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Market Analysis of Online Cab Service Industry in Australia

Discuss about the Strategic Marketing Plan of Ingogo.

The aim of the report is to develop a strategic market plan for Ingogo for the coming 18 months. In order to develop a marketing strategy for the online cab booking Ingogo, it is important to carry out a detailed market analysis to understand the present situation of cab industry and the competitive analysis as well. The report shall give a brief analysis of the customer segmentation and the regions where the cab company can actually expand its business. On the basis of the findings, a marketing strategy to increase the market sales and the revenue of the organisation shall be presented that would help the organisation to achieve the desired financial and marketing objectives.

Overview of the company:

Ingogo is the Australian taxi company that specialises in the online taxi booking and payment. At present, this taxi company operates in the regions of Melbourne, Sydney, Perth, Brisbane and Adelaide. The taxi has become a reliable service for the people of Australia (Ingogo.com.au, 2018).

Service features:

The taxi app ahead of the ASX listing has been found to overhaul its app in order to improve the user experience. Ingogo is the first online taxi company that has provided the riders with fixed fares that include the tolls and other charges (Ingogo.com.au, 2018). The taxi company does not charge any surcharges to the customers and also allows the users to book the cab even two days earlier.

Current market situation:

According to 2015 statistics, Ingogo has raised $12 million that has valued the company at $100 million. It has been found that more than $4 million was raised from crowd funding. Ingigo also received a grant from the Australian Federal Government in order to build the business in Australia (Ingogo.com.au, 2018).

Macro force analysis:

Factors

Analysis

Political

Regulatory factors like changing tax policies and availability of permits to new and operating businesses (Chan et al., 2016)

Economic

Opportunity of employment with the expansion of the business. Australians also prefer spending good amount of money when it comes to safety and comfort.

Social

Target group of people prefers hassle free rides and the issues in terms of searching destination by other transportation means.

Technological

Similar technological means can be easily adopted by other competitors. Increased usage of smart phones among the users has resulted in increased usage of the app (Wirtz & Tang, 2016).

Environmental

The increased usage of fuel is a major environmental concern. Traffic congestion and other related issues

Legal

Factors like copyright laws, labour and employee safety laws are the major legal factors under concern (Nie, 2017).

Customer analysis:

Reports suggest that there has been an increase in the usage of the online cabs by 5.1% within a period of six months. Over one million Australians have been found to download online cab apps on their mobile (Bashir, Yousaf & Verma, 2016). The consumers are embracing the app service and there has been a considerable increase of the customers using the mobile phone apps to book their cabs. The concept of ride sharing has also helped in attracting more consumers to use the online cab service.

Competitor analysis:

Uber is the primary competitor of Ingogo. Uber has established its market in Australia and it has been found that 7.6% of Australians have already downloaded the app and 4.3% actually books a cab once in a week; according to 2016 statistics (Poó, Ledesma & López, 2018). Other important players of the industry are GoCatch and Cab Charge. Ola is also set to enter the market of Australia considering the cab market opportunity in Australia.

Competitive Analysis

Other stakeholder analysis:

The stakeholders of the Ingogo cab include the consumers, the business partners, government bodies and others. It is important for the company to abide by the rules and regulations of the transportation policies considering the macro environmental factors.

SWOT analysis:

Strengths

Customer satisfaction rate is high due to its services along with the pricing strategy compared to the traditional taxi operators.

Weaknesses

Imitation of the service can be done easily. The service is largely depended on manpower and internet and technological service.

Opportunities

Entering in new markets with better marketing and pricing strategy and also by the means of innovative and unconventional services.

Threats

Increased number of competitors in the market along with increased frauds and scandals. Losing trust due to one negative incident related to the cab service can also become a great threat to the cab service.

Problem statement

The online cab services have been facing certain challenges in the recent time due to the increase competition of the online cabs in the market. Ingogo is facing highest challenges in terms of this factor as this company is comparatively new in the market and is yet to take over the market (Wirtz & Tang, 2016). Other online cab service giants like Uber and GoCatch are already established organisations and have been operating in the market since a long time. It would be a great challenge for Ingogo to enter a new market unless proper marketing strategies are applied. Ingogo is in the expansion stage and has been considering the expansion of its services to other regions of Australia and thus, the aim of this report is to come up with a potential marketing plan that would help the organisation to reach its business objectives and goals.

Discussion of potential market segment

For the current market expansion and the marketing strategies, Ingogo shall target the markets of Queensland, Victoria, New South Wales and the regions around these territories. The target group of customers are the users of online cabs. These groups are mainly the office goers as they are the ones who need the cab services on a regular basis. However, they are not the only potential group but other groups include any traveller who requires a ride to reach out a particular location. From the statistics it has been found that that there are more than 174,600,000 passengers travelling on a regular basis with over 7,347 taxis available in New South Wales (Refer to the appendix for more details). However, the demand for the online cab booking services has been increasing and thus, there is a potential market need for the cab service.

The market segmentation can be defined as below:

Factors

Brief explanation

Demographic

Age group between 14 and 50 years who are the active users of smart phones can be the potential target group of people. This might include people of both the genders with various economic status and socio-cultural backgrounds (Liu et al., 2017). Any person in need of a taxi ride, is the target consumer.

Geographic

The regions like Queensland, Victoria, New South Wales and other regions of Australia are the geographic target segment for the cab service to target.

Psychographic

As the cab service offers a hassle free and comfortable ride, those who prefer to use to have an easy go for their journey are the particular group of people.

Behavioural

Considering the consumption and need behaviour, the particular target group of people always look for a benefit-sought, customer loyalty and benefit sought programmes for any kind of service that they want to use. (Conlon & Perkins, 2018)

Discussion of target market and positioning

The target group of people who shall be responsible for booking the cabs can be considered to be in between the age group of 14 and 50 years as the app offers easy means of booking a cab and can be operated by anyone. The target based on the income group need not to be high as the cab service offers its service at a lower and competitive price. People who prefer to enjoy a hassle free ride and want to reach out the location at the earliest without waiting for the traditional cab services prefer to use this service (Angus & Valentijn, 2018).

Customer Segmentation


Considering the need of the demand of the target group of people, the positioning strategy for the cab should include innovative approaches. For instance, it is very important that the app should be designed in a way that it would be very easy for the people to book the cab. In order to create a greater domination in the market, it is equally important that the cab service comes up with a plan of giving better discounts and offer (Poó, Ledesma & López, 2018). In fact, any kind of loyalty program would also be effective in keeping a hold of the target group of consumers. However, it is equally important to maintain a high quality, competitive cost and flexibility in order to maintain speed, innovation and great service.

Marketing objectives and goals

  • To increase the sales by at least 5% within 12 months that will result in growth of market share
  • To enter new market and target new customers
  • To build brand awareness and enhance the customer relationship

Specific

To enter the new market and target new consumers in order to increase the market share of the company

Measurable

The increased use and the change in the figure of the market share compared to the other services available can be easily measured

Achievable

With correct positioning and marketing strategies, the aim can be easily achieved

Relevant

In order to enter a new market, it is important to set a new positioning strategy by evaluating the market opportunities and positioning the product accordingly

Time bound

This marketing plan has been designed for 18 months and it is expected that the outcome can be achieved within this time.

Financial objectives and goals

  • To generate minimum $5,000,000 revenue within the span of 18 months by entering new market segments
  • To increase the distribution or the reach of the service among the new segment group to increase the sale
  • To achieve the desired cost in return that has been spent against the promotional and marketing objectives

Specific

Increasing awareness on the benefits of using the Ingogo cab service compared to other taxi services available by right promotion and advertising

Measurable

The increase in sales can be measured after a particular period of time and the difference in the financial gains can be calculated

Achievable

By the means of right advertisement and promotional means the target can be achieved

Relevant

Increasing market reach can only be ;possible by proper promotional activities

Time bound

A time period of 18 months is needed

Marketing mix

Factors

Brief analysis

Product

The online booking cab service that would operate in Australian cities

Place

Regions like Victoria, New South Wales, Queensland are the new market segments while the cab already operates in the regions like Sydney, Perth, Brisbane and others

People

Any person who is in the need of a cab in order to travel or reach out to a particular location. People of Australia are the targeted group of people for the service (Chatfield, Reddick & Brajawidagda, 2015)

Price

The cab service provides competitive pricing and also offers several discounts and loyalty programs as a pricing means. The cab ride starts from $2 and depends on the usage of the cab service.

Promotion

The promotion would be carried on by various channels that would include both traditional and digital media.

Marketing strategy proposed implementation

In the view point of Armstrong et al., (2014), a marketing strategy should always follow a particular theme in order to increase the impact of marketing strategy among the target consumers. For the Ingogo cab services, it is equally important to come up with a promotional theme that would be followed using various media. For this particular duration of 18 months, the theme that has been proposed is, “Let’s go in Ingogo” with the idea that this cab service will help any person to reach out their destination at the right time within a comparatively low cost. As mentioned above, the commercials and advertisement would focus on the various strategies or facilities including pre-booking, availability of car within few minutes, comfortable journey, loyalty programs and other benefits that the cab service might come up from time to time in order to increase its customer base and services.

Marketing strategy

Implementation

Duration/frequency

KPI

Traditional media like television commercials

By hiring a media agency for developing a commercial

The advertisements shall be telecasted mainly during evening hours as the demand of the cab remains high during the day time.

Increased number of bookings of the cabs from various customer segments

Outdoor advertisements including hoardings

Outdoor media agency for coming up with innovative ideas to reach out the right message in a creative way

Setting big hoardings at prime locations from where the advertisement can be easily viewed by the travellers. This would target the people who does regular road journey

Increase in the market share

Social media advertising

Hiring social media and PR personals for carrying out the PR activities in the various social media sites like Facebook, Twitter, Instagrams and even in search engines like Google

Writing articles, developing creative contents in the form of images or captions can actually attract large group of people using the social media. Focus has to made on the social media advertising mainly rather than using other media

Increased number of likes and shares of the posts or blogs made in the social media sites

Personalised promotions

By giving promotional offers and discounts using direct messaging and e-mails and also by giving promotions in the apps

It is important to come up with various offers and discounts in order to create a better bonding with the consumers and also as a means of the pricing strategy

Increased number of repeated bookings and

The proposed budget for the 18 months promotional activities can be given below.

Advertisement need

Amount ($)

Television commercials (20 sec duration advertisement)

75,000

Newspaper advertisement

55,000

Outdoor advertisement

70,000

Social media advertisement

60,000

Direct advertisement

10,000

Others

20,000

Total

290,000

Conclusion

A detailed analysis of the present market situation of the taxi industry in Australia has been carried out and it has been found that there is a great opportunity for the online cab services as the demand of the cab services has been increasing in the recent time. A detailed market analysis has been carried out and a proposed marketing strategy has been given in the report. It is expected that considering the present market scenario if Ingogo understands the need of the hour and carry out its marketing in a unique way, it can easily achieve the targeted marketing and financial objectives of expanding its business.

References:

Ahmad, I., Balkhyour, M. A., Abokhashabah, T. M., Ismail, I. M., & Rehan, M. (2017). Occupational Musculoskeletal Disorders among Taxi Industry Workers in Jeddah, Saudi Arabia. Biosciences Biotechnology Research Asia, 14(2), 593-606.

Angus, L., & Valentijn, P. P. (2018). From micro to macro: assessing implementation of integrated care in Australia. Australian journal of primary health, 24(1), 59-65.

Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.

Atia.com.au (2018) ATIA Australian Taxi Industry Association Retrieved from: https://www.atia.com.au/taxi-statistics/ [Accessed on: 14-5-2018]

Bashir, M., Yousaf, A., & Verma, R. (2016). Disruptive business model innovation: How a tech firm is changing the traditional taxi service industry. Indian Journal of Marketing, 46(4), 49-59.

Chan, J. W., Chang, V. L., Lau, W. K., Law, L. K., & Lei, C. J. (2016). Taxi App Market Analysis in Hong Kong. Journal of Economics, Business and Management, 4(3).

Chatfield, A. T., Reddick, C. G., & Brajawidagda, U. (2015). Government surveillance disclosures, bilateral trust and Indonesia–Australia cross-border security cooperation: Social network analysis of Twitter data. Government Information Quarterly, 32(2), 118-128.

Conlon, R., & Perkins, J. (2018). Wheels and deals: The automotive industry in twentieth-century Australia. Routledge.

Heber, A., (2015) Australian taxi app Ingogo is expanding into Brisbane, Perth and Adelaide Retrieved from: https://www.businessinsider.com.au/australian-taxi-app-ingogo-is-expanding-into-brisbane-perth-and-adelaide-2015-4 [Accessed on: 14-5-2018]

Ingogo.com.au (2018) Our Story Retrieved from: https://www.ingogo.com.au/our-story/ [Accessed on: 14-5-2018]

Li, H. R. (2016). Taxi Positioning in the New Age of Internet and Industrial Development Research. Procedia engineering, 137, 811-816.

Liu, Y., Han, L., Yin, Z., & Luo, K. (2017). A competitive carbon emissions scheme with hybrid fiscal incentives: The evidence from a taxi industry. Energy Policy, 102, 414-422.

Nie, Y. M. (2017). How can the taxi industry survive the tide of ridesourcing? Evidence from Shenzhen, China. Transportation Research Part C: Emerging Technologies, 79, 242-256.

Poó, F. M., Ledesma, R. D., & López, S. S. (2018). The taxi industry: working conditions and health of drivers, a literature review. Transport reviews, 38(3), 394-411.

Roymorgan.com (2016) The Uber phenomenon Retrieved from: https://www.roymorgan.com/findings/6658-uber-phenomenon-201602050108 [Accessed on: 14-5-2018]

Wang, A. (2015). The Economic Impact of Transportation Network Companies on the Taxi Industry.

Wirtz, J., & Tang, C. (2016). Uber: Competing as market leader in the US versus being a distant second in China. SERVICES MARKETING: People Technology Strategy, 626-632.

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