Case Study Boo Hoo. Essay Example For Students

Case Study Boo Hoo. Essay Question 1. Which strategic marketing assumptions and decisions arguably made Boo. com’s failure inevitable? Contrast these with other dot-com era survivors that are still in business, for example lastminute. com, Egg. com and Firebox. com. Boo. com was started by 3 Swedish entrepreneurs as they wanted to launch a world wide online retail website selling major sports brands clothing like Adidas, Nike, Fila, Lacoste, Polo and Ralph Lauren etc. here were major decisions and assumptions were made, taking for an example the currency conversion rate offered in US and Europe was far lower than the normal currency conversion rate in the market this lead to negative impact on the Boo. com and its sales. Initially it was though that world wide launching and making it a successful online store within month by injecting huge amount of money would lead to brand recognition in the market. Company invested $135 Million in the first 6 months in order to make it popular website all over the w orld (Tillett 2000). Author Verma Verma (2003) explains that website retailing is least expensive as maintaining website and uploading pictures and graphics and using creative 7 Ps of the marketing mix leads to positive result. Boo. com spend $6milion in 1999-2000 on web developing and adding pictures of the products which coasted them $200 per picture was a huge expense created by the company management, due to those reasons they couldn’t generate $20 million in 2000 and on 18th May 2000 company got bankrupt. The assumption of being a global brand within months by injecting unnecessary money in the technology and it operation was a wrong decision made by the Boo. com management which actually led to disaster and company needed urgent finances in 2000 which eventually lead them to bankruptcy. Another major assumption went wrong was the selection of the target market. Company started targeting males and females aged 18 years to 24 years old as it was believed they are more fashion conscious people. But critics and according to media pointed out the fact that these people are fashion conscious but how many 18 to 24 male and females go online and do shopping using their credit cards. This is what we are talking about in 1990 where online frauds and dial internet were common comparing to now. In contrast there were other online retailers like egg. com and Firebox. com and they survived and still running business. As money or profits generated and wise and realistic strategies and tactics were used by these companies. According to a travel Trade Gazette (2007) clearly stated in their article that Boo. om blew their money and wasted on so many unnecessary technologies. Article also presented that boo. com is linked with one of the biggest failures of the first dot. com era. It materialised at around the same time as lastminute. com and was Swedish-owned UK-based site selling lifestyle apparel. Extravagant marketing and development costs meant it burned through money which impacted i n 2000 when investors gave up and $20 million was not raised by the company on 18th May 2000 and was declared bankrupt. Where as other online companies used less financial sources and tried best to attract customers and satisfy their needs and wants. So basically above arguments and facts clearly shows various wrong decisions were made by the Boo. com management and by the company itself which led them to failure. Question 2. Using the framework of the marketing mix, appraise the marketing tactics of Boo. com in the areas of Product, Pricing, Place, Promotion, Process, People and Physical Evidence. For online retailers it is vital to create their marketing mix very effective as it is not mere limited to the Place, Price, Product and promotion (Rix Stanton 1998). Reconstruction and the Issue of Equality after the Civil war EssayIn many ways, the vision of Boo. com founders were ideas before their time is very true and based on the facts gathered and theories it can be easily justifiable. It was understood that in 1990 in UK US most of the indfgdfgternet connections were dial up with 40K to max 56K speed. Boo. com came up with the extensive piece of technology which is used now in 2005 and after still people complaint about the speed and the software they need to load to access the website or to use their tools online effectively. A recent example is â€Å"Flash Player† is required to watch some graphics. In 1990 ith the dial up speed customers were frustrated since it took more than 8 second to lead a page properly and on top of that they required such free software available online. This has created a negative satisfaction within the market as they have to go through 44 pages catalogue and fashion magazine to buy certain product an d again on top they have to wait for 10 days for the delivery. These ideas today are highly successful as ADSL and ADSL 2+ has created a revolution as they can generate page with 20,000kbps speed and most of the computers now already comes with various small and big software. So this shows that if Boo. com would have launched in 2007 with same strategies and tactics they would have become successful. Unfortunately the timing wasn’t so right and even though Boo. com invested so much in the technology wasn’t worth it at all. For an example Boo. com introduced the virtual salesperson in 3D graphics in 1990 with dial up speed I wouldn’t be that effective beside it would take long time to load and guide with the customer’s queries. Now days most of the retail website using such tactics to attract customers and where target market can even put their product on the dummy virtual salesperson just to get an idea that whether it will suit or not. in order to attract customers online advertising and marketing tools were used by the company were they send potential customers emails and provoke them to visit website and which would lead to sales. Arguably not many aged 18 to 24 males and females goes online and shop in 1990 the percentage was way low comparing to now. Author Son Ikuta (2007) agrees and justifies that wrong selection of target market lead to high cost and low profits which happened to Boo. com as well they didn’t reach their target market well and which lead to negative results. References: †¢ Rix P. Stanton W. J. 1998 â€Å"Marketing: A practical Approach† 3rd edition. McGraw Hill. Sydney †¢ Son J. D. Ikuta S (2007) â€Å"Customer selection problem with search cost, due date, sideline profit, and no waiting room† Pacific Journal of operational research. Volume 24. Number 5. †¢ Tillett L. S. 2000 â€Å"It’s back from the dead† Internet week article. Issue 834. Page 11. †¢ Travel Trade Gazette (TGG) May25th 2007 â€Å"There is life after death Boo. com† Tonbridge. Page13. †¢ Viswanathan N. K. Dickson P. R (2007) â€Å"The fundamentals of Standardizing the global marketing strategy†. International Marketing Review. Volume 24. Issue 1. Page 46. †¢ Verma D. P. S. Verma G (2003) â€Å"Online pricing: Concepts, Methods and current practices† Journal of service Research. Volume 3. Issue 1. Page 135.