Sample Marketing Essay Paper on Target Marketing

Target Marketing

EBay is the largest online retailer started in 1995 as a marketplace for buyers and sellers to meet and do online auctions. Since its conception, the company has grown into one of the largest in the world with a market capitalization of $23.96 billion and coming in at number 52 on the Forbes World Most Valuable Companies list. With a listing of over 800 times at any particular time, the company needs to segment its customers in order to be able to address their needs satisfactorily (Team). This paper looks at two customer segments at eBay as well as their characteristics and challenges.

EBay was originally created as a platform for selling and creating collectibles and antiques on an auction basis. EBay’s first segment of customers are thus people who purchase items on an auction basis. The set of customers in this segment demand unique and hard-to find items or items whose price is undetermined. They are also patient and willing to wait for the bidding process to complete. This segment has declined in recent years with the popularity of fixed listings but still remains pivotal to eBay business.

The second segment of customers on eBay are those who like purchasing products that have a fixed price. This segment makes up for 79% of sales and occupies the largest space on the platform. Most of the times listed on the eBay platform have a fixed price. The segment is then divided into subcategories based on the frequency of use and the amount of products being bought. The customers in this category have a similarity in that they already know the price they want to pay for the product they are purchasing. These customers are also young and want to save on time spent shopping. They are likely to want same-day pick-ups if possible and like avoiding shipping costs.

The pros of auction listings are numerous and include the fact that it takes a relatively shorter time to sell an item on auction. Additionally, it enables sellers to scale up the price when the item they are offering is hard to find. It is also beneficial to sellers who do not know the price of their products, thus allowing the market to dictate the price. One of the cons of auction customers is that some of them are dead-beat bidders who purchase items or agree to purchase items then disappear without paying for items, causing headaches, fees, and delays for the seller. Additionally, many customers are not accustomed to auction sales which makes this platform tedious or uncomfortable, with disagreements being frequent (Gordon).

The benefits of fixed-price listings is that they eliminate dead-beat bidders by requiring immediate payment for items. Most products will only be taken off the sales shelf after the customer has made payment for them. Another pro of fixed-price listings is that they offer higher returns than auction goods and are also more predictable (Miller). This segmentation, however, has its drawbacks such as fixed-price listings running longer than auctions at times. They cannot also be utilized when the sellers or buyers are unaware of the price of the product. These listings are also offered at a premium which means that customers pay more for them.

In conclusion, both ways of segmenting customers have their benefits and cons. The popularity of the fixed-price platform, however, has led eBay to emphasize more on fixed listings which not only bring in more revenue but reduce disagreements and confusion. That said, the decision to do auction or fixed-price listing largely depends on the product being sold. For products with close substitutes or that are readily available, fixed-price listings is the best platform, while for unique or hard-to-find items auction listings are the best platform.

Works Cited

Gordon, Whitson. Sometimes, It’s Better to Ignore Auctions when Selling on eBay. 14 August 2013. Document. 16 June 2016.

Miller, Michael. Selling Via eBay Auctions or Fixed-Price Sales: Which Is Best for You? 21 February 2011. Document. 16 June 2016.

Team, Trefis. Key Challenges Besetting eBay’s Marketplaces Segment. 4 June 2015. Document. 16 June 2016.