Blue Nile: E-commerce Business Analysis and Marketing Mix Strategies

This report provides a comprehensive analysis of Blue Nile, a prominent online jewelry store founded in 1999. It examines the company's background, highlighting its evolution and growth in the e-commerce sector. The report delves into Blue Nile's key features, including its customer education initiatives, product quality assurance, and competitive pricing strategies. It also assesses the company's strengths, such as its focus on diamond jewelry and the utilization of information technology, and identifies opportunities for expansion. The analysis includes a detailed examination of Blue Nile's marketing mix, covering its product offerings, pricing strategies, online presence, and promotional activities. The report concludes by summarizing Blue Nile's success factors and emphasizing its adaptability in the dynamic e-commerce environment.

Running Head: E-commerce 1
E-commerce and E-Business
Student Name
2/16/2020

Running Head: E-commerce 2
Contents
Introduction......................................................................................................................................3
Background of the Company...........................................................................................................3
Key Features....................................................................................................................................4
Strength of the company..................................................................................................................4
Opportunities of the company.........................................................................................................5
Marketing Mix.................................................................................................................................6
Product.........................................................................................................................................6
Price.............................................................................................................................................6
Place.............................................................................................................................................6
Promotion........................................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

Running Head: E-commerce 3
Introduction
The online jewelry store selected is Blue Nile. It is founded in 1999 by Mark Vadon in
Seattle, Washington, USA. The e-commerce facility is considered as a growing platform for the
businesses. In past years people do not have believe in it but as the time passed people started
believing in online shopping and now consider it as best facility. As the technology increases and
trend of online shopping rises the e-commerce started growing rapidly. Blue Nile has been
popular for its style and loyalty to its customers. From the beginning it has been a top leading
online diamond store. They believe in best quality and that’s why customers faith in them and
mostly prefer Blue Nile jewelry. Their main product is diamond jewelry and they main target
those customers who can afford diamond jewelry. They mainly believe in online business and
that’s why they promote e-commerce at large (Bilgic, & Duan, 2019)
In the below parts there will be detailed analysis of Blue Nile strength, opportunities, its
features and strategies for surviving in the market.
Background of the Company
Blue Nile accesses its business online as it does not have any solid stores like its
competitors have and still it is the leading brand across the globe. It went public in the year 2004.
Few years ago people do not believe in online shopping and prefer offline. But as the market
raised people started believing in online shopping and enjoyed e-commerce facility a lot. That
was time when Blue Nile becomes a leading online store of jewelry. They offer many deals and
offers to their customers with affordable prices. Also, one of its best facilities is to provide
education to its customers who visit their website for the first time. This facility gives knowledge
to customers of diamond products and aids in comparing prices (Serdyuk & Votchenko, 2019).
Form the starting point to billing point the Blue Nile facility give instructions to buyers. From
the year 2004, Blue Nile is continuously experiencing a fabulous growth in its activities. The
report company shared showed that they had annual revenue of $169.2 million in the year 2004
and which rose to $302 million till the year 2009. Therefore, it reflects that company is growing
and their strength is also good.

Running Head: E-commerce 4
Their main focus is on diamond jewelry because they are masters in that. To achieve their short
and long term goals they adopted many strategies to promote their products. In the starting their
aim was to build trust and faith in their customers. After that they aimed for earning profit. The
business model used by Blue Nile is business – to – consumer (B: C)(Burr, 2018)
Key Features
Blue Nile to become this much successful has to use a lot of strategies and models to
promote their own product. One of its main features from starting is to educate their customers
while buying anything from their online store. Their online store is very friendly and impressive.
In their online education they teach each and everything related to diamond or other jeweler from
starting point till the billing point (Chopra, & Thomas, 2017)
Another key Feature is their quality. Blue Nile always ensures about their products and
commit that there will no compromise in the quality of jewelry. Their products are made under
proper surveillance and due care. None of the employee is harmed. Also, the product material is
first tested and then comes for public. Each and every product is certified (Richman, 2017).
Customers are getting a lot of benefit while buying any jewelry from Blue Nile due to the
reason that the company offers heavy discount and benefits. Their prices are always being
reasonable and affordable for their customers. Once a customer buys a product they get a habit
for it. This reflects the attractiveness in customers for the Blue Nile products. There are bunch of
competitors in the e-commerce but none of them can beat Blue Nile strategies and its business
model. Their growth is due to their futile styles and innovative ideas for public (Fruzzetti, 2019)
Strength of the company
Their main business and growth depend on its diamond jewelry and therefore, it is the
strength for Blue Nile. The main support which aids a lot in the business is Information
Technology. It has made things easier for the Blue Nile to reach to its customers. The digital
media promoted e-commerce at a huge level and made things simple for online businesses. As
per SWOT Analysis the strength for the company is customer’s satisfaction and faith towards
them. Every business has its main strength in their customer’s interest. The customers pay high

Running Head: E-commerce 5
attention in the products of Blue Nile. Every new product launch by Blue Nile is different and
unique in its own way. In the year 2009, it was having return on equity ratio 60% and also, it has
attractive turnover ratios. Their main strength and business is of wedding bands and engagement
rings. The company is a top retailer in diamond business (Granados, & Gupta, 2013)
Since from starting the value and image of their products are being high and valuable.
Their assurance towards their product and quality make them unique and strong to deal with
market challenges. It builds confident in the customers as well as employees to work harder.
Blue Nile education facility makes their brand stronger from its competitors in the e-commerce
market. Blue Nile does not have any solid store or offline stores still it has been tough one to
compete. Therefore, this all make Blue Nile a different online jewelry store across the globe.
Blue Nile always focuses on latest trends and carefully studies the taste and preference of their
customers to fulfill their requirements. They always stay up to date with latest technology and
styles (Kalia, Kaur, & Singh, 2018)
Opportunities of the company
In the growing and emerging market the survival is not so easy. There comes lot of
challenges and opportunities and the company who met or overcome it becomes successful. The
opportunities are that United States has an environment which excludes political interference in
the business. This was the best opportunity for the Blue Nile as they wanted to expand their
business in England through which they can connect easily with other countries. The increasing
demand for the jewelry y products forced Blue Nile to work in United States and become a
leading one. In starting people buy only at occasion but with the help of advance technology and
recent trends people started purchasing for everyday wear. Therefore, it leads to increase in the
online sales and growth of the company (Kim, & Peterson, 2017)
Another opportunity is the increasing technology; this can be used for promoting,
marketing and connecting with the other online stores. Through information technology
company is able to know its competitors move and can enhance their style. Each and every
online store is now marketing online through number of social media apps or links. Every
challenge brings an opportunity for the business and who face the challenge comes on top. Thus,

Running Head: E-commerce 6
Blue Nile never says no to challenges as their confidence is high and they are always ready to try
something new(Liu et al., 2017)
Marketing Mix
It compromises of factors that can be managed by a company to attract or influence
customers for their products. It is the analyses of companies marketing strategy. There are four
factors known as 4P’s (Product, Price, Place, Promotion) (Datta, Ailawadi & Van Heerde, 2017).
These four factors will explain the strategy of Blue Nile which they adopted to carry on its
business. The below is the Marketing Mix of Blue Nile:
Product
The products of Blue Nile are always been in priority. The jewelry provided by the Blue
Nile is designed by certified jewelers and each and every product is certified. The products are
made under proper care and no adulteration or mixing is done. They have wide range of products
with different styles and latest trends. For customers satisfaction they have 33000 options and
bunch of choices. They first target their customers and then make products available for targeted
men and women (Parkin, 2010)
Price
The pricing strategy is set according to their products. Their main product is diamond
which is very costly and therefore, the prices are also premium and affordable by rich or high
profile individuals. The other jewelry products have reasonable range and affordable by every
class of people. Their pricing totally depends on the international market as it deals
internationally (Patel, Goyal, & Agarwal, 2018)
The pattern for jewelry is does not change that much instantly and therefore, the cost is
lower. They set prices at par level due to the reason of brand image and brand value. They
always keep one thing in mind while deciding prices that their product piece will give difference
of 20-30% from its competitor’s prices (Shaw, 2016)

Running Head: E-commerce 7
Place
From its incorporation the products are only available at online. It has been one of the
largest selling jewelry website in the U.S. and has a strong brand presence. They do not have any
solid store as they don’t feel a need of it. Everything is online and the products are directly
available in the market or at place specified (Thompson, 2010)
Promotion
The main and foremost important marketing mix for every business to go ahead is
suitable and great promotion strategies. The Blue Nile uses number of media channels to
promote their products. The media channels include social media services (Instagram, Facebook,
online pages and blogs), ads on television and ads on mobile apps. They are very clear with their
product and its promotion therefore, they target specific groups. The specific group includes high
or rich profile class people who can easily purchase diamonds. They also have many taglines to
show their main interest (Zhou et al., 2013)
They maintain and update their website at regular intervals so a customer feels every time
new and updated while using website of Blue Nile. They do every possible thing to promote
themselves such as hold seminars or organize events to launch their products at mega level. Also,
they offer heavy discount time to time to get in touch with customers(Thompson, 2010)
Conclusion
The above report can be concluded here that Blue Nile is famous for its high quality
products and services. Their main product is diamond jewelry and then fine jewelry. Blue Nile
has no physical or solid store to buy products as they only operate from online. They had
believed that each and everything is possible if customer have faith in the company. This
confidence made them successful and now they are top leading online jewelry brand. Behind the
success there are lot of struggles and challenges faced by the company as an opportunity. They
never say no to any change or opportunity even though they capture it. There encouragement and
style of management made customers reliable and believe in them.

Running Head: E-commerce 8
The marketing mix of Blue Nile is very impressive and attractive. Every competitor
always tries to follow their strategies and style but always failed. Because Blue Nile environment
is dynamic as it changes with the environment. Therefore, style and strategy also changes. Blue
Nile thought was that there are number of benefits in doing online business. The online business
needs a huge level of technology and knowledge of internet and requires less investment
compare to offline stores.

Running Head: E-commerce 9
References
Bilgic, E., & Duan, Y. (2019, April). E-commerce and Business Analytics: A Literature Review.
In International Conference on Digital Economy (pp. 173-182). Springer, Cham.
Burr, J. M. (2018). Requiem for the Sudan: war, drought, and disaster relief on the Nile. British:
Routledge.
Chopra, S., & Thomas, R. (2017). Focus on diamond retailing: Blue nile, zales, and
tiffany. Kellogg School of Management Cases.
Datta, H., Ailawadi, K. L., & Van Heerde, H. J. (2017). How well does consumer-based brand
equity align with sales-based brand equity and marketing-mix response?. Journal of
Marketing, 81(3), 1-20.
Fruzzetti, L. (2019). Culture and change along the Blue Nile: courts, markets, and strategies for
development. British: Routledge.
Granados, N., & Gupta, A. (2013). Transparency strategy: Competing with information in a
digital world. MIS quarterly, 637-641.
Kalia, P., Kaur, N., & Singh, T. (2018). E-Commerce in India: evolution and revolution of online
retail. In Mobile commerce: Concepts, methodologies, tools, and applications (pp. 736-
758). IGI Global.
Kim, Y., & Peterson, R. A. (2017). A Meta-analysis of Online Trust Relationships in E-
commerce. Journal of Interactive Marketing, 38, 44-54.
Liu, Y., Li, K. J., Chen, H., & Balachander, S. (2017). The effects of products’ aesthetic design
on demand and marketing-mix effectiveness: The role of segment prototypicality and
brand consistency. Journal of Marketing, 81(1), 83-102.
Parkin, G. (2010). Digital marketing: Strategies for online success. UK: Fox Chapel Publishing.

Running Head: E-commerce 10
Patel, D., Goyal, S., & Agarwal, R. (2018). E-Commerce Business Model. In Improving E-
Commerce Web Applications Through Business Intelligence Techniques (pp. 110-129).
IGI Global.
Richman, B. D. (2017). An autopsy of cooperation: Diamond dealers and the limits of trust-
based exchange. Journal of Legal Analysis, 9(2), 247-283.
Serdyuk, A. V., & Votchenko, E. S. (2019). Econometric modeling techniques for boosting
brand competitiveness (based on jewelry industry). Экономика: вчера, сегодня,
завтра, 9(7-1), 160-169.
Shaw, E. H. (2016). Ancient and medieval marketing. In The Routledge Companion to
Marketing History (pp. 47-64). British: Routledge.
Thompson, A. A. (2010). Blue Nile, Inc.: World’s largest online diamond retailer. AA
ThompsonStricklandA. J. IIIGambleJ. E.(Eds.), Crafting and executing strategy: The
quest for competitive advantage. New York, NY: McGraw-Hill.
Zhou, Q. S., Yang, M. X., Zhang, P. F., & Qiu, Y. (2013). Study on the Innovative Jewelry B2C
Business Model in China and Africa. In International Journal of Engineering Research
in Africa (Vol. 10, pp. 65-77). Trans Tech Publications Ltd.