Analysis of Relevant Factor in Marketing
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Marketing can be defined as the action of promoting and selling products and services including market research and advertising. It is the management procedure in which products and services move from concept to the consumers. In the present research report Ebay Inc. has been selected, which is the popular American multinational corporation and e-commerce company. For the current study electronic product laptop has been selected (Kiang, Raghu and Shang, 2000). The present research report is designed to identify the main forces of the marketing environment which will be likely to impact the products and services of the association in the coming five years.
Porters five forces model is one the popular technique of market analysis which includes five forces of market such as bargaining power of buyers, bargaining power of suppliers, rivalry among existing competitors, threat of substitute products and threat of new entry (Grossnickle and Raskin, 2000).
Bargaining power of buyers: Generally, there are two kinds of buyers of Ebay such as customers and retailers. Retail purchaser are the group which has the most effect for company and other confectionery producers. There is high level of competition for shelf space and threat of backward integration especially with brand only goods. Retail purchaser of the association can make direct impact on revenues of the association (Pines, 2006). On the other side, there are online limitless number of buyers of the association. However, there are single price for all over the world, and thus buyers do not have any real power in influencing Ebay.
Bargaining power of suppliers: Suppliers are the group which can influence quality and price of laptop. Changes in prices and technologies of these products will affect the price of profitability of the association in the next five year (Cravens and Piercy, 2008). In order to get sustainable supply of cocoa, company has created partnership with various big manufacturer of laptops such as dell, HP etc. On the other side, company can acquire several regular suppliers in order to ensure that they have control over the prices of the products. Finally, it can be said that suppliers can influence prices and quality of the electronic products and thus, entity should make effective strategies to get regular supply of inputs. Furthermore, the company does not have classical technique of selling, but instead provides a services which brings the buyers and sellers together. Thus, it can be said that the suppliers does not have sufficient power to influence the marketing of the business (Kotler, 2000).
Rivalry among existing competitors: Ebay is online retailer entity and this is one of the fastest growing the competitive sector of the world. There are ranges of big competitors of Ebay which may influence sales and profitability of the business in next five years. However, as long as Ebay continues to appeal to the drop of companies, they will not have a problem with competition. Yahoo auctions is one of the most significant up coming competitors of the entity, which are fighting eBay for a piece of the market. The major reason behind it is that people know the name of Yahoo and Google very well (Peattie, 2008). In order to fight with high level of consumers, entity continues to appeal to its consumers and provide the suitable products and services with low prices.
Threat of substitute products: Normally, there are not ranges of substitutes to trading online. Another option would be to go back to trading at an auction house. The other option would be to sell the items directly stead of placing them on an auction. Thus, it can be said in the auction purchasing consumer must pay higher prices, but in online business consumers can get various kinds of competitive prices (Kiang, Raghu and Shang, 2000). In the case of online business, there are ranges of other sites which can provide same kinds of substitute products such as laptops of Chinese market. Hence, there is the threat of substitute products for Ebay.
Threat of new entry: In the present world of internet, there are very low barriers for new entry. The major barriers come from government regulation. There are several products and services that cannot be sold by the online companies in several areas. Hence, it can be said that there is always a threat of new entry in the online retail sector (Grossnickle and Raskin, 2000).
Internal environment of the business also affect the marketing of the association. Thus, VRIO is one of the best tool through which internal environment of Ebay and its competencies can be evaluated easily.
Business Model: It play very significant role in the business because it is what created the sector they are in. The model of Ebay comprises not only their modes of payment, but also the society in which they do business. It provide open interaction with seller and buyers of the electronic products and services (Pines, 2006). It is the economical and effective model of business. This model will be helpful for the association in achieving objectives of the business in upcoming five years.
Brand Identity or recognition: Presently, Ebay is widespread brand of online business and major reason behind it is the business model used by the entity. The company have got approximately 67 percentages market share,which represents that consumers of enterprise know the products and services very well. In order to this, good brand recognition helps the association in getting funds, consumers and profits. It also helps in developing good customer base by satisfying needs of the society (Cravens and Piercy, 2008).
Product offering: Ebay lists more products and more differentiated products than any other online auction site. Various kinds of brand of laptop is provided by the company such as HP, Dell etc. This enhance value of the business as it gives options to the people.
Consumer services: It is also one of the major core competencies of Ebay. The entity has big and skilled team of employees which can provide best services to clients (Kotler, 2000).
Political factors: Political factors including taxation policies and government legislation can be either advantages or disadvantages for the company. When taxes will increase then customers will decrease to use of electronic product as well as sales of stock of product will also reduce. In reverse case when taxation policies will be favourable then consumers will buy more products and profit margin of the firm will be enhanced effectively (McDonald and Wilson, 2011). In near future, change come in labour laws and regulations can affect production of the company. e.g. when government brought restrictions and Copy right and legal law can create problems for company in coming five years. Law regarding to employees working hours that they could only work from 9am till 5pm then resulting factory hours would be cut short and production will be reduced. UK government and NHS were created very strict policy and concerned about working hour of labour that can influence performance of company.
Economic factors: Fluctuation comes in price level and interest rate can influence marketing environment and laptop product of firm. If interest rate will enhance then firm would not want to borrow as much money for expansion and it will apply restriction on enterprise to expand its business and investment in research and development related activities in product development and expansion (Frontier Economics Ltd., 2008). Similarly, due to increase interest rate, consumers of the country will also under pressure to their loans and they will not spend disposable income to buy luxury items and also result in low sales from the consumers.
Social factors: Changes arise in needs and demands of people, demographic profile of customers (age, and income level) and use of new emerging techniques will affect marketing environment of organisation as well as laptop product offer by enterprise to their customers. In modern era, most of the people are techno-savvy and many studies showed that attractive marketing and clear appearance of products on website have created wide impact on the canvas of the mind of customers (Donici and Maha, 2012). If firm will not offer electronic product in compatible price as compared to other competitors then it would unable to retain its current position as well as capture wide market segment significantly. In UK, local residents of country are taking interest to sell products online using new B2B and B2C online transactions will create challenges for enterprise to attract more visitors and convert them into regular customers.
Technological factors: Emergence of new technology has changed product delivery and packing process and made them more attractive. The organisation has taken initiative to effective use of new techniques including CRM, SCM and Cloud in its business process to make them more compatible and advanced against other business rivals present in the same industry (Koumparoulis and Scott, 2012). Many customers have complained about product delivery process of e-bay that can affect marketing environment of company as well as delivery of laptop product to their customers at stipulated time. However, eBay can overcome such kind of issue through effective use of Drone for product delivery and increase confidence of customers in services and products delivery process of enterprise. By using it, firm can save time as well as cost arise in transportation and delivery of laptop product to their customers.
Impact of internal and external factors on marketing environment on eBay and laptop product can be understood with help of this method.
eBay is a leading global brand for online auctions and acts as a middleman between sellers and buyers. It has more than 100 million people who buy products and using services of company around the world. The major strengths of the company are trustworthy brand and effective use of new techniques in products delivery and solve customers on time. These characteristics will make it more reliable and helps in creating positive image in the minds of customers (Donici and Maha, 2012). Organization commitment makes it pioneer in online auctions and helps in taking competitive advantage over such giant retailers as Amazon effectively. Enterprise has highly invested in boosting IT services and customer relationship management (CRM) skills and knowledges to serve over 100 million users. On that basis of the current technology used by company for online payment and tighter control over buyer’s shopping experience, it can predict that in coming five year firm would be able to retain its current position in the market place and connecting more users to services and product offer by firm.
Organisation has charged higher fees for the sellers for providing various services including listed goods, sold goods, PayPal transaction fees and some adornment fees. The amount of money charged by company has risen significantly over the years due to these sellers gets zero profit on their low price products (Donici and Maha, 2012). Most of the laptop manufacturing companies have taken initiated to develop their own websites for selling products online that will affect sales and profit margin of enterprise in coming five years.
eBay has a strong payments' system PayPal which is convenient and easy to use. The firm can grasp market opportunity through attracting growing number of mobile shoppers towards use of payment system for convenient shopping and payment processing. The company has its IT and CRM systems that will help firm to easily stake out a market share and continuous capture opportunities in coming years (McDonald and Wilson, 2011). In addition to this, enterprise has continue adding new services through mergers and acquisitions and improve delivery process of laptop online in effectively.
Threats: Online services offer by low cost online retailers as well as increasing competition from its core competitors including Amazon in term of cheaper shipping charge and better knowledge about home market that will influence marketing environment of company and create hurdle in success path of enterprise (Murray, 2010.). In addition to this, online security and fluctuation arise in exchange rate will affect performance of firm in coming five years.
On the basis of the research report it can be concluded that political, technology, economic and threats of substitutes and new rivalries can create issues from the company as well as laptop product. In near future, through emphasizing on use of Drone, IT and CRM systems in terms of quick delivery of products in low price at stipulated time eBay would be able to access the hugest online marketplace in the world effectively.
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