UberX Operational Trends in the Taxi and Limousines Industry - Case Study Example

CONSUMER BEHAVIOUR By (Name of Student) Student ID Number Subject Code Due Date Introduction Reigeluth (2013), argued that, Uber is basically a technology company which offers free software platform usable by mobile devices for individual who wish to request for taxi services. Uber technology has a capability of tracking a client’s phone via GPS coordinates regardless of the user’s location and within shot time Uber driver arrives. The uber application technology is able to inform a client of the nearest uber taxi through a text message that is auto generated and sent to his or her mobile phone. Uber offers affordable and convenient services to its clients. These taxi services include; UberTaxi, UberX, UberSUV, UberBlack among others. This report will examine of UberX operational trends in the Taxi and Limousines Industry. UberX is regarded as an Uber service with the most popularity as among other available Uber services. It is widely referred to as “the low-cost option” for riders and as a ridesharing product of Uber. UberX is a reliable, affordable and safe transport alternative. It is a service whereby people use personal vehicles in providing rides. UberX utilizes a digital platform to connect riders to drivers. This is regarded as a product that lowers costs of transaction between sellers and buyers. This helps in explaining why it is viewed as a method that is cost effective especially for point-to-point transport. UberX has increased supply to point-to-point transport market though it does not exactly replicate the existing market offering. Therefore, it is safe to suggest that it has added differentiated services and competition to the existing players in the Australian regulated taxi and limousine industry. UberX encompasses a bidirectional system of rating used to reduce information asymmetries. This provides information to sellers and buyer for more effective decision making. This is a complementary and different measure as compared to other methods for the fact that customers can identify whom they are buying services from (Reigeluth 2013). 1) UberX Market UberX delivers a smaller portion of services to clients as compared to the entire taxi industry. It is indicated that UberX contains approximately 8.8 percent of the total rides involved in point-to-point transport market in Australia. Due to the given UberX’s notable growth, this can be rendered a conservative assumption. This growth in number of rides and expansion in the market share can be attributed to the variety of benefits that are enjoyed by clients who use the service. The main gradient for these client satisfactory benefits are; the rise in differentiated services and the reasonably low costs of rides. Uber owners encourage clients to use more of their UberX point-to-point transport market. This grows the market size of point-to-point transport since the clients are either attracted by the low costs or prices or the various features that UberX offers. Due to fairly low prising and variety of services, it has been noted that there are net benefits associated to the above stated, although the overall market is the same, there are monetary benefits experienced by UberX because of stronger customer gain (Wincent 2005). Deloitte Access Economic Report indicated that fin81ancial net benefit experienced by UberX through its operation in Melbourne, Sydney, Perth and Brisbane is worth more than $81 million per year. The report further indicated that 61 percent of UberX point-to-point transport rides are new, this is induced by their differentiated services offered (36 percent) and/or price point which is indicated at 25 percent. Therefore it is safe to conclude that firstly, UberX’s market share is large and wide, secondly, the target market is for all and thirdly, each and every market segment is accommodated and has a variety of services to explore (Martin and Joomis 2007). 2) UberX competitors UberX does not presently have significant competitors in Australia. Though it competes with international taxi service providers like; Didi Kuaidi, Lyft and BlaBlaCar. In 2015, an Australian application “RideBoom” begun its competition endeavour and recently taxi-hailing applications like goCatch and Ingogo. Have been introduced to the industry as UberX competitors. Taxi drivers of different companies in Sydney indicated that through the platform usage, there has been a notable increase in returns in earnings of about 30 to 50 percent. Prices of taxis differ from UberX’s. Competitors fare structure is a combination of distance covered rates, travelled time and waiting charges. This charges also differ during the peak hours and off-pick hours. UberX implements a similar charging trend as the taxi industry. The difference is the fact that UberX has a predefined pricing method for high and low demand of supply. Unlike its competitors, UberX enhances transparency between its clients and drivers. This is due to the fact that Uber application displays data like drivers name, plate number of the vehicle and so forth, this features lack in the other competitor platforms (Farinda 2009). 3.1) Target Market Uber just like any given company, must first and foremost understand and clearly define its target market and adapt a strategic market mix for it to succeed. Uber does not encounter a lot of constraints like other taxi cabs due to its embraced smartphone technology. The company’s business model utilizes smartphone technologies of clients to link them with drivers who are independent. This renders this method an effective, cheap and convenient way to acquire point-to-point transportation. Uber has a large and wide clientele who love and appreciate its services, their services are customer oriented and are suitable for all age groups (Martin and Joomis 2007). This report targets young adult group of ages between 25 to 35 years of age. Young adults mostly use UberX services in their day-to-day activities. This activities differ in terms of distance to be covered for its completion, time taken, time period and so on. Therefore the young adults require convenient, cheaper and readily available means of transport. This Uber target market has a great tendency of high mobility and they rarely reside at one place for long hours. Their nature of activities, social lives and geographical coverage is likely difficult to define. Therefore, it can be perceived correct to indicate that they are heavy users of UberX services. Uber Company has positioned itself as a specialist in offering quality but affordable point-to-point transportation services that are aimed at supporting these group of young adults fulfil their transportation or mobility needs. 3.2) Potential Market In order for UberX to assess potential target market, two aspects ought to be considered, the first aspect is the possible attraction of potential clients to Uber who would never have engaged the Uber mode of from point-to-point transportation services. Second aspect concerns those clients who use other taxi services other than Uber’s and they are influenced on switching to Uber. One of the potential market segment that Uber can venture into is the finished product supply and or delivery. This Uber services can be introduced to companies that manufacture products. Due to technological advancement, Uber can render these services to companies since they have the capacity to monitor products while supplying and also they have the capability of reliability, this is because they can be available 24 hour a day and at the shortest time possible (Reigeluth 2013). According to Martin and Joomis (2007) stated that there are seven categories of core needs that are common to all individuals. Individuals must fulfill the needs found at the lowest level of the pyramid before they are interested in tackling the next level. The upper most three levels “represent growth needs” and the lowest levels represents deficiency needs. The young adults need to equally fulfill the following needs in order for them to regard their specific individual needs met. a) Needs and motivates The young adults need to survive. This is accomplished by the availability of basic needs. These basic needs are food, air and water. Therefore these type of individuals rely on Uber for mobility purposes in the verge to meet these needs. The underlying motivator is the urge to accomplish the required task. For example; young adults may feel craving for barbeque at a friend’s house 30 miles away. Here, food is their need and urge is their motivator. Therefore UberX tends to aid the young adults group to satisfy their physiological needs. The accomplishment of hunger and urge satisfaction leads to another level of needs that ought to be satisfied (social needs), the young adults need to feel secure and free from danger. b) Perception Perception is an individual’s view on a brand or a product when a client makes first contact with it. Though in marketing the concept is well understood as client information processing. At the initial stage, all the client’s senses are fully occupied in receiving the brand’s market communication messages. Four main stages occur during perception in marketing which include; attention, sensation, retention and interpretation. The young adults group highly uses technology to communicate and share information, UberX’s dependable services are likely to be shared widely and faster due to these technologies. c) Reasoning Reigeluth (2013) stated that, behaviourism learning theory can be most applicable in the process of promoting UberX. This is a learning theory that solely focuses on individuals “objectively observable behaviour’s” while eliminating any independent activity of the mind. Learning is further defined by behaviour theorists as acquiring new behaviour based on exposed environmental conditions (Reigeluth 2013). Therefore, UberX is bound to increase its revenue due to the fact that once the young adults group acquire the behaviour of using UberX’s point-to-point transportation services, likelihood of them stopping is almost impossible and as long as the group is in existence, UberX will always be their favourite due to the low cost and easily available facilities. d) Lifestyle of the target market Young adults group share almost similar lifestyles. Due to this fact UberX is fulfil the needs that measure their styles of lives. Uber is bound to evolve with the ever changing needs of this group (Mathew 2005). 5) Consumer Behaviour and Decision making According to Zhang (2011) consumer behaviour is regarded as the processes that clients go through in the process of purchasing goods and services. This process influences their decisions and usage of the purchased product and or services. The author further indicated that the consumer decision making process is made of five main steps that a consumer moves through when purchasing goods and services. These steps are; need recognition, search for product information, product evaluation, product choice and purchase and lastly, disposal of the product (Zhang 2011). a) Need Recognition Marketers have a tendency of trying to stimulate a client to realize that he/she has a need for certain product or service. For example when a beverage makers locate their products in gymnasiums, this makes people who are training realize that they have the urge for refreshments after long and tiresome training. Therefore, Uber company has to make the public especially the young adults group realize that UberX point-to-point transportation services is what they require to effectively, conveniently and efficiently concur their transportation needs. To achieve this, Uber ought to strategically identify information sources that the target group often uses to acquire and share information among themselves. This will enable Uber Company to share their various and affordable services to the target group. Therefore Uber Company should place its information in targeted sources for the group to access and evaluate (Staddon 2003). b) Search for Information Immediately the target group realizes that there is need for point-to-point transportation, it will require them to search for necessary information concerning the product that they need. Searching process may take various forms, some include; inter-personal discussion and sharing among the target group, searching through social media platforms like Facebook or Twitter. Therefore, Uber ought to frequently review their online informational materials to ensure that they are always geared to clients’ needs satisfaction. c) Product Evaluation Obviously, there are other competitors in the taxi and limousine transport industry. Therefore Uber Company ought to efficiently and strategically place information in regard to UberX in the most precise way. This is to avoid overwhelming and information overload to the clients. Their product should be above per so that they can dominate cabs market share and gain competitive age over its competitors. d) Product choice and purchase Product choice and purchase is where the target market make the final choice in regards to product. These choices are determined by prier information that was gathered in previous stages. UberX information availed to the target group is believed to be concrete enough by the fact that the company offers more products that are geared towards client needs satisfaction as compared to other competitors. e) Product Disposal Product disposal is the process in which client’s termination the use of a product or service. This can be influenced by the level in which the client is satisfied by the use of the product. If the client is in question of a product or service delivery. Then he/she might develop negative attitude towards the product use. Based on this research, it is therefore safe to indicate that since UberX has various facilities that are liked and used by the target group, it is safe to state that young adult group will not be disposing off UberX services (Broad 2012). 5.2) Evaluative criteria Evaluative criteria are viewed as certain characteristics that are of value to an individual. For example; the type of ride one requires, the passenger capacity, the type of colour, the mileage and so on (Wang 2003). Evaluative criteria is used by clients to help the narrow down their choices. Target market depends on several factors in evaluating different brand. Some of the factors are; nature of ride to be taken; when going for a game drive, a client may opt to seek a 4x4 ride services as opposed to an individual who is seeking services for an official meeting. Secondly, the issue of preference and accommodation is another factor to consider, if the young adult group intends to travel as a team in one ride then they may opt to seek services of bigger rides as opposed to individuals who do not mind about travelling as a block (Farinda 2009). . 5.3) UberX services Clients always depend on available and reliable sources of information. Therefore, the more and extensive advertisement Uber does, the more the clients it will get. Clients mostly use technology advancement tools like social media to check for alternatives and price and services comparison. Therefore, Uber should ensure that the company picture portrait out there should be the true representation of their services. 5.4) Post purchase behaviour Post purchase behaviour is the act of paying for goods and services after use. This behaviour has both negative and positive impact on the business. Positive impact is the fact it encourages clients to seek for goods and/or services even in times of financial constraints. This encourages clients to “stick” by the service provider because of the credit facilities. On the other hand, the limitation to a company is that it may create an imaginary picture on a business. For example the market competitors may think that UberX is always engaged with clients hence it is viewed like there is more monetary return. In the real sense it might be that most of these clients are being serviced on credit or even for free as one of the company’s marketing strategy (Staddon 2003). 5.5) Loyalty It is widely viewed that loyalty goes hand in hand with reward. Uber family tends to retain its clients by rewarding them for their loyalty to the Company. Uber’s clients regularly receive updates on new products in the market and any offers that they may be exercising from time to time. 6.0) Marketing strategy Marketing is the act of creating awareness on a new or existing product to the public or target market (Pellemans 1971). The whole purpose for the act is to increase the products market share or creation of one. UberX can differentiate the services it offered by using advanced technology to deliver its services. Example of this technology is real time online social postings. This will create up-to-date news and updates that stream live to target market. UberX has positioned itself as a specialist in offering quality and affordable point-to-point transport services to the young adults of Australia (Lu 2004). ICM Mix/Promotional Mix Drawing on Fill (2009), integrated marketing communication (IMC) refers to the marketing function of promotion. Oladepo and Abimbola (2015) are of the opinion that IMC is the process of creating and reinforcing uniformly beneficial relationship with key stakeholders of an organization and this is often done by developing a strategic communication plan that facilitates good relationship with the organization through a broad range of media. Elements of promotional mix encompass direct and digital marketing, personal selling, sales promotions, public relations, and advertising (Goi 2009). 7.0) Evaluation and Recommendation Key elements of promotional mix that can be adopted by Uber include direct and digital marketing, public relations, and advertising. In order to inform people regarding a broad range of rides it offers, Uber Company should employ Digital marketing. Borrowing from Zhang et al (2013), digital marketing entails marketing in which messages are sent using a medium that solely rely on digital transmission such as the internet. Specifically, Uber Company should advertise its programs via social media platforms such as twitter and Facebook. Facebook will provide an opportunity for potential to interact online and share their experiences (Zhang et al 2011). Uber Company should also continuously develop its website. Uber should also deliver relevant, valuable and free information in order to keep the young adults coming back, build trust, and attract fresh prospects. The company should provide fresh contents each time a client returns. Advertisement should also be an important marketing strategy Uber. The Company can advertise its products through the newspapers, radios and television. Most people, including the young adults like reading newspapers and as such, they are more likely to come across ads from Uber. Most people in Australia like listening to advertisements offered by radio stations and as such, Uber can use this opportunity to advertise its products and persuade people to try its services (Kim 2008). Uber should also use public relations to its various services. Drawing on Goi (2009), public relations aims to build good relations with the firm’s publics, including legislators, stockholders, and consumers. Public relations play an integral role in heading off unfavourable events, stories, and rumours. It may consist of conducting and publishing surveys regarding various products offered by Uber. Therefore, Uber Company should take advantage of the benefits associated with public relations (Goi 2009). Conclusion UberX Company is one of the few point-to-point transportation services in the world. 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