Nick Jenkins launched Moonpig in 1999 after he saw a gap in the
card market. With ecommerce just taking off at the time he thought it was an
exciting opportunity to start an online venture. His attitude was, “ I decided that if I was going to
start a business I didn’t understand, it might as well be something that no one
else understood either ”. Rizk, S., (2009) Jenkins created a strong image
for his brand with a pig in a space helmet, he developed this when carrying out
his research into what to name his company and no results would come back from search
engines when he entered the name.
A unique selling point is the factor or consideration presented by
the seller as the reason that one product or service is different from and
better than the rest of the competition. One of the key points of Moonpig is
the range of popular cards that are found on the high street that are able to
be customised to include photographs and faces which has helped to secure 90%
of the online card market. One of the strategies Nick Jenkins used was to
expand what Moonpig could offer and he did this buy merging with Photo Box in
the summer of 2011 in a 120 million pound deal. Nick Jenkins commented "Stan and I both believe that we can now offer a much wider range
of photographic products to our customers while adding our own Moonpig
creativity. We can also take our core greeting card product to countries which
would be difficult to access as a standalone business." Sheahan, T.,
(2011) Moonpig’s
revenue has now changed from £90,000 in their first year of operation to £31.2m
in 2011.
The revenue has changed so dramatically since 1999 because
Moonpig’s marketing mix has also changed dramatically in the last 12 years. The
products Moonpig offer have increased to more than 10,000 customisable cards
and with the merge of them and Photo Box their products are not just cards
giving the business more markets to operate within.
Companies now operating in e-commerce face tough competition as
only very little collateral is needed to set up a business and make it look professional.
As a result many markets are saturated unless a new concept is developed and a
strong brand is created. A strong brand is most commonly created within markets
today by using unusual names so that when
typed into a search engine there are only few results.
"The days of accidental naming are over,"
says Naseem Javed, the founder of ABC Namebank, a New York-based consultant
specializing in corporate nomenclature. To stand out in the overcrowded global
marketplace, he says, a company's name must now be especially odd. "Ten,
twenty years ago you could start a business and take the name in any
direction," he says. "Now, with 200 countries on the cyber-platform
around the globe, finding the right name has become an expert's field. A
company that took this on board when competing with the likes of Moonpig was
Funky Pigeon after they took on the ‘twitters effect’ when creating their
online greeting card brand.
New businesses entering the e-commerce market face oligopolists with their already established brand identities. Finding the strong
unique selling point and creating the right brand can now be the difference
between success and failure.
Moonpig is currently an established force in the online greeting
card industry, however they currently only have a small percentage of the
market as a whole and with more competition by the day, Moonpig are having to
constantly create new marketing campaigns and offer more to their customers to
differentiate themselves from competitors such as Funky Pigeon. However this is
proving more difficult as competitors are trying to create as bigger similarity
as possible to save on marketing costs and make it more difficult for
Moonpig.com to become a monopoly within the market.
Moonpig’s costs are being affected as a result of competitors paying
to associate their brand with theirs in results for searches within online
search engines, taking away the advantage of having an unusual brand name.
“The name is a bit of a hot topic at the
moment! It was very useful in the early days when you typed in moonpig to
a search engine and just got the moonpig website returned. Unfortunately that is no longer the case
as Google now allows anybody to bid on our trade name and recent European court
cases have failed to protect brand owners from this type of paid search
bidding. The result is that lots of people try and piggyback on our
traffic using paid for search on the term Moonpig. This isn’t in itself a
problem; we can see that all of the people searching for ‘moonpig’ do come
through to us despite other advertisers so we don’t actually lose the
traffic. What is more of an issue is that because more people are bidding
on it the cost of bidding on your own trade name increases considerably.
The result is that everyone in our sector now pays considerably more for search
to advertise their own brand names. It seems to me that the only
real beneficiary from this is Google who must be seeing increases in revenues
at the expense of brand owners who are now forced to pay extra to advertise their
own brand names” Ahrens, D., (2010)
Moonpig are facing a lot of threats from competitors, however they
are operating in a market that is not affected by recessions as people always
have birthdays and there are events in the calendar such as mother’s day and
Christmas where people exchange cards. One issue may be the disposable income
of their targeted market however with the modern busy lifestyle people lead,
people are more happy to save themselves time and pay more but have the added
bonus of not having to worry about buying the card and posting it. The
convenience factor makes using the website so appealing.
Moonpig should continue to develop their brand ‘Adding value to
the product by branding involves a great deal more than merely giving the
product a catchy name. Branding is the culmination of a range of activities
across the whole marketing mix, leading to a brand image that conveys a whole
set of messages to the consumer (and, more importantly, to the consumer’s
friends and family) about quality, price, expected performance and status’ Blythe,
J., (2008) Their slow expansion strategy and continue to increase the products
that their UK website offers and look to continue to establish themselves
within Australia.
Ahrens, D., (2010) Interview:
Iain Martin, MD if Moonpig.com, Available at (http://www.grapevine-consulting.com/2010/11/interview-iain-martin-md-of-moonpig-com/),
(date accessed: 31/10/11).
Blythe, J., (2008) Essentials
of marketing, Essex: Pearson Education Limited.
Rizk, S., (2009) Moonpig: Nick
Jenkins, Available at: (http://www.growingbusiness.co.uk/moonpig-nick-jenkins.html), (date accessed: 01/11/11).
Sheahan, T., (2011) Moonpig.com
acquired by PhotoBox in £120m deal, Available at: (http://www.printweek.com/Business/article/1081764/moonpigcom-acquired-photobox-120m-deal/), (date accessed: 02/11/11).
Spitznagel, E., (2010) ‘The
Twitter Affect’, THE CORPORATE NAME GAME,
Who Owns Your House, available at: http://www.businessweek.com/magazine/content/10_44/b4201103199948.htm,
(Accessed: 17/11/11)
Image taken from: http://www.google.co.uk/imgres?q=moonpig&um=1&hl=en&sa=N&biw=1279&bih=649&tbm=isch&tbnid=UEFZSZo6f7fthM:&imgrefurl=http://www.igimages.co.uk/blogarchive/2009/juneblog.html&docid=HSJCK_EG7fxC8M&imgurl=http://www.igimages.co.uk/blogimages2009/june/moonpig.jpg&w=322&h=348&ei=v-FLT82lBdOD8gPN5-ypDg&zoom=1&iact=hc&vpx=177&vpy=164&dur=723&hovh=233&hovw=216&tx=94&ty=120&sig=102174241805041392403&page=1&tbnh=130&tbnw=120&start=0&ndsp=19&ved=1t:429,r:0,s:0
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