To all,
BII info, from prospectus filed Jan. 18/99. Download entire prospectus from sedar.com
>>>Merchandising Strategy
Bid.Com's goal is to become recognized as a market leader in E-commerce with a particular strength in six to ten core product categories. While computers, computer accessories and upgrades are still a strong category to be supported by Bid.Com, the other product categories targeted for core competence by Bid.Com are:
Current Emerging
· Consumer Electronics· Toys · Games· Sporting Goods· Memorabilia· Jewelry· Rare Books · Travel· Entertainment
The merchandising strategy is built upon an online content offering that management refers to as its core retail customer "show" which is programmed with:
· The Online AuctionÔ 24 Hours per day, 7 Days per week, of Rising Price Auctions providing continuous auction activity in many different product categories.
· Prime Time Declining Price Auctions which are targeted to special event marketing during prime viewing times for Internet users.
· Direct marketing to repeat customers.
The above formats provide suppliers with a choice of auction as well as fixed price formats, whichever best suits a particular product. The Company plans to use strategic marketing alliances to build distribution of the "show" to as many potential customers as possible. This is achieved by running many concurrent auctions for different product categories, in different geographic areas and time zones, with custom branding for different marketing partners and execution of multiple advertising programmes.
In implementing this marketing strategy, Bid.Com will concentrate on the following retail practices that it believes will translate well to the Internet:
(1) Developing product depth within the core product categories;
(2) Offering price discounts to consumers;
(3) Changing the product mix frequently to maintain a regularly changing site;
(4) Developing future customer loyalty programs;
(5) Enhancing the total consumer buying experience from sales through to product delivery;
(6) Creating cause marketing and supplier cross-promotional opportunities; and
(7) Focussed marketing to channels and chat rooms with an affinity to products being sold.
Marketing Developments and Alliances
The marketing development efforts of Bid.Com are focussed both within the AOL organization, as described under "Strategic Alliances", and towards new marketing partners. The following initiatives for new distribution alliances have been announced by Bid.Com:
· Yahoo!. The Company initiated a promotional contest on Yahoo! in May, 1998 as an advertising test to help determine an optimal longer run program. Subsequently, the Company and Yahoo! entered into an advertising agreement pursuant to which Bid.Com has advertised on certain Yahoo! sites through the end of 1998. Management understood that this arrangement would deliver over 20.0 million monthly advertising impressions through the end of 1998. For two weeks during each month of the term of this arrangement, Bid.Com was prominently featured on the Yahoo.com main search screen, directing viewers to the Company's Web site. According to an April 20, 1998 Media Metrix report, Yahoo.com is the top ranked Web site with respect to users at work with a 52.9% reach, compared to the AOL.com Web site which ranked third highest for users at work, with a 39.4% reach. Yahoo! is the second highest ranked Web site for home users with a 42.8% reach, as compared to AOL.com which is the top ranked Web site for users at home, with a 48.3% reach. Yahoo.com is also ranked first in Page Views.
· Netscape (Netcenter). The Company's experience with AOL has demonstrated that keyword advertising is one of the most effective ways to reach an audience that has a higher propensity to buy online. Accordingly, in May, 1998, the Company entered into keyword marketing arrangements with Netscape (Netcenter). By owning keywords such as "auction," "auctions," and "bargains" on the Netscape (Netcenter) search engine, the Company ensures that these arrangements will deliver customers with pre-determined interest in this type of Web site to Bid.Com. In April, 1998, Media Metrix ranked Netscape (Netcenter) as the second most popular Web site for users at work with a 42% reach.
· MetaCrawler. Bid.Com began a multi-area advertising and promotional arrangement with MetaCrawler, a specialized search engine that aggregates the results of other systems such as Yahoo! and Excite. Bid.Com has exclusive positioning in the MetaCrawler Marketplace and preferred positioning in other prominent areas. This agreement is renewable every three months at Bid.Com's option.
Licensing Opportunities
Bid.Com's marketing alliance with Toronto Star for the territory of Ontario is the first illustration of a local auction and cybermall license. Community based content is viewed by management as a fundamental trend for Internet programming. Newspapers in many major urban centres are reacting to the potential threat of losing a portion of conventional paper advertising budgets as customers move in part to electronic advertising. By having a credible Internet presence, newspapers can offer a new dimension to the traditional marketing mix. In addition to attracting electronic advertising revenues, newspapers can offer a cost effective way for their advertising customers to establish a web presence and by doing so, can potentially earn a portion of any E-commerce revenues that result. The business opportunity for newspapers is evolving from preservation of advertising revenues to actually earning a percentage of the value of transactions generated from their online classified advertisements. Bid.Com expects to market its platform as a turnkey solution to the evolving online business challenges for newspapers.
Management believes that the potential to license the Bid.Com platform to European and Pacific Rim markets will position Bid.Com for international growth as foreign markets continue to follow North America's embrace of the Internet.
Business-to-Business
Bid.Com launched the development of a business-to-business format of the auction platform in late 1998. Management believes that various sectors are well suited to utilize their auction platforms resulting in revenue streams which have the potential to exceed consumer based revenues. Based on general E-commerce industry research, management believes that the dollar volume of business-to-business Internet commerce will be ten times the size of the retail sector in three years time.
Cause Marketing
Bid.Com endeavours to stimulate charitable E-commerce activity through cross-promotions with entertainment icons and products that are popular to emerging demographic segments.
Bid.Com has an exclusive contract to host the RADD International Web site (Recording Artists, Actors and Athletes Against Drunk Driving) until the year 2001. This organization, chaired by David Niven Jr., boasts over 300 tier one rock artists including Paul McCartney, Elton John, Rod Stewart, KISS and Melissa Etheridge to name but a few. Bid.Com intends to establish a strong position in the entertainment sector by operating this Web site and the "Rock Auction" of artist memorabilia, concert tickets and other related products on behalf of RADD.
Bid.Com believes in the strategic targeting of the 18 to 30 year old market demographic for future share growth as this Internet friendly segment gains increasing purchasing power. Bid.Com hosts the Canadian BACCHUS Web site, part of an international charity promoting responsible use of alcohol beverages, with over 100 Canadian and 750 U.S. affiliated organizations. Through BACCHUS, poster campaigns for RADD have reached over 3,300 college and university campuses across North America, with the RADD Web site address displayed prominently on all materials.
In June, 1997, Bid.Com hosted the Digital City All Charities Online Auction in partnership with Digital Cities Inc., a community-based Internet content subsidiary of AOL, plus over 50 community groups and six media partners in the Dallas/Ft. Worth area. <<<
Regards,
A |
