As a newly appointed marketing assistant of the Addison Lee marketing team, you have been asked to write a report addressing the following task areas:
- Describe the Production, Product, Selling, and Marketing orientations
- Identify and explain the orientation adopted by Addison Lee, and provide two (2) examples that demonstrate Addison Lee’s use of the approach
- Describe marketing environment analysis and discuss why it is important for Addison Lee, prior to setting a marketing strategy
- Considering the macro environment of Addison Lee, identify and discuss one (1) Economic factor and one (1) sociocultural factor that impact Addison Lee’s marketing decisions. Explain whether the factors create marketing opportunities or threats for Addison Lee
- Considering the micro environment of Addison Lee, identify two key competitors and discuss their potential threat to the business
- Identify and explain two (2) internal environmental factors that could be considered as strengths or weaknesses of Addison Lee’s business operation
The Marketing Director has announced a new objective for the company: To grow the Addison Lee car service business by 3% by targeting a younger demographic of olds by June 2018.
- Explain the concept of market segmentation and its importance in planning a marketing strategy for Addison Lee
- Discuss two (2) segmentation approaches that Addison Lee could adopt when segmenting the market for 16 – 25-year olds
- Using the 7ps, Identify and describe Addison Lee’s current marketing mix using appropriate examples for each of the 7P’s.
- Recommend changes to the Product, Price and Promotion element of Addison Lee’smarketing mix (7ps) which will enable the business to achieve its desired objective.
Innovative Approach to Technology and Production
Business management and implementation of the innovative strategy is the first and foremost requirement for a company to compete in the globalized business scenario. The strategy must be innovative and provide a good impact on the customers. Customers are the main concern of the company so their benefit and need is the basic consideration for the company. In this given case study, Addison Lee is Europe's major private hire car service company which was founded in 1975 and through their innovative technology; they have continued their business for 40 long years. Moreover, the company approved more than 20,000 jobs every day which is a huge database of employees that engaged with the company so the company's sustainability is the key attribute for the employees and market (Addison Lee 2017).
The methods that used for the tangible and intangible inputs and provide clarification over the services and goods are stated as production. Addison Lee innovative app has provided a 40% growth in advance booking in 2015 compared with 2014. In the Christmas campaigning process, the company has created a slogan ‘Have a surge free Christmas' which resulted as the busiest ever Christmas for them as the mobile booking app has got the highest percentage of booking form the customers.
Selling is the primary transaction that happens in between the seller and buyer and that transaction is taken place by choosing the target market. From the statistical report driven form 2014 have noticed 44% of extra booking has been done in 2015 (Addison Lee 2017). Addison Lee serves a good quality of products and they have their quality reputation for the branding of product too. 177% expansion of courier division and the proper delivery time rate is the enhancing management that the company has done throughout the years.
Product is the tangible and intangible attributes that manufactures and redefined for sale and this action and process depend on the buyer and seller strategy. Most of the products from Addison Lee Company have the innovative nature and that also encourage the drivers to work in an effective way. Cars are high in quality and those have so many innovative features that met customer satisfaction and meet the revenue generation of products. The special discounts over the service are also valuable in case of customers as these services or products are being sold at a lesser price than expected.
This is a philosophical change that focused on the customer desire and discovers the thought that market has produced to their existing customers. The company's strategy of contribution permanent price fare compared to competitors who decide to considerably augment their prices at the demanding period. So their business must be increased as the customers prefer their business in their busy times in Christmas (Addison et al. 2017). The company has doubled their fleet of vans and delivering the largest bicycle courier in Europe. The company has provided the best drivers, great cars and fixed price that provide a good response from the customers. Most of the technological innovations are driven by them and they have successfully implemented that in their strategies.
Selling and Product
Technical leadership has provided into the management so that Addison Lee can ensure their best practice and maintain the standard in the developmental scenario. For the promotional purposes, rich media has been used and web access is available for them.
At first, they have done their promotion through media, internet process and article and newspapers. Sound processes to prop up the congregation of necessities, prioritization of requests and deliverance of lofty excellence briefings, presentations and reports thus their marketing strategy is based on the improved scenario of globalization (Wu, Chen and Olson 2014).
Secondly, Addison Lee has demonstrated their good relationship with the stakeholders of the company for managing better data engineering process. The company’s approach to the customer is accurate as they have set their target to reach more customers with innovative strategic implementation.
The business environment in the organization and good operational method encourage the form of management as well as improved the scenario of the business development (Li et al. 2014). For the environmental change in the organization introduction of the mobile app is important. It allows London customers to order a cab in New York and be guaranteed of the lofty class practice over at hand. Customers’ good feedbacks are the essential need for company. Organization environment often provides good behavior to their employees and that reflected on the employees while dealing with the customers.
Addison Lee has become the latest company who has implemented the gig economy to their organization. The economic practice has provided the legal battle for the employee rights and possession. The economy of the company will increase by the implemented method of imposing innovative strategies in the organization. 3% increase in car in the Christmas season and the overall 40% increment in the overall season create an economic boost to the company. On the other hand, the working experience of the company and the nature of the demands more equivalent at this juncture when customer satisfaction is the major criteria of the organization.
The political section is important as the company will not take their stand if the political assortment is not allowed and business has not been established. So for the betterment in business, political understanding and legal support from the government is needed for the development of the company.
The environmental factors are important for the company establishment as company is not formed in the adverse condition when the environmental acceleration is not support the view of the companies. Environmental aspects are important as the place and environmental support the business for growing aspect.
Technical Leadership and Promotional Activities
With respect to the socio-cultural branding of the ecological issue and the maintenance of licensing policy of the cab are to ensure the environmental and social aspect in the UK. There are different religion employees and customers have been served by the company thus company's diverse attitude may help the process of finding a good socio-cultural aspect for the organization and the whole society (Schaper et al. 2014).
Implementation of new technologies and applications are creating chances for a better economic sustainable condition for the company. For the economic enhancement, more drivers are recruited and the number increased by 3600 to 4450. If more employees are associated with the company then their business process must get a huge boost as more review can be earned by that process (Mishra, Mishra and Grubb 2015).
The economic progression is depending over the monetary position of people. The place is suitable for the business and people have good amount of money and they can easily avail those cars and this is the reason the company can flourish their business by provinding more amount of cars and that encompasses their business as well. So the economic stability of people encourages the business to extend their market and justify the establishment.
The legal issues are also related to the business terms and for this reason government has set some legal policies for the sustainable condition of business. In that case legal aspect like promoting industries or the additional marketing structure providence is important to mitigate their issue in terms of legal aspect.
They are also doing the same business in the UK and thus they also tried to improve their marketing strategy so that they can get a competitive advantage than other similar companies. UBER is one of the most competitive company and Gold line Cabs are another one who has the strong base in the UK (Wild, Wild and Han 2014). Those companies have a respectable elasticity in market and quality pricing system that provides the good organizational structure for the development of the business. They have also implemented some strategic innovative changes for the customers.
There are certain companies like UBER, which has cab locator system and split of billing section that encourages their customer facility, however, Addison Lee has not implemented that technological aspect. This has to be regarded as one of the threats. UBER is significantly cheaper than the other companies due to their increasing demand so customer like the cab, but Addison Lee has provided a good quality of cab and for this; they have to fix a particular price for that (Adekola and Sergi 2016).
Impact of Environmental Factors
Addison Lee has some strengths and weakness that also impacted their organization with respect to expanding their business.
The key strengths of the company are to assume investigation which quantifies promotion opportunities with up-to-date information on business targets, pricing policy and other solution aspects of the business (Aithal 2016). On the other hand, they have introduced technological implementation like using driver PDAs, GPS tracking, and text massaging to drivers for the better accessible for the customers. Addison Lee uses the modern technology that reduces emanation of gases and has been awarded by "Green500" project. Suppliers are the main concern for the company and they have also technologically sound as well. The marketing business will flourish as the by the proper distribution of the business. If people know about the company’s policy and procedure they are quite happy to choose their operation as the imposed planning and strategies are quite affordable for the customers.
On the other hand, the company has certain weaknesses also that like to be highlighted for the better recommendations. They have some problem regarding fines and payments. The high court ruled for Addison Lee's drivers to use or instruct the bus lanes for the excessive fine incidents. More fine cases have hindered company’s revenue (Khan 2014). The negative impact of the company has affected when negative reviews have found form the company like iPhones and for his application, company’s reputation got affected.
The marketing opportunity for the company is to provide better and hustle free driving experience for customers. On the other hand the companies have imposed technological assistance like chat with the driver, route mapping and route analyzing option is another opportunity that can be provided by the company.
Customer feedback and competitive market are the threats that Addison Lee has faced in quite a few years. There are UBER and other most recognized brand that provide intact competition to Addison Lee by providing better customer facility and opportunity and comfortable drive to them for that reason Addison Lee have to upgrade their opportunity and facility so that sustainable business market can persisted for them.
The marketing strategy that may enhance their business in the UK will be the demographical presentation of car service business by targeting the age group of 16 to 25 years young people. By the implementation of this strategy, company business has increased by 3% which is a sound improvement that company has done in recent times. Implemented strategies for tackling of courier marketing or delivering of luxury products are the prospect of providing the market segmentation so that revenue can be generated from different ways (Lovelock and Patterson 2015). Rebranding strategy of the company also encourages the business to provide subdivision over the module and offering better quality and service to the passengers.
Impact of Socio-Cultural Factors
The chosen group for market segmentation is the people aged between 16 to 25 years. The demographical presentation has made a proper establishment of sociological and economic approaches. 3% business growth has depended on this target group to use their cabs and took their service in a frequent manner. As the group is very young so special strategic changes like reducing the fare or provide a certain special discount on the fare or free passes will be offered from the mobile application that has been launched by the company (Al-Debi and Mustafa 2014). People like to use cabs for their traveling and this need is the ultimate reason behind the running of Addison Lee business. Their business will flow as those range of people has to invest a less amount of money and they traveled by cab, this has to be a good experience for them and they like to use it more. By that process, their app also has got promoted as well and the range of business got a boost from those selected age groups. Customers can access Wi-Fi in Addison Lee cabs. The usual reaction time in firms makes contact with centers within four seconds, and 87% of its drivers have rated five stars by its consumers (Ho 2014). This is another innovation of marketing segmentation approach that has been implemented by the company so that a good way of communication has accessed in a proper way.
The extended 7P's of marketing demonstrates the pricing, promotion, Physical evidence, People, Product, Process, and Place of the business organization. In case of pricing issues, the company needs to implement the small fare rates for the selected group of people so that they can afford the money. There are some fixed price rates for the general customer and that will encourage the revenue generation for the company. Addison Lee is a recognized brand and they are promoting their business to enhance their opportunities in the business market. Technical applications that have launched from the company and this need to be promoted through the web devices or social media so that people can know about the benefit and use it (Dmitriev et al. 2014). Physical products like gifts, prizes, and packages help customers to make an integral relation to the company. Customers always want quality service at a low cost thus their inputs and physical products enhance the business dimension. All the people are the target customer for the organization. Not only the economically sound people but also average economic people are using their facility as the company has separate package and facility for them. The cabs, jets, buses, the company offered are best in quality and that also provides the best experience to customers. In case of process management customer satisfaction and delivering the quality approach to the customer is the necessity requirement. Place of the organization is important for the marketing business development (Ward 2016).
Impact of Legal Factors
There are some strategies that need to be implemented for the better outcome of Addison Lee. They have to ensure honest and reliable service that mitigates the fine situation and economic imbalance of the organization. The quality analysis must be imposed in a good manner so that customer finds something trustworthy in their product or services. The infrastructural enhancement annual increase of fuel cost, energy cost all will raise high in price but the company has to use their pricing strategy in an intellectual way, if they increase their price drastically then the customer will not access their service so a better pricing and systematic outcome is needed from the company. Creating a hotline for the customer is important so that customer can contact the executive in a troublesome situation.
Therefore it can be concluded that Addison Lee has to implement proper marketing strategy for the developmental change in their organization. 3% increment in their business and 50% increment at the time of Christmas sale has executed a greater finding in business. Addison Lee approaches the customer to provide more featured progression in terms of delivering good quality of cars and employees. Location management, use of GPRS, driver number plate, Splitting bill all these are imposed by the organization. Therefore, all these aspects are needed to implement in a critical way so that business process will enhance in this globalized market.
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