Addison Lee is one of the largest private hire services company operating in the UK since 1975, the company has been doing well since the time it started its operations. The company has gone leaps and bounds sever since. The company is now looking forward to work and rebrand its entire marketing strategy.
For the purpose of the report, the entire assignment is divided into 4 sections, illustrating the evolution of marketing (describing the product, selling production and marketing orientation concept), it further moves to analysing both the macro and micro environmental factors for Addison lee (Porter, Pestle, SWOT are used as framework). The management wants to increase the market share of Addison lee and for the purpose it has to increase its audience targeting and come up with new innovative ways to market its services, the marketing mix will be studied to understand the 7P’s of marketing for the company followed by recommendation in its marketing strategy to gain a considerable size of market share and diffuse its new innovative strategies.
Production: Production for Addison lee can be its newly designed GPS system to track the vehicle, its newly launched App, which was launched with the thought of getting the business model move to B2C in lieu of its earlier B2B model. This has seen a surge in rides for Addison lee, and with Umber’s license getting cancelled in London, creating a situation of win-win for the company.
Product: The product in case of Addison Lee is the hire services they provide to the commuters. They provide cabs, taxi bikes, jets, coaches etc. to the people in London.
Selling: Selling in Addison Lee happens through website (25%) &the mobile application (50%) which was launched in the year 2009. The company is getting good traffic both on its website and the application, the download on the play store has increased manifolds, which hints that the business is doing well.
Marketing Orientation: It is a company philosophy focussed on discovering and meeting the needs and desires of its customers through its product mix. The company has gotten into ETA model for it, launched App, starting with sending personalized email to the clients offering value deals and has also changed its logo giving it a feeling of tinge and premium look.
The orientation adopted by Addison lee is towards revamping the entire marketing and branding strategy. The company is on a mission to gain traffic from its new target audience. They have developed a new logo for the company, bold & with a premium look, in order to gain the market attention. The company at the same time is investing on enhancing the customer experience, in order to achieve that, the company has been working on data sciences and have started give ETA to customers, GPS services, etc. Also, another example of its marketing orientation is, providing customized deals to its customers, sending them deals in their mails, so that they can get the personnel touch from Addison Lee. The company is also focussing on peak off weekend fares, tipping the cabbies and also coming up with new fleets to accommodate the increasing demand.
Marketing environment can be understood as the external forces and factors that affect the company’s ability to develop and maintain successful transactions and relationships with its customers. It comprises of both internal and external elements which can affect the performance of the organization (Armstrong, Kotler, Harker & Brennan, 2015) it is extremely important for Addison lee to do a PESTLE & SWOT analysis, and work on the finding of both the macro environment and micro environment forces before developing its marketing strategy. Without knowing what is present in the business environment and not having a thorough understanding of the market, the chances of business strategy to fail are increased exponentially (Dawson, 2014).
PESTLE provides an overview of Political, economic, social, technological, legal & environmental factors affecting the business environment, it will help Addison lee understand these forces and hence can have a backup strategy of fill some gaps in its already formulated one. SWOT, on the other hands, helps the company understating its strength and weaknesses, something which is internal to the organization, at the same time, helps in identifying the external opportunities and threats to its existing business. Therefore, thought leaders and management experts have stressed over and over again, to do a market environment analysis before formulating a marketing strategy (Qureshi, 2016)
Economic factors: These factors can be understood as the financial indicators in GDP, inflation rate, purchasing power etc. These factors can have a great impact on the marketing decisions of any business entity. The business is operated out of London, and London is one of the richest cities of the UK, with greater purchasing power, better adoption of technologies and almost 80 % population being urban. Overall a good market for taxi hiring companies (Blanco & Cohen, 2017)
Sociocultural factors: This aspect focuses on the forces within the society. Family, friends, colleagues, neighbours and the media are the social factors. These factors affect attitude, opinion and interest of the users. London, having massive urban population, people is akin to the growing usage of technology and reduction in traffic and pollution; it makes them a great customer for taxi hiring services. With the advent of digital marketing, more and more people are getting used to the benefits of carpooling services, and with the kind of deals being offered to the user, everyone has a positive word of mouth to spread. Hence, a perfect scenario for Addison Lee (Edwards & Seda, 2016)
Both the economic and social factors create marketing opportunity for Addison Lee.
London is a very big market for taxi hire services, but if major competitors to Addison Lee are to be considered, one can easily pick Hail and Umber. Both the companies have web and app based business models and both of them are doing fairly well in the market.
Hail is touted as the nearest competitor to Addison lee, due to its great discount and free rides it offers to its customers, it can be a threat to Addison lee, and force the company to up its game of providing discount and free coupons.
Uber: Addison lee has been operating on the same business model as Uber. Uber did a terrific job in London and other states. Uber was easily a buzzword for taxi hiring in London, and people have been using it interchangeably. In the present scenario, Uber’s licensed have been cancelled, which is a sigh of relief for Addison lee.Uber was the major threat to the company because of its better penetration strategy and its popularity among the masses and the classes.
SWOT, as explained in the earlier part of the report, provides an analysis of internal strength and weaknesses and external opportunities and threats. In the light of the same (Dan, 2014) Strength and weaknesses of Addison lee can be:
Diversifying the customer base from B2B to Business to customers: This is a huge strategically change the company made, this has helped the company in gaining millions of customers and thus, has become hugely popular amongst the population. The company realized quickly that B2B model can only yield some part of revenue for it, and in order to have a higher business it has to move to B2C as well (Hollensen, 2015)
Mobile application: The entire world is going mobile; everyone has access to their smart phones at all the time. The company in 2009 came up with its mobile application to book ride, this was a big step and also contemporary to what some of its competitors were doing.
Not been able to make a big name in carpooling services: The Company has made a name for it in hiring services, but is still behind its competitors in carpooling services. This can be one of the weaknesses of the company seeing the increase in car pooling services (Yuan, 2013)
Customer feedback: The Company has maintained its reputation in delivering excellent service quality. But in some parameters like taking customer feedback, and social listening and social mention on the social media platforms is missing
Objective: Grow Addison Lee car service business by 3%, by targeting younger demographic of 16-25 year old
Market segmentation can be understood as dividing the entire market set up into smaller subsets comprising of consumers with similar taste, demand, choices and preferences. It can be understood as a unit of likeminded individuals. Each market segment is entire different from other market segment. The individuals in a market segment respond in a similar manner to changing market conditions, fluctuations and scenarios. Planning a marketing strategy on basis of market segmentation is important in order to set the right targeting and understand the customer base. Without understanding the customer base, all the marketing effects will be wasted (Wilkinson, 2013)
Therefore, given the objective of Addison lee, segmentation approaches mentioned above will help the company in achieving them.
Product: This involves design, technology, usefulness, value, quality, packaging etc. of the product offering of the company (Hamzah & Sutanto, 2016)
Price: Different pricing strategies like skimming, penetration, and cost based, and value based the company adopts while selling its products or services (Mintz & Currim, 2013)
Place: The place where the company sells its products or the channel it adopts to sell.
Promotion: This has to do with the marketing efforts in advertisement, special offers, free gifts coupons etc. the company gives away to promote its services (Qiu, 2014)
People: It consist of the employees, management, culture and the customer service (Khan, 2014)
Process: The process adopted by the companies to execute its services or products.
Physical environment: Relates to the tangibility offered by product or services (Baker & Saren, 2016)
|
Product |
Provides a mix of taxi hiring and courier services in London. |
|
Price |
Price skimming – Penetrating the market by keeping its prices low and thus skimming the market. Premium options are also available. |
|
Place |
The company is present in almost 350 cities since its inception in the year 1975. |
|
Promotion |
The company is offering huge discounts by customized deals to its customers, offering loyalty rides to its most loyal customers, offering huge discount on the rides and free coupon on the social media. |
|
Physical evidence |
The company has revealed a new logo for itself, bold new premium look. It has Toyota cars, jets etc. for its customers, which bring class to the brand. |
|
Process |
The company uses its website and mobile application for its business. ETA is calculated through GPS services. |
|
People |
The management has good experience, the drivers are taught about the values of the company and also made accustom to the new technology getting used in the cabs. People are one of the strong facets of Addison lee. |
Product: The Company should focus on pushing its application to every smart phone user present in the cities it is operating. The application has to be pushed in order to get it installed and put to use. The company should go completely on app based model and stop spending money on the website. It should also venture into carpooling services to expand its customer base. In order to make people install the app, the company should lure them into free rides and once they install the app, the company can retain them by providing quality services.
Price: One of the most important aspect of marketing mix, Addison lee should focus on cost based pricing, infused with occasional discount and coupons to its new customers and reward points for its loyal customers. The company has to work on a retention strategy and treat all three of its customer base: Loyal, new & existing differently and adopt a completely different customized strategy for each of them.
Promotion: The Company is promoting its service on social media heavily, unveiled a new logo recently to match up to its new target audience. The only point the company has to do more in order to be more effective in promotion is, post the reviews and ratings on the social media and also push newsletters of its service quality feedback given by customers to its mass audience. This will create euphoria among the people and they would see Addison lee as the brand they can trust and rely upon.
Conclusion
The majority of business coming to Addison lee is from its newly designed Mobile application, since then the traffic coming from the website has reduced which is extremely good for the business. It is highly advised to the firm to focus on extracting revenue from the mobile application. It is highly recommended to start with promotional offers, loyalty rewards and bonus coupons for its loyal customers and also to acquire a new customer base.
Addison lee has laid emphasis on its 7P’s of marketing, this is the reason the marketing strategies of the firm are in sync with the goals of the organization and the reason of development of positive synergies in the efforts of the firms and the defined objectives.
The Segmentation, targeting and positioning of Addison Lee is well defined, with its audience ranging from corporate individuals to family members and students. This is the segment which is generating maximum revenue for the company and hence all the marketing efforts have to be diverted on retaining the above said segments or to gain audience from these segments.
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Blanco, J.M. and Cohen, J., 2017. Macro-environmental Factors Driving Organised Crime. In Using Open Data to Detect Organized Crime Threats (pp. 137-166). Springer International Publishing.
Dan, N.I.E., 2014. A SWOT analysis of Beijing Marathon game operation. Journal of Physical Education, 6, p.005.
Dawson, J.A., 2014. The Marketing Environment (RLE Marketing)(Vol. 1). Routledge
Edwards, G. and Seda, P., 2016. Empowering midwives in the United Arab Emirates. MIDIRS Midwifery Digest, 26(3), p.387.
Hamzah, S.B. and Sutanto, J.E., 2016. The Role of Marketing Mix (7P) for Consumer Buying Decision Pastry Cake in Malang City.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Khan, M.T., 2014. The concept of’marketing mix’and its elements (a conceptual review paper). International journal of information, business and management, 6(2), p.95.
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Mintz, O. and Currim, I.S., 2013. What drives managerial use of marketing and financial metrics and does metric use affect performance of marketing-mix activities?. Journal of Marketing, 77(2), pp.17-40.
Oh, Y. and Oh, J., 2017. A critical incident approach to consumer response in the smartphone market: product, service and contents. Information Systems and e-Business Management, 15(3), pp.577-597.
Qiu, L., 2014, June. The Perception of Marketing Mix of TICA by Convention Providers in Bangkok. In 3rd International Conference on Science and Social Research (ICSSR 2014). Atlantis Press.
Qureshi, I.H., 2016. MARKETING ASSETS: LINKING RESOURCE-BASED VIEW AND MARKETING ENVIRONMENT. MARKETING, 3(1).
Wilkinson, F. ed., 2013. The dynamics of labour market segmentation. Elsevier.
Yuan, H., 2013. A SWOT analysis of successful construction waste management. Journal of Cleaner Production, 39, pp.1-8.
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