Marketing Plan.pdf

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York University
Administrative Studies
ADMS 2200
Richard Patterson

© Saving time for what matters 2.0 Table of Contents 1.0 Title page 2.0 Table of contents 1 3.0 Executive Summary 2 4.0 Company description and history 3 4.1 Business Background 3 4.2 ePay overview 3 5.0 Mission, Vision, Values and Goals 4 5.1 Mission 4 5.2 Vision 4 5.3 Values 4 5.4 Financial Goals 4 5.5 Non-financial Goals 5 6.0 Core competencies 6 7.0 Competitors in self-service market 7 8.0 Target Market 8 9.0 Marketing Mix 8 9.1 Product Strategy 8 9.2 ePay benefits 9 9.3 Distribution Strategy 9 9.4 Promotional Strategy 10 9.5 Pricing Strategy 12 10.0 Budget, schedule and monitoring 14 10.1 Budget 14 10.2 Schedule 15 10.3 Monitoring 16 11.0 Appendix A 17 11.1 Works Cited 17 1 © Saving time for what matters 3.0 Executive Summary Not enough time for holiday shopping? Frustrated that you have to wait in line for 20 minutes to pay for one item? Do you want to shop online to overcome these constraints, but worry that you can’t see and touch the product before you buy? What if retail shopping came with the convenience of being able to pay anywhere, anytime, at the touch of a button? Everyone looks for more time in their day and time spent waiting in line is not only draining, but takes away from a whole host of other things that individuals want to be doing. Time is a commodity that cannot be purchased – but if a business could save time for its clients, it would create a loyal and more satisfied customer base. ePay is the solution. This smart phone app combines the convenience of shopping in-store and online, allowing the customer to pay for their product instantly with their phone, saving time for what matters. ePay is a service brought to you by eBay, the well-recognized online auction company. As owners of Paypal, we are already a known and trusted name in secure payment options. By combining the technology of Paypal with already existing self-checkout systems, we have created an entirely new payment platform to fit the needs of demanding future shoppers. In the 2012 December holiday, retail sales declined 0.9%, while online sales rose 26%, both compared to the previous year. This shows that consumers are currently moving away from retail to online shopping and ePay helps by providing an opportunity for retailers to get consumers back into stores. The strength of ePay’s market lies in the fact that the usage of convenience-based technology is on the rise. In particular, our target market consists of technologically savvy users between the ages of 25-40 who are trendsetters and lead a busy lifestyle. These shoppers demand better and different experiences from stores they frequently shop. Our competitive advantage comes from our ability to bring the check-out process to the user, rather than bringing the user to the check-out, differentiating our service from traditional POS systems and self-checkouts. The ePay service is the only known transaction medium that allows a user to shop in-store and bypass the check-out lineup. eBay has the financial means to finance the start-up of ePay, having generated a revenue of over $14 billion in 2012. The charge for stores who wish to use the ePay service will be determined by the formula 300,000 + $200,000n + 0.015R, where n is the number of years the service is used, and R is the total revenue generated through ePay usage. The transaction surcharge is 1.5% of the total transaction, about half of what credit companies currently charge. This is a feasible cost for large stores 2 © Saving time for what matters that struggle with consumer traffic or wish to reduce their total labor and admin costs. The app is always free to the consumer, allowing them to try it at no cost and no risk. ePay’s goal is to help people get more out of their day by connecting them to their purchases faster. Additionally, we hope to impact society by saving people the time to allow them to lead more enriched lives. Moreover, we are contributing to the green initiative by providing a paperless payment a receipt storage platform, thereby reducing waste. We hope that by addressing these issues, we can generate a profitable service that will bring value to our shareholders and stakeholders. 4.0 Company Description and History 4.1 Business Background Pierre Omidya founded eBay in September 1995. The company was originally called AuctionWeb and was owned by the Echo Bay Technology Group. They tried to register the domain name but found it was already registered to Echo Bay Mines so the domain name was shortened to eBay is headquartered in San Jose, California and they provide online platforms, tools and services to help individuals and merchants in online and mobile commerce and payments in the United States and internationally. eBay is currently a multi-billion dollar business and it’s localized in over 30 countries worldwide. It’s payment segment known as Paypal, which they acquired in October 2002, offers payment and settlement services for consumers and merchants on and off eBay websites and other merchant websites. Paypal allows individuals and business to send and receive payments online and through mobile devices. Paypal is the leading online payment system for more than it has over 123 registered accounts and supports payments in 25 different currencies. It has been and continues to be the best in its industry because of its reliability, ease of use and its security. 4.2 ePay Overview ePay is the name of the new service that allows consumers to be able to go into stores partnered Paypal and make purchases by scanning the items directly through their smartphones. The process is very simple: consumers go into any of our affiliated stores and review products they want to purchase. They have the convenience of getting more information and help from the store clerks as well as being able to physically inspect and compare it with other products that may be similar. When the 3 © Saving time for what matters consumer is satisfied and is ready to pay, they can use the ePay app and pay for their purchase with through their Paypal account. Paypal has been proven to be fast, convenient, and safe. This reduces the lineup at regular cash registers and saves the consumer time for what really matters in their life. ePay can be viewed as a digital wallet on your phone – one convenient, secure spot to keep all your ways to pay. It gives every consumer the flexibility to choose the best payment method for them, allowing consumers to link their debit and or credit cards to their PayPal account. ePay provides an additional level of security for consumers because sellers and merchants never see any of the consumer’s sensitive financial details. ePay uses the industry’s most secure data encryption technologies and physically secure servers that aren’t connected directly to the Internet. A dedicated team of anti- fraud experts works around the clock to ensure the highest level of security. 5.0 Mission, Vision, Values and Goals 5.1 Mission To help people get more out of their day by connecting them to their purchases in a fast, secure way and all at the touch of a button. Skip the checkout and save time for what really matters. 5.2 Vision We are striving to help people live happier and less stressful lives by saving them time on their shopping. Our users discover that there is in fact, more time for friends and family; what really matters. 5.3 Core Values ePay is committed first and foremost to providing a safe and secure service to our users and their transactions. We are efficient, secure and simply convenient. We have a history of being reliable, dependable and safe and that continues to this day. 5.4 Financial Goals There are currently over 123 million active accounts on PayPal and 2.6 million of these active accounts are classified as top customers. These customers average 98 purchases a year through PayPal 1 and spend an annual average of $4,214. 2 Please see below for some of the highlights in the 2012 financials by PayPal 4 © Saving time for what matters 2012 FULL-YEAR FINANCIAL METRICS • PayPal’s 2012 annual revenue was $5.6 billion, up 26 percent year over year. • PayPal revenues represented 40 percent of eBay Inc. revenues in 2012. • PayPal’s net Total Payment Volume for 2012, the total value of transactions, was $145 billion, up 22 percent year over year. • PayPal’s Merchant Services business processed $97 billion in Total Payment Volume in 2012, up 25 percent year over year. • PayPal processed $14 billion in mobile payment volume in 2012 – more than 3 times the mobile payment volume of $4 billion it processed in 2011. PayPal expects to process $20 billion in mobile payment volume in 2013. PayPal’s mobile payment volume has been steadily increasing since 2011 and the company expects it to top out at 20 billion in 2013. We here at ePay are expecting about 5% of this number to be through our ePay system. This amounts to 1 billion and we believe in this because with so many of our clients already using PayPal regularly for most of their online purchases, the next natural step is move to payment through smartphones. Since our product is relatively new and our consumers will be unaware in the first few years, we’re targeting for about 5% of total PayPal sales with gradual increases as the app becomes more popular. Our long term goal is to account of about 40% of all PayPal sales within 5years. The ePay app is free for the consumer and we’re going to integrate it into our website and encourage our users to download and use the app. 5.5 Non-Financial Goals ePay’s non-financial goal is to partner with some of the top retail stores in North America. By the time we roll out the app, we would be partnered with Lowes, Ikea, Home Depot, Futureshop, Bestbuy as well as Walmart’s electronic department. We’re strategically targeting these stores because there are the leaders in terms of sales in their fields and also because we believe their products would work seamlessly with our ePay app. Most of the products these stores sell are bulky and as such is easier to scan and arrange pick up or delivery for the consumers. At this point in time, we would not be feasible to integrate this method of payment for products such as groceries and other small products that might need to weighed in order to find the price. Our goal for 2015 is to expand our network of partners and be affiliated with a lot more stores 5 © Saving time for what matters thus giving our users more options when it comes to where they want to shop. By this time, we would have a solid history of the product and as well as feedback from our customers and this will allow us to address customer concerns such as fixing any bugs with app and improving it’s functionability. By 2017, we hope to have perfected our app and be ready to roll the product out to our international users. More research and advancements will have to done at this point as we’ll be facing different issues if we’re trying to go international. Some of these issues will include integrating different currencies into our app as well as addressing the sheer volume of sales worldwide and making sure our servers and databases are able to handle the increased workload. 6.0 Core competencies Originally, eBay's core competency was their innovative idea to offer auction services online as well as the technology to do so. Today, eBay's core competency seems to be their brand name recognition and high website traffic. The large amount of traffic to eBay brings a large number of sellers and buyers together so that an extremely large array of common and rare products can be found for purchase. Not many organizations can reach the position at which eBay stands since very few have the marketing resources and well-known reputation to draw consumers. eBay holds a competitive advantage over other competitors in many aspects. Firstly, eBay’s costs to sell an item online are unbeatable compared to that of other smaller online trading/auctioning sites. eBay educates sellers in negotiating and finding the best price for selling an item in the marketplace, benefiting not only the seller and buyer, but the company as well. Secondly, eBay offers a wide variety of items, from electronics to furniture to automobiles, and allows for any buyer to be able to easily purchase and process safe transactions through their affiliated payment company, PayPal. The payment process is one of the most simple and secure online payment options available. Although eBay does not have a material product, their valuable intangible product is the low-cost advertisement ‘space:’ any person interested in selling an item can use for a reasonable fee to showcase their item(s) nationally or internationally. Last but not least, since eBay reaches millions of people on a daily basis, it is nearly the only online trading/auction website that most customers will look to nowadays. eBay is purely a web-based company, so the company can be accessed by anyone, anywhere in the world, making their services available to all their target customers. 6 © Saving time for what matters eBay’s latest innovation, called ePay impresses on the consumers the fact that it is simple, effective and convenient. ePay then uses near field communication (NFC) to make secure payments fast and convenient by simply scanning the item wished to be purchased, and purchasing it right then through the ePay app. This app is available to all consumers free of charge, through the app store and other virtual stores for android and blackberry users. ePay uses its unique design and advanced functionality to gain a competitive advantage in the retail industry. As a growing service, ePay has developed the following core competencies in providing a unique, innovative service like no other.  Completely new, innovative design providing the first-mover advantage  Advanced functionality including creative features  Easy to access through the dominant app store for all smartphones  Saves time by shortening the checkout process  Simplifies the checkout process to make it hassle free for consumers  Maintains strong relationships with retails partners for growth and expansion  Customer-oriented, making changes through submitted feedback 7.0 Competitors in the self-service systems market The sales in the self-service industry account for more than $24 billion a year. This industry includes self-service systems such as ATM’s, vending machines, and self-checkouts units, the latter accounting for $10 billion a year of revenue. This specific market does not experience major competition due to the fact that NCR controls 70% of the market, with Wincor and IMB holding only 10%, Fujitsu at 9% and other small competitors share the remaining 1%. The possibilities for ePay in this industry are profitable for many factors. First, the product is strategically poised between consumers who demand fast, easy and convenient check-out options, and businesses that intent on increasing revenues, building customer loyalty, reaching the contemporary consumer and lowering their cost of operations. Second, it is a different and innovative service unlike nothing in today’s market. While NCR is the major competitor in this market, it is a brand that is not easily recognizable by many shoppers. However, given that eBay has over 110 million unique users, it has made its brand more globally known by offering not only a platform on which to make business, but also by offering its own secure method of payment through PayPal. This will definitely give ePay an advantage in the market 7 © Saving time for what matters penetration strategy. Also, integrating ePay into any of the sponsored stores represents a lower cost than setting up multiple self-checkout units. This will take up sales floor space and increase maintenance fees, as well as require preparedness for updates and unpredictable damages, leading to poor customer service. Finally, ePay will also prove to be a strong competitor in terms of surcharge fees which offer a lower rate than those offered by the major credit card companies. 8.0 Target Market ePay’s target market strategy will focus on smart-phone users between the ages of 25 to 40, this specific segment of the population represent the highest Smartphone penetration rate. People in this age group also tend to be trendsetters and they also demand better and different experiences from the stores they shop frequently. The app is designed to put more buying power in the hands of the consumer while providing the business with a different w
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