Detailed Analysis Of Carfax.Com

2467 words - 10 pages

IntroductionThe company that I will make a critique about is the Carfax.com which is a customer oriented firm. Its main vision is to create a one-stop source for vehicle history information for buyers and sellers of used cars. Established in 1986, Carfax Company provided helpful information including mainly vehicle records. Until 1993, the company has reached 10,000 records which were distributed via fax machines to the related customers. In 1996 the website www.carfax.com was launched. This innovation has brought a new dimension to the used vehicle market which provides efficient, up-to-date, fast and reliable information. Nowadays online used vehicle selling has become a separate market with its own environment.Marketing Environment Of Online Used Vehicle SectorMarketing occurs in a dynamic environment. The marketing environment of a particular product or service is made up of consumers, intermediaries, who are responsible for its distribution, and competing products and services. The consumer component of this environment is arguably the most important one. Without a clear understanding of the nature and extent of the consumers, competitors, society and governmental regulations, it is impossible to formulate an appropriate marketing strategy.Competitive Environment: A number of websites have become used vehicle search engines. This shows that the used vehicle market has shifted towards the electronic market that is based on direct communication with customers. Among those sites, there is an oligopolistic type of competition which leads to a small number of leading companies trying to get the big pie from the market. For example, more than 40,000 dealerships are offering their used vehicle inventory on the AutoTrader.com Web site. It's obvious that AutoTrader.com is the strongest rival of Carfax.com in the internet. Based on recent researches, in 1997, 47% of franchised dealerships had a Web site. In 2000, that number leapt to 92%. It is expected to reach 95% in 2001. Similarly, in 1997, 11% of independent dealers had a site. In 2000, 38.6% were on the Web. Dealerships are not finding the Internet a threat; rather, they are leveraging its power to their advantage. On the other side, the number of people using the Internet to help them shop for a used vehicle almost doubled between 1998 and 2000. Resulting competition mainly increases consumer satisfaction.Economic Environment: Since costs of an e-business is much more less in many aspects, Carfax and many other firms have decided to operate mainly on internet basis. For example the labor cost of the call-center is reduced compared to the previous case in which Carfax used to provide information via fax machine. Detailed information can be found directly on the website, that includes the comments on the car to buy it or not. Another aspect of economic environment is the problem of disposable income. People decide to visit the site if they are ready to spend money. If the economy is in recession...

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