E-marketing is key success of this business, and Mrs. Jessica has great expertise and relations in
marketing fields. She knows how to bring optimum results with little expenditure. (Harbour, n.d.)
The company has the chance to sell unique products for simple diversification and will also sell
products through buy now option on discounted price. Simple diversification enables product
distinction based on a variety of characteristics and in economics, leads to monopolistic
competition. (Pepall. 2005)
The company has short of capital but will arrange the same by finding investors as it has dynamic
business plan. Also this business has low customer retention, and the Smart Tech will be
competing with companies operating in the same target (Stix, 2012).
Penny auction businesses are growing by leaps and bounds. If marketed properly, the company
will play on this point and cater large share of market within few years by having a good
understanding of the most effective marketing mix. (Michigan State University, n.d.)
Modification in government legislation, regulations and tax policies might affect the business, for
example, in 2012 the State law of Georgia required license with auctioneer commission, and an
auction company went into a settlement because they did not have the license and paid over
$200,000 in consumer restitution (Kim, 2011).
A key reason for start-up failure is that they run out of cash during the most important phases
(Shontell, 2013). The business must not fall victim to this key reason and secure an adequate user
base to spark competition and generate revenue as soon as possible.
Scams and Fraud are regular issue and will contribute in customer overall retention to online
auctions, by NCL fraud center, online auctions are ranked on top with $326 average loss per victim
(" online auctions:” n.d).
The relative low industry concentration ratio and high growth rate may mean that opportunities
exist for market entry, however little loyalty exists amongst consumers. Market concentration is
measured by the market share held by the top firms, with a market share less than 50% for the
top, the company is competing in a perfectly competitive market. (AmosWeb, n.d.) Constructing
initiatives as to gain loyalty and capitalize on the high growth rates and take advantage of the lack
of potential customer brand loyalty in the penny auction segment.
A key advantage of many existing competitors is the established user base, making the key to
success vital to establishing a large user base as quickly as possible, to gain initial and repeat
customers. (The Times 100, 2013) Management marketing experience and strategy will help to
mitigate this threat to the great extent, through traditional marketing tactics of e-commerce
promotions and customer loyalty strategies.