Consumer Behaviour: of Uber - Case Study Example

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The paper "Consumer Behaviour: Case of Uber" will explore the 4P’s of marketing as these apply to Uber. Marketing is an important area for the company in terms of expanding the reach, and awareness of the business, which in many cases entails the use of promotions to induce trial (Naylor et al, 2006)…
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Download file to see previous pages Launched in 2009 in San Francisco as a mobile app for smartphones, Uber was formed to fill an urban need for carpooling in that city where parking is limited as well as expensive (Feeney, 2015). Uber’s foundation grew from casual carpooling that emerged in San Francisco and Washington D.C. in the early 1970s where there were at least two passengers and one driver required in a vehicle for it to use the special carpool lanes into and out of these cities to reduce vehicle congestion and save commuting time (SF Casual Carpool, 2015). The Uber app permits users to enter a request for a destination that is then routed to a fleet of company sourced independent drivers that have been screened and hired by the company (Bilton, 2012). The charges are handled through the Uber system based on time or distance (Bilton, 2012). In those cases where the speed exceeds 11 mph or 18 km/h, the charge is computed based on distance as opposed to time (Bilton, 2012). The charges are billed to the customer’s credit card when the trip is completed, and the need to tip is optional, as the company advertises that this is not necessary (Bilton, 2012). The drivers are paid through the Uber system (Rassman, 2014). From a business model standpoint, the company does not have the liability of insurance for the vehicles which is borne by the drivers and does not have to pay for vehicle costs in terms of upkeep or maintaining a rolling stock (Rassman, 2014). Varied members of the taxi industry in differing cities have submitted complaints that the service uses unlicensed taxi drivers that are stealing away customers, despite this, Uber is operational internationally in over 200 cities in 53 countries (Uber, 2015a). The entire concept is built on consumer convenience, ease and accessibility through the use of one’s smartphone, iPad or computer (Rempel, 2014). This is an important consumer marketing point concerning the end-use potentials that helped to launch the company that included considerations such as the advantages and benefits for drivers in the system, consumer exposure, and trip pricing. Uber uses the 4Ps of the marketing mix to build the company, expose the service and expand its use (Schenker, 2013). In terms of understanding this usage mode, a look at the traditional components of the 4Ps provide insights concerning how Uber uses this to benefit its business. The marketing mix as a concept was introduced by Neil Borden in the early part of the 1950s (Dominci, 2009). His twelve-point policies were refined by Jerome McCarthy in 1964 into the 4Ps of marketing that consisted of “product, price, place and promotion” (Dominci, 2009, p. 1). Convenience is the key foundation that Uber’s service is built upon. Prior to Uber, consumers had to rely on licensed taxi services that charged metered fares or private licensed cab services whose rates were similar to the metered taxis. The pricing structure differs because Uber does not have the fixed costs of rolling stock, vehicles that are not being utilized, or drivers to work into its overhead (Reisman, 2013). In addition, the company uses a formula that is based on trip distance or elapsed time that is lower than standard industry rates (Reisman, 2013). This offers consumers the convenience and utility of calling for a vehicle when they need it and booking it in advance to save them money and to provide them with the convenience of not having to seek a cab that might not be available during high utilization ties of the day (Yeung, 2013). The other benefit is that customers pay for their rides using a credit card (Yeung, 2013). ...Download file to see next pagesRead More
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