Case Study - Hosting

John Scott · Share | #1 (**permalink**) 10-19-2003, 03:53 AM

To learn Internet marketing, let's discuss a specific hypothetical case. I've chosen a shared hosting provider for the case study because shared hosting is a very, very difficult market. It's oversaturated, highly competitive and almost entirely void of brands, which makes everything that much harder.

We will discuss how to create the most highly-converting hosting provider on the Internet.

I'm ask for participation from all of you. This should prove to be a very educational thread.

First - the name of the company & website?

edbarton · #2 (**permalink**) 10-19-2003, 04:10 AM

An interesting topic. Well, the name must work well with it being a web hosting company as it needs to be good for SEO but at the moment I am out of ideas.

LazyJim · #3 (**permalink**) 10-19-2003, 04:39 AM

<fundimentalist's interjection>
I suggest that name is decided AFTER you chose a target audience.
If the customers you want are "everybody" then fine go ahead with the name, but remember you are targeting the hardest market.
Otherwise, THINK about the type of person you want to do business with and TARGET that audience.
</fundimentalist's interjection>

John Scott · #4 (**permalink**) 10-19-2003, 04:47 AM

Quote:

I suggest that name is decided AFTER you chose a target audience.

Damn. You beat me to it. I just thought about what I posted while eating a ham and cheese, and it occurred to me that the first decision must be the market to target.

Shows my great judgement in making you a moderator!

I'm a fan of targeting the higher end. Higher end = higher profit margins.

edbarton · #5 (**permalink**) 10-19-2003, 04:52 AM

I thought we were delibrately going for the hardest area etc.

John Scott · #6 (**permalink**) 10-19-2003, 04:58 AM

Hosting is the most dirtiest, competitive market. Within hosting, there are several markets to target.

Cheap Hosting.
Quality Hosting.
Middle-of-the-road hosting.

Some hosts are targeting the ulta cheap market, and offer hosting for $1.99 per month.

Others target the middle of the road, and offer hosting at $7 - $15.

One part of my business offers high quality hosting, and has subscribers paying $50 to $110 per month for 1GB / 5GB of storage, respectively.

LazyJim · #7 (**permalink**) 10-19-2003, 05:00 AM

Yeah I hate it when someone beats me to a post, - usally because the cat is trying to eat my fingers while i type!

Ok by higher-end you mean people with lots of money?
Now you need to refine that, - because a lot of the people with lots of money will (a) get someone else to chose a host for them, and (b) might not want to 'share' their hosting.

[The above is not based on research, it was my personnal judgement.]

John Scott · #8 (**permalink**) 10-19-2003, 05:07 AM

By high end, I simply mean high cost. It allows for use of the prestige pricing strategy.

LazyJim · #9 (**permalink**) 10-19-2003, 05:09 AM

"prestige pricing" - I like the spin on that, glamourise the negatives!

John Scott · #10 (**permalink**) 10-19-2003, 05:12 AM

Barron's defines it as:

Quote:

selling at a high price to create an aura of superior quality....Consumer studies have shown that for some products, ... the buyer believes price and quality are directly propotional.

LazyJim · #11 (**permalink**) 10-19-2003, 05:13 AM

Ok i'm starting to get your idea, your thinking about the product you have to offer, and working out the best market to target.

So we have a high-cost hosting service. Who would go for this, and why would they choose it over the other levels you mentioned low-end and middle?

I'm guessing it's that "you get what you pay for"?

edit: ok you are thining about your target market ASWELL - you wan't to target those that translate high cost to high quality. Which ties in with "you get what you pay for".

Aside from making sure their expectations are fulfilled in the product (beyond the scop of this exersice?), we need to ensure that the name and site portray the "quality" we offer.

LazyJim · #12 (**permalink**) 10-19-2003, 05:14 AM

gotta go and put screws in wood for a few hours now, can't wait to get back to this exercise!

edbarton · #13 (**permalink**) 10-19-2003, 05:16 AM

I guess I am a bit of a novice here

John Scott · #14 (**permalink**) 10-19-2003, 05:24 AM

Quote:

I'm guessing it's that "you get what you pay for"?

Precisely. When I first got into the Internet, I was looking for hosting. Some offered it for $10 a month. But my first website cost several thousand dollars, and I figured if the hosting price was cheap, then the quality must be bad as well. I found others offering it for $20 - $50, but it was still too cheap. I finally found somebody offering hosting at $79 per month, and I chose them.

Consumer perception is that high cost=high quality.

Quote:

Originally Posted by cardesign

I guess I am a bit of a novice here

It's all good. Evberybody has bought or sold stuff before, so we all know at least something about marketing.

I'm hoping this thread gets us all thinking, and will be educational to everybody here.

edbarton · #15 (**permalink**) 10-19-2003, 05:27 AM

Yeah, I am interested in how this topic comes out

Should be a good learning experience

LazyJim · #16 (**permalink**) 10-19-2003, 06:22 AM

high cost=high price?

what do you mean, I think perhaps I don't know the difference between price and cost?

Thanol · #17 (**permalink**) 10-19-2003, 06:44 AM

Maybe he ment value?

edbarton · #18 (**permalink**) 10-19-2003, 06:44 AM

cost is usually referred to as your expenses e.g. servers

price would be referred to as the customers expense e.g. how much they are charged for hosting each month

John Scott · #19 (**permalink**) 10-19-2003, 06:46 AM

My bad. I edited it.

High cost=high quality.

LazyJim · #20 (**permalink**) 10-19-2003, 06:57 AM

ok

I'd like to point out to no-one in particular, that i think you mean equates to and not identical to.

it's obvious and I think your short-hand is fine, I understand, just that anyone is expected to read and learn from this, we should do a little bit extra to be clear.
[But not go in to formal sepcification languages and all that horrid borring stuff though! - I'm calling that "stuff for stiffs" from now on]!

Incidently this brings me to another unrelated point...
Yes I hear the sigh from all of you, but you didn't think that would stop me did you?

What I have just proposed above, is to enter into the spirit of formal specification languages, - that is to remove ambiguity and aid communication.
The fact is they made a new language thats hard to learn, probably efficient, but to damn boring and hard to learn!

I'd like to relate this to the Web standards and the W3C.
For most people standards are boring and over complicated, fussy and pinickity.
The important part is you comply with the spirit of the standards. - but you do still have to learn about them and comply to some of the specifications because in this case, it's about enabling communication not just aiding it.