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

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

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

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

implementation

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

Question 1

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”

Question 2

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

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

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?

Question 3

1. Reviews2. Price guarantees3. Videos4. Search Engine

Reviews

1. “Love the space this laptop bag gives, the pockets for organization are wonderful. Easy to carry and transport.“

2. "Nice backbag for basic organization and a book or two. Laptop sleeve is a bit tight and smaller than advertised.“

3. "Very nice purse, but a bit small.“4. "Buy it. This suitcase is a little work horse

and drives beautifully. It's compact, small, and after 5 flights look brand new. ”

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?

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

Question 4

Question 4

Question 4

Application Question 1

Draw a product attribute map for eBags.

Application Question 1

PRICE

QUALITY

SERVICE / PAYMENT SOLUTIONS

DECOR (WEBSITE)

USER-FRIENDLY

NR OF PRODUCTS

0

50

100

Application Question 2

Compare and contrast eBags and Zappos (the subject of Case 9.2).

Zappos Online shoe retailer Sales:

1990 $0 2005 $370 million 2008 $1 billion

Excellent customer service Human resource management

policies

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

Zappos Why do you think Zapposdoesn’t drop ship like eBags does?

Speed Different product Consumer service

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