Alibaba.com: Electronic Marketing Analyzing Websites - Term Paper Example

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E-Marketing Analyzing Websites Table of Contents PART Overview: The Company 4 Brief Overview: Alibaba.com 4 Situation Analysis (SWOT) 4 Segmentation Targeting Differentiation 5 Positioning Strategies 6 PART 2 - Benefit, Cost & Value Creation – The Marketing Mix 6 Creating a Positive Customer Experience 6 Benefit, Cost & Value creation 6 Internet Marketing Mix 6 Customer Relationship Management Features 7 PART 3 - Consumer Characteristics & Branding Strategy 8 Ethical and Legal Issues 8 Environmental, situational, and personal factors affecting users 8 STDP Strategies 8 Branding and consistency online/offline branding 8 Offline versus Online Customers 9 PART 4 - Evaluation of the Website 9 Navigation and Usability 9 Design Guides 9 Credibility 9 Readability of Text 10 Landing Pages 10 Part 5 - E-Business Model 10 E-Business Model 10 Customer Value 11 Revenue Stream Sources 11 Part 6 - E-Marketing Metrics 12 Site Objectives 12 Metrics 12 Part 7 - Conclusion and Outlook 12 Evaluation 12 Recommendation 13 PART 8 13 References 15 PART 1 - Overview: The Company Brief Overview: Alibaba.com Alibaba.com is an internet based business. The company was established in the year 1999 by Jack Ma. His aim was to make internet accessible, beneficial and trustworthy for every individual of the society (Alibaba, n.d.). The company is presently headquartered at Hangzhou, China. The primary business of the company is to facilitate online selling and buying from anywhere in the world. Also for the B2B segment it connects organizations with manufacturers and suppliers all over the world. It employs around 24,000 people and has operation in 70 countries of the world. The company claims that as of March 2012, it had 79 million registered online users who are spread across 240 countries of the world (Chinadaily, 2012). The business of the company is divided into three segments namely business-to-business (B2B) marketplace, international marketplace (www.alibaba.com) and the China marketplace (www.1688.com) (Makcdn, n.d.). In addition, the company also offer ‘AliExpress’ (www.aliexpress.com), which is a transaction and wholesale based platform. This platform caters to less quantity buyers, and those who want their product to be delivered early. The company also sells internet infrastructure services, business management software, export related services, and offers educational services to develop e-commerce and enterprise management professional. The major competitors of the company are eBay Inc., DHgate.com, Bikudo.com, Global Sources Ltd., and HC360.com among others (Crunchbase, 2012). Situation Analysis (SWOT) Strength The company has strong market position Balanced business Model Less exposure to international trade environment The company is earning more revenues from the value added services. Integration of e-commerce Weakness The company finds difficulty in to contradict the selling of forged products. Opportunities Robust growth of Chinese economy Opportunity to foray into the Indian market The company should continue to expand value added service offerings (Marketline, 2011). Threats The biggest threat of the company comes in the form of internet fraud. Problems related to litigation Intense competition Segmentation Targeting Differentiation Segmentation is a major part of marketing. It is about sub-dividing the heterogeneous market into groups of homogenous segments (Allen, Macy and Hutchison, 2009, p.21). Segmentation helps companies to effectively target the customers (Croft, 1994, p.1). Among the available forms of segmentation i.e. psychographic segmentation, geographic segmentation, and behavioural segmentation, alibaba.com segments its market on the basis of demographics. They offer wide range of products and services so that every age group, gender, and occupation gets satisfied. The company targets its customers through the help of its existing customers. It depends heavily on the word of mouth promotion. In addition, customers are also targeted by means of promoting products through popular media. Positioning Strategies Positioning strategy is about how a company positions itself in the minds of the consumers (Ries, 2003, p.3). Alibaba position itself as an online service provider and a company that provides platform where users can buys and sell products. It has been also able to generate trust in the minds of the consumers. PART 2 - Benefit, Cost & Value Creation – The Marketing Mix Creating a Positive Customer Experience The values of alibaba.com lie in six factors. The factors are customer, embrace change, integrity, and promote teamwork, respect and passion. The company believes that customer is the most important factor for a business and to get success in the marketplace. In order to create a positive customer experience the company offers customized services, and offers wide range of products and services. Moreover, the interface and easy payment options helps the company to offer better customer experience (Alibaba.com Limited: Annual Report, 2010). Benefit, Cost & Value creation Offering a positive customer experience allows the company to reap many benefits. The most important one comes in the form of repeat sales. Customers who get highly satisfied make a repeat purchase and even at times become a word of mouth promoter for the company. Regarding the cost, the company has to deal with semi variable cost and fixed cost. Due to the E-business model, alibaba.com rarely has any form of variable cost. The fixed cost of the company comprises of research & development cost, and operational cost. The semi variable cost includes the cost related with advertisements and distribution. Internet Marketing Mix The marketing mix of the company is presented below:- Product: - The products of the company are global trade platform, enterprise and financial management tools, Chinese language online marketplace, internet infrastructure, Application services, Online trading tools, and wholesale marketplace. Price: - This strategy is about pricing the products and services in such a way that it gets successful in influencing customers to buy products. The company keeps a margin for itself but the product prices depend on the sellers. Also for registration the company charges a nominal amount. Place: - Since the business is based on the online platform, the place strategy has less importance. However since the company buy and sell products, it needs to setup warehouses at different places so that it becomes capable of delivering products on time. Alibaba.com has several warehouses and strong logistics department by which they deliver products. Promotion: - Promotion is the biggest and the most important aspect for an online trading company. Without promotion people will hardly know about its presence. Nevertheless the company spends substantial amount in promoting its products. The promotion is done through online advertising such as advertising in popular websites such as Google, Facebook and Twitter among others. Customer Relationship Management Features The company greatly depends upon customer relationship management for its future sales. The primary way by which the company maintains relationship with the customers is by using customer relationship management software. In this context the company maintains a record of the existing customers and it offers them with special discounts and offers. In addition to its corporate division the company has relationship managers who are responsible for creating and maintaining relationship with the consumers. PART 3 - Consumer Characteristics & Branding Strategy Ethical and Legal Issues From the very day of its foundation, the company has been following the legal guidelines. This is the reason why we have never found any speculative or controversial news about alibab.com. Moreover the company is also ethical and its business model is fully transparent. However there was an issue raised against the company which was related with the selling of shark fin products. In order to tackle it, the company very soon prohibited the sale of shark fin products in any of its online platforms. Environmental, situational, and personal factors affecting users There are various environmental factors that may impact the users of alibaba.com. Some of the major factors are social, political, legal, technological etc. The situational and personal factors that can affect are the users are natural calamities, infrastructure problems such as slow internet connection etc (Park, 2007) STDP Strategies The STDP strategies stand for segmentation targeting differentiation and positioning strategies. The company used behavioural segmentation, and targets customers of every age. In addition regarding its other division it targets business clients. It differentiates itself on the basis of product availability. The company position itself as online service provider and a company that provides platform where users can buys and sell products (Frenchtechtourchina, 2012). Branding and consistency online/offline branding The company has low recognition of brand in the US market. Nevertheless to increase the brand value and brand recognition the company participates in different trade shows. In addition, the company focuses highly on the brand engagement. Alibaba.com also practices participatory marketing in order to enhance its brad consistency. Offline versus Online Customers Alibaba.com has both online as well as offline consumers. Services and products such as enterprise and financial management tools, and the customers buying business management software falls into the offline category. On the other hand customer such as suppliers, advertisers, and users falls in the category of online users. PART 4 - Evaluation of the Website Navigation and Usability Navigation and usability are the two most important features of a web page. The common usability factors of a website involve meeting the business objectives, offering greater user experience and ease of access. The company in this context offers better usability as it has not made the website over crowded. The preview option also offers users with a superior usability. The navigation feature is also designed well. From a single window a user can navigate into multiple web pages. For example from its home page the user can navigate to any of its product categories. Design Guides The website offered by the company is extremely light. It allows the users to browse it at fast speed. Even with slow internet connection users will be able to perform their activities. It can be also said that the website is elegantly designed. The advertisements are also placed in such as way which does not affect the user experience, rather helps in attracting new customers. Use of flash media in its home page allows the company to enhance visibility and user interaction (Alibaba, n.d.). Credibility Credibility is one of the vital parts to operate efficiently. In this context alibaba.com due to its presence in the market for more than 10 years has gained substantial credibility. In addition transparent business model, ethical approach, privacy maintenance of users and timely delivery of products offered high credibility to the company. Readability of Text The texts are well displayed and person can read the website content with ease. In order to make the context readable the company has used simple font and regular black colour. This has made the website look simple and professional. However to increase the text visibility, the designers of alibaba.com have used red and orange coloured fonts. For example, the price of some products is highlighted in red and its minimum order quantities are portrayed in orange. Landing Pages The landing pages are about the content of the website and its available micro sites. The content of the webpage of alibaba.com comprise of the product category or the product list, promotional offers, 3rd party advertisements and also promotes the company showcasing the business competencies with the help of flash media. Part 5 - E-Business Model E-Business Model E-business model is like any other business model, which illuminates how a company perform its activities. This also throws light on how the company provides products and services to the companies, how the company generates revenue, and how it adapts to the new technologies and new markets. In general an e-business model has four components that are e-business concepts, value proposition, revenue sources and activities, capabilities and resources of the organization (Prudens, 2008). In the earlier days the business model of alibaba.com was completely about information exchange through the online platform. After that the company introduced a platform which is transaction based. They called it 168.com and AliExpress. In this approach the company facilitated online selling and buying and selling through their website alibaba.com. The strategy was to offer quality service to the existing clients and focus less on the acquisition of new customers. However after 2010, the e-business model of the company was changed for maintaining a balance between non-exports related and export related business, balance between value added service, service expansion and membership sales (Economist, 2012). Customer Value Customer value can be defined as the difference between the value customers gets from buying the product or service to the value they are paying to get the product or service. A company always try to offer high value for its offerings as it satisfies the customers and offer more chances of repeat sales. Alibaba.com is highly focused on offering value to the customers. They do not sell wide range of products and services rather they make wide range of products and services available for the customers. Similarly, the company offers sellers to sell their products to a diversified group of consumers. The company provides value to both the parties by charging nominal transaction amount. Revenue Stream Sources For a company to operate effectively in the market place, money is the most important factor. There are several costs associated with the operation of a company. It includes manufacturing cost, promotion cost, distribution cost, and overhead cost among others. Therefore it is important to manage the revenue sources properly so that substantial amount of revenue is generated from those sources. Some of the sources of revenue for alibaba.com are income from suppliers, income from the buyers, and income from the online advertisement. In general users can browse the available products and service without any charge, but if they want to avail it, customers at firs need to register and pay some registration fees. Hence the company also earns from the registered members (Customshq, 2010). Part 6 - E-Marketing Metrics Site Objectives The primary objective of the website is to facilitate online transaction of goods and services. The broader objectives of the company are detailed below: - To connect business ventures with the suppliers and manufacturers all over the world. This is to make the business transaction simpler. Through the website the company promote its business to a large extent. The website acts as a platform or a marketplace where buyers and sellers meet to carry out transaction. The primary objective of the website is to generate revenue for the company. Metrics Web metric provide information regarding the total number of sale, quantity and duration of site visit, geographic information of the user etc. The company can use balanced scorecard method and KPI management to record and maintain its performance. Balanced scorecard is an executive corporate and control method that foster companies to develop competent methods. It is also considered as a superior measurement system. On the other hand KPI management will allow the company to measure its performance through some indicators. It is also known as ‘effectiveness measurement indicators’. In addition it reveals significant company activities that help in achieving strategic goals (Bscdesigner, n.d.). Part 7 - Conclusion and Outlook Evaluation The study was about the evaluation of alibaba.com. The company has been thoroughly analysed and several of its aspects are examined. The factors that were taken into consideration were the internal environment of the company, its strengths, how the company segments its market and position itself in the minds of the consumers. In addition other factors such as the cost associated with the company and how it earns revenue were also taken into account. Finally, the online platform through which the company operates was also analyzed from its technical aspect. On carrying out the study it can be sated that alibaba.com has a sound business model. The company earns revenue from multiple sources that helps them to operate efficiently. Alibaba.com is also focused on offering high value and satisfaction to the customers. An elegantly designed interface and the ability to run using low resources makes the website user friendly and offers great customer experience. Hence from an overall viewpoint it can be concluded that the company enjoys a strong position in the market and operates effectively. Recommendation Despite of its strong market position, the company still has the opportunity to embrace development. Some of the suggestions are presented below:- In order to drive more traffic towards itself, alibaba.com must use the strategy of pay per click and search engine optimization. This will also increase the visibility of the company to a large extent. The interface of the website can be improved further. It can be made more user-friendly and can be given an engaging look. Therefore despite slow internet connection, users will be able to browse through it. Analysis of the web metric can be considered. Web metric analysis portrays information such as total number of sale, number and duration of site visit, geographic information of the user etc. Therefore if the company knows these facts, it can adjust the business and marketing strategies accordingly. PART 8 The study has helped to learn a number of things. The most important one is that the study revealed how an engaging interface of a website is important to drive customer towards itself. In addition, this study has also helped me identify the sources from where an online business generates revenue. Apart from that the business model of alibaba.com along with its products and services were also uncovered. Through this study I have been able to understand the importance of search engine optimization and how elements of a web page such as its text readability, resource consumption, landing pages and credibility play crucial roles in gaining market share. References Alibaba, No Date. Company Overview. [online] Available at: [Accessed 01 December 2012]. Alibaba, No Date. Welcome to Alibaba.com. [online] Available at: [Accessed 01 December 2012]. Alibaba.com Limited: Annual Report, 2010. Corporate Governance Report. [pdf] Available at: [Accessed 01 December 2012]. Allen, P., Macy, A., and Hutchison, T. W., 2009. Record Label Marketing. Massachusetts: Focal Press Bscdesigner, No Date. What is a KPI-based management and Balanced Scorecard Concept? [online] Available at: [Accessed 01 December 2012]. Chinadaily, 2012. About Alibaba. [online] Available at: [Accessed 01 December 2012]. Croft, M. J., 1994. Market Segmentation: A Step-By-Step Guide to Profitable New Business. London: Routledge. Crunchbase, 2012. Alibaba. [online] Available at: [Accessed 01 December 2012]. Customshq, 2010. How does Alibaba.com make money? [online] Available at: [Accessed 01 December 2012]. Economist, 2012. So long, for now why the Chinese web portal is giving up its stock market listing. [online] Available at: [Accessed 01 December 2012]. Frenchtechtourchina, 2012. Chinese Partners: Alibaba Group. [online] Available at: [Accessed 01 December 2012]. Makcdn, No Date. Alibaba.com: Company Introduction. [online] Available at: [Accessed 01 December 2012]. Marketline, 2011. Company Profile: Alibaba.com Limited. [pdf] Available at: [Accessed 01 December 2012]. Park , H., 2007. The Impact of Environmental Factors on Business Strategies in Selected Major U.S. Apparel Manufacturing Companies 1970-2005. [pdf] Available at: [Accessed 01 December 2012]. Prudens, 2008. The E-Business Model. [online] Available at: [Accessed 01 December 2012]. Ries, T., 2003. Positioning: The Battle for Your Mind. New York: McGraw-Hill Education. Read More