Case study: eHarmony Concepts of a case study: General to specifics. The economic, strategic and business logic of the industry. What are the choice, pros, cons, trade off. Intro eHarmony: online dating site for marriage-minded individuals. It combines extensive relationship questionnaire, patented matching system and guided communication. Information good of eHarmony: individual match. Match: eHarmony biggest competitor. I. Overall view of the industry | Size | Information flow | interaction | activities (work, random encounters) | 3 | 1 | 3 | brokers (family, friends) | 2 | 2 | 1 | market (parties, bar, club) | 1 | 3 | 2 | Interaction: how easy it is to get a relationship out of random encounters, …show more content…
Most important costs are advertising costs The profit depends on the market size. How many subscribers | Match | Yahoo | eHarmony | Revenue | $349 Million | $172.5 million | $ 190 million | Advertising | $145 Million | $ 17 million | $ 80 million | Profit | $204 Million | $155 million | $110 million | # subscribers | 1.3 Million | 900 000 | 600 000 | Profit/ Subscribers | $157 per year | $172 per year | $183 per year | Per month | $13.08 | $14.33 | $15.28 | Profits are not that great for such a differentiation strategy. Quantification shows that the business model is under severe threats. What next? 4 options: * Defending eHarmony’s position as the leading matchmaking company in long term relationship. * Broadening the customer base to include more casual dates * New business based on either eHarmony’s research and development efforts * Rapid geographic extension Two options: expansions geographic or with the development of new business area. Two options: addressing the core business, defending the market segmentation or broadening, moving away from the market segment. Defending the position and stopping rejecting customers contradict each other. If you stop rejecting customer you deviate from the original business model. If you stop rejecting your consumer, you cannot expand geographically because you wont believe in your business model. Particular focus is Chemistry. All the options
Increase the frequency of purchases by your customers. No matter how poor your current product or service, you must have some customers or clients. One key strategic dimension that you should be thinking about is how to augment and reposition your product in order to sell more to this group.
Concentrate on their current clients, broaden and deepen their relationship with them, while maintaining current offerings
As a consultant, I would apply major marketing strategies that would fit the new consumer segments and also serve the old consumers just the same. Both short and long term marketing strategies are equally needed for urgent and future decisions.
All market evidence should be linked to the customer, as opposed to competitors or the own product. A customer oriented management can keep a growing company
A firm wants to expand its marketing efforts. Which market segmentation criteria should be considered?
After identifying the sales targets, the strategies, tactics and actions to achieve them can be worked on. Gluck (2014), mentions that to identify underlying strategies and increase sales, a business can break into a new market segment by adapting an existing product or boosting the average sale per customer by using add-on sales or upselling premium features. When developing the sales strategies, the market segment, customers' motivations and expectations, and the capacity to meet customers' expectations should be considered.
keep an existing customer than finding new ones. A major part of the customer service, especially in a retailing
At eHarmony, the customer gets the chance to communicate with a potential partner after having paid for the communication process. The value provided in eHarmony’s business model concerns giving the paying member guided communication with a potential partner. The company ensures that they consider the preferences of the applicants before starting on the match-making process. According to Piskorski, Halaburda & Smith, the company considers the similarities among applicants in order to start the match-making process (6).
What driving forces do you see at work in this industry? Are they likely to impact the industry’s competitive structure favorably or unfavorably? (Did we answer this question?)
Every company and/or organization starts and operates to achieve a single major goal, which is normally included in the company’s mission statement. Setting a goal, however, does not translate into success on its own; it is only the fist step. Understanding market segmentation is the second most important aspect of doing business. “Sellers and advertisers want to be able to determine what the potential market is for their product or service, as well as the best ways to reach potential consumers” (Terrell, 2013). Once a goal is set, an organization first must decide if it wants to operate locally, regionally, nationally, and/or internationally, as the size of the geographic coverage has a large
and buyers. Entry into the industry would involve developing operations in either or both disciplines.
* 7 million people gone on dates with people they had met through online personals site, with 40% entering some type of long term relationship.
This process helps a firm or organisation in focusing its marketing effort towards a specific segment or a group of segments. Depending on the product, organisational goals, the size of the firm and the marketing resources available a firm may target only one ‘niche’ segment or alternatively focus on several related segments. Another method can be to start with one segment and add more when business grows successfully. Large companies often target all market segments and try to serve them by offering a large variety of products to suit all their needs, wants and demands.
General Issue: which segments should the company target? How should the company and its products be positioned?
Online Dating is defined as “the practice of searching for a romantic or sexual partner on the internet, typically via a dedicated website” (Oxford). In 2012, there were an estimated 1500 different dating websites in the United States and thousands more around the world. The most common dating websites are Match.com, Adultfriendfinder.com, christianmingle.com, Zoosk.com, and eHarmony.com. There are others depending on the user’s interests such as Cams.com is for those who like to communicate by camera, Gay.com is for those interested in other gay singles, Blacksingle.com is for those interested in other black singles and Seniorpeoplemeet.com is for the older person who is looking for that particular other in their age range. All dating