EBAY`S MARKETING SUCCESS 5
eBay`sSuccess as an Online Marketplace
Asone of the pioneer online market zones, eBay`s initial developmentintended to present the website as a platform for auctioning goods.However, it gradually evolved to the current biggest online marketarea. The website`s success generated a pricing revolution throughallowing purchasers to determine the prices paid for items. Theconcept adopted by eBay gave priority to value pricing, a strategythat was beneficial for both parties, as it gave customers thecontrol to determine the best possible costs of items while sellerswere able to arrive at good margins from the website`s broad reach.In this case, value pricing is the estimation of customers` valueperception on a product`s image, followed by determining its price,and observing the trend (Ennico& Shebley, 2011).The influence of eBay`s value pricing technique has influencedtoday`s businesses, with companies referring to the website beforeestimating their products` prices. The strategy is also interpretableas deep discounting, whereby customers perceive lower prices overtime rather than constant shallow discounts (Melnik,n.d.).
Inthe evaluation of fee structure set by eBay, it is important toidentify that the website does not purchase or sell items itself. Itrealizes its profits through fee collection, which is an insertioncost incurred for every listing, including a final value pricecreated on the fixed and alternative auctioned price (Melnik,n.d.).The eBay pricing structure initially intended to entice high-volumesellers while preventing individuals who exclusively list low-pricedcommodities. The price setting also recognized as second extent pricediscrimination, which denotes the activity of charging customers lessto purchase commodities in large volumes (Ennico& Shebley, 2011).Therefore, the pricing technique is an optimal measure to entice manycustomers. However, the strategy adopted by eBay should not ignoresmall-scale consumers who also frequently purchase single items(Hortaçsu& Nielsen, 2012).It is not advisable to charge minor consumers relatively hightransaction fees for single items, as this discourages them frompartaking in any online purchases, making them seek other onlinemarket zones.
Theneed for a company to expand means that it must expand its platformto accommodate more sellers and buyers. Therefore, eBay should devotemore funds towards establishing mobile applications. It is importantto establish a mobile application that can tell customers where theycan buy specific products, or help them to identify sellers withintheir locality. Therefore, this generates a social media concept thatmakes the process more personal, a strategy known as personal selling(Moran,2012).The concept of personal selling denotes a set of exercises aimed atthe achievement of marketing goals via establishing and preservingforthright buyer-seller relationships via personal interaction. It isalso vital for eBay, as a growing market platform, to give deliberateattention to developing countries. Various parts of developingcountries, such as Nigeria and Kenya, are already very conversantwith purchasing items on market platforms. Therefore, the improvementof internet services will aid eBay to achieve greater success.
Themarketplace`s true success came from the creation of a pricingrevolution through allowing customers to determine the amount theywould pay for items. Hence, eBay`s value pricing decision pleasedboth parties, by the creation of adequate margins for sellers andbest prices for customers. The value pricing has made eBay a guideplatform, whereby sellers and buyers confirm commodities` marketvalues. The marketplace has gradually adopted the fixed-price optionto accommodate immediate purchases. The initial pricing structure,developed to attract large-volume buyers and deter single-itembuyers, should now accommodate low-price and volume buyers sincethere is a deterioration of large-volume buyers. The idea is toencourage maximization of sales and profits because there is aninflux of low-volume buyers. The trend of online market platformsmight lead to eBay morphing into a replica of Amazon. However, thepersonalizing of sales, via the creation of direct platforms that cancreate a social connection between customers and sellers would be amajor leap towards eBay`s future success. The idea is achievable viameasures such as the introduction of mobile applications that candisplay a wide range of products and connect clients to physicallocations where they can obtain eBay products. Also, the expansion ofinternet services and subscriptions to developing countries isanother step in the right direction, since many of such countries arealready familiar with the idea of online trading.
Ennico,C. & Shebley, C. (2011). TheeBay marketing bible.New York, NY: American Management Association.
Hortaçsu,A. & Nielsen, E. (2012). Commentary—Do Bids Equal Values oneBay?. MarketingScience,29(6),994-997. http://dx.doi.org/10.1287/mksc.1100.0593
Melnik,M. Insertion Fees and Their Impact on Ebay. SSRNElectronic Journal.http://dx.doi.org/10.2139/ssrn.986823
Moran,N. (2012). Seeking the biotech eBay. Bioentrepreneur.http://dx.doi.org/10.1038/bioe.2012.1