Amazon and eBay Servqual 7Ps and GAPS Model Analysis Report

by Jason Shaw
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APPLICATION OF SERVQUAL TO ONLINE AUCTION SITES

The Analysis methods described above, namely the servqual analysis, the 7Ps, and the GAPS model, were used to analyze the online auction market in detail. To conduct efficient research, two major companies, namely eBay and Amazon, were the companies that were chosen for analysis and evaluation. The reasons for choosing these sites is apparently because both are dominant forces in the online auction market, but it remains to be seen who is better and who offers more quality in terms of service. To assess these companies (or web portals), several customers who happen to visit the sites of these companies regularly were questioned as part of a survey. In this survey, the viewers were required to answer several questions that would provide key information on what the average user was provided with in terms of service quality by each of these two sites.

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Other important reasons for choosing these companies are because they continue to operate in similar ways. Moreover, they are in direct competition in the quest to gain more shares in the online auction market. For the ease of conducting the survey, a group of around 30 people was chosen for the study after having established that each of them had no prior experience in all the site operations such as placing bids, searching, monitoring requests, buying them using credit cards, etc. These people were then given a time frame of 10 days within which they had to get familiarized with the operations of both the sites. As such, these sets of 30 customers got ample time to explore the area and were encouraged to do things such as placing bids, bidding for other objects, buying some of the products that had been posted on these sites, etc. After that, these customers were asked to answer a questionnaire that had a set of 15 simple questions. The questions were simply aimed at assessing different parameters of site quality such a the time required to get acclimatized to the site, the level of security visible, the range of products offered, the ease with which a customer could place a bid/compete/buy a result, the level of transparency in the site, etc. besides, questions that were asked as part of the questionnaire also aimed at assessing the site features such as the appeal, quality of site content, ease of navigation, ease of operation, etc. thus, the parameters evaluated by way of these questions would ensure that both these sites were thoroughly assessed for the extent of service quality gap present in these sites.

Amazon and eBay Servqual 7Ps and GAPS Model Analysis Report

The results of the analysis for each of these questions are presented in the form of a table. The table shows the average of the points given by the test customers on a scale of 1 to 4.

INDEX QUESTION EBay Amazon
Average rating Average rating
1 Ease of finding a product on the site      3.24 3.28
2 Ease of navigating through the site 3.40 3.55
3 The site makes you come back again and again 3.35 3.41
4 The appearance of the site 3.21 3.35
5 The level of competition among customers 2.95 3.12
6 Range of products 3.32 3.60
7 The ease of financial transactions 3.25 3.30
8 Security of private information 3.50 3.52
9 Ease of communication with the other party 3.15 3.26
10 Pace of sale of products 2.87 3.00
11 Product is verified thoroughly 3.40 3.35
12 Better for bargaining 3.26 3.17
13 Reputation 3.10 3.45
14 Speed with which products are delivered 2.95 3.15
15 Allows for resolving queries 2.90 3.04

The purpose of the evaluation was more directed towards using the actual and existing situation for evaluating the service quality rather than survey a test environment. Therefore, it was useful in this regard to have customers who were fresh from having interacted actively with the site just before the survey. It so happened that in addition to registering and using the various features of the sites actively, many had been buying and selling products and had thus gained good experience with both the places. Out of the 30 individuals for the survey, around 16 had either purchased or sold various items. Among these, 12 had used eBay while 14 had used Amazon to sell/buy. Among these, ten from each class had traded products on both the sites.

The difference in terms of usage is evident from the table listed above. It clearly shows that in most aspects, Amazon has had a slight upper hand in comparison to eBay. Mainly, it also indicates that the users who had traded products on both sides also ranked Amazon better than eBay. As has been previously mentioned, the rating was based on a scale of 1 to 4 against each of the 15 questions asked. The average response for each question in the case of the two sites under study has been listed. If one were to discuss regularly, both the sites have been rated quite high, but when compared against each other, there are some differences. The questions that received an overall maximum were about the ease of navigation within site, the range of products offered, the level of security mechanism implemented as also the verification of the product’s quality and authenticity. In contrast, both sites scored lesser in terms of the competition among customers, the speed of delivery of the goods that were bought, and the quality of the helpdesk at each of these sites.

In all, the average rating for the sites is as listed below:

  • eBay :
  • Amazon :

The ratings show that all in all, Amazon is better placed than eBay in terms of being able to stay in line with the customers’ expectations. It also suggests that users continue to expect online auction sites in being able to solve their daily needs. It also indicates that the user is mainly interested in the end product (i.e., the way the website looks and works) and, as such, is unconcerned about how it worked and processes internally. As such, a critical deciding element in this aspect points to the degree to which websites succeed in simplifying the work of the user and work towards handling the bulk of the work and complex processing. However, the low comparative rating for some aspects such as the ease of finding a product on the site, the comfort of financial transactions, ease of communication between two parties, etc. points to the fact that the public is yet to get familiarized in a significant way with the concept of online auctioning of products. As such, the percentage of people going online in this regard is quite low over the conventional buyers and sellers.

The graphical depiction of the rating for the 15 questions is as shown below:

Amazon and eBay Servqual Analysis Report

The blue line represents the ratings for eBay, while the red one represents the ratings for Amazon. It can be seen that Amazon holds the upper hand in most of the cases.

For evaluation of the 7Ps, each of the 30 customers was interviewed separately and were asked several related questions, some of which reflect in the table shown above. Additionally, some useful data has also been sourced to assist the present arguments. The discussions are as shown below:

  • People: Apart from attracting a large number of customers, it is also essential to ensure that the customers are retained. When asked about their opinion in this regard, many of the customers were of the idea that Amazon was better than eBay in this regard. They thought that on a comparative note, Amazon had much more to offer them, and the search option in Amazon was capable of yielding more suitable results when compared to eBay. Likewise, customers also said that they were under the illusion that almost anything that was found under the sun was available in Amazon, especially in the case of books. Thus, it can be seen that in terms of the range of products offered, Amazon has quite a lot to offer when compared to eBay.
  • Result: one of the most important things that an online auction site needs to consider in terms of providing to the customer in the range of products made available. In this regard, Amazon scores a definitive advantage over eBay. This merely is evident from the fact that in the case of most of the customers (as also with me), any search on google for any particular product would yield a result linking to Amazon 9 out of 10 times. This clearly shows that the range of products offered by Amazon is enormous when compared to eBay.
  • Price: one of the most lucrative things that Amazon has done to its product line is that it has ensured that all products get sold on a common platform. As such, it has become possible to obtain similar goods obtained from local as well as international sellers. Along with that, the bidding for used goods starts at rock bottom prices. It is not surprising to see a product worth $30 to be available for prices as low as $1. in this case, eBay has been unable to maintain such uniformity.
  • Customers both in the survey and elsewhere have expressed that they have been able to get much better prices for their goods when selling over Amazon in comparison to eBay. Of course, though Amazon is known to charge a higher commission, customers have said that they have found it hard to get the requisite price for their products, and the time is taken for reaching it has been far more time-consuming in the case of eBay.
  • Promotion & Place: so, what would be the best place for an online company to promote itself. If it were t attract potential online customers, and then in addition to advertising over the conventional mediums such as newspapers and television, the most lucrative Place would be the web itself. To promote itself, Amazon has been instrumental in ensuring that it gets noticed more often by promoting websites to include banners of the company on their web pages. Likewise, it has also used google to its advantage by ensuring that any product search over the world’s most famous search engine links to Amazon. Additionally, to help companies trade their products over Amazon, the company has developed some APIs (software methods and packages) that help companies ensure that all their products are listed instantly on Amazon, thereby ensuring that they go on sale from the word go. eBay as been slow to catch up in this aspect and, as such, has fallen back in the race.
  • Process & physical evidence: the most critical aspect n terms of the process in the security and the feedback mechanism incorporated. Amazon has been voted to be better when it comes to preventing abuse, and the site has ensured that all financial transactions take Place trough it (unlike eBay, which also allows for users to communicate and operate directly, which is open to fraud). Buyers and sellers have always acknowledged that transactions over Amazon have been much safer. The evidence s simple and straightforward. Though both the companies were founded in and around 1995, here is a stark difference in their annual revenues. During the year 2005, eBay registered a yearly income of $4.55 billion, while the revenues of Amazon have almost been double to that of eBay at $8.49 billion. This clearly shows that Amazon has been able to do more business and attract more customers when compared to eBay.

Thus, it can be seen, both in terms of data as well as information from various quarters, that eBay has not been able to match up with Amazon in most aspects. Though they are nearly rated equal in terms of the quality of service provided, Amazon has been able to attract more customers in terms of numbers. This is due to the various inherent qualitative features of the site that have been augmented with heavy advertising and promotion over the web.

ADDITIONAL REFERENCES
  • http://en.wikipedia.org/wiki/Amazon.com
  • http://en.wikipedia.org/wiki/EBay
  • http://www.ciao.co.uk/Amazon_co_uk_Marketplace__Review_5369954
  • http://aytozon.com/
  • www.fool.com/portfolios/rulebreaker/2001/rulebreaker010403.htm
  • www.businessweek.com/1999/99_22/b3631014.htm

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