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BMA610 Digital And Social Media Marketing

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  • Course Code: BMA610
  • University: University Of Tasmania
  • Country: Australia

Question:

E-Business and Marketing Plan

Background:

Your assignment is to develop a Digital Business and Marketing plan for a new business that utilizes digital means as part of its core business model. This could include a web or mobile app, or an internet specific business model. You must propose the new business model.

I urge you to think beyond a simple ecommerce website that “sells something”, and think about a creative, realistic and compelling competitive advantage meeting a gap in the market. You may propose an app for example. If you do propose a consumer good retail model (e.g., a website that sells apparel), then I will expect a detailed description of your channel structure and how you intend to achieve competitive advantage through a superior supply and/or distribution system (or other advantage).

Task:

In essence, you are proposing a ‘startup’. A startup business model is characterized by rapid growth and diffusion, often disruptive in nature.

Layout and Sections

I. Introduction: Introduce the purpose of the marketing plan. Briefly introduce your business model, and explain to the reader the purpose of the report.

II. Product Description: Include a more detailed (than exec summary) description of what your product is, and how it works. If you have wireframes (or mock-ups), please include them here. What are the benefits of using your product/service? (And what features provide these benefits). What’s your value proposition (why would someone use your product)?

III. Customer Analysis: Using secondary and, if appropriate primary data, describe the customer for your product. What benefits does your product provide to this persona?

Problem: Describe what problem your product solves for this customer (and/or if it has a social element, how does it bring people together in a meaningful way?).

Solution: How does your product solve this problem? Why and how is your product the best solution to solve it?

Market Segmentation and Target Market: Identify the most appropriate bases for segmenting the market and define relevant market segments. Most segmentation strategies consider geographic and demographic segments, and perhaps psychographic (lifestyle) segmentation and/or behavioral segmentation (e.g., benefits sought, usage occasions, etc.). Please justify your choice of segmentation bases. If you recommend segmenting the market on the basis of demographics (e.g., age and gender) and usage occasions, explain why.

In identifying your target market, you would likely use insights provided by secondary and/or primary research. Are the benefits sought in each target market identified homogeneous? Are the targets measurable, accessible, substantial, differentiable, and actionable?

Positioning Strategy: The positioning strategy captures how you want target consumers to view your product offering, often relative to the competition on benefits that are important to them. Think about the value proposition you are offering within the competitive environment and how you can communicate points of difference. The aim is to identify and communicate a clear, distinctive, and desirable place in the minds of your target customer.

IV. Industry Analysis: Describe the market you plan to enter. This section includes:

Competitive analysis: Who are the major competitors? (Tip: Don’t ever say that there are none. There are always substitutes). Describe representative competitors. What are their businesses and strategies? Who are their customers? What is their value proposition?

What benefits do they provide? How do their products/services, channels of distribution, and pricing deliver those benefits? How do they communicate the value to the consumers and potential consumers? What are their strengths and weaknesses?

Explain the structure of the market. What are the forces driving the market you plan to enter? Are there gaps in the market? If so, what are they? Are there significant barriers to entry or exit? Are there major buyers or suppliers that have a lot of power? Are there threats of or existing substitutes? How competitive is the market? Is it saturated? Is it growing? (Tip: Michael Porter developed a framework to analyze the attractiveness of Markets).

Social and cultural factors: What social or cultural factors or trends impact this market? Are there societal trends in the culture or in possible target markets’ subcultures that may support or impede the acceptance of your product? Will reference groups or opinion leaders influence the consumer’s decision to buy/use the product? Explain.

Technology: What technological trends will impact this market? Are newer products replacing older ones frequently? Could competitors readily duplicate your technology? In short, how does the technological environment impact the product? You might want to also investigate whether or not you have something that is patentable.

SWOT Analysis: SWOT stands for strengths, weaknesses, opportunities and threats. This table summarizes your situation analysis in a visual form. Strengths and weaknesses are internal to the company, while opportunities and threats exist outside the company (e.g. due to competition, customers, or environmental trends).

V. Marketing Strategy:

Pricing (Monetization): Recommend an overall pricing strategy, and develop a specific monetization strategy. Include a likely price given likely costs and size of market. The overall strategy should derive from an analysis of customer perceptions, competitor pricing, and estimated costs. Use secondary and primary research to justify your strategy. Describe the cost structure and resulting profit margins.

Promotion: Specify types of promotion. Try to think creatively here. Most startups have very little to no money for marketing, and PPC can get very expensive very quickly. Remember, you only have 30k. I recommend you try to motivate Word-of-Mouth. Analytics: Monitoring and Evaluation: How will performance be measured? What measures and data will be collected? When? How will it be analyzed and evaluated? How is success and failure defined?

VI. Conclusion: Summarize your report. Highlight main points, and leave the reader impressed.

VII. References: 

Notes:

Research: Secondary research is almost always used when creating a marketing or business plan. But in real life seldom will you create a marketing or business plan without also conducting primary research. Primary research could be in the form of observation, in-depth interviews, focus groups, or surveys. If you do conduct and analyze primary research, the research plan should be referred to in the report, and any instruments used included in the appendices.

Budget: Although you are not given a budget, please be realistic (assume you have $30,000).

 

Answer:

Introduction

Technological advancement has made the current business practice more competitive and complex. One of the major reason for introducing technology in business in a more robust fashion is to get more customers and bring more efficacy and sustainability to the business (Lohmüller and Petrikhin 2018). In respect to this, it can be stated the start-up business companies in modern times are highly fond of the digitisation of business and creates something unique in product and service. A futuristic business orientation can be characterised in the mind-set of the start-up businesses that redefines the implementation and execution of technology in business with greater vision and objectives (Andersson et al. 2016). It leads the business companies to facilitate new business models and encourages the organisations to integrate technology at the core of the business (Roh, Jeong and Park 2016). Based on this understanding, it can be argued that technology has transformed the perception and activity of the business companies greatly and the modern business companies irrespective of its size and type are interested to install technology at the core of the business practice.

In this regard, the current marketing plan is focusing on the start-up business initiative of GoCab, an online cab booking company that is interested to provide future experience to the customers. The report encompasses the product description, customer analysis, industry analysis and marketing strategy that GoCab should introduce as preparing its marketing plan. The focus of the report is to provide a strategically sound marketing plan to GoCab that will definitely help the company to gain competitive advantage in the market.

Product description

The riding service of GoCab is a application based process where the passengers can choose the type of the cars they want to ride and the estimated time and price will be highlighted in the application. The purpose of GoCab is to provide top class riding experience to the passenger in value price. There are several number of riding options in terms of car or cab, bikes and cycle. However, the bike and cycle ride is limited to the specific city only. Passengers have to book a cab for intercity ride. The company is belonged to a riding service industry and interested to provide top class experiences to the customers. Therefore, transparency and safety of the passengers are one of the major concerns for GoCab. There are both owned and shared cabs that GoCab provides. The owned cabs are directly owned by the organisation under specific registration. On the other hand, the shared cabs are not purchased by GoCab but the details of the car and the driver details are shared with the passengers after they book a cab.

The company is interested in providing some premium services to the passengers in comparatively low price like the destination tracker, keep an update to the customer care department and a video camera will also be installed in each of the cars whether it is highbred or owned so that it will ensure safety and security to the passengers and the drivers as well. In addition to this, it is important to note that the customers can get a 360° view of the cab so that if they want luxury or premium services then they can choose the right one through the mobile application. There is a separate subscription for premium membership for the passengers for two months, six months and one year and GoCab provides offers on the basis of the category of subscription. In fact, for the non-subscribed passengers also there are offers.

 

Customer analysis

There are numoruos accounts that stated poor passenger comfort and quality service can hamper the business companies. From the article of Reuters (2019) it is derived that famous ride-hailing company UBER was alleged with illegal operations and the company does not have any monitoring process or background checks over the driver. Moreover, unauthorised drivers issue is also happened where the image of the driver is not fit with the actual drivers (Scroxton 2019). Mismatch in the number plates and lack of monitoring process of the cab pooling services are very annoying and it creates threat to the safety of the passengers as well (Patel 2020). In fact, many of the cab drivers lodged complaints against passengers and their bad behaviour but they failed to provide any proof as they have no video footage or audio recording (Akoorie 2019). Henceforth, it becomes a serious threat for the cab pooling companies to facilitate a good relationship between the passengers and the cab drivers.

In response to this, GoCab provides a better experience to the customers in terms of transparency in the details of the cab driver and attach a label on the profile with the mark “verified”. It means the company will take every responsibility in case of any trouble that the passengers will face. Moreover, all the verified cars must have cameras that are operated from the office so that the management can access to all the videos between the passengers and the drivers without any interruption. Therefore, it is expected that the measures will help to make the customers satisfied about their safety and at the same time the drivers will also provide enough proof of misbehaviour of the passengers.

Market segmentation and targeting

Market segmentation

Geographic

The major service of GoCab cars will be in the city and urban areas. It can be stated that there are three type of rides that the customers can get such as cab, bike and cycle. The bike riding and cycling is strictly restricted to the urban areas whereas the cab service provides intercity rides also. It means the cabs can operated from urban to rural areas. Therefore, it can be stated GoCab will operate in both urban and rural areas.

Demographic

As far as the demographic segmentation is concerned, it can be stated that people from the age group of 18 to 65 are the target customers of GoCab. The age group of the people is huge because the company is interested to provide such service that meet the needs of any people from the age group of 18 to 65. Both male and female customers are the target customers of GoCab. There is no gender specification that the company follows to choose the target customers. Moreover, the life cycle stage of the target customers is also interesting. People belongs to bachelor stage to newly married couple and solitary survivors are also considered to be the target customers of GoCab. The demographic segmentation of the customer also provide the fact that the target people are associated with some profession like student, employees and freelancing professions or they are retired people. It encapsulates the entire age group from 18 to 65.

Behavioural

The behavioural segmentation identifies that most of the customers are soft core loyal or switcher because they are looking for the riding services that are comfortable and safe for the passengers. People are very much aware of the fact that there are some threats of security in the cab service companies so that they do not want any chance to face threatening situation. Besides this, cost efficiency is also identified as one of the important interests that the target customers are looking for. The personality of the people are basically from easy-going to ambitious and it depends on their profession. Furthermore, most of the customers are first time users. Nevertheless, there are some passengers who have previous experience in GoCab services. The company is a new venture so that it is obvious that most of the customers will be new.

Psychographic

 The psychographic segmentation is associated with the social class and the life style of the customers (Camilleri 2018). Based on this, it can be argued that the social class of the target customers of GoCab is ranged from middle class to upper class. Therefore, the income of the target customer also follows the same from middle income level to high income level. Moreover, in most of the cases the lifestyle of the customers is mainstream. Moreover, due to the inclusion of tourists in the target customer lists, an explorer life style of the target customer can also be seen.

 

Target customers

The primary target customers of GoCab are the professionals and family people with the age group of 23 to 35. Most of those customers are highly concerned about the price of service and the safety measures. Moreover, they have moderate level of income with a lifestyle of mainstream. They are generally associated with high ambition and belonged to the middle class family background.

Positioning map

Figure : Positioning map of GoCab

(Created by the author)

Based on the position analysis, it can be stated that cab riding service companies in Australia are focused on the low pricing strategy as the market is highly competitive and the customers are willing to get quality services in low price. However, the market is firmly dominated by UBER. Nevertheless, it can be stated that for GoCab, it will be a promising step to challenge the market domination of UBER with its better services. The company also assures to provide quality services to the customers with a low pricing strategy so that it will be a challenge for UBER to deal with GoCab. Moreover, the safety issues and in-transparency in drivers’ details is also considered to be a significant aspect for GoCab to attract more customers through its core emphasis on the comfort and security of the passengers and the drivers as well.

Industry analysis 

Competitive analysis

Factors

GoCab

Uber

DiDi

Strategies

Interested in making quality service for the customers with value pricing

Provide a number of service facilities in low pricing

Encapsulate the market with its huge financial backup.

Value proposition

Provide high safety and transparency in relationship between the customers and the divers.

Provide quality service to the consumers with low pricing

Uses its success and popularity in the Chinese market to encapsulate the Australian market.

Services

Cab, bikes, cycle

Cabs, bike, cycle, food and food delivery

Cab

Pricing

Value based pricing

Cost leadership

Value based pricing

Structure of the market

Competitive rivalry

Rivalry in the Australian market is intense. There are number of companies that provide almost the same sort of services to the customers (Kudva et al. 2020). There are potential rivals of GoCab like UBER, DiDi and Ola that are also practices effectively in the Australian market. The focus of the organisations is to provide quality services to the passengers in lowest price. Price is played a significant role in the Australian ride hailing market. Most of the companies are trying to make an effort to reduce its price of service but assured to provide high quality. UBER dominates the Australian market but the business model of UBER is easy to adopt (Tirachini 2019). There are many indistinguishable companies like UBER existed in the Australian market like GoCab. Therefore, the competitive rivalry in the market is high in Australia.

Bargaining power of the suppliers

The role of the suppliers in the market is limited as most of those companies are interested to develop their own IT department and technical assistance team. Moreover, the profitability in business attracts the cab drivers to register their name in different ride hailing companies (Vij et al. 2020). As a result of that it becomes pertinent for the business companies to influences and motivates the suppliers to get involved in this profitable business. Despite most of the companies does not have any owned cars and depended on the drivers, the suppliers have limited effort and bargaining power to influence the parent companies (Zhang 2019). It is the profitability measures that motivates the drivers to get involve in the ride hailing business of those companies. Therefore, it can be stated that the suppliers have low bargaining power in the market.

Bargaining power of the customers

In the Australian market, the customers have great power to influence the business of the ride hailing companies. As the companies are belonged to service industry so that it is essential for the organisations to provide better facilities to the customers and attracts them. The consumers are also expected to get quality services from the companies but in low price (Surie and Koduganti 2016). Therefore, the demands and needs of the customers are the major driving force in the market that influences the companies to change the strategy as per the expectation and aspiration of the customers. The market is highly focused on the demands of the consumers in fact, the launch of GoCab is also due to the changing pattern of the consumer needs. Based on this, it can be argued that the customers are enjoyed high bargaining power in the market.

Threat of new entrants

GoCab is a new company in the ride hailing market of Australia. It can be stated that the Australian market promises hug growth for the ride hailing companies. Therefore, it is obvious that new companies are always interested to invest in Australia. Advancement in technology and transportation are the key factors that boost the intention of the new companies to invest in the market. Moreover, the ride hailing market of Australia is still growing so it will not be a problem for the new companies to invest and grab the opportunity in the Australian market. According to Higgins (2017) the technology plays is playing a crucial part in the process where the new companies are introducing new technologies in the market. Henceforth, there is always high threat in the Australian market of new entrants.

Threat of substitutions

Using advanced technology is considered to be one of the significant characteristics that the ride sharing market of Australia practices. It is important to note that the entire market is depended on cutting edge technologies and Internet of Things. Therefore, significant threat has been existed in the market where substitution of the existing services can be altered. New companies are entering the Australian market with new technologies (Mcgregor et al. 2017). For instance, GoCab emphasises more on the security of the passengers and the communication transparency between the passengers and the drivers. Therefore, the market is still vulnerable for the existing companies and they are also looking for different technological introduction and improvements so that it will be easier to attract the customers profoundly. In respect to this, it can be stated that the threat of substitution is moderate in the Australian market for ride hailing companies.

 

Social and cultural factors

As far as the social and cultural aspect is concerned, it can be stated that the people in Australia are fun loving and they want to share their values in purchasing decisions as well. Henceforth, the business organisations have to respect the cultural values of the Australian people and shape the business in such a way that it meets the interest of the people (Yen et al. 2020). It is very important for the business companies to get social acceptance and recognition that is pivotal to do business in Australia. The Australian people are open minded and they are independent enough (Pueboobpaphan, Indra-Payoong and Opasanon 2019). Therefore, the business companies have to reflect the same nature of business efficiency so that it will provide confidence to the customers to purchase the service that the company has offered. Moreover, it can be stated that a transparency in business is always important while doing business in Australia. The Australian people are well aware of the business practices of different companies and they want to engage with their beloved companies (Mulley et al. 2020). As a result of that the business companies also maintain transparency in business so that it will be effective to meet the interest and aspirations of the customers (Fleischmann, Daniel and Welters 2017). The customer engagement measures are very effective to boost and motivate the consumers to get engaged with the organisation. Therefore, GoCab also emphasises on the same technique and bring customers into the organisational fold with transparency in communication and development.

Technology

According to the research of Marsden, Docherty and Dowling (2020) the current business practice is completely transformed into a technology based performance. It is not possible for the business organisation to achieve growth in business without the support from technology. In respect to this, it can be stated that from the product or service development to the promotion, the business organisations are heavily relied on the technological assistance (Weng et al. 2017). Moreover, it is pertinent for the business companies to have better communication and engagement with the customers as it is one of the significant tools for the companies to manage good relationship and communication with the employees. For the ride hailing industry, technology is identified as a driving force for doing business. All the companies are tried to ensure its success with introducing new technologies (Tussyadiah, Zach and Wang 2017). As a result of that the companies are interested to provide a smooth experience to the customers based on the excellence of technology. In respect to this, GoCab also emphasises on incorporating advanced technology in business. As a matter of fact, the ride hailing services that the company provides its customers is completely based on high-tech support. For instance, the security and communication with the cab drivers can be done through the mobile application and the passenger can trace the cab through the application (Hensher 2017). In case of any problem, the customer care services can be reached through technology. Therefore, it can be stated that technology plays pivotal role in creating business and helps to retain its success in the competitive market (Wong, Hensher and Mulley 2018).

SWOT analysis

Strengths

Opportunities

· Use of advanced technology is a strength for GoCab to gain competitive advantage in the market.

· GoCab is interested to make a transparent relationship with the customers.

· GoCab takes all the responsibilities for any issues so that the employees get assurance and confidence.

· GoCab has owned and hired drivers so that the company will get competitive advantage in the market.

· The riding service of the company is associated with three modes cab, bike and cycle so that it will be easier to get more customers.

· The Australian ride hailing market is still growing therefore it is a huge opportunity for GoCab to establish its business successfully.

· Development in technology also helps GoCab to introduce new technologies in its service that will help to maximise more customers.

Weaknesses

Threats

· The business model of the company is easily imitable so that in the long term business the company can lose its competitive advantage.

· The company is new in the market so that there is limited experience to do business successfully in the competitive market of Australia.

· Immense pressure from the rival companies can be obstacle for the successful growth of the business organisation.

· Competitiveness in the Australian market is a challenge for the new companies like GoCab to survive.

· The threat of substitution can be a challenge for GoCab for long term business stability.

Marketing strategy

Pricing strategy

Pricing is identified as one of the most important aspect for the business organisations to maximize the customer. In other words, it can be stated that the pricing strategy is considered to be one of the strategic tool for a business organisation to influence the consumers and push them to purchase the product or service that the company offers in a certain price. The Porter’s generic strategy is very relevant in the context as it provides enough competitiveness to the organisation for gaining strategic advantage as per the goals and objectives of the company (Wada 2018). In respect to this, GoCab is interested to set a broader scope of business by putting emphasis on the cost leadership practice. According to the research of Kurt and Zehir (2016) it can be stated that the cost leadership practice enables the business companies to gain more competitiveness in the market by reducing the cost of the product or service below the average price prevalent in the industry. However, there are still possibilities for the organisation to gain competitive advantage in the market due to its low price of the product or service.

Based on the cot leadership strategy, GoCab will follow penetration pricing strategy. It is important for the organisation to understand that the company is new in the market and the market trend is related to the low pricing of the service. Therefore, penetration pricing will be the right option for GoCab to get competitive advantage in the Australian market. Based on the research of Liu, Zhai and Chen (2018) it can be stated that the penetration pricing strategy is responsible to make a quick gain of the market share by setting a low price initially. The purpose of setting low pricing in the initial phase is to attract the customers to purchase the product or service offered by the organisation. Kienzler and Kowalkowski (2017) opined that the penetration pricing strategy is significantly relevant to the new entrants in the market. Moreover, another important aspect of the penetration pricing strategy is to gain brand loyalty. In course of offering quality product at the cost of low price definitely helps GoCab to get more customers and maximise the rate of customers for further sustainability in business.

 

Promotional strategy

The promotional strategy of GoCab will focus on the digital marketing strategy. It is important to note that the organisation is trying to influence maximum number of customers in a small span of time (Giovanni et al. 2018). Moreover, the budget of the company is also low so it has to manage a better and effective promotional strategy that can work on limited financial resources. In respect to this, the digital marketing strategy will be beneficial for GoCab to grab the attention of maximum number of customers. The purpose of GoCab is to create a strong customer base that can help the organisation to gain sustainability in the competitive market.

As per the research of Patrutiu-Baltes (2016) it can be defined that digital marketing encompasses positive marketing effort with the help of electronic devices like internet. The marketing channels are basically, social media, search engines, emails and other website connections. In this regard, GoCab chooses SEO, email and social media marketing techniques. The SEO practice helps to optimise the search engine in such a way that it will be beneficial for the customer to get the most desired result while searching (Mandal and Joshi 2017). Business companies uses this practice so that the company website will be atop of the search list. For GoCab, it is a very effective measure as the company is new in the Australian market. Moreover, the integration of social media marketing is also useful as the social media helps the organisation to get more customers through unique promotions. For GoCab, the integration of Facebook, Twitter and Instagram as social media marketing platforms is very important. The company should focus on developing digital contents in the form of newsletters and upload it in the social media platforms so that the target customers can get adequate information regarding the organisation Moreover, posting videos and image in social media related to the promotion will also help GoCab to attract customers.

Monitoring and evaluation

The monitoring and evaluation process of the marketing plan will be based on the kepy performance indicators that are able to measure the progress of GoCab. Therefore, the key performance indicators are as follows,

  • To increase the profit percentage of GoCab by 5% within 2 years.
  • To maximise the rate of customers by 10% by 2 years.
  • To retain the loyal customers up to 3% within 1 year.

Conclusion

The report clearly defines the measures and strategies that GoCab should follow in the process of gaining competitive advantage. It can be argued that the ride hailing market of Australia is highly competitive and the consumers are looking for a better application which provides security to the passengers and at the same time creating transparency in the communication between the customers and the cab drivers. Therefore, the primary market of GoCab has been set on the people with an age group of 23 to 35. In the marketing strategy, the pricing strategy of GoCab follow the penetration pricing strategy whereas the promotional strategy will be based on digital marketing. Based on the analysis, it can be concluded that the marketing plan will help GoCab to gain competitive advantage in the vulnerable ride hailing market of Australia.

 

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