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Presentation on theme: "JOINT BUY VALUE PROPOSITION TEST (BASED ON CUSTOMER INTERVIEW)"— Presentation transcript:


2 SURVEY METHOD Buyer Survey Seller Survey Fake Deal 4 F2F Interviews 17 online surveys 8 online surveys Steve Feiberg 1 Email Interview 30 Requests for price quotation Age group 20~30s Amazon/Ebay Small-size Sellers Amazon/Ebay Electronics Sellers

3 VALUE PROPOSITION VP Hypothesis for Buyer SideVP Hypothesis for Seller Side 1. Discount on products1. Selling products in bulk 2. Power to choose product for group deal *NEW* 2. Low transaction fees 3. Buyer community feedback on products and sellers *NEW* 3. Marketing for their brand name *NEW* New Hypotheses from F2F Customer Interview and Mentoring 1)In F2F interviews, buyers said that Groupon’s offers were too limited in terms of product selection and that there is no buyer community. 2)In meeting with our mentor, George, we realized that sellers can also gain valuable marketing when selling products to large groups of buyers.

4 VALUE FOR BUYERS #1 DISCOUNT ON PRODUCTS Buyer Survey 75% people are attracted by cheaper price 60% people are willing to form a group 80% people shared discounts with other people Fake E-Mail 5~10% discount offer in size of 30,50,100 in digital camera, laptop 8% transaction fee in that category in Amazon Conclusion 1)Buyers are definitely interested in getting a cheaper price on products. Most buyers are willing to form groups to get a discount and will even share information about a discount to other people. 2)But considering the fake-email responses, the discount rates are not as big as we expected. That might be due to the fact that most of the sellers surveyed were electronics sellers or the fact that the quantities that we proposed were not big enough to get more discount.

5 VALUE FOR BUYERS #2 POWER TO CHOOSE PRODUCT FOR GROUP DEAL Buyer Survey 57% said they want to choose which products are group discounted and 40% said kind of 55% said that product selection attracts them to an e-commerce site Conclusion The majority of people prefer to choose which product they want to buy for a group deal. Most people regard product selection as a major reason for using an e-commerce site.

6 VALUE FOR BUYERS #3 BUYER COMMUNITY Buyer Survey 25% said large buyer community attracts them to an e-commerce site Conclusion Some buyers value having a large buyer community on an e- commerce site. It is possible that the other buyers do not realize the importance of buyer product reviews on sites like The co-creation of value on was cited in the business model book as one critical factor in Amazon’s success.

7 VALUE FOR SELLERS #1 SELLING PRODUCTS IN BULK Seller Survey More than 17 out of 30 sellers answered that they are willing to sell in bulk Only 33% are willing to offer discounts proportional to group size. Conclusion 3 Sellers are willing to offer group discounts. But some sellers are not willing to offer significant discounts. This is probably because the sellers surveyed are mostly small sellers.

8 VALUE FOR SELLERS #2 LOWER TRANSACTION FEES Seller Survey 56% said they pay 10-20% transaction fees, 22% said they pay 5-10% fees 78% said transaction fees they pay are too much Amazon transaction fees are 15% for music, books, software, videos, wireless phones, office products, watches but only 8% for electronics Conclusion 1)Most sellers agree that their transaction fees are too high. But the transaction fees for selling electronic products on Amazon is 8% which is lower than we expected. 2)However, the transaction fees are still 15% for many other product categories on Amazon. Perhaps we should target sellers of other categories other than electronics.

9 VALUE FOR SELLERS #3 MARKETING FOR THEIR BRAND NAME Seller Survey Most of sellers on Amazon have their own website 44% market their items by using Amazon Conclusion 1)Some sellers use the e-commerce site where they sell their products as their marketing channel. This means that when sellers use our website, that can already be a significant source of marketing for their business.

10 SUMMARY VP Hypothesis for Buyer SideResult 1. Discount on products Somewhat confirmed. 1 2. Power to choose product for group deal *NEW* Confirmed. 3. Buyer community feedback on products and sellers *NEW* Not confirmed. 2 1 Need to consider changing category of products to offer and larger buying groups. 2 Need to ask more detailed questions about this to investigate further and carefully design our customer community feature. VP Hypothesis for Seller SideResult 1. Selling products in bulk Somewhat confirmed. 3 2. Low transaction feesConfirmed. 3. Marketing for their brand name *NEW* Confirmed. 3 Need to ask larger sellers more questions about their cost structure.


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