Product Development and Marketing, Essay Example

Introduction

Today, businesses can be started cheap making use of telecommunication and information technology products and developments. Indeed, according to Campbell, 69 percent of new start ups in the United States are home-based. This means that many people are now discovering the power of online collaboration and the low cost of start up associated with an internet business. The below e-marketing plan will be demonstrating how easy it is to come up with an idea and execute an entire marketing plan online. The author of the current marketing plan will focus on entirely internet-based development, promotion, and delivery, in order to simplify the plan and keep the costs associated with starting and running the service at the minimum.

The idea

The idea that will be covered in detail in the below paper is based on delivering value added services for customers using internet and mobile technology. The service will be based on the demand for eligible drivers for car sharing in large cities. The selected name is Designated Driver.  It is likely to be popular among people aged 21-30, who regularly take trips to central areas of large cities in the United States, and would not like to use a taxi or public transport service. When people go out for a party, they often struggle with finding a designated driver who would not drink all night. They could get a lift from friends, or take the taxi, sharing the cost of the fare. However, with the new service, bringing together qualified drivers and those who need a ride to town and home, private contracts can be offered on a personal basis.  Both customers and service providers would benefit from the service, as the site and mobile app would connect demand with availability. Customers could save money on their travel, while service providers could get paid for driving around on busy nights, taking multiple customers.

Features of the service

The service would be safe, easy to use on both computers and mobile devices. Payments will be processed online, using a safe,  SSL certificate payment page, and the site would take 25 percent of the fee paid by the customer as a commission every time a deal is made through the site. All drivers registering as service providers would need to be approved, after presenting a clean driving license. They will be regularly checked, and rated by customers to help new users choose the right private driver for their destination.

The service providers will be able to fill out their profile based on how long they are ready to travel, which days and times they are available, and what type of car they drive, how many seats they have, and whether or not they offer a pick up service. Pick up service will also be ordered online.

Customers can create requests online, or search for providers based on their location and specification. They can choose a service provider, send them a request, and once the person confirmed the request, users make payments online, which is held until the customer provides a feedback on the service, when the fee (minus 25 percent commission) is released to the service provider. This gives both the customer and provider the peace of mind that they will get what they agreed to when entering the contract online.

E-marketing research

The above business to customer agency business can become popular through word-of-mouth advertising. A recent publication by the World Economic Forum lists the benefits of online service businesses as follows: operational efficiency, effective communication, and the benefit for the customer provided through flexibility and the ability to personalize services. There are, however, a few risks associated with this type of service business, such as uncertain return on investment (depending on the success of the marketing campaign), and regulatory requirements related to payment processing, personal details, and software security.

The mobile economy has been growing significantly, and is expected to grow in the next decade, as users are now looking for easier, faster, and more flexible solutions to satisfy their needs, according to a recent research by A.T. Kearney. The number of subscribers to mobile internet services is projected to be growing to 3.940 billion people worldwide, according to the table (A.T. Kearney, 2). The total number of SIM-enabled connections is also growing. In North America alone, the growth is predicted to be 10 percent on an annual basis. This means that the pool of potential customers is likely to grow after introducing the new service (website and mobile application).

A Smart Insights study states that 26 percent of internet users now start on branded apps, instead of a website. This indicates that mobile applications are becoming more popular, due to the ease of use, and the speed of the service delivered.

A recent Market Insider article talks about the changing habits of customers related to traveling. Mobile apps are becoming popular among people who are looking for last minute bookings and deals (Business Insider). This also indicates that the new service would be popular among the target market.

Marketing environment analysis

The marketing environment of the apps market offering door-to-door services is only emerging, and while there are several car sharing apps already functional, with Uber being sued over their lack of legislation, it is likely that a private service that does not involve professional drivers would attract some of the customers leaving Uber.

The PESTLE analysis will be carried out below to determine the main drivers, hindering forces, threats, and opportunities within the new market.

The political environment of the market supports new ventures, however, the creators of the service will need to take into consideration the related regulations, in order to avoid penalties, reputation loss, and compliance issues. The example of Uber has shown that regulators carry out several checks and investigate complaints thoroughly, therefore, policies and terms of use, privacy statements and guidelines need to be created, while customer data needs to be safeguarded at all times, to comply with data protection regulations.

The economic environment of the market is currently competitive, with millions off new “practical” apps released each year. While some of them are profitable, there are free alternatives to finding a ride, therefore, the creators of the service will need to ensure that the new app offers more value to customers than other, free applications.

The social environment is pourable for the launch of the new product, as the Pew Social Trends website reports that there is a decline in marriage rates among young people in the United States. There will be more independent, single, and casually dating people working in large cities and living in the suburbs on their own, or with their parents needing a ride for a night out. Social trends confirm a growing market.

The technological environment of the market has partly been discussed already. The rising number of customers with Android or Apple mobile devices providing internet access has been rising in the past few years. Further, the confidence in mobile apps is rising with the increased safety guidelines implied by providers. Using apps is soon becoming a normal way of communicating, ordering services, and managing everyday life for Generation Y customers.

The legal environment brings forward some challenges related to customer privacy, data protection, and taxation issues. Legally, it is likely that service providers will need to register with the IRA to submit their income earned through Designated Driver. Legal challenges and requirements related to checks carried out among drivers and the safety issues are likely to arise, and internal policies need to be carried out to minimize the related risks.

As it has been stated, Generation X and Y customers care about the environment, therefore, if public transport is not available, and they prefer having a drink on the night, they might choose to share a ride, instead of getting a taxi for a single person. The environmental benefits of the service can be major selling points of the app. As the company will not operate an office and call center, the carbon footprint of Designated Driver will be minimum.

Market segmentation

At the moment, there are four major companies competing on the car sharing / car pooling/ private transfer market that have a mobile app: Sidecar, Uber, Lyft, Taxi Magic, and GroundLink (Roof). Customers are only becoming familiar with the thought of sharing a ride or ordering a lift online, therefore, the brand loyalty is low. The top five companies are likely to be taking 90 percent of the sales, however, related statistics have not been released yet.

The demographic market of the application and website is likely to be middle-class customers aged below 45, living in the suburbs of cities. While many people take public transport to get to their destination on a night out, services are limited and are not available in the early morning hours. At the same time, providers who work evening shifts and nights could benefit from earning extra money through the service.

The confidence in mobile payments and applications is still low, however, growing. Confidence level among Generation X and Y customers using the internet and applications is higher than average (Interface).

Target marketing

The target marketing segment will be middle-earners (single or casually dating), aged between 21 and 45. The target customer would live in the suburbs of a large city, and either not have a car, or would prefer having a drink on a night out. The target customer would be technologically enabled, owning a smart Android or iPhone, and be comfortable with ordering services or goods online. They would be registered for online payment systems. The target market segment will also consist of individuals without children, and those who have a social life. Both men and women are likely to be using the application.

The target customer will have a lifestyle that is based around individualism, freedom, and social connections. The market segment would have a strong sense of responsibility for the environment, and one of their motivations to use the service will be to save the environment, as well as to get a discount on their transfer. The target customer will be conscious about drink driving and will be a driver, looking to avoid penalties. The target market will consist of individuals who trust the internet and are receptive to social media recommendations, friends’ suggestions, and are looking to become trend setters. They would be open to new solutions, and happy to try something that is not a traditional way of transport. The target customer will be in work, and make use of the service on weekends mostly, or when traveling to and from airports. The below table will summarize the main characteristics of the target market.

Marketing positioning

While there are several reasons why customers would like to use the service, such as work car pooling, airport transfer, or doing the shopping, the highest demand would be concentrated in large metropolitan areas, and this is where the service should be started. The main focus of the service will not be work car pooling, as this is often offered by large employers anyway, for free. Airport transfers might be something that customers would not order through the app, therefore, the main message of the marketing campaign should be built around having a night out and getting a designated driver.

The main focus of Designated Driver’s market positioning will be based on the lifestyle choices of the target customer. Therefore, based solely on online advertising and partnering with similar applications to create in-app advertisements, the campaign will target those customers who are already using Android or Apple based applications. Another marketing channel that will be able to allow the creators of the service utilize word of mouth advertising will be social media. According to the Social Media Marketing Industry Report, the most commonly used content in social media marketing are originally written content, curated content, infographics, and original videos. Therefore, the marketing campaign for Designated Driver will be based on featuring individual experiences with the service, telling stories about how much safer and cheaper it is to book a ride through the app than to drive or to get a taxi for a night out.

As the main target population of the marketing campaign has already been determined as single or casually dating males and females aged 21-45, who socialize regularly and live outside of the city center of metro areas, the social marketing campaigns will be targeted based on demographic criteria. Facebook allows advertisers to filter the audience of their marketing messages, and this will make the promotion more effective and focused on the right niche market.

Another channel of advertising can be YouTube. While creating and uploading original customer testimonial videos and ads will help create awareness of the service and the app, paid promotion videos can also be placed on popular, related uploaded contents in order to get more traction in the market.

Marketing mix

Product:

The product offered will be the service to choose private transfer to and from the city center, using a trusted provider, and make payments securely via online or mobile platforms. This will allow users to reduce their risk of being cheated, and save money. For service providers, the product will be the ability to offer services and earn extra money by transporting people on the way to and from work. The main benefits of the product features determined below are: ease of access, real time feedback, the ability to review the provider’s rating before choosing a service, and flexibility. Users will have full control over their destination, their choices, and their payment options. Another feature and benefit related to the service can be the fact that sharing a ride can significantly reduce the carbon footprint per person. It has been found by Interface’s research that Generation X and Y customers have a high level of concern about environmental issues, therefore, they are likely to make a decision about transfer based on their green priorities.

Place:

The place of availability will be over the internet, through an application or online using a desktop or laptop computer. However, there will be initially some geographical restrictions of the service, given the fact that larger cities will have a greater demand for the service, therefore, these markets will become more popular in the first months of the launch. The service will not be offered via phone, or in person, and users will be restricted from getting in touch with providers directly. The place for payment will also be online, and no cash transactions will take place.

Price:

The service will be priced based on individual service providers’ preferences. Obviously, those service providers who offer rides while commuting to and from work, and are on the road anyway will charge less for the extra persons than those who would like to make a living of the app, and go around the suburbs of the large city in the early hours of Saturday and Sunday morning, to transport people to and from places. Competition among service providers – particularly in larger cities – will be likely to drive prices down, benefiting customers, and offering them several options to choose from.

Promotion:

As it has been stated previously, promotion of the product will be carried out almost entirely online. Teaming up with other, similar applications (though not competitors) will bring several advantages to the start-up business. The first aim of the marketing campaign will be to create a brand awareness among individuals who are most likely to use the service, and belong to the target population. The second aim will be to create a strong brand using branding videos and viral advertising methods. This approach has the potential to multiply the results of the campaign, as customers will be likely to share their experience and viral videos with their friends who might also be interested in the application. Facebook advertisement will also be selected, as it can create viral campaigns and awareness.

Promotion will be based on real users’ experience in the last phase of the campaign, to connect with potential customers on an emotional level. This way, users of social media can believe that people featured in the ads are just like them, and they are setting a trend, something that is relevant to the market behavior of Generation X and Y customers.

Works Cited

AT Kearney. “The Mobile Economy 2013” 2013. Web. <http://www.gsmamobileeconomy.com/GSMA%20Mobile%20Economy%202013.pdf>

Business Insider. “The Mobile Tourist: How Smartphones Are Shaking Up The Travel Market” 2013. Web. <http://www.businessinsider.com/the-mobile-tourist-how-smartphones-are-shaking-up-the-travel-market-2013-1?IR=T>

Bosomworth, D. “Mobile Marketing Statistics 2015” 2015. Web, <http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/>

Campbell, A. “69 Percent of U.S. Entrepreneurs Start Their Businesses at Home” Small Business Trends. 2013. Web.

Interface Space. “In the Spotlight: Generation Y”  n.d. web. <http://www.interfacespace.com/media/docs/Spotlight-On-Generation-Y.pdf>

Pew Research Center. “The Decline of Marriage And Rise of New Families” 2010. Web. <http://www.pewsocialtrends.org/2010/11/18/the-decline-of-marriage-and-rise-of-new-families/>

Roof, K. “Top 5 Car Sharing Apps” 2013. Web. <http://www.thestreet.com/story/11971941/6/top-5-car-sharing-apps.html#>

Statista. “Statistics and Market Data on Mobile Internet & Apps” 2015. Web. <http://www.statista.com/markets/424/topic/538/mobile-internet-apps/>

Stelzner, M. “2014 Social Media Marketing Industry Report. How Marketers Are Using Social Media to Grow Their Businesses” 2014. Web. <http://www.socialmediaexaminer.com/SocialMediaMarketingIndustryReport2014.pdf>

World Economic Forum. “Industrial Internet of Things: Unleashing the Potential of Connected Products and Services” 2015. Web.