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Case 11.1. eBags: The 4Ps of a Successful Online Retailer

Case 11.1. eBags: The 4Ps of a Successful Online Retailer. Anthony Liisi. eBags. 1998 Jon Nordmark left Samsonite eBags: online retailer of bags Profitable Growing ~30% a year Marketing program: 4P-s. Question 1.

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Case 11.1. eBags: The 4Ps of a Successful Online Retailer

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  1. Case 11.1. eBags: The 4Ps of a Successful Online Retailer Anthony Liisi

  2. eBags • 1998 Jon Nordmark left Samsonite • eBags: online retailer of bags • Profitable • Growing ~30% a year • Marketing program: 4P-s

  3. Question 1 • Describe eBags’ positioning strategy. Do you think the strategy is effective? Why or why not?

  4. Question 1 • 4P – Product • Deep selection • More than 36 000 products • 520 brands • Colors

  5. Question 1 • 4P – Price • Lowest-price guarantees • Completely free return policy • Practices tested before implementation

  6. Question 1 • 4P – Promotion • Word of mouth, public relations • Easy-to-navigate website • Searching engine • Special catalogue • Press releases • Customer reviews

  7. Question 1

  8. Question 1 • 4P – Place • Same as Dell – but better • Drop shipping • Products directly to customers • No inventory • Box with eBags logo and name • “Category killer”

  9. Question 2 • In a short paragraph, describe eBags’ brand. Comment on the strenghts and/or weaknesses of that brand.

  10. Question 2 Strengths Weaknesses • Wide range of standard products (color, size) • Specialized in travelers’ needs (universal plug adapter, packing cube, scale grip) • Positioning as a middle-product (few competitors) • Brand’s recognition low • Brand weak against copycats

  11. Question 3 • What steps has eBags taken to energize its customers? How has eBags turned its customers into advocates for eBags and the products it sells?

  12. Question 3 • Reviews • Price guarantees • Videos • Search Engine

  13. Reviews • “Love the space this laptop bag gives, the pockets for organization are wonderful. Easy to carry and transport.“ • "Nice backbag for basic organization and a book or two. Laptop sleeve is a bit tight and smaller than advertised.“ • "Very nice purse, but a bit small.“ • "Buy it. This suitcase is a little work horse and drives beautifully. It's compact, small, and after 5 flights look brand new. ”

  14. Question 4 • What is the difference between eBags’ core product and its actual product? Describe its actual product and your assessment of whether the actual product provides an attractive or an unattractive mix of characteristics?

  15. Question 4 • Product mix: all the product lines and items that a particular seller offers for sale • Range of associated products that yields larger sales revenue when marketed together than individually or in isolation from others • Width: number of different product lines • Depth: number of different versions of each product (size, flavor, color) • Consistency: how closely related product lines are to one another

  16. Question 4

  17. Question 4

  18. Question 4

  19. Application Question 1 • Draw a product attribute map for eBags.

  20. Application Question 1

  21. Application Question 2 • Compare and contrast eBags and Zappos (the subject of Case 9.2).

  22. Zappos • Online shoe retailer • Sales: • 1990 $0 • 2005 $370 million • 2008 $1 billion • Excellent customer service • Human resource management policies

  23. #1 Online bag retailer since 1999 • 2.5 million customer reviews • 14.8 million bags shipped • 2.5/14.8 = 16.8%

  24. Zappos • Why do you think Zappos doesn’t drop ship like eBags does? • Speed • Different product • Consumer service

  25. What would eBags gain and what would it lose if it adopted Zappos’s approach to warehousing and distributing products? • Increasing Cost (warehouse, employees, inventory) • Increasing Profit margins • A real company culture

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