UberEats Strategic Marketing ReportAMB359 Strategic Marketing - Semester 2, 2016 - Assessment 2

Team:Greer Zunker N9174869Leshi Luo N8999562Kai Yuen Li N9055011Brian Chak Hong Wai N9234772

Tutor:Sandra Sergeant

Tutorial:Tutorial 7, Thursday 3pm – 4pm

Word Count:2,122

Table of Contents

1.     Executive Summary.........................................................................................................3

2.     Analysis (Audit)................................................................................................................4

2.1 Customers Analysis....................................................................................................................... 4

2.2 Competitor Analysis...................................................................................................................... 5

2.3     Market/Submarket Analysis...................................................................................................... 6

2.4     Environmental Analysis and Strategic Uncertainty...........................................................7

2.5    Strategic Objectives........................................................................................................................ 8

3.     Execution Strategy...........................................................................................................8

3.1 Building and Managing the Brand Equity and Relationship............................................8

3.2 Creating a Sustainable Competitive Advantage..................................................................9

4. Campaigns......................................................................................................................10

4.1 Building and Managing Brand Equity and Relationships Campaign........................10

4.2 Sustainable Competitive Advantage Campaign...............................................................11

5. Budget.................................................................................................................................12

6. Conclusion...........................................................................................................................13

5. Reference List.....................................................................................................................14

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1.     Executive SummaryThis report was commissioned to examine how UberEATS can enter the Brisbane food

delivery market, by audit analysis and recommends some strategies to increase sign ups and

usage of the UberEats app. UberEATS’ marketing strategy will position itself as the primary

delivery service, targeting young adults aged around 20-30 year old including new graduates,

and part time or full time student who have a relatively busy lifestyle. The main competitors

for UberEats in Brisbane are Deliveroo and Foodora. The key environmental factors which

affect UberEats in entering this market are technology and political. In order for UberEats to

strive in this market a successful strategic campaign must be executed.

The quality of the UberEATS experience will provide a more personal, on-demand, fast and

efficient service to the food delivery industry. Two campaigns will be run during the three-

month launching period of this campaign with a focus in the first four weeks. The first

campaign will look at building and managing brand equity and relationships through a loyalty

based Uber and UberEats synergy. The second campaign will develop a sustainable

competitive advantage by focusing on the quality reputation of the Uber brand and will be

implemented through social media videos. These campaigns will achieve the 40% increase in

user sign ups and the 4.6 star customer satisfaction objectives set out.

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2.     Analysis (Audit)

2.1 Customers Analysis

External analysis is used to identify the opportunities and threats of the organisations

environment, which cannot be controlled by the company (Venter & Van Rensburg, 2009).

There are four categories used to analyse customer segmentation, these are; geographic,

demographic, psychographic and behaviour. As shown in Table 1, the target market for

UberEats are 20 to 30 year old adults, who are recent graduates, part time university students

or first time workers. The geographic of this target audience is that they mainly live or work

in the Brisbane CBD. In addition, they receive a middle-income wage of $998 per week,

giving them a disposable income of $600 a week to spend on takeaway meals (Australian

Bureau of Statistics, 2015). Geeroms, Verbeke and Van Kenhove found that people that work

are more willing to pay for takeaway meals (2008). Moreover, a current consumer trend is for

people to order takeaway meals, as it is more convenient for them than to prepare food

(Miura, Giskes & Turrell, 2012). Additionally, consumers are no longer willing to spend time

cooking for themselves, hence Australians now buy take away an average 4.1 times per

month (Menulog, 2014).

Table 1: Segmentation of UberEats

Segmentation base 20-30 years old graduated, part time students, first time workers.

Geographic Have work at Brisbane CBD, live at or around Brisbane CBD

Demographic 20-30 years oldHave middle income ($998 per week)

Psychographic Busy at work or busy at university, so not have enough time to cook for themselves. Most of them do not have transport.

Behaviour Too tired after work, prefer to go restaurant or order takeaway meals.

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2.2 Competitor Analysis

The main competitors for UberEats in Brisbane are Deliveroo and Foodora. Deliveroo deliver

a wide range of food, works with hundreds of restaurant chains and their mission is to deliver

food to customer’s home and office fast (Deliveroo, 2016). Customers can also track their

food when they use Deliveroo and the delivery time is around 30 minutes.

Foodora deliver high quality food to consumer’s home or office. The cuisine they deliver are

from “the best restaurants” in Brisbane (Foodora, 2016). However, Foodora only deliver to

Brisbane CBD, and the food takes around 30-50 minutes to be delivered.

Foodora and Deliveroo both have their own delivery staff and their own food packaging for

the restaurants. However, both of these companies only deliver to a limited area, Brisbane

CBD district. The delivery fee for Deliveroo is $5 and Foodora is $3.50.

UberEats offers special 10 minutes instant delivery for five items daily, other meals takes

around 35 minutes to be delivered (UberEats, 2016). Although Foodora has cheaper delivery

fee, it does not deliver outside Brisbane CBD and does not have as fast delivery time as

UberEats. Furthermore, Deliveroo has faster delivery time than UberEats, but it delivers to a

limited area as well. UberEats has the advantage of shorter delivery time, a slightly wider

delivery scope, 3km radium outside of Brisbane CBD, and existing brand loyalty. It will,

however, be difficult for UberEats to have initial market share as Deliveroo and Foodora

have already gained customer loyalty and will become more of a threat as they expand their

delivery service area (Moss, 2016).

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2.3     Market/Submarket Analysis

There has been an increasing number of food delivery companies in Brisbane, so it is

essential for UberEats to have market analysis in order to have a better understanding of the

market. The $70 billion food delivery industry has an online order rate of 13% and is

expected to grow to 65% by 2024 (Kim, 2015). There are two submarkets associated with

UberEats, which are restaurant industry and delivery service industry.

The restaurant industry has an annual revenue of $13.1 billion and the annual growth in 2011

to 2016 was 6.2% (IBISWorld, 2016). Moreover, the annual growth will be expected to be

1.4% in 2016 to 2021. The increasing busy lifestyle makes people to go to restaurants rather

than spend time to cook, and restaurants are expanding take away options for time poor

consumers (IBISWorld, 2016).

Another submarket is the delivery service market. The delivery market has an annual revenue

of $3.7 billion. The yearly growth was -2.8% in 2012 to 2017, and the growth will be -2.2%

in 2017 to 2022 (IBISWorld, 2016). Although the annual growth is negative, it has been

increased due to the growing of food delivery market.

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2.4     Environmental Analysis and Strategic Uncertainty

Technology tendency is one of the factors in environmental analysis; it can enhance the

service to advance the industry. According to Sheetz, delivery service companies tend to

adopt new techniques such as using app order instead of call order, and would otherwise fall

behind competitors (2009). For instance, UberEATS’ have to set up an appropriate IT

department for preventing delivery site crashes, to ensure the delivery orders are unaffected.

Also, some delivery service competitors simplify their apps to benefit consumers such as

more convenient and ease of functionality. Furthermore, concept testing could identify

defects in UberEATS before it enters a new market. As mentioned previously, UberEATS

needs to regulate and develop periodically, as the consumer base grows and needs to set goals

to keep improving.

Political is another factor, as changing of policies and regulatory enforcements can affect

strategic threats and opportunities (Prud’homme, 2015). GST changes affects UberEATS,

imposing the GST may pass extra costs onto consumers. Policies can be changed at anytime

by social response or by the decision of Queensland Government, so this is uncertain and

unstable.

Strategic uncertainty, which involves trends and incidents that could have an impact at any

time, affects the business strategy (Andersson, Argenton, & Weibull, 2014). UberEATS relies

on the habit of customers who want to have food by delivery service, if the habit changed,

that would have some negative effect on UberEATS such as loss of profit and customers.

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2.5    Strategic Objectives

The first objective is to increase consumer sign ups to UberEats by 40% in the first three

months. This can be measure by comparing sign ups before and after the campaign period.

The second objective is to ensure a 4.6 star satisfaction rating among customers by the end of

this financial year, 30 June 2017. As with the Uber app a rating should be conducted after

purchase and this can then be used to analyse what restraints are doing well and which are

getting low ratings, and the same goes for the UberEats drivers. This will allow for UberEats

to determine which restaurants and drivers and dissatisfying their customers and wasting

money and resources.

3.     Execution Strategy

3.1 Building and Managing the Brand Equity and Relationship

The marketing communications environment has changed dramatically throughout the last

decades, or even last couple of years. The Internet and technology has become the greatest

constituent of the fast changing environment that profoundly influences how people

communicate and interact (Aaker and Joachimsthaler 2000; Kapferer 2005). Therefore,

managing brand equity and relationship will successfully inform, persuade and remind

consumers about the brand as well as the products (Keller 2009). In order to build a strong

brand, according to Keller, “it is essential to shape how customers think and feel about your

product. You have to build the right type of experiences around your brand, so that customers

have specific, positive thoughts, feelings, beliefs, opinions, and perceptions about it,” (2009).

According to Bolton, Kannan & Bramlett (2000), loyalty programs have always one of the

customer retention strategies, in order to keep the customers coming back. In addition,

rewards and discount programs are always be one of most popular loyalty initiatives.

Customer rewards and loyalty program keep customer satisfaction level, as a result, company

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will experience greater customer participation (Bolton, Kannan & Bramlett 2000).

Furthermore, researches indicate that there is significant impact on the dimensions of social

media on brand equity. Social media provides a highly interactive platform which introduces

substantial change in communication between company and customers (Kaplan & Haenlein,

2012). The value of social media marketing as a strategic B2C marketing cannot be

neglected, companies can effectively build a community around their products and services

that promote business growth and implement customers loyalty (Taprial, & Kanwar, 2012).

The sharing function of social media provides all parties to exchange, distribute and receive

different content simultaneously, including broadcasting updated and desire information to

customers. Marketing on social media is not cost-free; specific skills and knowledge are

required to manage social media platforms to avoid public relation disaster. In this case, the

main purpose of employing social media marketing is to increase awareness of the new

UberEATS, lead Uber to build better brand equity and promote brand loyalty by building

relationships. This will, inturn, lead to an increase in customer sign ups and customer

satisfaction if the consumer feels as though they are being rewarded for their loyalty, aligning

with the strategic objectives. With regards to careful planning and defined goals, social media

marketing will add long-term value to the brand.

3.2 Creating a Sustainable Competitive Advantage

In order to position themselves above the competition of Deliveroo and Foodora, UberEats

needs to create a Sustainable Competitive Advantage (SCA). A SCA is a “value-creating

process that cannot be duplicated or imitated by competition,” (Kumar, 2016, p. 78).  In order

for SCA to be successful organisations must employ strategies and the right skills to mobilise

resources that lead to the creation of the competitive strategy (Bichanga, Muturi, & Ongaki,

2015). The SCA UberEats should focus on is the existing quality reputation the Uber brand

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already holds. According to Taxi and Uber Consultation Qualitative Research, undertaken by

the Executive Director of Municipal Licensing and Standards, Uber’s perceived strengths are;

a convenient experience from beginning to end, higher quality cars and service than taxis and

limousines, and a rating system which allows accountability and transparency to drivers

(2015).  These perceptions were built from Uber’s strict rules for its drivers especially

towards quality including car cleanliness, driver professionalism and friendliness, and rider’s

ability to rate drivers and see driver’s ratings (Uber, 2015).  In order to create a sustainable

competitive advantage Uber should replicate this quality assurance and reputation to their

UberEats drivers. This is a strategic commitment SCA, which focuses on a “do what you’re

good at” business strategy that results in an ever-strong and profitable business, much like

Aldi in their single-minded focus on cost and value (Aaker & McLoughlin, 2010). If

successfully implemented the 40% sign up objective will be easily reached in the first three

months, as the quality reputation will draw in customers who already appreciate the quality of

the Uber brand. This strategy will be executed through social media campaigns that focus on

the existing quality reputation and consumer perceptions.

4. Campaigns

4.1 Building and Managing Brand Equity and Relationships Campaign

To implement the strategic execution strategy, it is recommended to link the Uber APP to

UberEATS with a loyalty program. This program will operate from the start of the

UberEATS service launch with a 3 months operation, with the possibility of being ongoing if

successful. UberEATS users are rewarded for using the Uber service. Every time they ride on

Uber they will receive a $1 towards their UberEATS account and vice versa. This will

encourage user sign ups on both the UberEats platform and the Uber platform, aligning with

the sign ups objective. Also, Uber drivers will be allocated with a number of vouchers that

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can be distributed to travellers if they are new and willing to download the UberEATS app.

The vouchers can be used for a 20% discount on the first order, and the Uber driver will be

rewarded if the vouchers that are distributed are used. This will be measured through the

promotion codes on the vouchers that will be personalised for each Uber driver. This creates

brand loyalty and builds relationships between customers and Uber drivers, leading to a

higher customer satisfaction rate. This campaign will help building brand relationships and

develop loyalty among new customers.

4.2 Sustainable Competitive Advantage Campaign

To execute the sustainable competitive advantage (SCA) strategy a social media campaign

will run which compares UberEats to other food delivery companies by focusing on the

quality that has come to be expected from Uber. Four social media videos will be created for

Facebook that compare the convenience of ordering, car and deliverer professionalism, order

quality and customer review of the service. This will run once a week for the first four weeks

and is storytelling content marketing strategy. Storytelling strengthens brand reputation by

creating an experience your consumers can resonate with and drives consumers to action

(Clerck, 2013). This strategy will create the SCA Uber needs to outperform their competitors

and will be run on Facebook, which suits the target audience as 87% of Facebook users are

18 – 29 and 73% are 30-49 (Patterson, 2015).  By focusing on the quality through storytelling

and comparison UberEats will be able to use its existing quality reputation to create a

sustainable competitive advantage.

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5. Budget

The proposed campaigns will have a total estimated cost of $132,164 and will focus it’s

efforts in the first four weeks of the campaign period. The below table summaries the costs

for this campaign;

Table 2: UberEats Campaign Budget

Item Cost

Four Social Media Videos (Filming) $6,000 - $7,000

Four Social Media Videos (Editing) $3,000 - $4,000

Facebook Post Boost 6,300 – 17,000 a day (Videos) $150 a day/four weeks

$4,200

Digital Marketing Coordinator ($75,000 a year) $18,750 for three months

Marketing Team (four people) ($50,000 a year each) $50,000 for three months

Super plus Payroll Tax $11,875 + $25,969 =

$37,844

Loyalty Voucher Design $5,000

Loyalty Voucher Printing $370 (10,000)

Loyalty Voucher Distribution $5,000

Total $132,164

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6. Conclusion

The UberEats launch campaign will successfully increase sign ups by 40% and customer

satisfaction to a 4.6 star rating. This will be done through a loyalty campaign that builds and

manages brand equity and loyalty. The second campaign will create a sustainable competitive

advantage that will be supported by a social media video campaign. These campaigns, if

successfully implemented, will lead to the completion of the strategic objectives.

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