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EXECUTIVE SUMMARY Uber is transportation startup, which provides an App-Powered on-demand ridesharing service for smartphone users. Uber service is currently available in 129 cities in entire the United States and more than 100 cities in the globe. Moreover, Uber has been competing for market share from traditional transportation companies and also other on-demand ridesharing companies. The growth and success of Uber have helped the company to become new attraction for investors. Currently the company is worth around $18 billion (Mark Rogowsky, 2014). Uber continues to be the premier on-demand transportation provider of exceptional convenient experiences, and seeks to make this experience more affordable and accessible for all riders. Ongoing efforts are in place to continue to improve the quality of existing service and to develop new service, namely, UberPool for more options. As known, UberPool has been challenged by ridesharing competitors and law issues, this paper will provide details about various strategies and tools that allow Uber to maintain its position as the leader of car service application. This is a direct marketing plan for UberPool to grow widely outside of San Francisco Bay Area. The campaign will come throughout two of biggest holidays of the year, which are Christmas 2014 and New Year 2015. Along with the implementation timetable, we will continuously check outcomes and monitor our KPI’s to ensure that our campaign is performing efficiently and we are getting highest ROI. MARKETING VISION
Uber is built around the belief of seamless transportation platform/system. By connecting riders to drivers through mobile apps, they make cities around the world more accessible. It also opens up more business for drivers.
This marketing plan is a means for Uber to refocus its identification as differentiated from competitors in its market. This will include developing new marketing products, improving social media plan, competing pricing strategy and enhancing promotion plan.
This marketing plan will allow Travis Kalanick, the CEO, to focus his marketing efforts by taking the long view, and looking for results on a daily and weekly basis to see that the chosen tactics are successful.
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We want people to have more inexpensive, reliable, and on-demand convenient transportation. At the same time, the main purpose is to drive more users to Uber in even greater numbers as the business creates more opportunities for riders getting around, inbound and outbound of the city with their friends. 2. S.W.O.T. analysis (See Exhibit 1) Based on our SWOT analysis and research, we’d like to propose a marketing plan that will reach the following goals:
- Specific: UberPool will be able to approach more riders in the next quarter and the same time get a higher market share of taxi services industry.
a. Increase new customer account by 20% of existing Uber’s account
b. Achieve 15 % of market share in taxi services industry - Achievable: Conducting an assessment of situation every month - Relevant: match to the company’s vision that is building seamless transportation platform - Timeline: by end of February 2015
4. Strategies and Tactics
We focus on differentiation while keeping low-cost transportation for riders. In other words, we offer a new service, which is UberPool. With UberPool, you share a ride and split the cost with another person who just happens to be requesting a ride along a similar route. Since the service is based on a mobile application, we believe digital marketing strategies and social media boosting are the main keys of our marketing plan. SITUATION ANALYSIS 1. Market description
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a. Market Analysis
The idea behind UberPool is to attract more users by offering reduced price. The existing service by Uber that is UberX provides about 40% less cost fare to users than normal taxi services. By launching UberPool services the prices were reduced even more. For example, UberX would cost about $10 from one place to another; UberPool will only cost $6 (Uber, 2014). Further, to find out the popular places from which most of customers prefers to use Uber service, the company launched UberData project. The project analyzed 3000 users in San Francisco randomly to find out the popular places users like to visit (Lu, 2014). The final result showed the most popular places customers visit using car services are restaurants, nightlife, hotels and shopping. However, the result showed that 80% users most likely prefer to select pick up and drop off destination few steps further than the original destination. This data helped to improve the services as proper allocation of Uber cars was reorganized and drivers were able to save more time by assuming the final location of a users bit further than requested. b. Decision process of customers As UberPool is in initial stage, not many people know about the services provided. So, we conducted a small survey randomly selecting Uber users and asking few questions (See Exhibit 2). The final survey included of 34 people from different cities of the United States, most of the people were from San Francisco bay area. Only 71% of the people who took the survey knew about UberPool services. Furthermore, only 18 percentages of the Uber users were totally familiar with the UberPool concept and 59 percentages partially understood. The survey indicated that 65% of people have never used UberPool service. When comparing the Uber services, 24% said they prefer UberPool service that was only 50% less than UberX. The overall experience ratio showed that about 60% of the users were satisfied with their experience. The overall rating for the riding experience, condition of car and individual comfort level sharing car showed that about 40-45% rated very good. In addition, 47% users said they would surely recommend this service to others. This shows every category had not more than 50% of positive result. However, considering UberPool as a new service the results are really good. 2. Competitive environment
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The main competitors of Uber Company are Lyft and Sidecar. In term of new carpooling service like UberPool, their competitors have the market covered by Lyft Line and Sidecar Shared Rides. In this part we are summarizing a competitive analysis of UberPool versus those two competitors. Since UberPool is a new service for users sharing cars through mobile application, we are not including Taxicab companies as UberPool’s competitors. We are analyzing the UberPool’s competitors by 3 aspects: their products and services, their strategies and an overview of the futuristic market.
The first main competitor of Uber is Lyft, a startup first started in 2008. Back to the end of Summer 2014, Uber and Lyft both released new car-sharing services, which are UberPool and Lyft Line. Lyft Line was launching before UberPool based on timeline, and another startup company called Hitch first embraced this Lyft’s new service. Hitch was built to fill a dream of shared rides with strangers in June 2014; however, the scary competition of new transportation startups lead Hitch become one of Lyft’s acquisitions. Since then, Lyft Line has been developing by Hitch’s founders and their drivers.
About Lyft Line, as Lyft’s brand image, its main differentiator is community oriented. While running its own form of surge called “prime time”, they also offers discounts during “happy hour”. In term of brand image, Lyft has been noticed by their “Pink Mustache” which is attached in front of driver’s car; while Uber has been slightly noticed by a black sticker. In term of labor, Lyft has a better ranking for their drivers’ working condition because they keep driver pay high by reducing its commission share to 0%, while Uber’s is around 20-25%, which is high.
Another competitor of Uber is Sidecar, the latest entrance that was launched in 2012. While Uber’s vision is to provide medium-high standard services, Sidecar targets in narrower audience, who care about lowest fees, larger cars and the price of the trip upfront. One differentiator of SideCar is that it allows users to choose drivers from a list of rides, while Uber’s drivers are chosen randomly. In term of new carpool service, Sidecar offers a cheaper way to share a ride comparing to Lyft Line and UberPool, when their official banner of the service informs directly a comparison of prices among those companies. This latest service was first announced in May 2014, and it is also expanded in Chicago and San Francisco, while UberPool is limited in San Francisco to SFO airport. 3. Ideal customers
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As the company’s product is designed for mobile application, their customer segmentation is determined to be technology oriented. In other words, Uber targets is young, urban, smartphone-owning individual. Specifically for new feature UberPool, their ideal customers are metropolitan people who need on-demand and regular rides to their office, or to several public events. By sharing a ride with other people on a same route during peak hours, this service is a solution for high cost transportation, hectic traffic and also pollution. MARKET STRATEGY 1. Target customers Uber started as a service provider to all kind of users with UberX and Uberblackcars. After three and a half years of the company’s existence it launched UberPool (Brustein, 2014). The purpose of introducing UberPool service late was to have enough users to attract new services. This was a smart way by which Uber created a whole market. Futhermore, before officially launching UberPool in August 15, 2014, Uber had a trial run. The trial run was for only Google employees, to use the service to evaluate and rectify all the errors. This way of improvising was called as Beta. This was the plan of Uber to have enough users for its future services and improvise as much possible before allowing for public use. In my opinion, I would consider target customer for UberPool as a small group or individuals between the ages of 16- 30 in major cities. The people, who most likely go out very often, meet friends and colleagues at a location and return back home alone. 2. Remarkable difference
The remarkable difference of Uber is its positioning to serve exceptional convenience, as they believe that all users’ expectation is value, less-time-waiting, easy-to-use, and legendary service. All of Uber’s service offerings include this convenience aspect, and they are better compared to other competitors. For example, Uber has higher number of drivers, so it mostly take just few minutes-waiting when it is on demand. This connects to one of core slogans of Uber which is “Getting more time, value, and conveinince - you can have it all” (Uber, n.d.).
Even though, the services of UberPool is not unique from other ride-sharing companies, they are all positioned as convenience leadership plus new feature which means that riders
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that take UberPool will obtain high-end service with extra low-cost while sharing experience with other riders. 3. Marketing materials Marketing materials for UberPool include: ● Website ● Facebook ads ● Twitter - customer service ● Marketing emails ● Online ads via partnering The website offers a full instruction of UberPool service and all current activities, promotions and also upcoming events. Twitter will be a place for questions, concerns and also complaints from users. Marketing emails need to be accurate with ongoing and upcoming activities in order to keep customers on track. Partnering with other event planners is a great strategy that Uber has been working on: guests from selective events are able to get promotion to use UberPool for the route from and to the event location. MARKETING MIX STRATEGIES
1. Product strategy UberPool is a real time carpooling service that works by using Uber application. The objective of the product is to boost demand for paid rides by decreasing fare cost, change transportation belief of people and benefit Uber drivers. Normally, driver of UberX service will pick up a passenger and drop to their destination and end the trip as shown in exhibit 10.3. The fare does not start until another request comes and drive picks up a new passenger. However, UberPool service has a different concept. Exhibit 10.2 shows that the driver will pick up multiple passengers along the way and will be paid. It will eliminate the unpaid period-spent waiting for another request. This was example of how the drivers will be benefited by UberPool, but it is also beneficial for customers. The service will help to reduce cost by splitting with other rider. The concept is to push a button on Uber application, a car comes and picks you up and while on the way, another passenger joins you who are going in the same direction but final destination might be different.
2. Branding strategy
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Uber brand communicates our complete commitments to serve riders an exceptional riding service that is reliable low-cost and convenient. The brand embodies the values that we believe in seamless transportation platform. Also, Uber’s value is responsible to community due to the fact that Uber’s service could reduce traffic, pollution, and rate of driving under the influence (Chris, 2014). For example, the number of DUI arrested dropped by 10% after Uber entered in Seattle. In addtion, Uber brand has several types of services to satisfy different rider’s expectation. Uber’s services include Black Car, UberX, and UberPool, which is the latest service. For example, Black Car service focuses on high-end experience and special moment. On the other hand, UberPool emphasizes on extra low-cost riding within the same quality of service compared to UberX. To improve its brand, Uber not only continues to enhance quality of its services and offer new reliable service, but it also pursues promotion strategy and online marketing to be more engaged with both current users and potential users.
3. Pricing strategy The fair set for UberPool is the same as UberX. However, the concept of UberPool is to split fare charged with other rider helps the customers to pay less. The purpose of the company is to reduce 40% of the fare paid by a rider using UberPool. This kind of pricing strategy is called penetration pricing. To gain market share with new service, Uber is charging less. The pricing strategy will help the new service to spread widely and more quickly. The mindset of customers is fixed in a way that they are always seeking for some kind of deals to reduce their spending. As a result, the main goal of marketers when planning any marketing plan involves pricing strategies to attract more users. Same way, Uber is offering low price with its new service that is UberPool to gain market share. In addition, Uber is also providing promotional discounts for first time users.
4. Positioning strategy
In fact, market positions are rarely permanent due to competitive activity, new technologies, and internal changes (Mahapatra, 2013). In recently, Uber’s major competitor was planning to launch new service. To ensure that we will remain attractive to current customer and appeal to potential customers, Uber determined on strengthening present position with competitors by releasing new service, namely, UberPool. Here, Uber simply
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keep its vision and enhance major attributes which is low-cost, reliable and on-demand convenient transportation without changing the positioning. With our strong position and strategies, Uber believes that UberPool will be successful above competitors.
5. Promoting strategy
a. Advertising UberPool is a new service, and carpooling is also a new term. Consequently, it will be necessary to build awareness of the company’s concept. The role of advertising within the communications mix would be: ● To increase awareness of Uber and its new service: UberPool ● To encourage non-users to sample UberPool ● To develop the belief among both users and ideally, non-users that Uber is technically superior to competitors ● To attract more investors First, we would recommend recruiting College Ambassadors. Especially at several schools located in Downtown, or Financial District (like GGU), parking and traffic is extremely hard and tricky. UberPool needs to be more reachable for graduate students, then a representative of Uber would be the person who explains and helps promote the concept. The program should be taken for one to two months and promotions are needed for specific schools in order to encourage new users to try the service. The student segmentation might be small, but significant. During holidays such as Christmas and New Year, we would recommend launching “UberRedAhead” campaign. Especially at Christmas Eve and New Year Eve, riders are recommended and encouraged to drop a pin and a specific time (5-10 mins approximately) to show where they’d like to be picked up from. By this way, the process would be less hectic and ease the pressure on city’s cabbies by pre-booking their ride. This campaign also helps drivers to have a better route to pick up the second customer.
b. PR Plan The primary role of the public relations strategy is to create an image of community involvement by UberPool, which is embracing a sustainable environment for new logistic, transportation systems. Projecting this community involvement image is important to ward off any attempt by environmentalist groups to create negative publicity or to boycott Uber. It
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is true that Uber has been facing plenty of social and legal issues, so it is important that Uber needs to work out with their brand’s image in order to promote, not only UberPool, but all of their services in general. One component of the public strategy will be to partner with other sustainable businesses. By emphasizing the importance of being a green startup in an environment- friendly city like San Francisco, the brand’s image will be improved. Hosting a discussion group to explain how the service helps to reduce greenhouse gas emissions from transportation is another move for PR plan. This will give the company an opportunity to, at a same time, improve company’s brand and gain trust from customers. Uber spokesmen need to build better relationship and connection with reporters. Along with advertising campaigns, press releases should have deeper stories and ahead other competitors.
6. Online marketing strategy – Social media plan While advertising will be used to develop the high quality image of the brand, promotions, sponsorships and social media platforms will be used to generate customer traffic, especially to the website’s blog, where customers get official announcements. ● Facebook - main face: This will be the main channel for new users and current users to look for information, any new features and new promotions. Facebook advertising is also a useful tool for any marketing campaigns since Facebook’s active users have been highly increasing. ● Twitter - customer service: Uber has been doing great with their Twitter channel. They do not only use it to stay connected with customers, but they also use their Twitter page as an online customer service. Gone are the days people would call up a company and complain. That’s why customer service is becoming increasingly important on social media platforms like Twitter. It is necessary to be close with customers by replying their tweets, messages directly to Uber account. ● Instagram contest - tell audience stories: It has been convinced that Instagram’s engagement levels are blowing Facebook and Twitter engagement out of the water. By using a shortlink from an Instagram account, you will be amazed of result of ROI and visits. One of the most effective marketing concept on Instagram is reactive storytelling. We would recommend launching a contest of telling a story while riding
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with Uber. It could be a picture of a couple at pre-party, or of two strangers in the car going to a same party, etc. By promoting hashtag #UberStory, for instance, the contest will be technically influenced by Uber, but done so in a unique, compelling way. It will be a great opportunity to broaden the reach of Uber image. ● Google plus: Google plus might be a small tool for a marketing plan, it is still one of the fastest growing social media platforms right now. After taking a look at Uber account on Google Plus, we found out that they have stopped updating news and features since December 2013. We would recommend updating information of the company, and creating viral concepts for Google Video Hangouts, a feature of Google Plus, which is considered the most useful for on-demand quick conference. UberPool needs a short video clip to show basic instruction on YouTube, and also real-time Q&A sessions for nowadays technophiles. INTERPESONAL RELATIONSHIPS In this paper, we are analyzing and recommend developing the two personal communication methods most widely adopted are direct marketing and interactive marketing. Since Uber is a high-technology, B2C company, we believe direct marketing channels will be more effective than other channels (such as sale forces) because the company is able to reach the appropriate customers. “Wakeup emails” are an efficient tool for UberPool that Uber has done pretty well already. Before launching new promotion or new feature, a quick, creative email to inform customers is always a good way to remind customer about the service. A creative online greeting cards, or a letter from Uber to Santa Clause would be a nice way to put holiday spirits into marketing campaigns. The second method is called interactive marketing. We strongly believe a stable online customer interface is very important. Going through the main website of Uber, we have seen a site for selling products and services, but missing a connection to customers. Although we are controlling social communities through social media platforms, it is important to provide a sense of community for customers, with other users. UberPool is well explained and illustrated on Uber’s blog, but has not been well demonstrated within the official website of Uber. In general, Uber’s website has completed main features, such as Context, Content, Customization, Communication, Connection, Commerce but there is a lack of community. Building strong social media channels is important, but creating good interpersonal
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relationships from the original website is indispensable. Although Uber is willing to provide a high-end brand image, UberPool, however, is targeting big fast technophiles. As a result, a convenient communication for community is necessary. Another technique we would highly recommend is viral marketing. Creating buzz about the service by using word of mouth or Internet social networks is a creative and productive way to market UberPool. A viral advertising will be useful for spreading the words. Since Uber has been partnering with the San Francisco Society for the Prevention of Cruelty to Animals (SF SPCA), we would recommend creating an online advertising, which showed a short duo trip of two pets or more. By spreading the love, encouraging donation, at the same time, those adorable pets could be a big plus for UberPool. CUSTOMER RELATIONSHIP MANAGEMENT Uber is totally customer-oriented company providing services from real-time cab location display to user-friendly transactions (Minsker, 2014). The application has capability of showing efficient and timely car locations. The best part of the service is that a customer does not have to book a car priory for travel. A rider can request for car any time unlike other cab services. It only takes few taps on the application to order a car, pay for the ride and track the car in real time. In addition, after a request has been send the user will get the information of the car, driver and its rating. Uber should consider focusing on its customers by keeping in touch. Uber on regular basis should send information regarding service updates, deals and holiday greetings to not only the new but old customers also. Uber needs to maintain all the data of its customers and use promptly for the purpose of connecting to them. BUDGETS AND FINANCIAL INFORMATION
The budget allocation of this direct marketing campaign is based on previous financial information of Uber. According to our research, we came up with a forecasting of Monthly Revenues and Requests. Based on these forecasted numbers, we have planned a Monthly Expense Marketing Budget.
Table: Monthly Revenue Forecast
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Completed request %
Revenue per completed request
Revenue 110,087,432 133,756,230 192,274,581
Chart: Marketing Budget for UberPool
Based on the forecasted numbers from the Revenue, we came up with a specific marketing budget for Uber (see Exhibit 3 for calculations). By taking 9.5% of revenue for Marketing, we got a total spent on Marketing is $18,266,085 for this campaign. Among the sharing budgets, we especially focus on Social Media (15%), Person-to-Person contact (15%) and Events/Tradeshows (13%).
IMPLEMENTATION TIMETABLE OF THE CAMPAIGN
We are first launching the campaign in December, throughout two biggest holidays in the United States, which are Christmas and New Year.
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UberPool is a very promising service which is able to resolve plenty of today’s problems, such as pollution, traffic, etc. Uber has been known as a very creative technology company, so spreading the vibe via their marketing moves is necessary. If this campaign is successful, we will expect Uber to continue and improve the promotions to keep growing customer loyalty and increase sales. APPENDIX
Exhibit 1: SWOT Analysis for UberPool
- Mobile platform: not the first in market but they have filled a need of customers by cutting the edge of technology (transaction convenience – mobile payments; GPS and mapping technology)
- Well established logistics network (start from SF and now they are trying to cover all major cities)
- Lean and flexible (they do not own theirs
- Reliable on smartphone technology (there are another part of the world where people don’t live in high-tech platform)
- Doubt about standard insurance and liability questions (most start-ups offering services have to face it)
- Lawsuits charging illegal cab practices (at some cities like NYC); difficulty of dealing with taxi companies.
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- Got big investors (funds got raised nearly $50M, biggest deal was with Google Ventures)
- Great branding, good promotion (partnered with various event planners in order to broaden new service)
- Cut off transit time, pollution, gas costs, etc.
- Safety for customers is questioned since drivers got recruited through easy process.
- Legal issues from previous services have not been resolved; a new service still gets doubt from customers in general.
- International opportunities (they have been expending their services to overseas with regular service UberX)
- Potential market expansions (moving trucks, party buses, water taxis…)
- An increase of potential customers since the riding cost is apparently cheaper
- Regulatory backlash (from other cab companies and from users). Anti-Uber protests are everywhere.
- New competitors (iGo, ZipCar).
- Diversity of cultures might affect the using of customers (not everyone is willing to share a car with strangers)
Exhibit 2: Survey (via Google Survey)
UberPool using experience summary (question 1 to 3)
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Exhibit 3: Marketing Budget for UberPool
Get more partners, launch college ambassador
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Online display ads
Ads on Spotify, Pandora, Songza, etc.
Display ads like billboards and signs
Total spent on Marketing 18,266,085
Company Revenue Forecasted
Marketing as a % of revenue
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Mark Rogowsky (2014, Jun 9). Are Investors “Nuts” to value Uber at $18 Billion? In a few years, that‟ll seem like a bargain. Retrieved from http://www.forbes.com/sites/markrogowsky/2014/06/09/are- investors-nuts-to-value-uber-at-18-billion-in-a-few-years-thatll-seem-like-a-bargain/
Brustein, J. (2014, August 6). Uber could finally make smartphone carpools work. Retrieved from http://www.businessweek.com/articles/2014-08-06/uberpool-why-uber-was-smart-to-gain-users-before- trying-carpooling
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Hausman, A. (2014). Risk Vs. Reward. Retrieved from http://capitalistcreations.com/uber-a-great- startup-business-but-can-it-survive/#The_SWOT_Analysis
Lu, R. (2014, September 2). Making a bayesian model to infer uber rider destinations. Retrieved from http://blog.uber.com/passenger-destinations
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Minsker, M. (2014, September). Uber exemplifies forrester‟s „True‟ brand qualities. Retrieved from http://www.destinationcrm.com/Articles/Columns-Departments/Insight/Uber-Exemplifies-Forresters- TRUE-Brand-Qualities-98742.aspx
Soper, T. (2014, September 2). MIT study: Services like uberpool, lyft line cut transit time, pollution. Retrieved from http://www.geekwire.com/2014/mit-study-shows-services-like-uberpool -lyft-line-reduce- transit-time-pollution/
Toosh. (2013, January 3). Uber- what is it, why is it so loved and why is London the most difficult market? Retrieved from http://iamtoosh.com/2013/01/03/uber-what-is-it-why-is-it-so-loved -and-why-is- london-the-most-difficult-market/
Uber. (2014). Announcing UberPool. Retrieved from http://blog.uber.com/uberpool
Uber. (n.d.). Retrieved from http://www.uber.com