The three online marketing and shopping platforms had almost similar problems which affected their marketing strategy. These three companies offered stiff competition to each other. Some of the common problems in the case study are;
EXTREME COMPETITION
The first thing, both a buyer, as well as a seller notice on eBay, StubHub and Swaptree is that there is no dearth of products and listings and people selling the same kind of product. While competition may work in favor of the buyer as he or she is able to get a discounted item; it certainly works against the sellers. Simply because some sellers are selling duplicate or inferior quality stuff which might look the same as you’re listing. Their bad quality product gets sold quickly owing to cheaper price while you have to wait for a wise buyer to see the difference between quality product and an inferior one without paying much attention to the price difference.
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DELAYS AND INCREASING E-BAY, STUBHUB AND SWAPTREE FEES
Another common problem is delay of shipping the sold products to the customers, some delay and in the end could not reach the buyer thus causing an alarm regarding the integrity of the 3 online platforms. There are fraudulent buyers and sellers in the markets but it is difficult to spot them and they often steal from clients.
RECOMMENDATIONS
On extreme competition in the three selling sites, the most important thing to do is to provide the best possible details, description and pictures in their product listings so that the buyers and sellers can clearly get to know the quality of the different products listed. The competition should be healthy; this can be achieved by the 3 sites moderating their prices on similar products avoiding loss of many clients thus giving customers much of a choice when buying or selling products. As far as price is concerned, they can differ in the fees charged when selling or buying; this will make the market flourish.
Regarding delays and higher fees applied on customers, the companies ought to deliver their products on time as agreed and make sure that both parties are satisfied in the transactions. They should have an efficient and reliable customer care help desk who can respond to any issues of delivery; this will discourage negative reviews welcoming positive reviews thus creating a good marketing strategy. Again, these selling sites should reduce their fees and make them constant or if possible communicate when they want to make changes on the fees. Customer satisfaction should be their priority.
The most appropriate recommendation or action to be pursued is to create trust and belief with the clients by moderating the competition. The extreme competition discourages many clients because they ought to buy fake or bad quality products due to the prices imposed on the products. Price is a major component of creating a competitive marketing strategy. To make a good market you need to analyze the prices of your competitors and come up with standard prices which will win you a market luring customers from your competitors. Continuously increasing the fees will cause dissatisfaction among many clients and they will boycott the platform.
The principle of pricing in marketing strategies supports the above recommendation by giving the benefits or power of good pricing because deploying your product and never changing it seems ludicrous, yet deploying your pricing and never changing it doesn’t. Changing prices should go hand in hand with improvement in the features or quality of the products and services, fear of changing your prices often is actually the fear of complaints. Grandfathering avoids a lot of this, as current customers are unaffected for a period of time, and new customers will know no different. Considering the price and fee policy is the best action recommended for this case.
CALCULATION
Pricing function and Net Income effect;
| Mc Kinsey AT Kearny |
|
Reducing fixed cost 2.7% 1.5% Increasing volume 3.7% 2.5% Reducing variable costs 7.3% 4.6% Increase price 11% 7.1% |
Nothing impacts your bottom line better than improving your pricing. Two independent studies by McKinsey & A.T. Kearney , both concluded that a 1% increase in pricing affects a company’s profits more than any other change. In short, of all the things you can spend time tweaking, pricing will yield the best return.
REFERENCES
Hinterhuber, A. (2008). Customer value‐based pricing strategies: why companies resist. Journal of Business Strategy, 29 (4), 41-50. doi:10.1108/02756660810887079
Donald, Robert J. making a market ; e-Bay, StubHub and Swaptree. ISBN13: 9781616744380
