Running head: STRATEGY AND POSITIONING OF UBERSILVER Strategy and Positioning of UberSILVER Denise Caldwell, Hannah Provost, Nicole Ferrante, Rodney Goudy, Vicky Brennan, and William Daniels MKT 421 12/21/2015 Prof. Michael Stutler 1 2 Strategy and Positioning of UberSILVER Uber is an application that connects users to the nearest available driver. In this paper, the authors pose as an Uber product development team, working to introduce a new service called UberSILVER. The traditional marketing mix is composed of four components – product, place, promotion, and price; these four elements represent the main controllable factors that marketers can manipulate for a favorable outcome (Kerin, Hartley, & Rudelius, 2015). The authors will work to control those product, place, promotion, and price to make UberSILVER a successful service. Overview of Organization The Uber homepage boasts, “Uber is evolving the way the world moves. By seamlessly connecting riders to drivers through our apps, we make cities more accessible, opening up more possibilities for riders and more business for drivers.” (Uber, n.d.) Uber was founded in 2009 by Travis Kalanick. Travis Kalanick is the co-founder and the Chief Executive Officer. Thuan Pham is the Chief Technology Officer. Ryan Graves is the head of global operations and Salle Yoo is the general counsel (Uber, n.d.). Together, the team was able to build Uber rapidly and was able to expand across the globe. Once an Uber account is set up, anyone can download the Uber application on a smart phone device and sign in to the application. From there, individuals are able to choose the vehicle type. These types include UberX which is the low-cost Uber, the UberTAXi, which is a taxi without hassle, the UberBLACK which is the original, the UberSUV which has room for everyone and the UberLUX which is the ultimate luxury (Uber, n.d.). After selecting a vehicle, the individual has the mark the location and wait for the driver. Uber also gives the individuals the phone number of the driver so that the driver can be contacted. Lastly, when the individual is 3 picked up, they pay the Uber driver by a credit card that is automatically saved inside the application. Uber delivers passengers a safe ride from point “a” to point “b” twenty four hours per day, seven days a week, and 365 days a year. Description of Service The need for transportation for seniors is growing rapidly with about 8.4 million senior citizens depending on others for transportation. According to FamilyCare America, Inc., “This number is expected to grow, according to the Administration on Aging, by 2030 the number of drivers over age 85 will be 4 – 5 times what it is today.” (National Caregiver's Library, n.d.) There are a number of reasons for the elderly to become more dependent upon others; researchers have determined that seniors have an elevated mortality rate when measured by kilometers driven (Fabrigoule & Lafont, 2015). This occurs in a predictable sequence that takes years to cause the gradual narrowing of their social world and the inability to get to and from the places they need or want to go to. According to FamilyCare America, Inc., these changes include: 1. Physical and mental changes 2. Age-related functional declines or skill loss lead to less driving 3. Less driving leads to less overall mobility 4. Less overall mobility leads to increased isolation and other quality of life changes (National Caregiver's Library, n.d.). While some seniors are able to maintain their mobility longer with support from others many do not have this available to them. Those that do not may feel as though they have lost 4 their social status when they are no longer able to drive. In addition, they have to now be dependent on others, which can cause emotional, mobility, monetary, psychological, and social loss. Because of this the need for senior assistance will continue to grow and UberSILVER will help to make this transition easier for them. When seniors feel as though they are a burden to others they may miss out on many social events that they would enjoy, UberSILVER will be available to make their lives happier and provide them with more independence. As people grow older, it’s not a time to give up everything they know, but a time to learn new ways to maintain the lifestyle that they are used to in the best possible way. SWOT Analysis Strengths (Internal) Uber is very popular with its customers, enjoying high levels of customer satisfaction. The company operates in 295 cities and 55 countries worldwide and growing (Musil, 2015). The company’s marketing and high standard of service, with regards to how the drivers are verified drivers is great which help to increase the safety of their customers. Uber does not hire their drivers as employees and the drivers are for the most part independent drivers as they use their own vehicles. The hours are flexible and cost is lower than traditional cab service (Makos, 2015). Weaknesses (Internal) The relationship between Uber and the drivers is ethically questionable. Although many of the drivers rely on Uber as a major source of income, and sometimes their only source of income, Uber does not recognize them as employees. This can cause hardship for drivers because they have no benefits and are responsible for navigating tax implications on their own. So, it is expected that loyalty between Uber and its drivers is quite low. Uber has no real connection to the drivers and there are concerns regarding their business model and that they are not regulated. Drivers are fearful of putting signs in their windows indicating that they are Uber drivers because they don’t want to attract unwanted passengers (Makos, 2015). 5 Opportunities (External) Passengers have reported not being happy with traditional cab service arguing that their fares are too high. Their digital marketing platform can target opportunities in suburban and rural areas, where cab fares are high and do not provide good service. Consumers are increasingly in need of, and willing to pay for, niche services such as transporting patients to and from medical appointments, transporting children to school, and transporting pets to the vet or doggie daycare (Makos, 2015). UberSILVER seeks to fill one of these unmet needs in the market by catering to seniors that need someone to accompany them door-to-door on their outings. Threats (External) There has been bad publicity for Uber throughout the years, surrounding their treatment of drivers and lack of regulation; this could discourage potential drivers from signing up for Uber. Legislative changes are also a major concern to Uber, with local, state, and federal governments taking action to limit Uber’s ability to do business. Some new legal regulations, like Germany will ban Uber from operating altogether. Problems with local authorities can lead to expensive fines. As happens with any successful business model, copycat competitors are starting to enter the market, most notably Hailo and Intelligent Apps (Musil, 2015). Finally, driverless cars (like the Google Car) could significantly reduce market demand for Uber’s services (Makos, 2015). Competitive Analysis Uber is a mobile application that allows subscribers to receive car services from their cell phones. Users request a car by giving a location, texting an address or using an iPhone or Android app to set a location on a map. Uber sends the nearest driver to pick up the customer, and sends a text message with an estimated pickup time. After the ride is over, Uber automatically charges the user’s credit card. Uber uses GPS data from the ride and charges for distance or time depending on the travel speed. Tolls and surcharges incurred during the ride are then added to this, as well as a base fare. Uber has competitors such as Hailo and Intelligent Apps. Hailo is a mobile network that matches passengers and licensed taxi drivers. The Hailo Driver Network can be accessed by iPhone or Android apps as a taxi driver's companion and also allow drivers to accept credit cards 6 and includes a tipping function (Hailo, n.d.). Intelligent Apps is the developer of myTaxi, an app that allows users to order a taxi without a conventional taxi dispatching service. myTaxi offers taxi drivers the freedom to work independently without rigid structures, liabilities and monthly fixed costs. The taxi driver is displayed with picture, name and phone number, a fare calculator controls the transport costs and taxi drivers and passengers can track each other on the map (myTaxi, n.d.). While these competitors have similar apps and what look to be similar services, Uber is dominant in brand recognition and has been able to acquire over $1.5 billion in investment capital through various investors (Musil, 2015). Target Market Product Place Promotion UberSILVER Seniors who are able to use technology, are able to walk with minimal assistance, and seek company during outings. Mobile app that connects to registered drivers who have chosen to add the UberSILVER certification and passed a training course. 295 cities in 55 countries. Heavy concentration on American cities. UberSILVER will seek to build brand awareness in AARP magazine and similar publications, through doctors’ associations, and major grocery store chains. Hailo Anyone who needs a ride and is able to use technology. myTaxi Anyone who needs a ride and is able to use technology. Mobile app that connects to cardcarrying taxi cab drivers. Mobile app that connects to cardcarrying taxi cab drivers. Europe Germany, select European cities, and Washington DC. No known plan to market to seniors. No known plan to market to seniors. 7 Price Competitive Barriers Likely responses Complicated algorithm which is based on mileage and time spent. Target price will be slightly lower than taxis. The target market has less technology literacy than younger populations and may not trust a driver that they “meet” through an app. Uber can prepare a press kit to give to UberSILVER drivers, giving them the materials that they need to set up tables at doctors’ offices, grocery stores, etc. to meet potential clients. Same as taxis. Same as taxis. Uber has better brand recognition and is the first entering the senior market. Uber has better brand recognition and is the first entering the senior market. Hailo may attempt to enter the market using similar tactics as UberSILVER. myTaxi may attempt to enter the market using similar tactics as UberSILVER. Target Market Segments In any business, the target market is a very important factor. This is so because it influences the decisions made on issues like the marketing mix to use including the pricing, promotion, place and product. Uber is also not left out in this case as understanding its target market is quite important. Demographically, Uber as a whole targets the young school going children aged 10-18 years whose parents do not have time or resources to get them to and from school each day. This is a target market which is quite hard to satisfy since they have different needs and preferences. UberSILVER will target senior citizens aged above 65 years who are looking for not only a ride, but a reliable companion for outings. 8 Geographically, Uber targets customers from all over the world. Having its presence in over 60 countries, its customer base is quite high as long it will be able to meet their demands. This means that the senior customers stated above in all the parts of the world are an ideal target market for Uber. Psychographically, the target customers for UberSILVER are customers who have the technological equipment and skills necessary to use the Uber app. Uber provides its customers with flexible routes and also ability to work as per the demands of the customers. The behavioral factors to consider in this case include issues like the brand, the quality of service, the loyalty of the service offered. These factors are especially important for UberSILVER clients as they determine if the customer will feel comfortable using the service. Positioning Statement UberSILVER is a premium door-to-door service for seniors that need more than just a ride. UberSILVER drivers have passed rigorous background checks and training classes allowing them to accompany seniors to the grocery store, doctors' appointments, or any outing in a public place. UberSILVER clients can be confident that they will be treated with courtesy and respect. UberSILVER drivers have the opportunity to get to form a friendly relationship with their clients and know that they have helped someone, while earning a premium rate. The UberSILVER service offers seniors more assistance than a cab driver, who just sits in the car, and less expense than a home health aide service. Conclusion UberSILVER is an exciting new service for Uber that will improve the lives of the clients while earning a profit for the company. With the addition of this segment to the business we will be able to help this new niche of customers, giving them the ability to improve their life and 9 regain independence from friends and family members. Continuing to grow the brand name Uber we will be able to gain market share helping the elderly in our communities. 10 References Fabrigoule, C., & Lafont, S. (2015, 05 23). Car driving, cognitive aging and Alzheimer's disease. Medical Press, 44(10), 1034–1041. doi:http://www.sciencedirect.com.contentproxy.phoenix.edu/science/article/pii/S0755498 215001955?np=y Hailo. (n.d.). About. Retrieved 12 20, 2015, from Hailo: https://www.hailoapp.com/about/ Kerin, R., Hartley, S., & Rudelius, W. (2015). Marketing (12 ed.). New York, NY: McGraw-Hill Education. Makos, J. (2015, 03). SWOT analysis for UBER. Retrieved 12 20, 2015, from Pestle Analysis: http://pestleanalysis.com/swot-analysis-for-uber/ Musil, S. (2015, 10 23). Uber's redesigned driver app aims to boost income, rider satisfaction. Retrieved from CNET: http://www.cnet.com/news/uber-rolls-out-redesigned-app-for-itsdrivers/ myTaxi. (n.d.). FAQs. Retrieved 12 20, 2015, from myTaxi: https://us.mytaxi.com/faq.html National Caregiver's Library. (n.d.). Transportation and the Elderly. Retrieved 12 19, 2015, from National Caregiver's Library: http://www.caregiverslibrary.org/caregivers-resources/grptransportation/transportation-and-the-elderly-article.aspx Uber. (n.d.). The Company. Retrieved 12 19, 2015, from Uber: https://www.uber.com/about
Purchase answer to see full attachment