Uber's Attractiveness

One of the most successful and well-known tools used to determine market segmentation is VALS, which is developed by Strategic Business Insights. VALS stands for “values and lifestyles,” which places U.S. consumers into one of the eight profiles based on their level of resources and one of the three primary consumption motives of either ideals, achievement, or self-expression (Ferrell & Hartline, 2014, p. 138-139). VALS is primarily used by companies to market new product development, brand development, promotional strategy, and media placement (Ferrell & Hartline, 2014).

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

Uber has five major stakeholders that are very beneficial to Ubers business process. The primary stakeholders are the independent contract partner drivers and the government. In addition, Uber must follow set regulations by each local government to be able to fully complete all business process in each location. Furthermore, another major stakeholder of Uber are the clients and passengers. The clients of Uber are business such as restaurants that have partner with Uber. In addition, the restaurants allow all Uber customers/passengers the option to have their food delivered by Uber. Furthermore, another major stakeholder of Uber are traditional taxi cab operators. Which have been very beneficial to the company because there has been many allegations against the Uber business from various locations. That Uber is preventing traditional cab companies to allocate profit. The traditional taxi operators assist Uber in design cost efficient and competitive prices that will not harm traditional business. Also, another major stakeholders of Uber are business directors and executives.

Uber and Volkswagen are both very important and revolutionary companies that have shaped the world in their own individual ways. Although they are successful, they both have interesting start up stories and have run into the law on multiple occasions. Law has had a powerful impact on the how both companies have created their business model and made expansions to better each company. In the novels Wild Ride by Adam Lashinsky and Faster, Higher, Farther by Jack Ewing the authors go through the company’s stories and also the legal challenges that they had to face along the way and that they are still facing to this day. It is clear that the law gets in the way of these companies plans, and has gotten major employees of these companies in a lot of trouble for the illegalities that they committed. Many major companies get sued by employees and customers because they try to make money off of them. In many of the cases we can examine if it is worth it for the company to fight all of these cases individually or to group the similar ones together and make necessary changes to the company to satisfy the employees and customers. Even with some of these issues going on and many counter-arguments, both Uber and Volkswagen have handled their situations with the law very well to keep the companies moving forward.

How should this market be segmented? Identify the key segmentation variables that are relevant for this market.

In order to select the segment, there is a need to develop measure of segment attractiveness. The following are the list of some of the criteria that I used in selecting my target segment:

Every company and/or organization starts and operates to achieve a single major goal, which is normally included in the company’s mission statement. Setting a goal, however, does not translate into success on its own; it is only the fist step. Understanding market segmentation is the second most important aspect of doing business. “Sellers and advertisers want to be able to determine what the potential market is for their product or service, as well as the best ways to reach potential consumers” (Terrell, 2013). Once a goal is set, an organization first must decide if it wants to operate locally, regionally, nationally, and/or internationally, as the size of the geographic coverage has a large

Jacks current policy does not provide coverage if he were to use his personal vehicle for driving Uber customers (College for America, 2014). The exclusion section page 4, of the personal automobile insurance policy clearly explains that the policy will not cover the loss of any bodily injury, damages, or medical payment if the vehicle is operated in use as a public or livery conveyance. The policy clearly excludes coverage for any loss to your covered auto or any non-owned auto, which occurs while it is being used as public or livery conveyance (College for America, 2014). The benefits of the policy that is provided by Uber to its drivers are that the insurance for the automobile would start when the rider enters the vehicle and would stop

Market segmentation allows marketers to understand customers’ needs and identify target markets (Peter & Donnelly, 2011). Bright Light Innovations will be able to evaluate different segments to determine differential advantages in each of those segments. Furthermore, management will be able to determine any of the particular marketing mix for a more successful strategic plan. Market segmentation can be obtained by researching geographic data (zip code, region, etc), demographic data (age, occupation, nationality, etc), psychographic data (social status, personal type, etc), behavioral data (customer behavior), or any other data that can be beneficial to the research (Kawasaki, 2004).

In order to market the product into the market successfully, marketers need to have some marketing strategy to enter the desired market and make profit. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics (Schiffman et al., 2011). Understanding the market size and segmentation is valuable, but the keys to effective targeting is to know just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends ( Berry, 1999).

It is undeniable that Uber and Grab has given a big impact towards taxi industries. The convenience uses of modern technology have given Uber and Grab a big advantage and it also has flexible payment and cheaper fare rather than a taxi. Uber is known to be a sharing economy platform which is a system in which people rent, borrow, or share commodities, services, and resources owned by individuals, usually with the aid of online technology, in an effort to save money, cut costs, and reduce waste. Adi Gaskell (2017) stated that the effect of Uber towards taxi industries are complex, Uber has created more jobs than it has destroyed while some taxi company may have seen a loss in income. What is more is that Uber has given a wide opportunity for people to have a job and it is very convenience rather than being a taxi driver as there are many rules and regulations that need to be obeyed.

Secondly, Hertz also faces the threat of substitutes. There are other platforms such as train, taxi, bus shuttle that consumer uses as the means of transport. Due to heavy competition in the car rental and equipment rental industry, consumers are attracted towards the other rental services which offer similar products with low prices. For example, Avis provides excellent customer service with low price on its car rental and United Rental provides equipment rental service at lower price. This can make the Hertz rental business less useful. This can affect the overall attractiveness of the industry.

The specific environment, which is the set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use resources to create value, of a company is impacted by their customers, distributors, unions, competitors, suppliers, and the government. All forces impact Uber and how the organization reacts to its general and specific environment. The target customer segment that Uber is trying to attract to its company are people who do not own a car, don’t want to drive themselves to a party, want to travel in style, or want a cost efficient cab waiting for them at their door. Specifically, according to Vugo, a rideshare advertising firm, the majority of Uber customers are between the ages of 25 and 35. In addition, the typical rider is male (60%), has at least a bachelor’s degree (80% of riders), and are considered to be affluent (56% of all rideshare passengers reported a household income of at least $71,000).

Competitor is being defined as any person or entity which is a rival against another . In the automotive industry , companies would normally encounter the presence of one of more competitors since they offer a similar product or service . Therefore , a company would require a new strategy in order to stay ahead in the race to become the dominant manufacturing of automobiles . This has not been the case for local automotive manufactures in Malaysia . Proton Holdings Berhad has been receiving an uproar of issues , including its inability to compete with other automotive industry .

Uber was founded to fill a need to get people where they need to be, without using a traditional taxi service. “To passengers, Uber is essentially synonymous with taxis, and to drivers, it’s basically a referral service.” (Time, 2014) Uber is owned by Travis Kalanick, who co-founded the business in 2009 with Garrett Camp, originally known as Ubercab.) Anyone needing local transportation can request a ride through their application, available on iOS, Windows, and Android devices, which sends the request to all drivers in the area. An available driver claims the job, then use their personal vehicle to transport the customer. Upon completion, the driver and passenger complete a survey detailing the job. Currently, Uber operates in 58 countries, and 300 cities worldwide, almost guaranteeing that there is a driver available near you. At the end of 2014, Uber had over 160,000 drivers, acting as private contractors for the company. The company was designed to be, basically, a head for many contractors to operate under, taking a percentage of the money made by the contractors. However, this design was flawed from the beginning, because the service design failed to account for the greed of people. There is quite a difference between employees and contractors in regards to employment law. This includes benefits that a company must provide for employees, such as workmen’s compensation and FMLA that it is not required to provide for private contractors. In a landmark case in