1. EBAY
Development of Strategic
marketing Plan
eBay
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[Pick the date]
ThisDocumentincludestwotasksaboutthe Strategicmarketingplanof eBaywhile AcquiringSkype for
strategicreasons

2. 1
Contents
TASK 01..............................................................................................................................................2
Role of Strategic marketingin an organization..................................................................................2
Process involve in strategic marketing..............................................................................................4
Strategic Marketing and corporate Strategy .....................................................................................6
TASK 02..............................................................................................................................................7
Value of models used in strategic marketing planning.......................................................................7
Porter’s five forces ......................................................................................................................9
PEST Analysis..............................................................................................................................9
Customer Value Maps..................................................................................................................9
Key Success Factors...................................................................................................................10
Competitive advantage matrix ...................................................................................................10
Ansoff Growth matrix................................................................................................................10
SWOT analysis...........................................................................................................................11
Strategic positioning and marketing tactics ....................................................................................11
Merits of Relationship marketing...................................................................................................12
Bibliography.....................................................................................................................................13

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TASK 01
Role of Strategic marketing in an organization
Nearly a century ago, marketing scholars began defining the term marketing and today the
debate continues. Despite the simplicity of question, the answer is complex and various authors
have tried defining their own meaning.
The term ‘Marketing’ in different eras have been differently used by marketing people and
experts! Kotler Defines marketing as:
“Analyzing,organizing, planningand controllingof the firmscustomer-impingingresources,policies
and activitieswith a viewto satisfy the needsand wants ofchosen customersgroups at profit”
However, the American marketing association (2007) explains marketing is the activity, set of
institutions and processes for creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners and society at large.
CIMA-UK (1992) as a management process responsible for identifying, anticipating and
satisfying customer requirements profitably.
Kotler again in (1972) defines Marketing is a science and art of exploring, creating, and
delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled
needs and desires. It defines measures and quantifies the size of the identified market and the
profit potential. It pinpoints which segments the company is capable of serving best and it
designs and promotes the appropriate products and services. (Kotler P, 1967)
Hunt (1976) illustrates that the conceptual domain of marketing includes micro and macro
marketing, positive and normative theories of marketing, and profit and not-for-profit marketing.
Grewal and Levy (2008) defines marketing as an organizational function and a set of processes
for creating, capturing, communicating and delivering value to customers and for managing
customer relationships in ways that benefit and the organization and its stakeholders.

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Lamb, Hair McDaniel (2004) explains marketing as the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create exchanges
that satisfy individual and organizational goals.
Marketing is a process by which companies create value for customers and build strong customer
relationships, in order to capture value from customers in return (Wikipedia.com)
An aggregate of functions involved in moving goods from producer to consumer.
(www.webster.com)
So the difference in opinions of experts, authors, business men and other professionals have led
to produce a revolutionary improvement in the field of marketing. The widely used definition of
marketing (The CIMA-UK definition above borrowed from Kotler) has remained unchanged for
the last 30 years and does not do justice to the important role of strategic marketing in modern
businesses.
The most popular definition of marketing would inculcate social and other relevant factors to the
strategic marketing in the 21st century. Since the world has rapidly changed and businesses have
modified and much improved so as the marketing tools do. A business having large number of
clients must have differently marketed than a business having little number of clients. Because
marketing is highly dependent on how to satisfy customers need through market offerings that
may result in value optimization for company.
The importance of strategic marketing has acknowledged by organizations and marketing
practices have been adopted by a significant proportion of producers, wholesalers, retailers and
nonprofit organizations over the last 40 years respectively. This further reinforces the importance
of strategic marketing in today’s businesses. Instead of focusing only on production and selling
activities it has now become must for organizations to focus on customers and try to integrate
organization wide efforts to satisfy customer’s needs. There is no doubt that businesses have
evolved much and they are supposed to be operated in a highly complex and competitive
environment. So the marketing practices have become the oxygen for the survival of companies
in such environment. Moreover, a firm is always in a process of looking forward to have
competitive advantage, profitability and market share optimization and the firm’s value. This all

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is only possible when the strategic marketing is being practiced radically. (Wilson R and Gilligan
C, 2011)
eBay has got an enormous growth in the electronic business industry over the years. The
company is always looking to expand its operations and to make wise investments. It must be
noted that eBay has purchased PayPal service earlier in this decade.
Process involve in strategic marketing
Strategic marketing is a planning process that seeks to establish a clear direction and unified
purpose of all marketing efforts. Its conclusions are documented in a marketing plan that is
regularly updated. Strategic marketing process involves five steps:
 Identifying a mission
 Analyzing the situation
 Setting objectives
 Developing a marketing strategy
 And planning for evaluation
The first step in strategic marketing process of eBay is to articulate the reason why the enterprise
exist and how it can benefit target customers in the long term. Since the eBay is the most ruling
E-business enterprise in the united states and has a giant market place of more than 100 million
people at a particular time. Undoubtedly the market is highly uncertain and involves high and
stiff competition so the existence of firm is to be questioned if not properly operated via business
decisions.
The decision to acquire Skype with the massive bid is of course of the reason to support the
vision of eBay that induces future benefits to the intended users and a repulsive plan to the
competitors. Moreover, the Skype is already having a massive market with latest technology i-e.
Voice over internet protocol service (VoIP). The consumers in the United States and UK are
getting more internet savvy so the addition to the eBay with this technological advancement
would certainly give an edge to the competitors and this is how it can ensure the existence.

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Organizations regularly conduct situation analysis to evaluate and prioritize their strengths,
weakness opportunities and threats. This step in strategic marketing process helps Strategic
managers to understand the resource they can build on and challenges they face.
In the view of the Skype’s bidding by eBay, there are so many advantages to the eBay with this
acquisition. The strengths shown by eBay are enormous of course as it is the most leading
business in United States in terms of profitability and market share. The addition in the enterprise
would certainly add more value to the firm and the customers as well. Since, many of the experts
referred in the case have negated the decision of acquiring Skype because of the many reasons.
But the opportunity eBay is going to trap is undoubtedly remarkable.
As the businesses need more simplicities to have an easy doing business. By acquiring Skype, it
will enable the users to negotiate properly. As the UK broad band market is declining so the
users associated with the broad band are likely to shift towards (VoIP) technology for availing
the cheap call rates and quality service. So the additional is overall a good move for having the
future opportunities for the company.
On the other hand, there are negative points with this decision as well such as, heavy cost of
investment, eBay majorly operates in US, competition is high and etc.
The third step in strategic marketing is to set marketing objectives. These are clear measureable
goals that give decision makers for making choices and assessing progress.
The strategic marketing objectives of eBay are clear, as these acquisitions will add more value to
the company in terms of profitability and value optimization for business. Skype already have a
massive market share in Telecom industry. Skype carries VoIP technology which is a new
innovation to the entire industry. According to experts, VoIP telephony revenues are set to nearly
double to almost $8 bn over the next few years.
In addition, eBay’s revenue is mostly from the third parties and advertising agencies. Skype in
addition will do some good job in having more from the third parties. Since, the telecom sector
in UK has been tremendously improving over the years so it is also expected that the acquisitions
will further help more to gain much of new customers to the group. From a survey by
International data group it is predicted that up to 11% UK broad band users will have joined

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VoIP by 2007 which is really a positive sign for market share optimization of eBay. The
prospective benefits arising out of this acquisition are indeed significant and sufficient to admit
the purposefulness of this decision.
The fourth step in Strategic marketing is strategy development. This involves selecting a target
market, a distinct group of consumers who are likely to buy the firm’s products. Since eBay has
got a massive consumer market in United States and all over the world of an internet customers
of more than 100 million on a particular spot to have a business with the site. With the addition
of skype in to group, eBay is of course looking into penetrating in to the UK’s market as eBay’s
major operations are from United States. The Objective to expand business, enhance market
share, expend range of target customers and so on are legitimately enough to make a strategic
development for eBay.
The final step would be the evaluation as it involves the tactics to monitor and asses the
marketing strategies over the period of time. (Chernev A, 2009)
Strategic Marketing and corporate Strategy
Corporate strategies and marketing strategies often overlap each other because a major focus of
marketing includes the strategic planning aspects of developing, pricing and distributing a
product. The two diverge when corporate strategy has less to do with product or service
development and sales and more to do with profitability initiatives. (Sam Ashe-Edmunds)
Strategy refers to planning and goal setting to reach long term objectives as opposed to tactics
which refers to the execution of strategies. Corporate strategy primary focus on profitability it
includes: creating an organizational structure, debt reduction to improve the company’s balance
sheet, diversifying the product line to increase product and reduce product failure risk. So the
corporate Strategy of eBay is lucid as it aims to get financial and value chain benefits from
Skype’s acquisition. The fact is Skype has to add enormous amount of market share to the eBay
after acquisition. As it has a potential market for telecom users in United Kingdom. And inspire
the broadband users to the VoIP technology significantly. Thus this acquisition will enable eBay
to acquire and expand its existing market share and profitability to the next level.

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Marketing strategies on the other hand refer to plans that involve making or selling a product.
They revolve around the marketing mix, also known as the ‘Four P’s’ of product, price, place
and promotion. Marketing strategies include: creating a product with a unique selling benefit,
targeting a particular consumers demographic,, setting prices based on profit and brand
management needs, selling in places and using channels that maximize profits without damaging
the brand and using advertising, promotions, social media and public relations activities that
support company’s message.
Since, the eBay is targeting the UK’s market to acquire Skype users with the decision. This
decision has of course a bilateral effect to the company’s revenues, image and overall objectivity.
As it enables eBay to acquire sufficient market share in the retail industry, telecom and
advertising agency respectively to the prospective benefits from this decision are accountably
strong. (Johns Wiley & Sons, 2008)
TASK 02
Value of models used in strategic marketing planning
Strategic planning involves significant internal and external impacts on overall objectivity of an
organization and mapping out an approach to adhere those potential impacts. From a marketing
point of view strategies are followed up by customer needs, competitive factors and
resourcefulness of organization. There are numerous tools and models that are used in
developing and implementing ways to ensure that the strategies are developed appropriately such
that plans can be effectively put in to action.
Since, marketing is an effective part and parcel of business operations and they are supposed to
be carried out in absolute due care and accuracy. The outcomes of business are highly dependent
on effectiveness of marketing planning and drafting business strategies. Marketing plans having
all assured objectivity and affirmation to the course of business activities are devised taking care
of all relevant internal and external potential factors that determine the value optimization for

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business. Hence, marketing plans are a series of continuous efforts by the strategists to create a
wider market position for the offerings it carries.
In the meantime, planning is a sophisticated and vital part of business execution so the plans
need to be made in much care and assiduousness. The entire marketing plans are devised in
accordance with the need of consumer market with respect to the product and service (market
offerings) in such a way that they ensure value optimization for business. So, various valuable
tactics, tools and models are therefore used in strategic marketing based on their usefulness and
impartiality.
The following are the reasons as why the strategic planning models and tactics are so useful in
devising marketing plans: (McDonald M – Malcolm McDonald on Marketing Planning, 2007)
 Strategic models provide a common focus point for discussion. This helps strategists to
have a clear idea about the strategy and allow them to plan best for the organization
considering all relevant factors with in a lesser time and resources. In addition, it can be
much easy to evaluate, change and modify strategy at a given time due to any reason.
 Strategic models provide a common reference point. One can see a set of conditions and a
particular symptom to relate back to the strategy model to understand, evaluate, monitor
and control the reflection of any particular strategy at a particular moment. This enables
strategists to be proactive and stay alert to changing and uncertain business environment
so that necessary changes can be made at any time of need.
 Strategic models and tools create an ease for strategy maker to devise and implement a
particular plan in to business.
 These tools and tactics give a clear insight about business and its key factors to
incorporate in to a particular plan that later helps the decision makers not to regret much
about the initial plan and this enable strategists to save time and cost for the organization.
 Since, customer needs and wants and their taste for a particular product depend variably
on to the factors and are highly changing due to changing environment and market
competition. The strategic models thus help strategy makers to plan well for the
organization as to optimize maximum benefits out of planning.
Following are the Models that are useful in strategic marketing planning for eBay:

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Porter’sfiveforces
This is perhaps the most famous and effective model for strategic marketing planning of eBay as
the case in which eBay is looking to acquire Skype despite all negativity shown by the industry
experts.
Since, the industry in which eBay is going to invest for latest telecom technology for some
strategic reasons is highly competitive so porter’s five forces model would enable eBay to have a
clear insight about the market, competitors and market participants before such acquisition. This
will also enable the key strategists to plan well for the marketing of a new business unit once
acquired.
PEST Analysis
For wider environment scanning and for understanding how the five forces may change in the
future, the version of PEST analysis tool is very useful. For any strategy or a plan it become
very necessary to understand the business environment as the ultimate consequence of every
strategy is to be put on the environment. PEST analysis would enable eBay to encounter all
Political, Environmental, Social and Technological factors and aspects to the business before
inception of any strategic decision.
CustomerValueMaps
Strategy as positioning becomes much clear if eBay maps out the relationship between perceived
customer value and price. Such mapping is very useful when eBay is going to evaluate to
associated benefits from Skype if it goes on acquiring it. The market share of eBay is going to be
enhanced considerably once acquisition is made. This is due to the Skype’s own market share in
UK.
As eBay is willing to be known among UK and all over the world, so the Strategic marketing
planning of eBay in this regard is highly dependent on customer value map so that the managers
at eBay could affectivity be calculated the financial and other benefits arising out of this
acquisition. Thus the entire decision depends upon the prospective outcomes the acquisition
promise to eBay.

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Key SuccessFactors
One of the most important parts of business strategy is to work on with the key success factors.
Critical success factors basically give strategists the focus to devise relevant and appropriate
plans as to maximize the value of firm.
There are numerous key success factors one must reflect from eBay’s position in the market. As
eBay is one of the largest online retail center which owns are reasonably high market share
which allows them to earn much not only from ecommerce but also from third party
advertisement. The inclusions of Skype to eBay group will so many quantitative and qualitative
benefits that are supposed to be the critical success factors for eBay in the long run.
Competitiveadvantagematrix
The strategic marketing planning of eBay must ensure that the firm after acquisition will not lose
competitive advantage at any cost. As the market is highly competitive and the chances of failure
must be properly addressed in marketing plans to counter the adversity at any point of time.
AnsoffGrowthmatrix
Since the strategic marketing planning for eBay undergo an unusual change for the strategy
makers. The eBay acquires Skype for having more market share and high profits. This will result
in an enormous change in the market capitalization of eBay’s existing business. So, a matrix is
hereby needed to be used to monitor the consequences of such acquisition. The given strategic
planning model is a 2*2 matrix looking at existing and new customers and existing and new
products to map out a way to grow the business. Thus, eBay is indeed looking for a significant
growth in terms of profitability and market capitalization. Therefore, the matrix is required to be
used while making strategic marketing plans prospectively.

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SWOT analysis
A strategic tool, which can be used to identify an internal potential with respect to the external
environment so as to make business decisions effectively and efficiently. Since, eBay is going
through with acquisition of Skype for expanding its business and value optimization through
product diversification and business integration. The usefulness of decision would be calculated
through a strategic model i-e. SWOT, so that controllable factors could be controlled and
uncontrollable factors could be avoided in the best interest of eBay.
These and so many other strategic models that are used to measure the operating capability of
any firm as to plan and execute strategies in such a way that produces favorable results.
Moreover, eBay is making a huge investment regardless of the consequence but the relative
assertiveness of the decision is significant for a long run.
Strategic positioning and marketing tactics
Strategicpositioningisacentral marketingstrategywhere youuse varioustypesof promotionsto
conveythe message of yourmarketofferingsinsucha waythat the image of brand incustomersmind
as compare to competitorsisrelativelybettertoconvince customersforexchangeof value.
Market positioningisdone withthe helpof varioustoolsandmediums.Suchas,social media,
promotions,targetmarketing,nichemarketingtechniques,mediaselectionandetc.
Once the strategicpositioningprocesscompletesthenthe marketingtacticsare usedto marketthe
offeringsinthe marketplace tohave an exchange of value.The strategicpositioningof eBayis
undoubtedlyhighastocapture a potential telecommarketinUKas well fromSkype investment.This
will regardeBaywill highmarketshare acrossUK and otherparts of the world.
On the otherhand,marketingtacticsof businessneedtobe developedaccordingtooverall strategic
positionof the brand.Thisishow we use the marketingmatrix toelaborate the situation.Itincludes:
product,price,promotionandplace. Once a product ispositionedinthe market,then marketdecides

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for the price of the product,the price that customerswillingtopaycan be improvedthrough
promotionsandthiswaymarketingmatrix playsitrole.
However,eBayisoperatinginahighlycompetitive marketbutthe potential prospectiveadvantages
associatedwithSkype are enoughtoensure the objectivenessof the businesscombinationdecision.The
target marketforeBay’sproductsand fromthe third partyoperationsare now widerandare expected
to generate significantrevenuefromthe existingmarketplace of Skype throughmarketingmix.The
place where eBaytargetslike consumerindustryinUSwhere ithas a higherbusinessshare isnow
movingtocapture UK consumersviaSkype.The competitorrivalryinUKforeBay will definitelygivea
toughtime to have a distinctive positioninthe marketplace.Butthe strengthsmake sure all to
overcome everyfinancial andnon-financial hurdle. (PiercyN FandNicoulaudB, 2008)
Merits of Relationship marketing
In case of eBay, for example there is a clear link between strategic positioning and marketing
tactics utilized in a way that the later supports the former. The manner in which marketing mix is
dealt by eBay is fully in line with strategic positioning of its brand and offerings. Strategic
position of eBay relates to achieving market leadership in consumers retail industry in terms of
size and service range through innovation and quality service. Thus Skype in addition would add
a great deal of value to it. As marketing tactics selected by eBay such as investment on
acquisition of Skype to capture UK’s market with its existing cluster of consumers, are closely
linked with the positioning.
The merits of relationship marketing for eBay are immense. An effective utilization of
relationship marketing would allow eBay to increase the market share, customer’s loyalty,
customer’s attractiveness, positioning, customer retention, growth in sales revenue, enhancement
in third party advertisement and much more. This will also help eBay to have valuable feedback
from customers as to improve service as per customer’s demand and intentions. This will
valuably add a leading touch to eBay over competitors and I am hopeful this acquisition will
have a rigorous growth effect into eBay’s business.

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strategy. Kogan.
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Sam Ashe-Edmunds.(n.d.).Corporate StrategyVs.Marketing Strategy. Demand media.
Wikipedia.com.(n.d.).
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