Fundamentals of e-Business Assignment 2

Surname First Name Student Number : Ahamedali Jafar : Ahamed Udhuman Zaheed : 0817191

Course Coordinator : David Corfan

The major foucus is on Strategical approach on online branding.A Luxemburg. how they satisfy different needs of different customers. From this analysis suitable recommendations has been made and drawn conclusions. to show how their alliances with different organization help them to be more success. Strategic Partnership has been chosen from one of the Marketing Mix.Executive Summary The objective of this report id to analyse the online business strategies that are being followed by Skype Technologies S. their approach in relationship marketing has been analyzed. Futher to that. Extent of their marketing segmentation. 2 .

......................................................................................................3         Online Branding of Skype....................... Conclusion............1 ■ ■ What are they Selling to make money?.......................................... Bibliography......................................1 Terms of Reference..................................................................................................................................................2 Do customers really pay for Internet phone?.............................. References........................................................... 3 . Recommendations..........................................................1 Skype – organizational overview....................................................................................................................................................................................................................................................................... Relationship Marketing....................................................................... Marketing Mix – Strategic Partnership.................................Contents    Introduction..................................3 Extent of Segmentation.............

This report is developed by using text books that are available at the University of as one of the medium of transaction. People are finding no time even to shop for their personal needs. from Digital Library such as EBSCOhost EJS and some free online journals that are available on websites.1 million as of 2005 ! Terms of Reference: The objective of this report is to analyse a framework of ebusiness that is being carried out by Skype technologies via their website www. bills and payments.A is one of the popular and top ranking IP telephony company founded in 2003. It has its base at Now a days the usage of computers and Internet have become a fundamental necessity for everyone irrespective of whether they are professionals or a home-maker.Introduction: In this fast and competitively moving world. In the year 2005. This gap has been now filled with a bridge called ebusiness or online shopping in simple words. Some of the basic activities on day to day life are done online. 3mobile) Relationship Marketing Recommendations Conclusion. ticket reservation for journey as well as cinema are made reachable without stepping out of our home. Verisign Payment Gateway and Tradera. Rent. The structure and approach of this report will be as        Skype – organizational overview Online Branding of Skype Extent of Market Segmentation Marketing Mix – Strategic Partnership (eg. From this we can find that the performance of the organization is profitably as of the financial year 20062. For example online bank transactions. Skype has increased growth in revenue by 38% in first quarter of 2009 than financial year 20083. Now Skype is the subsidiary e-bay along with Paypal. Skype sell their products via their website (www. United States. e-Bay another giant of the internet business acquired Skype. The general focus would be how are they making money with their website. It is also said that that the number of banking users over telephone has declined to 14.5 million from 16. Skype – Organizational overview: Skype Technologies The original definition of e Business by IBM is “e-business (e’biz’nis) – the transformation of key business processes through the use of Internet technologies ”. International Classified .skype. Shopping. equipped with advancement in science and technologies. Online journals later than year 2000. Recently they have also started to sell Skype voucher through Sainsbury all over UK4. UK Payments Administration has come out with a news that the Internet usage on online banking is exceeding 50% of the total Internet users. 4 .

com) is available one different packages like Unlimited country. Unlimited 5 .What are they Selling to make money? The Skype offers wide range of products like skype-in (calls between skype to skype). Skype-out (calls between Skype and PSTN phones). Apart from this. accessories like headphones as shown below (Figure 2: Accessories being sold on Skype. Skype-in is free of cost available to all registered Skype subscribers and Skype-out (Figure 1: Subscription Price list of Skype. Unlimited World etc as shown in the image above. they also sell Skype enabled phones.

out of them 23.9 billion minutes is the paid calls used by subscribers with any one of the subscribing options shown in Figure 1. The ratio between free and paid users are 8:1.html It has been found from Skype journal that. Its success results from being able to sustain these added values in the face of competition”.5 billion minutes were called in last quarter.e. Malcom McDonald. 1992) is defined as an identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely. The remaining 2.6 billion minutes were used by customers within Skype network (Skype in or Skype to Skype). Online Branding of Skype: “Brand (Leslie de Chernantony. totally The characteristics which are essential that makes the brand a successful and strong one given by Dave Chaffey are    it is dependent on perception of the customers the added value of the product influences the customer perception the added value of the product should sustainable. one among the eight customers use paid services5. 6 . i.Do customers really pay for Internet phone? (Figure 3: Skype Usage in last quarter) Source: http://skypejournal. Further more. Brand plays an important role in positioning of the product in the market 6.

(Figure4: PCDL Model of branding) Position of the branding: Brand positioning is the part of brand identity and value proposition that has to be communicated actively to the target group. This can be assessed by selecting suitable ones from listed in above figure that are relevant to Skype.  Features: When features are concerned skype provides all features like Video calling. 2008) which has four important elements in building the successful brands. 1996). Let us assess the branding of Skype using PCDL model (Ghodeswar. An important feature which makes it differ from others are Skype on mobile. which demonstrates and advantages over the competing brand (Aaker. good voice clarity and chat facility.According to Dayal et al (2000). which will (Figure5: Skype Directory) 7 . in the Internet the brand is experience and experience is brand.

be discussed in detail about partnership with 3 mobile network. Twitter and Youtube7  Theme: Theme is a way of expressing the emotions and feelings to the customers to show that they care for them. Skype is or geographical location. Skype directory (Figure5) is an important feature which other PC calling softwares does not have. now even mobile versions are available. Skype uses its blue colour to express its theme and emotionality to its customers. How these messages are communicated?  Advertising Campaigns: Skype carry out its marketing campigns in innovative manner. Here we can search people based on email. She had Skype 3 phone. It reports in hearts and minds of the people which results in emotional relationship with customers8. (Figure 6: Skype Brand book expressing their feelings) 8 . People can call their friends and relatives at lower cost than the usual phones Communicating the brand Message: Brand awareness is the ability of the potential buyer to recognise or remember that brand is also a member of product category. In the Summer of 2008 they selected an Australian writer Rebecca Campbell. “A link between product class and brand is involved (Aaker. Hence the communicating the message about the brand plays a vital role in its success. 1991). She travelled 33 days across the globe spreading the marketing message of Skype. Nokia Tablet PC to keep updating her movements on Facebook.  Benefits: Some of the benefits to the Skype users are very easy to use. They are available for all operating systems. This can be seen in a page extracted from “The Skype Brand Book” shown below.

Both the attributes can be assessed with one evidence that is available to us. There are 443. 2003b).  Leveraging the Brand Equity: This can be defined as the leveraging the process which is linking the brand to some other entity which creates a new set of associations from the brand to the entity as affect existing brand associations (Keller.2 new accounts per day 3. Nokia. At the same time the failure of the child would have great impact on the parent.  Brand Extension: In brand extension is the experience of parent brand would have great impact on the performance of the child brand. This does not need any top-up 10. it can harm the parent's brand equity (Swaminathan et al. The acquisition of Skype by ebay would have great impact on this attribute. 2001). Their Partnership with 3 mobile network enable their customers to use Skype anywhere at free of cost. The brand performance of Skype can be assessed with relevant attributes. Sony Ericsson etc. This practiced by Skype by joining hand with with well known brands like 3 mobile. business. the quality of customers care service delivered in not satisfactory which needs improvement 9 . they use their color to build their brand image and identity. Millions of customers registering per day is a strong evidence that their product performance is more than expected with customer satisfaction. Customer Delight: One Major delight which Skype offers to its customers are Cheapest call rates and unlimited free calls within Skype network.  Product Performance and Customer Satisfaction.We can find that Skype uses blue color to express different themes like travel. As both are good performing brands this will be a strong element in the brand equity of Skype.  Customers Care: From the reviews by the customers on Skype forum. mobile etc. 9 . Delivering the brand Performance: Brand performance is an important factor which plays a vital role in deciding the brand value in the annual report every year. Not only here even in their partner's website like 3 mobile.  Ingredient branding: This is achieved by incorporating the attributes of one brand with another to gain popularity in the market.

Extent of segmentation : The Underlying priniciple of Market segmentation is that the individual customers have different product or service needs (S. Different marketing mix and categorizing the target audience or target group. He can go for World Unlimited package. we can find that the Skype has classified its products based on the geographical location of their customers. Maxim Integrated Products is an electronics components manufacturing company. he says that most he enjoy with skype is the Video calls between his colleagues and customers. Scott Smyth – Planning Solution.Dibb. 1996). Business to Business is one where they deal with corporate customers. sharing documents. Business to an individual or a common man. but the call to Asian content will not be allowed. he can call within Europe any number of minutes. The CO of the 10 . as their medium of communication in much economical manner than the typical PSTN telephones. So the Skype has focused on Individual customer's need. The variables which skype uses are geographic variables and based on the usage like commercial and domestic purpose like B2B and B2C strategy. Walter Curd CIO of the company says that they use Skype for making conference calls. The three important elements to extent of Market segmentation to serve the needs of different people are the organization itself. giving him the freedom of choosing any package. Customer support in Maxim is also carried out through Skype. They sell credits online based on giving them unlimited and limited minutes to particular locations if a customer buys Unlimited Europe package.  Geographic Consumer segmentation variables: From figure 1. They offer Internet telephony services to organizations. If customer needs to call United states and India. They also make calls in marketing operations. (Figure 7: Extent of Segmentation) Segmentation Variable: Identifying the segmentation variable is the first step of market segmentation.  B2C and B2B: Business to Consumer is the type which we have been discussing so far.

They attracting customer by integrating the default phone book with that of Skype. Nokia Customer will be provided Skype as preloaded while coming out of the box. Let us discuss some of the major partnerships of Skype and analyze the benefits out of them. When Skype recommends Plantraonics for PC Some of the popular partnerships of Skype Technologies are with 3 mobile 11 . The benefit out of this partnership will enable Skype to tap 75 million customers of Hutchison 3 network 11 . They both planned to give people freedom to talk anywhere at free of cost within Skype network and at low cost to other networks. This will acquire more customers who watch TV This would enable business callers to make free calls at one click and access to over 700. This will enable customers from Russia to buy Skype credits from retails outlets as UK customers buy from Sainbury's.  Strategic Partnership with 3mobile: This is one of the major partnerships of Skype with Hutchison 3mobile in March 2006. This features will be available to use in Wi-fi network and 3G network. 06/10/2009 European Directories 16/04/2009 QIWI Private Cabinets . Thereafter Skype will be available on Nokia Phones with Symbian S60 Operating system. Some of the upcoming and recent Partnerships of Skype are given below. By this Skype is able to bring in Nokia N-series users into its customers list 12 . In 2004.00 business across Europe. Date Announced 05/01/2010 Partnership Firms LG. Customers buy this brand with guarantee that it would be compatible for when they were using normal PSTN telephones. Source (Video): http://www. Plantronics is leading Headphones manufacturers that are light weight. Plantraonics and many more. Nokia. The benefit out of this partnership would be customer satisfaction by providing value added services. But now they have reduced it to $100.  Partnership with Nokia: Skype has joined hands with Nokia in the year 2008 at Barcelona. Panasonic and Ushers Benefits They have decided to embed skype in LG and Panasonic Broadband TV.5 million. Skype made partnership to manufacture headphones that are compatible with Skype software to make Internet calls over PC (Personal Computer) as Plantronics is a 40 year old experienced company13 .  Partnership with Plantraonics: This is one the oldest partnerships of Skype.000 (One Hundred thousand dollars).Russia Source: Marketing Mix – Strategic Partnership: The strategic partnership can be defined as the alliance between two or more organization to achieve common goals and maximum effectiveness of their says that they have been spending $2. These informations were collected from a video whose source is given below.

It is found that people who perceive high quality of relationship marketing are likely to be more loyal and specific to the service provider. When pricing is considered.informaworld. maintain. (Fig ure8: Relationship Marketing Model) Source: Relationship Investment: The relationship marketing is achieved by the combination of other variables like financial bonding.2 million new accounts every day. Skype offers cheap and economical way of calling without compromise in 1994)”. Concentrating on other two important elements of relationship marketing i. relationship marketing has influence over consumer loyalty. As whole of this model shows that attaining customer loyalty is achieved by relationship investment and relationship quality. Gronroos. which is achieved indirectly through relationship investment and relationship quality. 1995. From the research.e customer retention and customer extension. and enhance customer relationships (Berry. which contributes more toward customer retention and loyalty 14 . Berry & Parasuraman. ● Financial Bonding: According to Berry(1995). develop.ebsco.brum. social bonding and structural bonding. this model would be helpful.pdf Customer Acquisition is not complex part for Skype as they acquire customers by strategic partnerships and they have 443.aspx? target= it has been predicted that. defines financial bonding as customer loyalty with respect to pricing incentives. One of the news article of Skype says that there has been 50% increase 12 . Here is an online relationship model derived as a result of this analysis. defined as marketing activities that attract. 1991.Online Relationship Management: “Relationship %3Debscohostejs||AA3D3EFB68C36A3B40C78D54581474B7%26ft%3D.

international calling minutes. showing more care to improved design in interactivity which results in longterm relationship. when customer buy something online. is due to the pricing strategy of Skype 15. ● ( Figure10: Social Bonding) 13 . they try to help them showing best selling products or categorizing for which the customer is looking at as shown below. the social bonding in relationship marketing has effects over consumer's interaction psychologically. (Figure9: Increase International calling minutes 15) Social Bonding: According to researchers. according to Srinivasan et al (2002).e 21 billion minute. One form of social bonding which Skype does to improve customer relationship is. This increase in Skype to Skype free call by 50% i.

skype. Skype offers a wide range services like having a desktop phones like the PSTN one in the VOIP scheme. the assessment of customer's happiness and feeling becomes intangible.000 from expense on communication. The theory of relationship quality and research on relationship marketing says that the ultimate goal of relationship marketing is to strengthen the relationship of existing customers and convert the indifferent customers into loyal ones (Berry & Parasuraman. The relationship quality purely rely on the quality of service we offer to our customers. Relationship quality: In online context. one by customer retention and other by customer cross-buying. where the customers not only purchase Skype credit online. This mode of purchasing a product of a different brand id due to loyalty which is coupled with trust of satisfaction of customers over Skype technologies. As the quality of the Skype's product is good they increasing number of customers who are satisfied and trusting ● Structural bonding: According to Berry (1995) and Chiu et al (2005). Customer cross buying: Skype website which do sell skype enabled phones of 3 network. as Skype provides service delivery. Skype's strategy to retain its customer by providing value added services and advanced features in communication industry. Customer Loyalty: According Oliver(1995). as we cannot see the buyer's face. In treating its B2B customers. 1991). According to an official in Maxim Integration says that they have saved $100. the quality and minimal downtime service plays a vital role in relationship quality. relationship quality is the ability of the customer to rely on the seller's ability to exchange uncertainty and advanced task performance. as specified earlier. “loyalty is defined as a deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future”. ● Customer Retention: It is a well known fact that that customer acquisition is more expensive than customer retention. ● 14 . According to Garbarino & Johnson (1999) and Smith (1998).Source:http://shop. They also do purchase accessories for PC. irrespective of whether they are paid or free users. structural bonding is giving value added benefits to the custmers which are expensive in the market. Customer loyalty can be observed in two ways. The exchange uncertainty is all about delivery or shipping of the product. Skype phones which is branded by 3 network (partner's brand).

This leads them to pay more for customer acquisition than retaining the existing ones. use them in a safe and secure manner. Customers are paying for the product. the days are nearing to make electronic business as fundamental necessity for every human being to survive on earth. that is being offered. then this would end up in disaster. e-branding. This e-Business has given raise to e-retailing. This enables the researchers and inventors to think out of the box and give something new to the people often. Skype can introduce online advertisements like other chat service providers for PC as well as for mobile users. 15 . after sale service plays an important role in customer retention phase of relationship marketing. Imagine there is a new entrant into the market and the Skype continues this quality of service after sale. Hence the quality of service in customer support needs improvement setting some standards to it 17. today calling our friends and relatives who are living abroad has been made easy and at free of cost. The revenue of mobile advertisements in the year 2008 was £28 million which is 99. in such a way there is no harm society and environment. The growth of Skype has made a revolution in this information era. Every new day it dawns. Like this. Most of the activities have become mobile and transact electronically.Recommendations: Advertisements on Skype Applications and website: In order to strengthen the eBusiness. Improve Customer service quality: From the forum of Skype available to customers. According a news article the mobile advertising has grown vast and will have a good break in 2010.2% of the year 2007 and expecting more for the year 2009. Conclusion: As long as there is advancement in science and technology. mobile shopping etc. we can find that the feedback from customers are not happy with the support. the change process in environment keeps happening. Let us. Today Skype may be having millions new accounts everyday. there are new products and sellers in market arising day by day. Hence concentrating on mobile and online advertisement would yield more profit for Skype 16.

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