ServiceService

Quick and easy way to save on Quick and easy way to save on shippingshipping

Hotline for shipping problemsHotline for shipping problems UPS- Known for quality serviceUPS- Known for quality service

Marketing BudgetMarketing Budget

20032003 20042004 20052005 20062006 20072007

BillboarBillboardsds

$10,200,0$10,200,00000

$10,200,0$10,200,00000

$20,400,0$20,400,00000

$20,400,0$20,400,00000

$20,400,0$20,400,00000

TelevisiTelevisionon

$7,500,00$7,500,0000

$7,500,00$7,500,0000

$11,800,0$11,800,00000

$11,800,0$11,800,00000

$11,800,0$11,800,00000

InternetInternet$6,187,50$6,187,50

00$6,187,50$6,187,50

00$9,281,25$9,281,25

00$9,281,25$9,281,25

00$9,281,25$9,281,25

00

TotalTotal$23,887,$23,887,

500500$23,887,$23,887,

500500$41,481,$41,481,

250250$41,481,$41,481,

250250$41,481,$41,481,

250250

RevenueRevenue

Average shipping costAverage shipping cost $4.11$4.11

Average percentage kept Average percentage kept by eBayby eBay 8%8%

Average amount made by Average amount made by eBay per transactioneBay per transaction $0.329$0.329

Projected Number of Projected Number of UnitsUnits

2003 2004 2005 2006 2007

Projected # of eBay transactions 565,800,000 712,600,000 859,300,000 1,006,100,000 1,152,800,000

Projected percent using UPS rate 25% 40% 60% 65% 68.8%

Projected # using UPS rate 141,450,000 285,040,000 515,580,000 653,965,000 793,126,400

Income StatementIncome Statement

20032003

Net RevenueNet Revenue $46,508,760$46,508,760

ExpensesExpenses

Product DevelopmentProduct Development $3,400,000$3,400,000

Web MaintenanceWeb Maintenance $4,526,400$4,526,400

MarketingMarketing $23,887,500$23,887,500

Taxes (35%)Taxes (35%) $5,143,201$5,143,201

Total ExpensesTotal Expenses $36,957,101$36,957,101

NET INCOMENET INCOME $9,551,659$9,551,659

Income StatementIncome Statement

20042004

Net RevenueNet Revenue $93,721,152$93,721,152

ExpensesExpenses

Product DevelopmentProduct Development $1,500,000$1,500,000

Web MaintenanceWeb Maintenance $9.121.280$9.121.280

MarketingMarketing $23,887,500$23,887,500

Taxes (35%)Taxes (35%) $20,724,330$20,724,330

Total ExpensesTotal Expenses $55,233,110$55,233,110

NET INCOMENET INCOME $38,488,042$38,488,042

Income StatementIncome Statement

20052005

Net RevenueNet Revenue $169,522,704$169,522,704

ExpensesExpenses

Product DevelopmentProduct Development $3,400,000$3,400,000

Web MaintenanceWeb Maintenance $16,498,560$16,498,560

MarketingMarketing $41,481,250$41,481,250

Taxes (35%)Taxes (35%) $37,850,013$37,850,013

Total ExpensesTotal Expenses $99,229,823$99,229,823

NET INCOMENET INCOME $70,292,881$70,292,881

Income StatementIncome Statement

20062006

Net RevenueNet Revenue $215,023,692$215,023,692

ExpensesExpenses

Product DevelopmentProduct Development $2,000,000$2,000,000

Web MaintenanceWeb Maintenance $20,926,880$20,926,880

MarketingMarketing $41,481,250$41,481,250

Taxes (35%)Taxes (35%) $52,715,447$52,715,447

Total ExpensesTotal Expenses $117,123,577$117,123,577

NET INCOMENET INCOME $97,900,115$97,900,115

Income StatementIncome Statement

20072007

Net RevenueNet Revenue $260,779,960$260,779,960

ExpensesExpenses

Product DevelopmentProduct Development $2,000,000$2,000,000

Web MaintenanceWeb Maintenance $25,380,045$25,380,045

MarketingMarketing $41,481,250$41,481,250

Taxes (35%)Taxes (35%) $67,171,533$67,171,533

Total ExpensesTotal Expenses $136,032,828$136,032,828

NET INCOMENET INCOME$124,747,13$124,747,13

33

Contribution Margin Contribution Margin AnalysisAnalysis

2003 2004 2005 2006 2007

Revenue $46,508,760 $93,721,152 $169,522,704 $215,023,692 $260,779,960

Variable Costs $4,526,400 $9,121,280 $16,498,560 $20,926,880 $25,380,045

Contribution Margin $41,982,360 $84,599,872 $153,024,144 $194,096,812 $235,399,916

Contribution Margin Percentage 90.27% 90.27% 90.27% 90.27% 90.27%