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Transcript of Final project uber
Final Project – Marketing StrategyUber Technologies, Inc.
Kamarya Johnson | Fall 2015
Table of Contents
Product and Competitive Market……………………………………………………………………………………3
Marketing Objectives……………………………………………………………………………………………………..5
Target Segment and Justification……………………………………………………………………………………7
Media Resources and Strategy……………………………………………………………………………………….8
Positioning and Message Strategy……………………………………………………………………….……….10
Applying to Other Multicultural groups………………………………………………………………………..13
Evaluation of Effectiveness…………………………………………………………………………………………..14
Works Cited…………………………………………………………………….……………………………………………17
Johnson | 2
Final Project – Marketing Strategy for Uber Technologies, Inc.
Product and Competitive Environment
Uber is essentially the most popular growing and improving ride-sharing
service currently on the market servicing 251 cities in 51 countries worldwide.1 Co-
founders Travis Kalanick and Garrett Camp founded Uber Inc. in 2010 in the city of
San Francisco. Their idea stemmed from the issues city goers had dealing with
hailing and finding a cab in San Francisco. Thus the Uber app was established. Users
could get a ride within minutes without having to pay ridiculous high prices or
worry about their safety. According to Business Insider, the total revenue for 2014
was $102 Million and is expected to increase to $1.5 - $2 Billion by the end of this
year with the top 5 markets being New York City, Washington DC, San Francisco,
Chicago and Los Angeles.2
1 Ingham, Edmund. "Start-ups Take Note: Uber Made It Big, But Did They Get It Right?" Forbes. Forbes Magazine, 5 Dec. 2014. Web. <http://www.forbes.com/sites/edmundingham/2014/12/05/start-ups-take-note-uber-made-it-big-but-did-they-get-it-right/>.2 Kosoff, Maya. "New Revenue Figures Show $50 Billion Uber Is Losing a Lot of Money." Business Insider. Business Insider, Inc. Web. 07 Nov. 2015. <http://www.businessinsider.com/ubers-revenue-profit-and-loss-2015-8>.
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The ride sharing service, similar to taxis for passengers and a referral service
for its drivers/ employees, operates through a mobile app on cellular devices that
can be accessed on IOS iPhone’s as well as Andriod and Windows systems. Uber
functions completely cashless and utilizes gps location on phones to operate.
Through the app, users are billed from their registered credit card based on a couple
aspects such as location and drive time. Uber gets a 5-20% cut and the rest of each
fair goes to the Uber driver. Different options for service are available depending on
availability. The UberX option is low cost supplying everyday cars, there is then a
company service called Uber Black that supplies town cars with professional drivers
with a slightly higher cost. Also, there is Uber SUV, which supplies larger vehicles,
and Uber Lux, which supplies high-end cars at a much higher cost. There are also
requirements for Uber drivers and their vehicles. Drivers must have a valid drivers
license, car insurance, and pass a background checks and car inspections.3
For a couple of years now, Uber has been successfully operating providing
affordable and hassle free rides and jobs to people around the world. Furthermore,
there are many new competitors that this company faces and that have an impact on
their market. These competitors include:
o Curb, Inc. (Alexandria, Virginia): Founded in 2014 and operating in
over 60 U.S. cities, this app based company is similar to Uber but
allows users to schedule rides up to 24 hours in advance.
o Sidecar, Inc. (San Francisco, California): Founded in the same city in
2012, and operating just like Uber, this service is available in about 10
3 Pullen, John P. "Everything You Need to Know About Uber." Time. Time, 4 Nov. 2014. Web. <http://time.com/3556741/uber/>.
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U.S cities. With this service, riders can choose their driver and car as
well as tip through the app.
o Lyft, Inc. (San Francisco, California): Also founded in the same city, in
2012, this company operates very similar to Uber with different app
and logo appearances and is only offered in 60 U.S. cities. The concept
is exactly the same but with Lyft, you can choose to add a tip for your
driver.4
Although Uber is at the top of the ride sharing market, Lyft has become its
largest competitor. Lyft and Uber have many similarities when it comes to certain
aspects such as the app design, overall operation, and provided services. From the
research I have gathered, Uber seems to carry a more professional feel while Lyft is
more casual and friendly.5
Marketing Objectives
Uber has been successful thus far, but what this company needs is further
marketing and advertising to help this company grow even further. Specifically,
Uber should expand their African American customer base by creating a marketing
strategy geared toward these specific consumers. This company is rapidly growing,
"fulfilling over one million rides on a daily basis and currently has over eight million
users.”6
4 "Who Are Uber's Biggest Competitors?" Zacks Investment Research. 8 Sept. 2015. Web. <http://www.zacks.com/stock/news/189318/who-are-ubers-biggest-competitors>.5 Waldrum, Josh. "Uber vs. Lyft: 5 Things I Learned From Giving Up My Car." 17 Feb. 2015. Web. <https://www.thezebra.com/insurance-news/848/uber-vs-lyft/>.6 Freier, Anne. "Uber Usage Statistics and Revenue - Business of Apps." Business of Apps. 14 Sept. 2015. Web. <http://www.businessofapps.com/uber-usage-statistics-and-revenue/>.
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Firstly, Uber Technologies has only slightly delved into marketing and
advertising campaigns. Uber came out with a few marketing campaigns, but they
were all too niche specific and did not explain the product and its benefits to users.
For example, some campaigns were to team up with Spotify or the company
delivering Christmas trees to homes.7 There should be campaigns that explain the
product and show what markets would benefit from it.
The African American market would completely benefit from this product.
According to UC Berkeley News, out of the many ethnicities in the U.S., Blacks have
the lowest car ownership, “with 19 percent living in homes in which no one owns a
car. That compares to 4.6 percent of whites in homes with no car, 13.7 percent of
Latinos, and 9.6 percent of the remaining groups combined.”8 With this information,
a marketing strategy should be put into place that encourages African Americans to
take advantage of Uber services.
Additionally, Uber cannot compete based alone on their low price for
transportation. They must strategically understand habits of African Americans in
order to come up with the proper campaign. According to a study conducted by
Experian Marketing Services, African Americans are more likely than the average
American to seek out deals, have positive views of advertising and are 86% more
likely to be interested in ads that they see on their phone.9 Uber is a mobile phone
based app; marketing toward blacks would help increase the company’s revenue.
7 Lu, Alicia. "17 of Uber's Most Brilliant Ad Campaigns - Urbanful." Urbanful. 21 Jan. 2015. Web. <https://urbanful.org/2015/01/21/17-of-ubers-most-brilliant-ad-campaigns/> .8 Maclay, Kathleen. "Study Explores Metro Car Ownership Patterns, Race, Segregation and Disaster Planning." Study Explores Metro Car Ownership Patterns, Race, Segregation and Disaster Planning. UC Berkeley News, 23 Mar. 2006. Web. <http://www.berkeley.edu/news/media/releases/2006/03/23_carownership.shtml>.9 African American Shopper Analysis. Experian Marketing Services. Web. <https://www.experian.com/assets/marketing-services/reports/african-american-shopper-analysis.pdf>.
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Target Segment and Justification
As stated previously, Uber’s main populated cities are New York, Chicago, DC,
Los Angeles, and San Francisco. All 5 of these cities are within the top 15 most
populated African American cities.10 It would make sense to target this ethnic group
when considering a marketing strategy.
According to Business of Apps, 52% of women and 48% of men use Uber.
This percentage is almost equal, so both men and women are to be considered for
marketing. When it comes to age, 68% of people between the ages of 25 – 44 use
Uber’s services. Which concludes that this age range would be a good age market.
African Americans embody a high purchasing power and it is important to
understand the trends and influences that they hold. Furthermore, blacks are
essentially “luxury lovers” and “feel strongly about how they’re perceived by others
especially when it comes to their automobile.”9 They want to be noticed and ride in
style, even if they cannot afford it, and Uber can provide this opportunity.
Uber tends to be focused on word of mouth advertising, which does not
relate well with African Americans. Studies have shown that this ethnic group is
“less likely than average to be influenced by their friends or others and are more
likely than average to be influenced by most types of advertising”. Advertising is key
when it comes to getting the product out there. People want to hear about things for
10 "Metro Areas With Largest African American Population." BlackDemographicscom. 2010. Web.<http://blackdemographics.com/population/black-city-population/>.9
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themselves and learn about the product. African Americans want to try new things
and learn about new products that could benefit them.11
Media Resources and Strategy
Uber is fairly new to the market and therefore they are fairly new to
advertising as well. Finding information on Uber’s advertising countrywide was
difficult, but I did come across the company’s advertising campaign within and
around one of the most populated cities, New York City. The Uber campaign in New
York City is currently delivering advertisements on seventeen cable television
systems, five broadcasting systems and three radio stations12. The advertisements
are more media based rather than print based. Which many companies are turning
to these days since the world of media is rapidly growing. Many users are spending
more time watching television and listening to the radio, than reading newspapers
and magazines.
Recently Uber has spent over $3 million on media advertising alone on the
New York City campaign. About 50,000 of those dollars were used for advertisement
on an Emmis Communications owned local radio station known as 107.5. Most
dollars were spent on this radio station, which reaches an R&B music audience.
Uber spent most dollars on this radio station because its listeners were those of
minority consumers, which encounter the most problems when trying to hail a
11 African American Shopper Analysis. Experian Marketing Services. Web. <https://www.experian.com/assets/marketing-services/reports/african-american-shopper-analysis.pdf>.12 Kurson, Ken. "Revealed: Uber's TV Buy Is Gigantic." Observer. 22 July 2015. Web. <http://observer.com/2015/07/revealed-ubers-tv-buy-is-gigantic/>.
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cab13. This piece of the campaign can be very important when dealing with the
African American market. Also, Uber riders are mostly those of a younger age who
are also more likely to listen to this radio station. Therefore creating a great
marketing platform for potential young African Americans customers.
Furthermore, the African American purchasing power is steadily on the rise.
As mentioned before, African Americans have a great presence on social media and
prefer to see advertisements on their cellular devices. With this information, Uber
should consider reaching the African American market by possibly establishing
advertisements on phone applications, social media sites, and other sites that can be
accessed from ones mobile device. This can also be extremely convenient since Uber
is an app exclusively for cellular phones. According to the Pew Research Center,
48% of African Americans utilize social media networks on their mobile devices as
compared to the 36% of whites that do14. These statistics give light to a new
platform for a potential Uber marketing strategy that could be incredibly beneficial.
Uber as a company is devoted to providing customers with greater
accessibility and better businesses for drivers. They are determined to bring cities
and their people closer together. Uber has changed how the world works by
connecting users and drivers through a simple app that is convenient for all market
groups15. The aspect of connecting people and creating a greater accessibility
13 Kurson, Ken. "Revealed: Uber's TV Buy Is Gigantic." Observer. 22 July 2015. Web. <http://observer.com/2015/07/revealed-ubers-tv-buy-is-gigantic/>.14 "Social Networking Fact Sheet." Pew Research Center Internet Science Tech RSS. 27 Dec. 2013. Web. <http://www.pewinternet.org/fact-sheets/social-networking-fact-sheet/>.15 "The Company." Uber. Web. <https://www.uber.com/about>.
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provides a great appeal toward African American consumers. They want to be
involved and a part of something that helps their community thrive.
Positioning and Message Strategy
Uber has become more of a household name and a service that is used by
more and more people daily. Not only has Uber’s low transportation prices caught
the eye of many consumers, but also their focus on connecting people and bringing
them together has made this company have a positive presence in society. African
Americans want to be part of positivity and want to be noticed as being a part of
something with a great name.16 With Uber’s competitors like Lyft, Sidecar, and Curb,
this company must stand out and thrive through marketing and advertising
strategies that reach certain communities to help signify and represent what this
company is all about.
Additionally, transportation has become a substantial aspect in most
American’s day-to-day lives. We all rely on some form of transportation to get from
place to place, especially if living in a large heavily populated area such as New York
City, Washington DC, San Francisco, Chicago and Los Angeles. Which is where Uber’s
top 5 markets are located and is where many African Americans reside. With 19% of
African Americans living in households where there is no car17, they require to seek
other forms of transportation. This is where the reliability and convenience of Uber
services appeals to the African American community.
16 African American Shopper Analysis. Experian Marketing Services. Web. <https://www.experian.com/assets/marketing-services/reports/african-american-shopper-analysis.pdf>.17 Maclay, Kathleen. "Study Explores Metro Car Ownership Patterns, Race, Segregation and Disaster Planning." Study Explores Metro Car Ownership Patterns, Race, Segregation and Disaster Planning. UC Berkeley News, 23 Mar. 2006. Web. <http://www.berkeley.edu/news/media/releases/2006/03/23_carownership.shtml>.
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In urban areas in the United States, where “African Americans are almost six
times as likely as whites to use transit to get around”, African Americans and
Hispanics make up 54 percent of all transit users.18 As a company, Uber would
appeal greatly to this market due to less travel time and perks in dependability and
convenience.
Additionally, due to minority groups such as African Americans being
mistreated by Taxi drivers/services, they might steer clear of services that might
come across as being quite similar, such as Uber. These possible consumers need to
be informed of the motives and goals that this company has and they need to be
given trust and assurance that Uber is professional, friendly and overall motive is to
bring people closer together as a community.
Interviews with regional African American consumers in one of Uber’s most
profitable cities, New York City, New York, disclose preferences when it comes to
transportation and how they usually get from one place to another. These particular
individuals were asked where they usually go in a typical day, what form of
transportation they use, what they like and dislike most about such transportation,
and if they use their cell phones regularly throughout the day (excluding calls and
text messaging). Below are some local responses:
Martin Jackson, 25, has lived in New York City for 7 years: “A typical day for
me would be going to school, going to work and then maybe hang out with friends if
I have the time.” “I usually walk to school and work when I have time since I live
18 Bullard, Robert, Dr. "All Transit Is Not Created Equal." All Transit Is Not Created Equal. Web. <http://reimaginerpe.org/node/306>.
Johnson | 11
close, or take Uber if I’m in a rush.” “It can sometimes be too cold or rainy to walk
but Uber is quick, reliable and cheap considering.” “I am always on my phone
whether it be email, social media or just because I’m bored.”
Shauna Harris, 31, has lived in New York City for 11 years: “Typically I go to
the gym in the mornings and to work during the last half of the day.” “I usually
walk/run to the gym since it’s around the corner and take a Uber or subway ride to
work.” “Walking to the gym is convenient and taking Uber or the subway to work is
just what makes sense since its cheap and convenient.” “ I use my phone pretty
regularly, mostly for social media, specific phone only apps and catching up on my
TV shows.”
Tanisha Dorsey, 42, has lived in New York City all her life: “During the day I
go to work, possibly do some grocery shopping and then come home to my family.”
“I tend to ride the subway since I’ve been taking it since I was a little girl and it’s just
what I’m used to.” “The subway is what I am familiar with and I have no problems
with it”. “I use it [phone] to go on Facebook and to check emails mostly.”
Based on analysis and interpretation of these responses, certain findings
were uncovered that relate to convenience and familiarity. Below are the outlined
conclusions:
1. Convenience
o Credibility value: Everyday city goers
o Convenience outcome: Quick and reliable transportation
2. Familiarity
o Price value: Cheap everyday transportation
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o Familiar Choice: Familiar modes of transportation in a busy
city and familiar cell phone usage
These finding that were revealed based on the interviews have a great deal to
do with Uber’s overall ideal image and what they want the community to know them
by. They want to be known as having quick and reliable transportation for everyday
city goers, and they want to provide cheap and familiar services to the public
through the use of their mobile devices they use everyday.
Applying to Other Multicultural Groups
With the multicultural population growing in The Unites States, they are
becoming a greater target to reach when it comes to marketing and advertising.
Multicultural consumers are the new faces of the marketing world.
Uber’s overall image and their message can apply to all multicultural groups.
People want to be involved with something that is the most convenient and cost
effective. They want what is reliable and something they can count on everyday.
Also, transportation is something that most, if not all Americans come across on a
daily basis. Other multicultural groups, not just African Americans, can benefit from
the safe and convenient ride services that Uber can provide.
Furthermore, as stated previously, with African Americans and Hispanics
making up 54 percent of all transit users, both minority groups can be a target for
Uber’s growing market. 45 percent of cell phone owners find themselves using their
phones rather than a computer for Internet services.19 Utilizing smartphones for 19 Fete, John. "Hispanics Are Mobile-dominant. Are Your Campaigns?" Marketing Forward Blog. 19 May 2014. Web. <http://www.experian.com/blogs/marketing-forward/2014/05/19/hispanics-are-mobile-dominant-are-your-campaigns/>.
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marketing and advertising can reach both African Americans and Hispanic
consumers.
This company has already begun a minor amount of marketing for their
Hispanic consumers. They began a test of UberEspanol with a small group of local
users in Chicago. This test consisted of users being able to select a Spanish-speaking
driver.20 Uber’s marketing plan for this was an extremely smart idea keeping in
mind that the Hispanic population in America is growing rapidly.
If Uber wants to keep the company growing and in the forefront of ride
sharing services and transportation overall, they need to start branching out and
targeting new groups of customers in new innovative ways and cell phones are a
great place to do so. Creating innovative new ideas to reach these new groups and
delivering the positive message of what Uber stands for is key.
Evaluation of Effectiveness
According to Reelse, the video marketer guide, 82 percent of smartphone
users notice ads on their devices, while 35 percent visit that ads website, and 49
percent make a purchase based on that ad.21 This has caused many marketers to
realize that smartphones have become a great platform to place advertisements to
draw people into the company.
There needs to be some kind of measurement that tracks the proof that
African Americans are beginning to use Uber more than other forms of
20 Elahi, Amina. "Uber in Chicago Speaks Second Language: Spanish." Chicagotribune.com. 20 Aug. 2015. Web. <http://www.chicagotribune.com/bluesky/originals/ct-uber-espanol-chicago-bsi-20150820-story.html>.21 Rick, Christophor. "48% of Smartphone Users Watch Video on Them, 82% Notice Mobile Ads." ReelSEO. 27 Apr. 2011. Web. <http://www.reelseo.com/48-smartphone-users-watch-video-82-notice-mobile-ads/>.
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transportation and competitors such as Lyft and transit systems. All due to what
they are noticing on social media and websites they use through their mobile
devices.
Uber must measure their effectiveness when it comes to reaching African
American consumers, below are some outlined approaches:
Focus group: Creating a focus group before the campaign is launched can be a
good way to get feedback before anything officially starts. This can be convenient
because one could make last minute changes to the campaign that could be
considered as improvements.
Opinion polls: Surveys and polls should be conducted to test how African
Americans view Uber and what they think the company stands for and what their
motives are. The survey should uncover if Uber is their preferred choice of
transportation. Also the polls should contain their cell phone usage in relation to
social media, emails, websites, etc.
Field Test: Similar to the UberEspanol campaign previously mentioned, Uber
could start by only implementing this campaign in one city to test if the campaign
takes off. With New York City, Atlanta and Chicago having the highest population of
African Americans22, this campaign should be tested where there is a high black
population in order to see exponential results.
If successful, Uber should see an increase in sales, especially where African
Americans and possibly other ethnic groups are present. They should also see a
22 "Metro Areas With Largest African American Population." BlackDemographicscom. 2010. Web.<http://blackdemographics.com/population/black-city-population/>.
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growth in their African American customer base and brand loyalty. It would be wise
to begin targeting to this ethnic group to be ahead of their competitors. Uber wants
to improve and grow as a company, and reaching out and recognizing new groups of
clients could lead to a greater overall success.
Works Cited
Bullard, Robert, Dr. "All Transit Is Not Created Equal." All Transit Is Not Created
Equal. Web. <http://reimaginerpe.org/node/306>.
Elahi, Amina. "Uber in Chicago Speaks Second Language: Spanish."
Chicagotribune.com. 20 Aug. 2015. Web.
Johnson | 16
<http://www.chicagotribune.com/bluesky/originals/ct-uber-espanol-
chicago-bsi-20150820-story.html>.
Fete, John. "Hispanics Are Mobile-dominant. Are Your Campaigns?" Marketing
Forward Blog. 19 May 2014. Web.
<http://www.experian.com/blogs/marketing-forward/2014/05/19/hispani
cs-are-mobile-dominant-are-your-campaigns/>.
Freier, Anne. "Uber Usage Statistics and Revenue - Business of Apps." Business of
Apps. 14 Sept. 2015. Web. <http://www.businessofapps.com/uber-usage-
statistics-and-revenue/>.
Ingham, Edmund. "Start-ups Take Note: Uber Made It Big, But Did They Get It
Right?" Forbes. Forbes Magazine, 5 Dec. 2014. Web.
<http://www.forbes.com/sites/edmundingham/2014/12/05/start-ups-
take-note-uber-made-it-big-but-did-they-get-it-right/>.
Kosoff, Maya. "New Revenue Figures Show $50 Billion Uber Is Losing a Lot of
Money." Business Insider. Business Insider, Inc. Web. 07 Nov. 2015.
<http://www.businessinsider.com/ubers-revenue-profit-and-loss-2015-8>.
Kurson, Ken. "Revealed: Uber's TV Buy Is Gigantic." Observer. 22 July 2015. Web.
<http://observer.com/2015/07/revealed-ubers-tv-buy-is-gigantic/>.
Lu, Alicia. "17 of Uber's Most Brilliant Ad Campaigns - Urbanful." Urbanful. 21 Jan.
2015. Web. <https://urbanful.org/2015/01/21/17-of-ubers-most-brilliant-
ad-campaigns/> .
Maclay, Kathleen. "Study Explores Metro Car Ownership Patterns, Race, Segregation
and Disaster Planning." Study Explores Metro Car Ownership Patterns, Race,
Johnson | 17
Segregation and Disaster Planning. UC Berkeley News, 23 Mar. 2006. Web.
<http://www.berkeley.edu/news/media/releases/2006/03/23_carownersh
ip.shtml>.
Pullen, John P. "Everything You Need to Know About Uber." Time. Time, 4 Nov.
2014. Web. <http://time.com/3556741/uber/>.
Rick, Christophor. "48% of Smartphone Users Watch Video on Them, 82% Notice
Mobile Ads." ReelSEO. 27 Apr. 2011. Web. <http://www.reelseo.com/48-
smartphone-users-watch-video-82-notice-mobile-ads/>.
Waldrum, Josh. "Uber vs. Lyft: 5 Things I Learned From Giving Up My Car." 17 Feb.
2015. Web. <https://www.thezebra.com/insurance-news/848/uber-vs-
lyft/>.
African American Shopper Analysis. Experian Marketing Services. Web.
<https://www.experian.com/assets/marketing-services/reports/african-
american-shopper-analysis.pdf>.
"Metro Areas With Largest African American Population." BlackDemographicscom.
2010. Web.<http://blackdemographics.com/population/black-city-
population/>.
"Social Networking Fact Sheet." Pew Research Center Internet Science Tech RSS. 27
Dec. 2013. Web. <http://www.pewinternet.org/fact-sheets/social-
networking-fact-sheet/>.
"The Company." Uber. Web. <https://www.uber.com/about>.
Johnson | 18
"Who Are Uber's Biggest Competitors?" Zacks Investment Research. 8 Sept. 2015.
Web. <http://www.zacks.com/stock/news/189318/who-are-ubers-biggest-
competitors>.
Johnson | 19