Addison Lee is a London based private hire company that was founded in the year 1975 by John Griffin. The company’s services include pick-up on demand, availability of cars with pre indicated price, advance bookings, Wi-Fi connectivity, easy cash payment and so on (Addison Lee 2017).
Marketing communications is the implementation of various communication tools in order to market a product or service (Pearsoned.co.uk 2017). It is a part of the overall marketing strategy of a company.
The report discuses the marketing strategy applied by Addison Lee to focus on a new target group of customers in the age of 16 to 25 years.
Businesses previously used to stress more on other factors such as production, product and selling rather than on consumers. However, this trend has changed and today, the consumer is the ultimate ruler (Study.sagepub.com 2017). Through marketing orientation, one can identify which factor a particular business focuses on. The four basic factors include production, sales, product and marketing.
In production-oriented business, companies mainly stress on mass production to reduce costs.
Product-oriented businesses rely mostly on the quality of their product or service. Companies orientating their focus on product quality neglect the demands and desires of the consumers.
Selling the product to the customer is the sole target of a sales-oriented company. A sales-oriented company does not consider the wants of the consumer, rather presumes what the consumer wants.
The most favored and applied strategy for companies in today’s world is the marketing orientation. This type of companies put all their efforts to lure the customers and satisfy their needs in every way possible (Dalgic and Leeuw 2015).
Addison Lee is undoubtedly a market-oriented company. The company invests all its energy in providing services that cater to the needs of the customers.
In its attempt to connect with the new generation customers, Addison Lee rebranded itself by launching its new logo with a modern look. The digital redesigning of the logo allows Addison Lee to have a distinct look amidst a host of other similar businesses.
Addison Lee was initially a business-to-business (B2B) company focusing more on profit through other businesses. However, with the emergence of social media and increasing competition, the company decided to shift its focus to a more consumer-based approach (Rogers et al., 2017). This has been evident from the personalization strategy where the company allows its customers to grab personalized deals through emails and through the company’s app.
Environmental analysis of market refers to the process of identifying every internal and external element that can influence a company’s performance. The best and the most common way to analyze the marketing environment are to do a PESTLE analysis. It includes, political, economic, social, technological, legal and environmental (Percy 2014).
In case of Addison Lee, analyzing the different marketing factors becomes crucial as it is undergoing a transformation phase. With its launch of premium look last year, the company looks to expand its business beyond UK. To achieve this, it has to devise a marketing strategy that encompasses demographical, geographical and other factors. In order to plan a strategy, marketing environment analysis is extremely essential (Campaignlive.co.uk, 2017). This allows Addison Lee to map the behavior of consumers, the shift in behavior, and the political conditions of the targeted region, assess the economic strength of the company and so on. Most importantly, Addison Lee’s strategy to target new consumer group comprising the younger generation can only be achieved through environmental analysis.
The chief macro environmental factors include political, economic, socio-cultural and technological (Boone and Kurtz 2013).
To Addison Lee, economic factors like consumer assurance, service, inflation and interest rates do have a significant impact on its business. Consumer assurance is a key to success.
The social elements such as family, reference groups and influential people and the society overall are the factors that influence business strategies. Education, language, aesthetics, religion and such may be termed as cultural factors.
Consumer assurance, as mentioned earlier, is the key to success and with its fresh vision to be a consumer-centric company, Addison Lee can utilize this factor. The younger generation is tech-savvy and almost all the leading firms have targeted it. The personalized features give it an edge over its rivals.
In contrast to the macro environmental factors, six micro environmental factors are there that affect a business.
Addison Lee faces stiff competition from a number of minicab private hire companies. Uber, Kabbee, Mytaxi (formerly Hailo) and Taxify are its top competitors.
Uber and Mytaxi are however, the two toughest competitors that pose threat to Addison Lee. Uber, a San Francisco based private hire company has even surpassed Addison Lee’s success. The smartest thing Uber did to dominate the London taxi hiring market was to offer a much higher pay to the drivers that was never offered by any company. In addition, it also gives cheaper rides to passengers in comparison to Addison Lee.
Mytaxi on the other hand utilizes the 21,000 Black Cab drivers to attract passengers. It also offers a discount of ten pounds for the first order a passenger places. Other than that, Mytaxi sets its fare based on Transport for London regulations.
The internal factors are the ones within an organization or a firm that have an effect on the firm’s performance.
Among the above-mentioned factors, location and performance are the two primary factors that could be chosen to determine Add Lee’s operations.
In terms of strength, location is one of Addison Lee’s biggest strengths. Operating from London enables Add Lee drivers to navigate places easily and satisfy passengers.
Performance is an internal factor that depends upon the decision taken by the company (Arnett and Wittmann 2014). In case of Addison Lee, it could prove to be a weakness since the success rate has fluctuated after the arrival of Uber in particular. The 2016 financial year witnessed a decline in the total revenues by 7.5%.
Market segmentation refers to a marketing theory, which segregates the entire market system into smaller groups that comprises consumers who have the taste, demand and preference (Howell 2015).
Segmentation involves various approaches by which the market is categorized into particular segments. These approaches include, demographic, geographic, psychographic and behavioral.
Addison Lee is a firm that needs to consider the segmentation precisely keeping in view its objectives. With its new strategy to target customers between the ages of 16 to 25, it becomes even more important to utilize the elements of market segmentation. The marketing strategy thus has to look into the possible segments of the overall customer base.
Market segmentation involves four major approaches Cross, J.C., Belich, T.J. and Rudelius 2015).
When the market is divided based on the age group, gender, family, social class, occupation, religion and marital status, it falls under demographic segmentation.
Geographic segmentation refers to the categorization of the market based on country, population, city and climatic zone.
In psychographic segmentation, the market is divided by the lifestyle of the consumer and that is why it is often called lifestyle segmentation. Consumer’s opinions and interests are considered under this segmentation (Armstrong et al. 2014).
Behavioral segmentation includes variables such as purchase occasion, user status, loyalty, readiness of the buyer, benefit-sought and so on.
Demographic and behavioral segmentation of the market is what Addison Lee should choose to attract its newer target keeping in mind its objective.
Addison Lee has targeted the younger customers to increase its revenue and hence it is imperative for the company to design its premium services in a way that attracts youngsters.
Behavioral segmentation may come in handy to specify the target customers as the company can research on the buying behavior, the benefits customers seek from its services and so on (Solomon 2014).
The marketing mix means a set of measures, or plans, used by a company to promote its product or brand in the market (Us.sagepub.com 2017). The marketing mix comprises of the seven Ps that include, Price, Product, Place, Promotion, Physical Environment, Process and People.
Product – Addison Lee offers wide range of services to its customers. These include, car service, courier service under which a customer can book same day, next day and international courier. Executive services, airport transfers, coaches and events are the additional services offered by Addison Lee.
Price – Addison Lee charges a minimum fare of 7.5 pounds for each journey. The company uses a fixed postcode-to-postcode pricing strategy. Customers are charged an addition admin fee when they book through Add Lee’s Customer Service Center. However, bookings made through its App or website has no extra charges. Addison Lee does not have surge pricing and the price is set at the time of booking.
Place – Addison Lee operates mainly in London, United Kingdom however, it provides services throughout Europe. In addition, the company has expanded its business in other parts of the world, the first and latest being New York City, USA.
Promotion – In its recent promotional activities, the company has announced to target the younger generation. The company has also evolved its digital marketing in order to promote the brand on a higher level. The new premium look unveiled this year was a part of the promotion strategy as well.
Physical Evidence – Addison Lee has more than 4,800 cars in London that carry 10 million passengers every year. The brand Addison Lee is renowned the world over and its services have seen a consistent rise for over 40 years. To a common Londoner, executive, premium car services mean Addison Lee.
People – People refers to the ones who run the business and the ones who consume the business that is the consumers. Addison Lee has been successful in maintaining good bond with its customers that has resulted in its consistent performance. However, the people within the business have to be valued more. Recent cases of drivers’ dissatisfaction and consequent trials and verdicts in courts ruled against the company portray a negative picture.
Process – Addison Lee, as mentioned earlier has over 4,800 cars in its fleet that range from Mercedes to Toyota to BMW. The drivers hired by the company are independent workers and earn wage in terms of journey rates, commission charges and other performance based incentives (Pavlou and Stewart 2015).
Based on Addison Lee’s new objective to target 16 to 25 year olds, there can be some changes made to the product, price and promotion strategy.
The product can be given a young look different from the executive, professional look. The cars at service already have 4G Wi-Fi facility so the younger customers will have access to what they mostly prefer- the internet.
The pricing strategy might include some additional features. To cite an example, the lowest fare of and Add Lee booking is 7.5 pounds, this can be reduced to five pounds for first timers. In addition, the company may offer gift vouchers to the first time travelers.
In case of promotion, technology can be best utilized to attract the young customers. Addison Lee has its own App and website that is used by customers to book services. However, the company can organize events for youngsters and allow them to have a drive in the luxury cars to have a feel of what the company has to offer (Charter 2017).
Conclusion
Therefore, from the above discussion, it can be deduced that Addison Lee’s target to achieve 3% growth in their services by targeting 16 to 25 year olds can be definitely achieved. The company has to encourage its employees to map out a plan that suits the taste of the younger generation. The various elements and factors of the marketing research and strategy have to be outlined concisely and each point must be minutely covered. The target group is vulnerable to influence and hence, the company must make sure that they possess a positive influence.
References:
Addison Lee. 2017. About Us | Addison Lee. [online] Available at: https://www.addisonlee.com/services/about/ [Accessed 10 Nov. 2017].
Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.
Arnett, D.B. and Wittmann, C.M., 2014. Improving marketing success: The role of tacit knowledge exchange between sales and marketing. Journal of Business Research, 67(3), pp.324-331.
Boone, L.E. and Kurtz, D.L., 2013. Contemporary marketing. Cengage learning.
Campaignlive.co.uk. 2017. Addison Lee appoints new chief customer officer. [online] Available at: https://www.campaignlive.co.uk/article/addison-lee-appoints-new-chief-customer-officer/1412464 [Accessed 10 Nov. 2017].
Charter, M. ed., 2017. Greener marketing: A responsible approach to business. Routledge.
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Rogers, C., 2017. Addison Lee goes premium to drive global expansion – Marketing Week. [online] Marketing Week. Available at: https://www.marketingweek.com/2016/09/20/addison-lee-goes-premium-to-drive-global-expansion/ [Accessed 10 Nov. 2017].
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Upper Saddle River, NJ: Prentice Hall.
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