Grab Taxi Marketing Analysis, Research Paper Example

The marketing success story of Grab Taxi is the subject of this marketing analysis. Grab Taxi also goes by the brand name MyTeksi.  MyTeksi is the brand name used in Malaysia with a play on words to enhance marketing perception with the “MY” representing the abbreviation for the country of Malaysia. The term Teksi represents the pronunciation of the English word Taxi. Grab Taxi is a computer and smart phone application for the taxi industry that utilizes global position systems (GPS) technology in order to schedule, book, and dispatch taxis to customers who require such services of transportation. The application is primarily used in South East Asia. The business is helping to advance and improve the taxi markets by making an application which is mobile, cost effective, and easy for customers to use. This technology improves both sides of the distribution chain by supplying taxi dispatch companies and demanding customers.

Anthony Tan is founder and CEO of Grab Taxi. What makes Grab Taxi a marketing success is that it better enables customers to book taxis on a more accurate as need basis. Driver safety is also a factor that Grab Taxi took into consideration when the application refurbished the entire taxi industry. Meeting and satisfying customer needs is the ultimate factor for a marketing success story. (Velayanikal, 2014)

When Tan decided to pursue the technological idea of Grab Taxi, he chose a perfect marketing environment that would help to stimulate the application. Breaking into the taxi industry itself, there were many factors and forces that drove the application’s ability to form and maintain lucrative and strong relationships with its customers. (Purnell, 2015)

Grab Taxi first needed the foundation of a solidified micro environment which is the internal factors within the business that influence the ability to meet customer demands. There is a continuous demand for taxi services in South East Asia and in order to satisfy these demands the application was developed with the capabilities of locating the nearest available taxi driver for each specific booking request. (Appendix A) (Tan, 2015) Deciding to integrate the application into smartphones was a sharp business idea for the Grab Taxi project as they are widely used in South East Asia as well. (Russel, 2015)

Next, the Grab Taxi project needed to satisfy the marketing environment on the meso level which is the industry that the application would be operating in. Being operated in the taxi industry, the Grab Taxi application would be able to stimulate the circulation of communications between the customer and the taxi service the desired. (Davidson, 2015)There was a gap in the taxi industry between the taxi service and the customer that consisted of queued phone calls and waiting periods. The Grab Taxi application was able to fill in these gaps.

Finally, the Grab Taxi project needed to satisfy the marketing environment on the macro level which is the national and economic factors that affect the micro environment. (Appendix B) (Kolter, n.d.)The technological factor was the prime factor when considering the impact it has on the marketing environment’s macro level in South East Asia. In 2014, about 18 million smartphones were purchased in the region of South East Asia alone. This may possibly account for 18 million new users of the Grab Taxi application should these smartphone carriers ever require taxi services. (Ericsson, 2015)

An important and imperative part of the marketing plan for the Grab Taxi application was the use of market segmentation. Marketing segmentation is the strategy that involves breaking down a wide target market into sub-divisions of customers, other businesses, or other nations with mutual interests in products or services. Once these sub-divisions are established, the next part of the strategy is to design a plan that targets them as potential customers. (Appendix C) (Kan, n.d.)Grab Taxi created an effective geographic segmentation by successfully making their application available to various countries throughout South East Asia including Malaysia, Singapore, Thailand, Vietnam, and Indonesia. (Asiddao, 2014)This leads to the demographic segmentation within these countries, which involved variables primarily based on age and occupation. (Friedman, 2006)Many citizens in the working classes of the South East Asia region required taxi services to travel back and forth between home and work on a daily basis which is why this segmentation was effectively addressed in the marketing segmentation plan. (Bland, 2014)Such behavior among a demographic class of working citizens also correlated with behavioral segmentation. Because these customers required taxi services on such a frequent basis, this increased usage rates and responses to the Grab Taxi application. (Investopedia, 2015)When customers would continue to use the Grab Taxi application in their daily routines, this created loyalty status within the behavioral segmentation. The frequent taxiing life styles that drove these customers to use the Grab Taxi application influenced psychographic segmentation. This segmentation is measured through activities, interests, and the opinions of customers in regard to the application. Considering how those in the South East Asia working class shared common interests in working activities, their opinions towards the Grab Taxi application showed as they continued to use it. (Boeckel, 2012) Having access to a taxi service on an as need basis is a benefit for the customers using the application and this concept addressed segmentation by benefits. Cultural segmentation was also addressed in the taxi industry as the Grab Taxi application became a large part of technological culture.

The next phase in the Grab Taxi marketing strategy was its market positioning. Market positioning is a procedure of determining a specific marketing problem contingency and developing a reasonable solution based on market research within a given industry; in this case the taxi industry.

Consider My Teksi in Malaysia. Despite having nearly 37 thousand taxis in the surrounding regions, the taxi companies already in place were still challenged with meeting the quota for daily customer demands of taxi services. Only averages of 1 in 4 customer bookings are successfully relayed with a taxi service and even then it still takes on average about half an hour for the taxi to reach the customer. (Koizumi, 2014)Such conflicts in meeting customer demands may be due to deficiencies in radio dispatch communications systems currently being used by taxi companies.

Then there is the issue of passenger safety. With potential customers fearing that they might be robbed or kidnapped for ransom money, revenue declines drastically as these potential customers would otherwise be regular customers. Such an issue especially applies to the female demographics of Malaysia as well as those traveling by themselves at night time. (Ping, 2014)It is unfortunate that the female demographics receive unwanted sexual harassment among taxi drivers and even have fears of being raped. Not only does this impair business but it is also unethical on every level.

My Teksi proposed their solution to these issues in three phases of their application. With the user interface smartphone application allowing for easy booking and dispatching of taxi services, My Teksi would address the issue of meeting customer demands by improving the communications systems technology currently being used, as it has shown to be inefficient. Using GPS, booking and dispatch of taxi services are executed much quicker. (Servers, 2013) Phase two of the solution addressed the safety issues by allowing customers to confirm with the dispatching company that the taxi driver picking them up is licensed and authorized. Phase three of the solution expands the service platform by allowing customers to book taxies from multiple cities throughout South East Asia using only the application. (Walton, 2014)

The final phase in the Grab Taxi marketing strategy is in the marketing mix. An effective method of evaluating a business through its marketing mix is by using what is called the 7Ps. The 7Ps consists of the product, price, promotion, distribution (place), physical evidence, people, and process. (Appendix D) (Team, n.d.)

The product being provided by Grab Taxi is actually an intangible service. Because the Grab Taxi application provides services for customers through its own use, it is considered the product. The product mix would be in the varying languages that the Grab Taxi application services in depending on the country it is being used it. (Venkatraman, 2014)Pricing of the product is not fixed but rather variable depending on the region, currency, and ultimately how long the drive is for each individual taxi job. In Malaysia for example, transportation regulations help to keep taxi fares minimized which makes taxi services comparatively affordable among customers. (Schafer, 2011)Grab Taxi promotions consists of advertisements and public relations. Effectiveness in promotions can easily be seen in the various media outlets they advertise in. Grab Taxi has multiple social networking pages including Facebook, Twitter, and Instagram. They have also gained media coverage by appearing in various news reports and televised stories such as the Wall Street Journal, Yahoo Finance, and Bloomberg. (Nyberg, 2014)The distribution factor in the marketing mix is unique in the taxi industry as being able to provide services to customers is not confined to strict locations. Customers will book taxes that need to be distributed to many locations throughout varying parts of a given city or state. The Grab Taxi application actually improves distribution through its advanced communications network. (Lee, 2014)Because information systems technology is such a factor in the Grab Taxi application service, physical evidence comes in the form of digital evidence. The Grab Taxi application is able to keep track of previous and ongoing bookings. (Jenk, 2015)The people involved are the employees executing the service. Grab Taxi like most business has employees for specific tasks such as programing, customer service, and management. Finally there is the process of taxi job queuing that the Grab Taxi application is able to organize through its unique allocation programming algorithm. (Hong, 2014) (Auyong, 2014)

It is important to further not that Grab Taxi is not the actual employers of the taxi drivers themselves. Grab Taxi simply provides the communications network that connects customers to a taxi agency. One future problem that Grab Taxi is already starting to experience is in customer complaints. (Bacon, 2012) If a customer has a negative experience with a particular taxi service or driver, they may have a tendency to address the complaint to Grab Taxi even though Grab Taxi is technically not responsible for such a matter. Grab Taxi is aware that from a quality assurance stand point, customers may experience negative taxi services from time to time. Grab Taxi also accepts the reality that customers will come to them with questions and complaints regarding such issues. Grab Taxi has addressed that they take as much responsibility as they can for these issues of concern. They are efficiently responsive regarding customer complaints through multiple lines of communications and go as far as addressing such complaints on a local level. (Lang, 2015)One recommendation for Grab Taxi regarding this adversity would be to work more closely with the taxi employers themselves.  By ensuring that these employers meet quality business standards, it reflects the image of Grab Taxi back to customer opinions and experiences. (Su, 2015)

Another future challenge that Grab Taxi may face has to do with cultural ethics. In December 2013, Grab Taxi was forced to remove from its Singapore application a feature that allowed for customers to tip their drivers. (News, 2013)This concept may be accepted and even encouraged in western culture, but in Asian culture it can sometimes be viewed as touting. The Land Transport Authority in Singapore reports that taxi drivers are prohibited from collecting fares that exceed the official price of the service, which means no tips are allowed. Although the tip feature has been discontinued in Singapore, it still remains in the Malaysian, Thailand, and Philippine markets. (Kumar, 2014)A recommendation for this conflict might be for Grab Taxi to consider cultural trends depending on regions. Conducting surveys among customers would be an effective way to evaluate if tipping has trended into the culture of certain Asian countries. If the surveys meet a specified number of customers that are in concurrence with the tipping of their taxi drivers, then they should continue with it. Conversely if there are not enough customers in concurrence in a given state or country, then the tipping feature should be discontinued in that location to correlate with cultural trends. In any case, Anthony Tan’s Harvard business education has well prepared him for any scenario that may arise.

Bibliography

Asiddao, M., 2014. GrabTaxi: making commuting easier and safer in Southeast Asia.. [Online].

Auyong, H., 2014. Why GrabTaxi is giving Singapore’s largest taxi operator a run for its money. [Online]
Available at: https://sg.finance.yahoo.com/news/why-grabtaxi-giving-singapore-largest-092916745.html

Bacon, J. A., 2012. Bacon: Innovation Uber alles. [Online].

Bland, B., 2014. Southeast Asia’s answer to Uber.. [Online].

Boeckel, M. S. B. &. W. E., 2012. Uber- How a technology firm is changing the traditional transportation model. [Online].

Davidson, A. &. F. L. A., 2015. Producing Transport Systems: Uber, Driverless Technology, and the Modern City.. s.l.:(No. 15-5395).

Ericsson, 2015. Why Smartphone Use Is Growing in Southeast Asia and What It Means for ITSPs. [Online]
Available at: http://www.ipsmarx.com/blog/why-smartphone-use-is-growing-in-southeast-asia-and-what-it-means-for-itsps/

Friedman, H. H., 2006. Market Segmentation and Targeting. [Online]
Available at: http://academic.brooklyn.cuny.edu/economic/friedman/mmmarketsegmentation.htm

Hong, K., 2014. The war Uber Faces: How it’s Battling Grab Taxi and Easy Taxi in Southeast Asia. [Online].

Investopedia, 2015. Market Segmentation. [Online]
Available at: http://www.investopedia.com/terms/m/marketsegmentation.asp

Jenk, J., 2015. Theory meets practice in the taxi industry: Coarse and Uber. [Online].

Kan, Q., n.d. Market Segmentation. [Online]
Available at: http://thehomeofknowledge.com/wp-content/uploads/Market_Segmentation_Diagram.png
[Accessed 11 April 2015].

Koizumi, H. &. K. T., 2014. Southeast Asia’s GrabTaxi picks up SoftBank cash. [Online].

Koizumi, H. &. K. T., 2014. Southeast Asia’s GrabTaxi picks up SoftBank cash. [Online].

Kolter, n.d. Global Marketing Environmental Factors. [Online]
Available at: http://www.studylecturenotes.com/sites/default/files/field/image/global%20marketing%20environment.jpg
[Accessed 11 April 2015].

Kumar, D. S., 2014. Cab booking app GrabTaxi comes to Singapore. [Online]
Available at: http://sbr.com.sg/source/e27/cab-booking-app-grabtaxi-comes-singapore

Lang, R. D., 2015. Uber can’t wait: New liability for distracted drivers. [Online].

Lee, T., 2014. GrabTaxi is one of Southeast Asia’s hottest start-ups. Here’s how it’s kicking ass.. [Online].

News, L., 2013. GrabTaxi’s rewards function will be removed as it conflicts with rules. [Online]
Available at: http://www.sgcarmart.com/news/article.php?AID=9450

Nyberg, H., 2014. Adopting western online services to the Vietnam market. [Online].

Ping, L. K., 2014. Pros and cons of using taxi apps.. [Online].

Purnell, N., 2015. GrabTaxi Expands in Singapore with New R&D Center, More Staff. [Online]
Available at: http://blogs.wsj.com/digits/2015/04/09/grabtaxi-expands-in-singapore-with-new-rd-center-more-staff/

Russel, J., 2015. GrabTaxi, Uber’s SoftBank-Backed Rival In Southeast Asia, Tests Courier Service. [Online].

Schafer, M. D., 2011. Mobile dynamic ridematching and e-Ticketing: A carriva-based concept to integrate Public Transport and Carpooling. [Online].

Servers, W., 2013. This service is brought to you by NetHosting. [Online].

Su, S., 2015. Case Study: Grab Taxi’s Growth Attacks. [Online]
Available at: http://500.co/grabtaxi-marketplace-growth-hacks

Tan, A., 2015. The Grab Taxi App. [Online]
Available at: http://grabtaxi.org/wp-content/uploads/2014/07/grabtaxi-coupon.png
[Accessed 11 April 2015].

Team, S., n.d. 7 Ps Marketing Mix. [Online]
Available at: http://www.slideteam.net/media/catalog/product/cache/1/thumbnail/543×403/c68698d68bdc5cacf3dcc75ce675b615/7/p/7ps_marketing_mix_powerpoint_template_slide_Slide01.jpg
[Accessed 11 April 2015].

Velayanikal, M., 2014. This Asian tiger is mauling Uber, and its founder is the great grandson of a taxi driver. [Online]
Available at: https://www.techinasia.com/grabtaxi-stay-ahead-of-uber-southeast-asia/

Venkatraman, N. V. P. P. A. E. S. O. A. &. B. A., 2014. ). Theorizing Digital Business Innovation: Platforms and Capabilities in Ecosystems. . [Online].

Walton, N., 2014. Taxi apps could transform global transport models.. [Online].