MKTG100 | Discussion on the Market strategy of Uber

Introduction

Every company faces many challenges in running the various departments or in changing the policies. These issues affect the productivity and growth of the company. To reduce the issues a company makes the strategy to gain the competitive advantage or to grab the high market share. Marketing strategy is a forward-looking and long-term approach to attain the high competitive advantage. eve tThe main objective of market strategy is to achihe company goal as on the basis of company goals these marketing strategies are made. In this report, Uber has been taken into consideration to analyse the issues and strategy of the company. Uber is a transportation network company which operates in peer-to-peer ridesharing, food delivery, and taxi cab. It operates in 785 metropolitan areas in the world; its platform is designed through websites and mobile application. Riders are also founded by the mobile application (Uber, 2018).

At the beginning of the report, issues faced by the company will be discussed. After that, market segmentation, target, and positioning of the company is analysed. At the end of the report, marketing strategy will also be analysed to reduce the issues and attain the higher market share.

Challenges faced by Uber

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Uber is a technology company which connects the driver and the rider. It is the responsibility of the driver to pay taxes but the government claims the amount of taxes from the company. According to the government, the entire ride payment is the revenue for uber that’s why uber is liable to pay taxes. The company charges the tax from the drivers or the riders by increases the ride fares. Due to more pressure or loss; the company has stopped the services in some particular cities or states.

Government Challenge

The company faces an incredible risk at the time of working in cities or countries. There are some cities and countries in which Uber cabs are banned such as American cities. In America, the government took steps towards the industry and declared the car-shipping application illegal. Airport authorities banned Uber drivers to drop-off the people, the authorities charge extra fees to drop-off and pick-up the customer at the airport (The New economy, 2015). The extra fees paid by the drivers and the company increases the fare of a ride for the riders, which decreases the competition as compared to the traditional taxis. The government authority randomly bans the services which makes difficult conditions for the drivers as well as the company (Hall, and Krueger, 2018). It is a governmental issue which is faced by the company.

International expansion

The company faces issues while expanding the business at the international level. It increases the operational risk of the company such as Asia has more taxes because of the large population as compared to America. It increases the competition between the cabs and traditional taxis (The New economy, 2015). It has been seen that in expanding the business in Asia the company had to face tough competition by reducing the fair value of ride. The company can easily expand the business but it is difficult for the drivers to compete against the traditional taxies which have high brand value as compare to the Uber companies in Asia (West, Ford, and Ibrahim, 2015).

Segmentation, targeting, and positioning

Segmentation divides the population into groups according to behaviour and nature; targeting is process of selecting a specific group to influence or to sell the whole products. Positioning is the selection of marketing mix which is more suitable for the target customer segment. Uber targets all age of people with the different services; the company offers different services to the different types of people such as Uber X, Uber Pool, and Uber XI for the cost-saving customers. Uber Premium is also offered by the company to the customers who can easily afford and did not mind to pay more (Research Methodology, 2018). Below table provides a clear picture of Segmentation, Targeting and Positioning strategies of Uber:

According to the above table, it has been seen that the company sets the target as per the customer behaviour. The company offers the Uber X, Uber XI and Uber pool to the lower and middle class who can easily afford the fare. These cabs also travel everywhere where the company is operating. These rides are especially for those who are of age of 18-25 because at this stage students and employees are struggling for the successful career. The other rides offered by the company to the high-class people who can easily pay more. Usually, these are the settled people or handicapped which can pay more but need a high level of comfort. The company target all age people with the different level of category (Uber, 2018).

Market strategy of Uber

Referrals

The company gives the opportunities the people to ride free by referring the application to friends. The company provides money-get-money offers in which the first timer gets the free ride to try the services. It is a marketing strategy of the company to attract the more customers towards its services. It helps the company to get the high market share by increasing the demand of customers (Weinstein, and Winston, 2016). It has been seen that the company earned high profit from which it can easily pay tax amount. It reduces these issues of the company; not only the company but also the customer gets the advantage of the services of the company.  The company also offers the incentives to the drivers so that the relationship with drivers and riders are maintained. It further reduces the international competition or can easily enter the new area (Lawton, and Rajwani, 2015).

Feedback

There is one major difference between the traditional taxies and Uber cabs that the cabs have a rating system for both drivers and passengers. Drivers are highly motivated by their ratings, and the passenger gets the extra benefits on high stars. This system helps to promote trust between the driver and riders, so the risk of losing a customer due to high fare is reduced. The company also takes the advantage of the customer review; it can solve the complaints of a customer which attracts the more customers and beat the competitors (Marketing, 2018).

Special offers

Uber always launches new special offers; groups of people around the world enjoy these services. It delivers the services from the kitchen to offices and other times. It also offers the ride to a passenger with the celebrities to promote the services of the company. People are attracted towards the rides just because of benefits provided by the company and to meet the celebrity. These surprise and delight tactics work on loyal customer and generate the positive attitude within customer mind towards the company and drivers (Nagle, and Müller, 2017). This helps the company to compete with the competitors by building the strong brand image in the market. This strategy also reduces the government risk because higher demand of customer created trust and strong relationship of customers with the company.  The government could not ban any kind of beneficial services for the customer (Alstyne, Parker, and Choudary, 2016).

Recommendations

Record of Human resources

From the above analysis, it has been recommended that the company should adopt tracking systems so that the company can easily track the complaints of riders and improve the services. The company has to use the appropriate tool which tracks the complaints and record of the employees’ data (Fritz, Tilahun, and Dugas, 2015). It is observed that the record of employee improves the productivity of the company.

Training

It is said that the employees are the main assets of the company. It is necessary for the company to hire the excellent employees to achieve high market share. Drivers and employees of the company are selected by the HR department. It is the responsibility of the department to select the appropriate candidates. The company has to provide the best training to the Human resources department; so that they can conduct the inclusive interview. Senior leaders, HR staff, and managers have to train to build the strong relationships and encourage the new ideas.

Conclusion

From the above analysis, it has been concluded that Uber connects the people to travel from one place to another. The company’s main aim is to connect cities and people; it uses the transportation to achieve the objective. Uber faces many issues such as high taxes, government risk, and others. The company sets the target, segmentation, and positioning to gain the high revenue and attracts more customer towards the company services. The company makes marketing strategy to reduce these issues and gain the competitive advantage. These strategies mainly include referrals, providing special offers, and many others. Marketing strategy helps the company in building the strong relationship with the customer and increasing demand. It has been recommended that the company has to record the data of the employees or to adopt the technological software which will help the company to track the customer complaints. It is observed that the company will expand the business at the international level in a few years.

References

Fritz, F., Tilahun, B. and Dugas, M. (2015) Success criteria for electronic medical record implementations in low-resource settings: a systematic review. Journal of the American Medical Informatics Association, 22(2), pp.479-488.

Hall, J.V. and Krueger, A.B. (2018) An analysis of the labor market for Uber’s driver-partners in the United States. ILR Review, 71(3), pp.705-732.

Lawton, T.C. and Rajwani, T.S., (2015) The Routledge companion to non-market strategy. Routledge.

Marketing. (2018). Marketing Strategy of Uber – Uber Marketing Strategy. [online] Available from: https://www.marketing91.com/marketing-strategy-uber/ [Accessed 2/10/18].

Nagle, T.T. and Müller, G., (2017) The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

Research Methodology. (2018)  Uber Segmentation, Targeting and Positioning. [online] Available from: https://research-methodology.net/uber-segmentation-targeting-and-positioning/ [Accessed 2/10/18].

The New economy. (2015). What problems does Uber currently face?. [online] Available from: https://www.theneweconomy.com/insight/uber-problems [Accessed: 2/10/18].

Trullen, J., Stirpe, L., Bonache, J. and Valverde, M., 2016. The HR department's contribution to line managers' effective implementation of HR practices. Human Resource Management Journal, 26(4), pp.449-470.

Uber. (2018). About Us. [online] Available from: https://www.uber.com/en-IN/about/ [Accessed 2/10/18].

Alstyne, M.W. V., Parker, G.G. and Choudary, S.P. (2016) Pipelines, platforms, and the new rules of strategy. Harvard business review, 94(4), pp.54-62.

Weinstein, A. and Winston, W., (2016) Defining your market: winning strategies for high-tech, industrial, and service firms. Routledge.

West, D.C., Ford, J. and Ibrahim, E., (2015). Strategic marketing: creating competitive advantage. Oxford University Press, USA.