Page 435 - Marketing Management

412 PART 5 SHAPING THE MARKET OFFERINGS

communication service in 2005, which allowed buyers have helped take the company to the top of such lists
and sellers to communicate over voice or video free and such as Newsweek’s Greenest Companies in America
generated additional ad revenue for eBay. However, in and Fortunes 100 Best Companies to Work For in back-
2009 eBay sold a majority stake in Skype to focus more to-back years.
on its e-commerce and payments businesses, leading
the company to acquire Shopping.com, StubHub, Bill Questions
Me Later, and others. eBay now has a presence in 39 1. Why has eBay succeeded as an online auction mar-
markets around the world. ketplace while so many others have failed?
Although eBay was a darling in the dot-com boom
2. Evaluate eBay’s fee structure. Is it optimal or could it
and has achieved tremendous success since then, it is
be improved? Why? How?
not without challenges. These include a worldwide re-
cession, increased competition from Google, and diffi- 3. What’s next for eBay? How does it continue to grow
culties as it expands globally into tough markets such as when it needs both buyers and sellers? Where will
China. Its CEO, Meg Whitman, retired in 2008 after lead- this growth come from?
ing the company for 10 years and was replaced by John
Sources: Douglas MacMillan, “Can eBay Get Its Tech Savvy Back?” BusinessWeek, June 22, 2009,
Donahue. Under its new leadership, the company con-
pp. 48–49; Cattherine Holahan, “eBay’s New Tough Love CEO,” BusinessWeek, February 4, 2008,
tinues to focus on one of its founding beliefs: a strong pp. 58–59; Adam Lashinsky, “Building eBay 2.0,” Fortune, October 16, 2006, pp. 161–64;
commitment to and investment in technologies that help Matthew Creamer, “A Million Marketers,” Advertising Age, June 26, 2006, pp. 1, 71; Clive
Thompson, “eBay Heads East,” Fast Company (July–August 2006): 87–89; Glen L. Urban, “The
people connect. Recent efforts to adopt mobile applica-
Emerging Era of Customer Advocacy,” MIT Sloan Management Review (Winter 2004): 77–82;
tions, integrate with iPhones, and become more green www.ebay.com.

Marketing Excellence communication efforts, Southwest uses humor to poke
fun at itself and convey its warm, friendly personality. One
TV spot showed a small bag of peanuts with the words,
>>Southwest Airlines “This is what our meals look like at Southwest Airlines. . . .

It’s also what our fares look like.” Its ongoing “Wanna Get
Away?” campaign uses embarrassing situations to hit a
funny bone with consumers. And its tagline: “Ding! You
are now free to move around the country” is a self-parody
of its in-flight announcements. This lighthearted attitude
carries over to the entertaining on-board announcements,
crews that burst into song in the terminal, and several
personalized aircrafts, including three painted as flying
killer whales, “Lone Star One” painted like the Texas flag,
and “Slam Dunk One,” symbolizing the airline’s partner-
ship with the NBA.
Southwest’s business model is based on streamlining
its operations, which results in low fares and satisfied con-
sumers. The airline takes several steps to save money and
passes the savings to customers through low fares. It flies
over 3,100 short, “point-to-point” trips in a day—shuttling
Southwest Airlines entered the airline industry in 1971 more passengers per plane than any other airline. Each
with little money but lots of personality. Marketing itself as aircraft makes an average of 6.25 flights a day, or almost
the LUV airline, the company featured a bright red heart 12 hours each day. Southwest can accomplish such a feat
as its first logo and relied on outrageous antics to gener- because it avoids the traditional hub-and-spoke system
ate word of mouth and new business. Flight attendants in and has extremely fast turnaround service. In its early
red-orange hot pants served Love Bites (peanuts) and years, it turned planes around in less than 10 minutes.
Love Potions (drinks). Today, its turnaround averages 20 to 30 minutes—still the
As Southwest grew, its advertising showcased its fo- best in the industry and half the industry average.
cus on low fares, frequent flights, on-time arrivals, top Southwest’s unique boarding process helps. Instead of
safety record, and how bags fly free. Throughout all its assigned seating, passengers are assigned to one of three