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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. Group 1. Introduction.

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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 Group 1

  2. Introduction The main website, eBags.com, carries bags and accessories from more than 500 brands including Samsonite, JanSport, Kate Spade, Fossil, and Nike. eBags also operates both Handbags.com and the eBags Corporate Sales site and offers its own private label products under the name The eBags Brand. eBagsis an online retailer of handbags, luggage, backpacks, laptop bags, and accessories based in Greenwood Village, Colorado near Denver.

  3. History Five people founded eBags in the late spring of 1998: Jon Nordmark, Peter Cobb, Frank Steed, Andy Youngs, and Eliot Cobb.

  4. History • From summer 1999, eBags' starting experiencing rapid growth. Much of the early success of eBags can be attributed to three strategies: a drop ship model, customer reviews, and an outsourced call center. eBags drop-shipped most products direct from manufacturers to consumers.

  5. History • Following the website launch, three events caused cash to dip: the "dot com bomb" of 2000, the recession of 2001, and the terrorist attacks on September 11, 2001. September 11 specifically caused eBags' luggage sales to slow to 2% growth for the next six months. • In October 2004, eBags launched eBags.co.uk with the intent of expanding further into Europe at a later time. • By the end of 2008, eBags passed $100 million in annual gross orders. • Today eBags.com continues to sell bags from over 500 brands but now also offers accessories including jewelry, hats, scarves, and camping gear. As of 2013, they have sold 17 million bags and have over 2.5 million reviews on the website.

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

  7. EBAGS POSITIONING STRATEGY • Provide a wide selection of products from various brand. 36000 products from 520 brands, including all the major brand like Samsonite, Nike, North Face and Jan Sport • Offer the customer the ability to choose from all brand they like

  8. Customers can see products coming from all colors available. Take advantage of the unlimited space offered by the virtual world, compared to physical stores.

  9. Have deep selection of product in its most popular categories. For women handbags: there are 12000 handbags from 200 brands Serve the busy customers who don’t want to go from store to store to search for a bag.

  10. The website is clean and easy to navigate and make it convenient for customers to shop. Ex: If a shopper conduct a search for backpacks, he or she will be prompted to choose a brand or price range, then the site will display extensive products on the chosen category. • Help customers to shop for specialized items

  11. eBags positioning strategy is effective: - It has superior services compared to physical stores - Its website provide useful features which helps it differentiate from other online stores.

  12. Question 2 In a short paragraph, describe eBags’ brand. Comment on the strengths and/or weaknesses of the brand.

  13. As a category killer, ebags concentrates on only bags but offers a wide selection with lowest-price guarantees and a completely free return policy for their customers. In addition, customer loyalty is maintained through many initiatives and customer care programs.

  14. Strengths • Category killer • Reasonable price and free return policy • Satisfy customer needs • Good customer service • No inventory • Weaknesses • Lack of real shopping experience • Low profit margin

  15. What step has eBags taken to energize its customer? How has eBags turned it’s customers into advocates for eBags and the products it sells?

  16. E bags focus only on bags, which make the customer more convenient to search for bag related items, which means it doesn’t need to go to other sites to search for other bags. • The convenience of incorporating the sellers need and buyers need made E bags more energize to the customer. • Consumer like quick and easy step to buy products, which makes Ebags one of their choice.

  17. E bags doesn’t do intensive marketing, they mostly rely on word of mouth which is easier and none costly. • Ebags 4P’s focus on customer satisfaction and needs, which is to make customer satisfied. • Ebags conduct a lot of studies, to further improve customer satisfaction and needs, which turned customer into advocators.

  18. 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?

  19. Question 4 • Apart of core products (bags), they provide other accessories such as watch, hat…

  20. Question 4 Most of the product lines and items that a particular seller suggestions for sale

  21. Question 4 • Large number of different product lines • Large number of different versions of each product (Size, Favor, Color)

  22. Question 4 • Range of associated products that have larger sales revenue when marketed together than individually or in isolation from others

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