Data Analytics - UBER

Assessment'2:'NEW'SERVICE'PROPOSAL' Table of Contents ! Executive Summary ...........................................................................................................1 Background ..................................................................................................................................... 2 Introduction ..................................................................................................................................... 2 Positioning ..........................................................................................................................3 Key Competitors ............................................................................................................................. 4 Competitive Advantages................................................................................................................. 5 Positioning Map………………………………………………………………………………......6 New Service Concepts Pitch/Appeal…………………………………………………………….6 Analysis of the new Service Concept Idea and Marketing Plan A. Product………………………………………………………………………………………...7 B. Price and Revenue Management……………………………………………………….........7 C. Distribution Services…………………………………………………………………………8 D. Promotion and Education……………………………………………………………………9 E. Service Environment and Other Physical Evidence……………………………….............10 F. Process………………………………………………………………………………………...11 G. People…………………………………………………………………………………………12 Conclusion……………………………………………………………………………………….13 References……………………………………………………………………………………….14 1 Executive Summary Uber Technology Inc was found by Travis and Garrett in 2009 and quickly dominates the market share of transportation in America. Uber now has several functional product lines such as Uber Rush, Uber Eat (food deliver) and Uber Car and the young company was estimated to be worth $62.5 billion in 2015 for its convenience and flexibility. Started up with only an app and several drivers, Uber now has proved its value and keeps gaining market share in transportation. The app itself is very efficient, productive and very easy to use. Users simply have to open the app on their phone and allocate their location on the system then the nearest driver will pick them up in minutes. After the customers reached the destination, the payment will be made either by cash or automatically processed via bank account, which already have been registered in the app. This report was commissioned to develop service line extension for Uber as a private tour service in Melbourne City of Australia. Uber will provide a new combination of private tour and Uber drivers, which is called UberTour, aiming at couples and small groups of family to provide a comfortable trip around Melbourne city with price bundle. This will place the company in a position of premium quality service with affordable price compared to other competitors in Melbourne. The competitors in Melbourne city include The Private Tour Guide, I Love Melbourne tour and Private Tour Victoria. The new service will differentiate with others by its flexibility and convenience. Since some customers require private atmosphere during the tour instead of joining a crowded group of tourists, UberTour narrows down the number of customers into a small groups of close people, offering them quality time to spend with their beloved one. The core product is a service of convenient private tour with 3 supplementary elements as consultation, exception and hospitality. In this service, consultation is performed as suggesting destinations, specifically restaurants and landscapes, to customers. Exception is presented as modern equipment and nice in-car furnishing. Last but not least, hospitality element will be provided with TV and magazines or snack and drink to customers. To book the tour, customer can simply use UberTour smart phone app or go on Uber’s website to register. After customer booked the tour, service backline will immediately process the data based on customer’s required time and place. The driver will contact to customer directly to pick them up and their place. 2 Introduction and Business Overview A. Background Uber Technologies Inc. was found by two founders Travis Kalanick and Garrett Camp in 2009. It is an American multinational online transportation network company headquartered in San Francisco, California. It develops, markets and operates the Uber mobile app, which allows consumers with smartphones to submit a trip request, which is then routed to Uber drivers who use their own cars. As of April 12, 2016, the service was available in over 60 countries and 404 cities worldwide. In October of 2010, Uber had a $1.25 million angel financing round. In October of 2011, with investors champing at the bit for a piece of Uber pie, the company raised an $11 million Series A led by Benchmark Capital. In winter of 2011, after entering Seattle, Boston, Chicago, Washington D.C, Uber started expanding internationally in Paris. In December of 2011, Kalanick announced that Uber had raised $35 million in Series B from Menlo Ventures, Amazon’s Jeff Benzo and Goldman Sachs. In July 2012, Uber launched UberX, which is more affordable and using hybrid vehicles. In the end of 2012, Uber expands into new cities. And Uber came into Melbourne with a soft launch since 7th January 2013. In August of 2013, Uber officially raised a new funding at $361.2 million at a $3.7 billion valuation. In March of 2014, Uber announced the insurance plan for drivers to extend their own personal coverage, focusing on when there are no passengers in the car. In April of 2014, Uber launched a new courier service called Uber Rush. In June of 2014, Uber announced $1.2 billion funding on its latest round with a $17 billion valuation. In the end of 2015, Uber was estimated to be worth $62.5 billion. Uber Eat, Uber Rush, Uber Car B. Introduction The idea is to combine a tour guide with Uber to provide a private tour around Melbourne for a single person or a couple. Our target customers are people who love traveling but prefer to have a private tour, not a tour with lots of people, which is provided by many tourist agencies. We also collaborate with start-up, who do food app (an app shows recommended restaurants near you with rating star), to guide customer to unique, best quality restaurant around Melbourne. Therefore, customers can visit beautiful places in Melbourne but also can taste the cuisines of Melbourne. By using this service, customers or travellers will receive a luxury and exclusive tour, which can be adjusted to tourist’s interest and it is affordable for everyone. This service aims to give customers an unforgettable experience in Melbourne than just tourism. The new service line is in People processing and Mental stimulus processing, included both tangible and intangible actions, which are passenger transportation and education. In people processing, customers physically enter the service factory by entering the Uber car and the tour. Also, customers co-operate actively with the service operation, which is Uber drivers, to communicate and understand the landscapes. Thus, Uber Tour must consider carefully about the process of the service, as well as the output from customer’s perspective, such as departure time, social surrounding and physical effort. In mental processing, customers depend on such service can potentially be manipulated by suppliers, which means everything that Uber introduces about the landscapes will somehow affect customers understanding about the landscapes. Consequently, ethical standards must be required to Uber tour guides. Therefore, to be the Uber tour guides, employees must pass the tourist training of Uber. According to Tourism Victoria Research, the number of tourists come to Victoria is increased rapidly in the past few years. The international visitor of Melbourne is estimated 51.3 million in the end of December 2015, which is grew by 17.5%, compared to the previous year. And nowadays, tourists demand more about exploring new places, experience convenient services. Compared to traditional travelling tour, tourists desire a new level of experience these 3 days. About 25 per cent of international visitors to Australia travelled on package tours in 200506, but this fell to about 15 per cent by 2013-14 as the number of free and independent travellers increased from about 75 per cent to 85 per cent over this period (TRA 2015d unpub.) C. Positioning Target Customers Our target market is a single tourist, a couple and a small group of relative people. The common characteristic of this target market is that they visit Melbourne for the first time. They want to understand the culture of Melbourne but they do not want to be in a crowded group of tourist agencies. Thus, they want to have a qualified tour of Melbourne but also be able to control the tour and have the flexibility as the way they want to. Differentiation of the service The differentiation of this private tour and the tours from tourist agencies is that the atmosphere of the tour. Since the customers do not want to join those crowded tour, Uber Tour has to limit the number of tourists on each journey. In the other hand, the transportation of Uber is all about small vehicles. At the moment, Uber does not have any bus to support a big group of people. Therefore, by having a limited number of tourist, a single, a couple and a small group of relative people are suitable to the characteristic of Uber Tour and the type of transportation of Uber Tour having as well. The cost of the tour is also be considered by this target market. By compare and contrast, low cost with high quality is the best choice for them, which is exactly the same with the brand imagine of Uber, low cost but high quality of transportation service. Therefore, the target customers of Uber Tour should be single person, coupe or small group of relative. Customers Location Customers Size Market served by customer Usage Rates Tourists can be international tourist and Australian tourist, who come from other state of Australia. +, International Tourist: the international visitor of Melbourne is estimated 51.3 million in the end of December 2015, which is grew by 17.5%, compared to the previous year. And it is expected to be growth rapidly in the next few years. +, Australian Tourist: the population of Australia is 24,077,425 people on 19 May 2016. In the other hand, the population of Melbourne is 37,106 people in the beginning of 2016. Therefore, the number of Australian tourist come to Melbourne is huge. The demographic of target of market of Uber Tour are young people or even the small group of relative people, who are willing to try new things and have young lifestyle. In the other hand, the older generation tends to join tour guides from tourist agencies to get the safety, reliable and nothing wrong happens to their tour. However, the target customers of Uber Tour are prepared to take the risk of exploring new places by themselves. The aim is to feel the freedom when traveling and the quality of every service they use, which is difficult to be provided by various normal tourist agencies in the industry. If customers have friends who have car, then target customers can spend one or two day with the friends. However, in the other days, Uber Tour will definitely the best choice to explore Melbourne. And Uber Tour can be used during the whole holiday, until the last day of the trip. Then Uber Car will be ready to take customers to the airport. So the services of Uber can support each other to 4 deliver highest quality of service to tourists. Purchase Situation Since Uber Tour is an extension service line of Uber, so it will be New Task Purchasing for target customers. Therefore, Uber Tour will be compared and contrast to its competitors by customers. And the criteria to evaluate will be the review and the information on the main website or application of Uber Tour and its competitors. Key Competitors The Private Tour Guild Destination Option Prices Great Ocean Road, Phillip Island Penguin Prices start from $178 to $198 per Melbourne & Experience, Yarra Valley Indulgence, Discover person, included pick up and drop off, Melbourne City Tour, Mornington Peninsula vehicle, unlimited bottle water, morning Victoria Tour, Private Guiding, Multi Day Tour tea and coffee, lunch. Majestic Blue Mountains, Southern Bay & Prices start from $140 to $257 per Eastern Beaches, North Shore & Northern person, included morning tea and lunch, Beaches, The two sides of Sydney, Hunter complimentary bottled water, optional Sydney Valley Vine Wine & Dine, Bondi Beach, afternoon tea at guest’s expense. Southern Highland Country Escape, Sydney Food & Drink Tour Prices on application. On each day of the tour, customers will visit specific Tasmania 4 day Private Tour popular destinations and specific restaurants in Tasmania, which are chosen by The Private Tour Guild. The price of The Tour Guild charge is reasonable for the service, transportation and schedule of the tour. The price is not high, it is acceptable for everyone tourist. The tours provide the basic experience at every destination. The tour in Sydney is cheaper than the tour in Melbourne because the duration of Melbourne’s tours is longer than Sydney’s, which is 10 hours vs. 7 hours. -! I Love Melbourne Tour I Heart Melbourne Tour < http://www.iheartmelbournetours.com.au> Type of Tour Price Great Ocean Tour $154 per person $114 per person Phillip Island Private Tour $46 per person Melbourne City Sights Private Tour $93 per person Puffing Billy Private Tour Different prices, based on the destination and the numbers Food and Wine Tour of anticipates, duration Different prices, based on the destination and the numbers Family and Friends Tour of anticipates, duration Designed for any occasion. Different prices, based on the Special Occasion Tours destination and the numbers of anticipates, duration The price of I Heart Melbourne Tour is much cheaper than others competitors. However, there is no limitation for anticipates on each tour. The activity on each part is the basic activities, not thing special to attract customers. I Heart Melbourne Tour are found and run by a husband and wife so the quality of service and physical evidence can be poor, compared to other competitors in the market. 5 -! Private Tours Victoria Type of Tour Coastal Tours Winery Tours Wildlife Tours Adventure Tours Private Tours Victoria Destinations Great Ocean Tours (1 or 2 days), Phillip Island, Grampians and Great Ocean Road (3 days), The Bay of Melbourne in a day. Mornington Peninsula Hot Springs and winery tour, Yarra Valley, Private Mornington peninsula winery, MT Dandenong and Yarra Valley winery Phillip Island, Puffing Billy and Dandenong Mountains, Mornington Family Fun Tour, Private Puffing Billy + Phillip Island Penguins Tour, Private Grampians and Great Ocean Road (3 days) Great Ocean Road, Puffing Billy and Dandenong Mountains, Great Ocean 2 days, Grampians and Great Ocean Road (3days), Private MT Buller Snow Tour, Lake Mountain Snow, Private Sovereign Hill Tour Melbourne City Tour, Mornington peninsula hot springs and winery, MT Dandenong and Yarra Valley Winery, Golf Tour Morington Penisula, Mornington Family Fun Tour, Puffing Billy & Phillip Island, Private Welcome to Melbourne Tour Price Prices start from $125 to $2799 Prices start from $99 to $199 Prices start from $125 to $2799 Prices start from $125 to $2799 Prices start from $70 to $750, except the golf tour starts from $375.000AUD Private Tours Victoria provides various tours with different length from 1 to 3 days. Consequently, the prices are various from low to high. It is divided into 5 categories but the tours are repeated in each category so it’s confusing to customers. The price is acceptable for the transportation, the professions of tour and staff. But there are not too many activities on each tour, most of them are basic activities, the highlight activities are only available in luxury tours with high prices in 3 days. Competitive advantage Being known as a reliable transportation company, Uber owns a transportation system and the quality has been proving. Taking advantage of this, the cost of transport services will be lower as much as possible. In addition, besides of cooperating with the start-up of food app to provide a list of the best restaurants for customers, Uber is currently running a new service line, Uber Eat. With Uber Eat, Uber is going to have new partners, which are restaurants. Consequently, the cost will be less because of the support of price from the restaurant by negotiating. Therefore, the competitive advantages are the transportation system, the price of the service and the database of restaurants. The requirement of booking before the tour in tourist agency is days or a week. The competitors of Uber Tour require two or few days. However, tourists only need 24 hours ore less to book the service, depends on the destinations, due to the number of available drivers in Uber system. As mentioned, Uber Tour provides a Melbourne tour to tourists about landscapes of Melbourne and also unique restaurants around Melbourne as well. Compared to competitors, which are providing Melbourne tour but each tour has its own theme, such as like foody tour, wine tour, old landscape tour, etc. The purpose of the service is to deliver a luxury and unforgettable tour to tourists of Melbourne with the lowest price as much as possible. One of the problems to customers is that time. Tourists do not have much time to spend on each tour with different themes. Therefore, combining landscape with other theme will definitely increase the value offer to customers. Besides, customers also can create their customized itineraries by their own knowledge or Uber Tour can recommend the best destinations for the tour, based on the Signature Tours 6 interests of customers. Therefore, the flexibility and convenience are the competitive advantages of Uber Tour. Positioning Map New Service concept’s ‘pitch/appeal “In the end, it all boiled down to the industry’s lack of ethics, and willingness to exploit customers. While there are some occasions that may require a visit to a travel agent, I now urge everyone to research as much as possible from home.” (TEGAN SULLIVAN, 2015) This is an extraction from an article on TheNewDaily.com.au. The concept of Uber Tour is to make traveling become easier than before. To travel to Melbourne or anywhere, tourists tend to choose tourist agency to book tickets, accommodation, etc. But nowadays, those things are easy to do, thanks to the convenience of Internet. So Uber Tour is created as private tour, which is available all the time to book within a quickest time. In the end, this service will fix the problem of choosing wrong tourist agencies, which will cost customers more money and time and the quality and value received are unacceptable. Analysis of the new Service Concept Idea and MKT Plan A. Product We are offering a private tour around Melbourne, also collaborating with Start-up that does food app to help the customer/s to choose a quality restaurant for them to enjoy in the tour. In other words, the core product we are offering is a service of convenient private tour included transporting passengers to different destinations. This service is Uber’s new service. Therefore, the service we are offering is a product - line extension, which can be defined as a new service/s that added into the business (Paley 2001, p. 89). The service is supplemented by 3 other enhancing supplementary service elements. The first one is consultation. According to Avlonithis and Papastathopoulou (2006, p. 40), consultation is a supplementary service element that provides customers with advices from a knowledgeable service person to maximise use of the company’s services. This service element can help us do better in business. We collaborate with Startup who does food. Therefore, by understanding customer’s needs and wants, we can suggest 7 and usher the best restaurant in the area for them to enjoy. The second one is exception. According to Rao (2007, p. 129), exception can be defined as a special request that is provided by the service provider for the customer/s and it is on special consideration. In other words, customers can make some special request to make them comfortable, as long as the request is following the consideration. With this supplementary service, customers can use our service with joy and feel comfortable. The third one is hospitality. According to Avlonithis and Papastathopoulou (2006, p. 40), hospitality can be defined as a service that makes customers feel comfortable while using the service or waiting for the service. We do not want the customers feel bored in the car. In this case, UberTour provides magazines and television behind the front seats of the car to make customers feel pleasant while we are taking them to the destinations they want. Also, music is always available. The brand strategy that is suitable for Uber Tour is fully focus strategy, which limit range of services to narrow and specific market. The opportunity is to develop recognized expertise in a well-defined niche of private tour, which protects Uber Tour against would-be competitors. Moreover, it allows Uber Tour to charge premium prices in the future. Also, the market of tourism is big enough to generate needed volume of Uber Tour. B. Price and Revenue Management Uber Tour uses cost based pricing as the strategy. Consequently, there will be price bundle which customers can choose which bundle fits them the most. The bundle has 3 spots minimum with prices start from $155 per person. Customers can also add 1 or more spots during the tour if the customers are still not satisfied. If customers could not find any bundle that fits them, they can make their own itinerary. Therefore, we will emphasize cost based pricing; activity - based costing. Below are the rate fences to justify pricing structure that will maximise this service. In the other hand, revenue management is price customization, which means charging different destination different prices for same service, based on the distance between destinations. Physical Fences Basic product Amenities Service level - Size of the car - Transportation - Free snacks and welcome drinks when customers get in the car - Customers pick up - Personal driver (who is also the tour guide) - Customer service - Customer’s personal request Non - physical fences (transaction characteristics) Time of booking Location of booking - Discounts for first time purchases - Pay full price after the tour is done - Customers making reservations online are charged lower than those making reservations through phones - Customers have to be in Melbourne to make reservations 8 Flexibility of usage - Extra charge for cancellation Non - physical (consumption characteristics) Duration of use Location of consumption - Must stay under guidance of the driver - Prices vary by destinations Non - physical (buyer characteristics) Group membership - Child, student and senior citizen discounts Frequency of consumption - Member of certain loyalty tier with the firm will get discounts Size of customer group - Group discounts based on size of group C. Distributing Services For this service line, customers contact us through Uber’s website or Uber Tour smart phone application to book the service, then our driver will pick the customers. Therefore, customers and Uber Tour transact remotely through cyberspace. It is more convenient because of the development of technology. Most of people have smart phones and high speed Internet to connect between the customer and the company. The other advantage of distributing service through cyberspace is the website and the mobile application is online 24 hours everyday. Therefore, customers can easily find information about our service 24 hours. This service is also distributed through telephones. Thus, customers that do not have smart phones still can use our service. There are no locational constraints needed for Uber Tour. D. Promotion and Education The target audience of Uber Tour are small groups of family and travellers who like to travel a lot, do not enjoy crowded tour, prefer the flexibility and convenience when traveling. It is difficult to communicate service benefits to target customers when Uber Tour is intangible. The main problems are generality, non-search ability, abstractness and mental impalpability. The strategy is using internal promotion in company-specific channels, which are Uber applications (Uber Car, Uber Eat) and online advertising. The objectives of Marketing communication plan of Uber Tour To create memorable images of Uber Tour To build awareness to customers Reposition Uber Tour relative to its competitors To provide useful information to reduce the uncertainty and perceived risk To encourage trial Familiarise target customers with the process of Uber Tour Teach customers how to use Uber Tour to best advantage 9 Channels How and When Promotion clip on social media website (You Tube, Facebook, Instagram, Twitter) to show the process of Uber Tour, satisfaction of previous Advertising customers, etc.) The other option is to buy advertising on these platforms, such as Facebook ads, YouTube pre roll ad. When UberTour starts to fully operate, these advertising will keep running for at least 6 months or more. Email to users of Uber Car, Uber Eat to announce the new service line, Direct Marketing which is Uber Tour. 3 emails per week is enough to build awareness to existing Uber’s customers and encourage them to try Uber’s new service; UberTour. Stimulate positive interest about Uber Tour through news leases in popular newspaper. The contents will be about Uber Tour, the value offer, the price Public Relation and quality of service. Same as advertising, public relation about UberTour will run at least 6 months or more when UberTour is fully operated to build awareness and encourage trials. Using company-specific channels, which are applications and websites of Internal Website Uber, such as Uber Eat, Uber Car. It does not cost much and easy. This kind of advertising will always shown in the Uber’s website. Using poster, banner in the airport will build awareness of Uber Tour to OOH target customers as soon as arriving in Melbourne. OOH will run at least the first 6 months or more. Using search Engine Advertising to target relevant messages directly to SEO desired customers, such as buy the top rankings in the display of search results with key words tourist agency or private tour. SEO will run at least the first 6 months or more. Promotion program can be designed similar to Uber Car’s program. Customers can receive discounts for the trip from friends. In each account, customers will receive a personal code. Customers cannot use that code but can share it with friends. Then the friends can apply this personal code while booking the tour to receive instantly $20 discount for the first trip. It encourages target customers and tourists to select Uber Tour as the tourist partners when traveling to Melbourne. In the other hand, if the friends use the codes, the target customers also have $20 discount on their trip as well. Therefore, the number of customers using Uber Tour will be increased rapidly. E. Service Environment and other Physical Evidence The service environment of this new service will mostly be provided in-car. Therefore, we will focus on in-car service dimension. First of all, people are considered the most important dimension in this service. The drivers need to dress up nicely along with friendly attitude in order 10