One of the world’s oldest professions is matchmaking, and given the role of technology in today’s world, it’s no surprise that the industry is booming. With an explosion of new websites and apps, the dating services industry has performed very well in the past five years and is continuing to grow as today’s singles turn to the internet for help finding love.
Dating apps have somewhat revolutionized the way the world dates today, so if on Valentine’s Day love is not in the air, check on your smartphone! Millions of people use the apps to overcome social barriers and in some cases their shyness. Today over 30 per cent of all new established relationships start on dating apps. Consumers’
dating preferences vary significantly, influenced in part by demographics, geography and sensibility.
As a result, the world market for dating products is fragmented, and no single product has been able to effectively serve the online dating category as a whole.
Dating sites provide access to more potential partners than do traditional dating methods, but the act of browsing and comparing large numbers of profiles

can lead individuals to commoditize potential partners and can reduce their willingness to commit to any person.
Match Group Inc.
One of the leading dating apps, Tinder, is part of Match Group Inc., which operates a portfolio of brands, including Tinder, Match, PlentyOfFish, Meetic, OkCupid, OurTime and Pairs. Each of the dating app brands tries to target different segments in the market.
In June 2018, Match Group Inc. acquired 51 per cent of Hinge, which is targeted especially towards urban millennial women looking for relationships.
Their brands are available in over 190 counties and offered in 42 different languages. Their international revenue represented 45 per cent and 39 per cent of their total revenue for the fiscal years, 2017 and 2016, respectively.
Table 1 shows financial performance by Match Group Inc. from 2013–17.
By the end of 2017 the number of employees in Match Group Inc. was 1,300. In the following we go into more detail about the main product in the Match Group Inc. – the Tinder dating app.

Tinder
Tinder was launched in 2012 and has since risen in scale and popularity faster than any other product in the online dating category with very limited marketing spend, growing to over 3 million paid subscribers today. Tinder’s distinctive ‘right swipe’ feature has led to significant adoption among the millennial generation, previously underserved by the online dating

category. Tinder employs a freemium model, through which users are allowed to enjoy many of the core features of Tinder for free, including limited swiping and communicating with other users. However, to enjoy premium features, such as unlimited swiping, a Tinder user must subscribe to either Tinder Plus, launched in early 2015, or Tinder Gold, which was launched in late summer 2017.

Tinder’s revenue is primarily derived directly from users in the form of recurring subscriptions, which typically provide unlimited access to a bundle of features for a specific period of time, and the balance from à
la carte features, where users pay a non-recurring fee for a specific action or event. Tinder offers a combination of free and paid features targeted to its unique community. In addition to direct revenue from users, Tinder generates indirect revenue from online advertising, which makes up a much smaller percentage of the overall revenue as compared to direct revenue.
The ability to connect instantaneously through an app is an appealing aspect to many single consumers.
Because this app is free, Tinder makes part of its profits through ads and its premium service, Tinder Plus.
Tinder is distributed through a variety of third-party publishers and distribution channels. The ability to market dating app brands on any given property or channel is subject to the policies of the relevant third party. Certain publishers and channels have, from time to time, limited or prohibited advertisements for dating products for a variety of reasons.
Currently, many Tinder users register for (and log in to) the dating app through their Facebook profiles, though Tinder recently launched an alternative authentication method, that allows users to log in to Tinder through their mobile phone number.
Tinder attracts the majority of users through wordof-
mouth and other free channels. The online marketing activities generally consist of purchasing social media advertising, banner and other display advertising, search engine marketing, email campaigns, video advertising, business development or partnership deals, and hiring influencers to promote their products.
The offline marketing activities generally consist of television advertising and related public efforts, as well as events.
In the following, we go more in detail about Tinder’s key (worldwide) competitor, Badoo......

Questions
Match Group’s CEO, Mandy Ginsberg, has contacted you as an expert in marketing. Mandy has asked you to give a report on the following tasks:
1. Why is Tinder such a successful brand?
2. What are the key competitive advantages of Tinder versus Badoo?
3. What implications would Facebook’s entry into the dating app market have for Tinder’s future strategy?
4. Which ‘entry mode’ strategy would you recommend for Match Group’s future internationalization strategy?

Transcribed Image Text:

badoo Source: NurPhoto/Getty Images. tinder