Marketing and Online Social Networks
Situation Synopsis: Competitors have developed different approaches to attract consumers in the online dating market; some of which have been copying eHarmony’s product features and using alternative strategies to attract singles.
Company’s Current Strategy: eHarmony uses a focused differentiation strategy. It focuses on singles seeking a serious relationship and long-term compatibility. It distinguished itself from other sites by using a unique matching algorithm. They have also invested substantial resources into marketing and R&D.
Problem Statement: eHarmony has opened the door to their competition by declining potential customers as a way to ensure quality control. eHarmony 's CEO must decide how to react to imitations of its business model, encroachment by competing models and the rise of free alternatives.
1. EXTERNAL ANALYSIS 1. General External Environment Demographic: • Age 40 and 50 year olds becoming the fastest growing segment • Age structure: 60% of eHarmony users were women • Members reflect the geographic distribution of the US quite well
Legal • Lawsuits for discrimination, etc. • Privacy settings
Socio-Cultural: • Average age to get married is increasing • The marriage rate had reached its lowest point in recorded history • Cultural changes and economic factors had a substantial effect on the marriage market • Fluctuating divorce rates • One-fifth of marriages were initiated through online encounters
Technological: • Increasingly sophisticated communication and recording technology • R&D: relationship dynamics, physical attraction, and couples • Must obtain patents for matching systems
Global: • Competitors have expanded globally 2. Industry Situation Analysis 1.2.1 Industry Structure
The online personals industry can be segmented into 4 different categories where the 3 main players; eHarmony, Match, and Yahoo!