Professor Young - Marketing Research



Professor Young

Marketing Research Methods X460.6

Product Research:

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Table of Contents

Section I:

Introduction ……………………………………………… Page 3

Competitive Profile ……………………………………… Page 3

SWOT of &

Company Profile ………………………………………… Page 5

Customer Profile ………………………………………… Page 6

Product Profile & Pricing ………………………………. Page 8

SWOT for

Distribution ………………………………………………. Page 10

Product Promotions and Reviews ………………………. Page 11

Advertising

Partnerships

Offline Partner Events

Onsite Promotions

Reviews

Conclusion ………………………………………………… Page 14

Section II:

Annotated Bibliography ……………………………………. Page 16

INTRODUCTION

has become synonymous to online dating as Kleenex is to tissue or more recently, Starbucks is to coffee. Since its inception in 1995, has grown to be the largest online dating service according to the independent measurement firm ComScore Media Metrix. Within the first year of launching its online service, nearly 500,000 members visited the website and used the service. operates subscription-based online dating sites in 32 countries, with members in more than 246 countries/territories worldwide, across six different continents in 18 different languages. The company, headquarter in Richardson, Texas, has expanded globally to include offices in cities like Paris, London and Sydney.

has a stronghold on the online dating industry and strategic marketing position, but more recently, it has been troubled by declining revenues and stagnant subscription rates. A December 12, 2004 article in the New York Times suggested that maybe Americans are simply getting tired of the online dating circuit. Our research will focus on learning more about some of the reasons for the increasing disinterest of a once over-heated industry. The goal of this project is to take the findings and learn more specific information about audience segments so we can make recommendations on improving the marketing and product to meet consumer needs.

COMPETITIVE PROFILE

The online dating market is a wide open arena with a variety of corporations. Many companies focus on niche markets at a lower cost. , along with a few others, is one of the more mainstream companies. Since it’s important to know the competition, we’ve focused on the two largest competitors to , Eharmony and AmericanSingles. A SWOT analysis of these two companies in comparison will help determine where stands within the online dating industry.

: an online relationship service - as opposed to the many dating sites on the Internet - and is focused on helping singles of all ages find lasting and loving relationships.

|Strengths |Weaknesses |

|Unique positioning |Not international |

|Holds the only industry patent for its unique Compatibility Matching|More expensive |

|System(TM) |No advertising on the site which could affect the longer term |

| |business revenue. |

|Opportunities |Threats |

|More partnerships and co-brands |Niche market of specific type of matchmaking – might be a short term|

|Can continue to develop its brand as the “alternative to online |trend |

|dating” and leverage the marriage minded demographic | is international with many exclusive contracts |

: an online Personals service owned and operated by MatchNet. Millions of members and great connection features.

|Strengths |Weaknesses |

|Offers chat so members can connect instantly |Currently is relying only on the Personals revenue stream and |

|Is part of a larger personals network (Spar k Network) with |hasn’t added advertising to the site which could affect the |

|various niche target markets so it can leverage cross-promotion |longer term business revenue. |

|Opportunities |Threats |

|Is positioned to create larger content and advertising options |Difficult and costly to build brand awareness for each individual|

|for niche personals properties. |brand. |

COMPANY PROFILE

is a proven leader in online dating services. The company's online dating sites and affiliated businesses span six continents, operating more than 30 dating sites in 18 local languages and supporting local currencies. is an operating business of IAC/InterActiveCorp (Nasdaq: IACI).

Since launching its service in 1995, is constantly improving its features to meet the demand of the users. By offering paid services, match avoided the problem of many online companies; How to make money. While other e-commerce sites are struggling to stay afloat with strapped cash flow, match continues to strengthen its market share, expand its business and increase its revenues. As a subsidiary of InterActiveCorp., increased its revenues from $29.1 million in 2000 to $185.3 million in 2003 for fiscal year-ending in December.

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But the business appears to be cooling off. Revenue for the personals division in the third quarter of 2004 was up 3 percent, to $49.7 million, compared with the same period of 2003, but operating income was off 37 percent, at $2.8 million. The company explained the drop was due to higher marketing costs and other expenses needed to attract customers, which are expected to continue.

Additional Product Lines/Websites

Match international – date internationally

mobile – wireless dating

Online SpeedMatching

by mail





CUSTOMER PROFILE

Internet penetration in U.S. households has reached nearly 75 percent, rising roughly 9 percentage points in a year. Nielsen/NetRatings identified the online friend and dating community as one of the most popular social networks on the web, attracting 927,000 visitors from home and work in October 2003 — up from 532,000 in June 2003.

Most of the online dating surfers were male (53.6 percent vs. 46.4 percent female) and in the 35 to 44-year-old age group (27.64%), followed by 25 to 34-year-olds (22.29%), 45 to 54-year-olds (21.28%). Jupiter Research examined online dating activities by gender;

| |Browsed Profile |Posted Profile |Responded to Profile |Paid to access Site |

|M |29% |18% |13% |8% |

|F |13% |8% |5% |2% |

There is no “typical” user for an online dating site. While most users are between the ages of 20 to 45-years-old, one of the fastest growing segments belongs to baby boomers. The online users are professionals and non-professionals alike, and have a wide range of interests and tastes. Many of these users are highly educated and fall into the upper levels of average household income.

According to the U.S. Census, there are 90 million singles in the U.S. alone. Singles in urban areas are most likely to complain that they are either too busy working, shopping or exercising to throw themselves out there in the single scenes. On the other hand, viewing profiles, pictures and emailing via online can be done at work, and follow-up phone calls can be made from home. offers these options to those affluent urbanities. Search engines match them with candidates who do or don't smoke, drink, do drugs, have children, and who are looking to date, have a fling, make new friends or find a partner.

As another user group, divorcees are more than three times as likely to use a dating site as the average Internet user; and singles are more than twice as likely to do the same. Divorcees make up only 8 percent of the 18+ Internet audiences, yet they represent 27 percent of those using an online dating site recently. This information is a good source for to strategize its advertisement and promotion placements accordingly.

Additional to these two groups, online dating is gaining popularity among seniors. According to Nielsen/NetRatings, in August 2004, more than 16% of those active on the top five dating sites including sites Yahoo Personals and , were 55 and over and, more than 5% were 65 or older, according to Nielsen/NetRatings. That’s up from 15% in the 55+ category and 4.8% in the over 65 group a year earlier. announced seniors are the fastest-growing online demographic overall. Older online daters appear to have different goals from their younger counterparts, according to a survey done by . It found that 26% of singles age 55 and older indicated that they were looking for a commitment or marriage, versus 55% for ages 18 to 29 and 60% for ages 30 to 39.

Online Dating is now a common way for people to discover new friends and romance on the Internet. Some reasons include people are delaying marriage, seeking higher education; women are working more and a high divorce rate. As a result, the necessity for a new approach to dating is clear and technology has stepped in to address this need.

PRODUCT PROFILE

With over 14 million users, commands the largest number of profiles active on the Internet. You will find no shortage of listings regardless of where you live, and most of the profiles are in-depth because of the comprehensive questionnaire that members must fill out.

Browsing listings and creating a profile is absolutely free to anyone. A single profile can include up to 25 pictures, as well as voice files. Each profile is comprehensive, covering physical attributes (tattoos and piercings), favorite local hot spots, hobbies/interests, and pets. The set of profiles on has to be one of the most extensive and best available.

The search feature is industry standard, but its "keyword search" is what set them apart from other competitors. One can type a word or interest and the system will return profiles that contain that word or interest. Also available are "custom searches" that let the user get more specific about interests, lifestyle, appearance, etc. You can even search by location, trait specifics, personality and usernames. Other search options include quick search, personality search, my matches and new member matches.

As with most dating services, users can send a "wink", an expression of interest to other members for free. When one decides to make contact via email (’s email address) with the other person, the user will need to sign up for full membership subscription.

Another convenient feature is the two way matching system that locates all members that meet your criteria and then further narrows that list down to include only members who are looking for people with a profile like yours. The matching features are the best aspect of . They offer a non-intimidating and relatively short "personality test", as well as a "physical attraction test" where you pick facial features and body types you like from a series of images. Although these tests can be fun to take, they only help in selecting a match if a potential match has also taken these tests. But even on a more basic level, offers plenty of help in finding matches through their "total attraction matching" search feature, which finds potential matches based on answers given for the extensive profile. In terms of matchmaking features, offers more than most other sites.

SWOT for

|Strengths |Weaknesses |

|Post multiple photos |Does not allow Free "Show Interest" feature - allows you to show |

|Chat with other members |interest toward other members, and allows them to show interest in |

|Add voice files to your profile |return |

|"Total Attraction Matching" feature finds matches in your |Does not have Active chat channels |

|area |Does not offer One-on-one chat for members |

|Send free "winks" to members you are interested in, and see |Instant messaging not available |

|if they "wink" back | |

|Opportunities |Threats |

| is one of the oldest and most known online dating |There are a lot of competitors in the market offering unique services |

|service companies. Using its’ brand it can implement new |such as background checking, instant messaging, personality tests, |

|features to remain in the market. |etc. for a very competitive price. has to keep up with all |

|Upload videos |the new entrants to maintain its market share and position in the |

|Instant messaging |market. |

PRODUCT PRICING

provides a wide range of features. This variety of services available relates to the customer relationships they are trying to create. Initially, a user is allowed to browse for free for seven days, creating a short-term relationship with a large audience. However, one needs to create a free profile in order to gain access to services. The cost of the first month subscription is $29.99. Long standing customers are rewarded with price breaks on subscription; three month subscription will cost $50.97 or $16.99/month, a six month subscription will cost $77.94 or $12.99/month. The longer-term customer relationship includes a variety of included and additional pay services to keep the customer entertained including mutually compatible email agents and mobile messaging. The overall pricing is competitive with other online dating sites.

DISTRIBUTION

has taken a once taboo subject mainstream to the public, mainly through its advertising, cross-promotional and marketing placements and strategic online distribution sites and partnerships. With its stronghold in the online personals industry, continues to capture market share by partnering with most of the major internet providers. It powers online dating on MSN across Europe, Asia, the United States, Australia (NineMSN) and Latin America. One can begin to understand how manages to amass so many members from all over the world participating in its online community or services. One of the key factors to its growth is its co-branding service with other online personals sites. From the partnership, provides dating and relationship content on its partners’ sites, and it give an opportunity to promote other services in its vast community with banner ads across the site.

In February 2003, further expanded its distribution channels by offering people MatchMobile wireless dating service (), where wireless customers can peruse ’s profiles and photos directly on their mobile phone screen. For $4.99/month subscription fee (Cingular Wireless rate), wireless customers have unlimited text messaging and mobile access to the personals database.

Another avenue has expanded its distribution is forming other online companies/sites, , and , where paid members of have accessed to all its affiliated services. offers traveling services for singles to meet other singles in different locations throughout the world. sponsors social events mixers in various cities, (eg. San Francisco, New York City, Boise, London, Paris). The platform is to provide members of opportunities or outlets to meet other members face-to-face in a fun, non-threatening environment. is a service offers to single people a chance to go on quick “dates” with other single people. They will have an opportunity to chat with the person within a few minutes and then they rotate to another table to meet someone new. has recently launched its internet version, Online SpeedMatching, in 2004. The service allows singles to “meet” and talk to other singles without leaving the comfort of their home. With Online SpeedMatching, members login to an electronic pre-scheduled SpeedMatching session on the Internet where they can participate up to 8 dates per four-minute session. During each phone conversation, a complete profile and photo of their date is displayed on their computer screen.

PRODUCT PROMOTIONS AND REVIEWS

Advertising

spends anywhere from $10K to $20k annually on advertising to build brand awareness and drive subscriptions. Following is a list of only some of the channels uses to reach potential customers:

• Television and radio

• Print

• Billboards

• Affiliate programs

• Email marketing

• Search engine marketing

Partnerships

has taken the lead in partnering offline in innovative ways. For example, powers online dating for MSN across the United States, Europe, Asia, Australia and Latin America. In addition, is the premier personals provider for Love@AOL, offering the service on both AOL and Netscape in the United States and the United Kingdom (sister site, UDate). Below are some examples of partners/affiliations of :

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With increasing high visibility on the largest Web portals, is able to get its product in front of millions of prospective customers, making it that much easier to build their member base and revenue from subscriptions.

Offline partner events

Another way that match reaches prospective customers is to take its online product into the “real world” through events such as the "Wheels of Attraction" which it undertook with Mercedes in July 2004

With its database of members, helped lure about 125 consumers to the event for Mercedes test drives, which doubled as accelerated dates. Part of the attraction for came about via results of a survey of over 1,400 members, with 66% saying a person's car often reflects the potential or dynamics of a relationship. What an innovative way to get in front of customers and build a public relations event!

Onsite promotions

consistently offers either 3 or 7 day promotions so members can try out a FREE subscription to see if it’s right for them.

Reviews

is touted by other online communities and reviewers as the best online dating services. Forbes gave its approval stamp by voting it as one of the “Best of the Web” out there for its extensive database and search capabilities. One can search from the most urban cities to the most obscure areas (eg. Hubbard, Iowa). Another website, , an internet publication devoted to around the clock coverage of the online dating services industry, gave it 8 out of 10 stars rating for its functionality and all its advance features, although many of those features will cost extra beyond the based subscription cost of $29.99/month (They have mastered the art of bundling services!).

From a customer’s standpoint, is definitely a love-hate relationship. Female clients, overall, have more positive experiences and are likely to embrace because men outnumbered women in the database. Although, states that the ratio of woman to man is approximately 50:50, the reality is there are significantly more male paid subscribers than females. The women are usually inundated with hundreds of emails and winks daily from men, which some, if not most go unanswered; hence, the biggest complaint from male clients – the low to NO response rate. A male reviewer for reviewed and raved about the website, contents, and eases of usage, but his overall experience was nothing to write home to. He said, “…I’ve found it to be not as effective (for me) as other services. While I’ve communicated with few people, I have yet to meet any in person from (compared that to eHarmony where I’ve already met 6 people in person while using it for a shorter period of time than )”.

CONCLUSION

In spite of spending millions of dollars on cross-promotions and advertisements, and the overall, online dating industry have dramatically declined in 2004. In addition, recent articles in the popular press have proposed that the “excitement” of online dating, so prevalent during the first few years of the millennium, has begun to wane significantly. As the industry matures, it's increasingly sifting through casual

daters and so-called ``serious daters.'' To revitalize the industry, some dating Web sites are refocusing its target on users who want specifically serious relationships. Unlike casual daters, as the theory goes, serious daters are willing to pay more for special features including personality tests and cordoned off areas for people seeking only a long-term romance. Those looking for long-term commitment are prime prospects for dating sites because they are more likely to sign up for longer subscriptions and fork over more money, analysts said.

Indeed, an article in the New York Times in December of 2004 questioned whether or not the industry bubble had “sprung a leak.” Last month, the number of visitors to online dating sites fell 24 percent compared with a year ago, according to comScore Media Metrix. Only 14 percent of Internet users are expected to browse dating personals this year, down from 21 percent in 2003, according to Jupiter. In 2003, the growth was 77 percent. With the recent lay-offs done by and other major online dating services, it is one of many signals that the industry has reached its maturation in the U.S market and simply need to contract to be more efficient and profitable.

While the U.S market shares for online dating service might be stagnant, the European market is exploding. is ahead of its competitors by being the dominant player in that market. is also exploring other niche markets by offering , targeting younger audiences, who are looking more for “friends” rather than marriages.

No one believes that the door is slamming shut on online personals, but the slowdown in business does indicate that the honeymoon period may be over. "People were turned off because expectations were raised so high," commented by anonymous executive sources and they also said, "Web sites could only under-deliver." The research goal of the survey is to detect the true nature of the decline in the industry and identify one or more potential solutions for match to increase its penetration in the competitive landscape.

ANNOTATED BIBLIOGRAPHY

New York Times, E-Dating Bubble Springs a Leak, by ALEX WILLIAMS, December 12, 2004

This article explores the recent decline in the online dating industry.

, : Love at First Click, Judith Graham, February 3, 2003

This is a general article that describes the online Personals business and ’s success in this industry.

Salon.con, , By Heather Havrilesky, May 15, 2002

This article was published at the beginning of the online dating boom and describes the process and the new success of the industry.



This is a website that provides extensive comparative information about online dating sites.

Ad ,

This Web site offers tips and gossip on high profile marketing and advertising campaigns.

Marketing Vox News --“ Sponsors CBS Show Cupid on TV, Web and Wireless

15 Jul 2003

This Web site provides marketing news.

ContentBiz, March 8, 2004, How Gains Nearly 50,000 New Paid Subscribers per Month.

This article reveals a few metrics about subscribers and marketing tactics.

The Atlanta Journal-Constitution (Atlanta, GA), Jan 28, 2005, PLAYED OUT?\ ONCE HOT, ONLINE DATING SITES HIT SLUMP AS SINGLES REDISCOVER OLD-FASHIONED WAYS TO CLICK. (Living) Helena Oliviero.

This article examines the decrease in the online Personals industry due to general lack of buzz about this 5-year old industry.



This site provides information about online dating companies, ratings, an articles related to online dating.



Online dating sites and prices, all about the same as match except speciality groups and eharmony (people looking for marriage making it competitive with event matchmaking/by mail, etc.)



definition of online dating and comparision to other different services, design issues and listing of some sites.



Has article on one person's online dating experience. Similar to one of our team member’s experiences.



Articles and advice about online dating.



Mostly ads for several sites with links to their sites. Good source of a variety and breadth of sites.



Competitive intelligence including daily rankings of a range of popular websites. Internet usage statistics and online dating age segments.



Article about online dating information from an international standpoint.

, Sex and the City, by Allison Fass, February 17, 2003



How is going offline to attract more users

Corporate Website



Overview of the company; listing of its partners and affiliations

, Targets Men, Plans Ad Spending Boost, By Christopher Saunders, February 14, 2002



Targeting male prospective users

, and Earthlink Partner is Personals, October 4, 2002



The co-partnership between match and Earthlink.





Customer reviews of



conclusion



Again for conclusion

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