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IBBAAA BRAND MARKETING PLAN FOR THE TARGET MARKET MUNICH - GERMANY
Analysis | Strategies | Tactics
EVELYN SINDERMANN |MIM 2015 Professor Protano: Strategic Brand Management
EXECUTIVE SUMMARY
Ø  The brands opportunity is to increase the revenue to €8.2M by targeting the
corporate market and creating a premium offer by the end of 2015.
Ø  The rise in disposable net income (€2,504 in average) and the growing number of
corporations in Munich offer new business opportunities for UBER. Raising brand
awareness by capturing & communicating a superior value proposition strengthens
UBERs brand equity.
Ø  The strategic alternatives are:
A: “Keep Driving” (gain market share by penetrating existing target audience)
B: “Go Corporate” (attract new target audience with existing service)
C: “Go Crazy” (innovate & create new product for new audience – be provocative)
Ø  Recommendation: “Go Corporate” is the best option in terms of market potential (growing
demand) and an ROI of 17.7%
Porters 5 forces | The market attractiveness is low due to a highly competitive
environment, risks of substitutes and medium threats of new market entrants
Threat of new entrants | MEDIUM
¤  Patents on various technologies build a
boundary for competitors from a technological
aspect
¤  There are no proprietary elements that
prevent new market entrants.
¤  Compliance with German transportation laws
is required to enter the market
¤  Low seed capital is needed to enter the
market
Power of Suppliers | HIGH
¤  Drivers & Rental Car Companies have a high
bargaining power.
Power of Competitors | HIGH
¤  Taxi & Limousine services are higher in price but
offer a broader network
¤  Similar services to Uber (Lyft & Wundercar) are
currently banned by law but have the potential to
enter the competition with new business models
similar to Uber.
Threat of Substitutes | MEDIUM
¤  Public transportation, car sharing services and
bicycles are easy accessible alternatives and less
in price
Power of Buyers | HIGH
¤  Customers have multiple choices according to their
needs
¤  Scheduled rides: Taxi
¤  Luxury rides: Limousine Services
¤  Self - driving: Car sharing e.g. DriveNow,
Car2Go,
MDI: Opportunity to tap 86% passenger transportation
market by increasing the number of rides by 2020
1980 1990 2000 2010 2020
100
20
5
10
15
0
Market Demand of Passenger
transportation in Munich*1:
12,2M
Potential Market Demand*2:
90,4M
MDI: 12,2M/90,4M ≈ 14%
*1: Passenger transportation based on
Taxi business excluding car sharing &
public transportation.
*2: Estimated data
MarketDevelopmentIndexMDI
Market Penetration
UBER has a growth potential – differentiation &
innovation is required
0 50 100
100
50
0
MarketDevelopmentIndexMDI
Share Development Index
MDI ≈ 14%
SDI ≈ 54%
Growth with Market
Development
Uber has the opportunity
to increase their market
share from 7,78% to
14,41% by 2020.
Our competitive advantage: Price Leadership
Operational Excellence
Product Leadership
Customer Intimacy
Munich Drivers (Private Limousine Service)
Taxi München eG/ IsarFunk
(2 main taxi operators in MUC)
UBER
MVG
(Munich public
transportaton system:
Ubahn, Sbahn, Bus, Tram)
Uber operates in an attractive market with potential to
strengthen their competitive position towards leadership
Unattractive Average Attractive
StrongAverageWeak
Market Attractiveness
CompetitivePosition
Disinvest
Proceed with
Care
Cash
generator
Phased
Withdrawal
Proceed with
Care
Growth
Leader
Leader
Try Harder
Double or
Quit
Building on low operational costs allows price leadership
position.
Relative Strengths Relative Weaknesses
¤  Competitive Advantage
Ø  No proprietary inventory (cars) & direct
employees (drivers & dispatchers) allow
minimal operational cost and fares that are
20% lower compared to the competition
Ø  A scalable business model facilitates a
possible German-wide expansion with
minimum investments
Ø  High quality standards of cars & services
ensure brand recognition and strengthen
¤  Superior Value
Ø  Cash-less payments and pricing
transparency builds trust & safety among
customers and drivers
¤  Superior technology & innovation strengthen
Ubers operational excellence and help growing
brand recognition in a competitive environment.
¤  Legal vulnerability
Ø  Successful US business model is restricted in
Germany and leads to additional costs.
Ø  Commercial drivers license: €240,- per
driver/ every 5 years
Ø  Privately owned cars are restricted to
commercial use. Rental car companies
need to provide cars and insurance
¤  Lower profit margins due to additional costs and
shared revenue with rental car companies are
compensated with higher volume.
Market growth potential compensates possible profit loss
due to external threats
¤  Increase the number of drivers from
120 to 200 by the end of 2015
Ø  Use economies of scale: 80 additional
cars result into a 40% revenue growth
Ø  Higher frequency lowers the estimated
time of arrival.
Ø  Customers benefit from faster
service
Ø  Increasing the frequency of rides per
driver/day from an average of 11 rides
to 15 results in an estimated revenue
plus of €2.5M annually
¤  Capitalize on operational excellence to
increase the volume and frequency of
rides and gain market share of more
than 5% by the end of 2013.
Opportunities Threats
¤  High pressure from governmental
restrictions & key industry players
Ø  Taxi industry sees Uber as a “grey-
market service” and tries to file lawsuits
that may cause unexpected legal
expenditures.
Ø  Possible minimum wage restrictions for
the taxi industry and price increases
from rental car companies will decrease
profit margins.
Ø  Negative PR about Uber influences the
customer behavior and can result in
dropping demand and market share.
¤  Profitability will drop if Uber cannot
compensate possible cost increases by
establishing significant brand equity
The business model in Germany – an explanation
1.Uber recruits drivers
•  Pays commercial taxi license
(legal requirement)
2.Uber connects drivers with
local rental car companies
•  Commercially driving with
private cars is illegal
4. Drivers receive
requests via the Uber
app:
•  Locate passenger
pick-up & drop-off
destination
•  Receive cash-less
payment via Uber
3. Passengers use Uber app:
•  Pick-Up request
•  Real-time tracking
•  Payment
Consumer – two main target groups
Students (age 18-25) Young Professionals (25-35)
•  Transportation to/ from University
•  Cheap alternative to taxis & public
transportation
•  Pick-up from parties & events
•  Split fares with friends
•  Transportation to/ from work or
business meeting
•  Comfortable driving experience
•  Fast & reliable transport
•  Expense tracking when traveling for
work
•  Traveling “in-style”
•  “Cooler” than taxis
•  Most of my friends don’t know about it
yet
•  Surge-pricing during peak times too
expensive
•  A high qualitative service with short
waiting times
Consumers support the Uber business model. Build on general demand for
transportation, enhance brand equity and awareness for future growth.
Customers – Drivers build the core of the business model
Drivers
•  Passengers
•  Profit margin
•  Commercial taxi license
•  A vehicle
•  Easy-to-use technology
•  Safe money transfer
•  Reliable customers
•  Insurance & benefits
•  Reliable partner who provides technology & infrastructure
•  Direct connection to the passenger
Drivers value Uber technology. Build on drivers feedback for
innovation and consumer insights.
Collaborators – Local rental car companies (a
necessary middleman by law)
Rental car companies
•  Renters (Uber drivers)
•  Profit margin
•  Long-term contracts about expected rental volume
•  Responsible drivers
•  Growing customer base
•  Partner who delivers constant source of income
Enhanced credibility and higher rental volume increases the chances to
negotiate lower rates.
PESTEL: Increasing market demand opens possibilities in the areas of new
technologies & sustainability. Risks of increasing costs need to be considered.
Political & Legal
Industry regulations:
•  Government requires
commercial licenses
•  Political discussion about
minimum wage laws for taxi
industry
Ø  Decreasing profit margin due to
higher cost
Economic
•  Germany reached historical high in
disposable income. Munich has the
highest disposable income (monthly
net average: €2,504)
•  Growing corporate sector
Ø  Price sensitivity decreases
Ø  Growing profit in corporate sector
increases demand for private
transportation
Social
•  Population density in cities is
growing
•  People follow fast paced life
style
Ø  Increasing demand for
transportation in urban areas
Technological
•  Automobile manufacturers work on
technologies for more sustainable
vehicles
•  Use of mobile applications for daily
activities is increasing
Ø  The market is open for technological
enhancements and innovation
Environmental
•  Trend goes towards environmental
friendly & sustainable transportation
•  Growing demand for Electrical &
Hybrid cars
The strategic problem – a lack of brand awareness
Situation: UBER penetrates a traditional service industry with an innovative &
technology based business model – for a 20% lower price than the average
competition...
...but what is the problem? – Supply & Demand
Uber is new to the
German market.
People don’t see Uber
as their “first choice”
yet.
Low demand makes
the business
unattractive for
drivers.
The business has a high growth potential but lacks in
Brand Awareness
Strategic Brand Alternatives
LOW BRAND
AWARENESS
ESTABLISH
BRAND EQUITY
“KEEP DRIVING” “GO CORPORATE” “GO CRAZY”
CHANGE
BUSINESS
MODEL (Invest
into own fleet of
electric & hybrid
cars)
LEAVE GERMAN
MARKET (Search for
other European
countries with less
governmental
restrictions)
The Alternatives – A | B | C
A: “Keep Driving” (gain market
share by penetrating existing target
audience)
B: “Go Corporate” (attract new
target audience with existing
service)
C: “Go Crazy” (innovate & create
new product for new audience – be
provocative)
Existing
Target Market
New
Product
ExistingNew
A B
C
Not an option
Ø  High legal
restrictions
A: “Keep Driving”
PRO CON BENEFIT
•  No need for investments in
R&D or innovation
•  Existing customers can be
used as advocates
•  Increases sales & profits
•  Changing customers
perception of an
existing product/brand
is difficult
•  No differentiation
•  Easy to imitate for
competitors
•  Price Leadership status
can be retained
Investment
Marketing campaign
€ 700,000
ROI
6,5%
B: “Go Corporate”
PRO CON BENEFIT
•  Enter new customer segment
•  Create value for a different
audience
•  Leverage on growing number of
corporations and high
disposable income within the
business sector
•  High costs in terms of
Marketing
•  Combines the
knowledge of Ubers
operational excellence
with new market
options
Investment
Marketing Campaign: €200,000
Sponsorship/ Branding € 85,000
ROI
17.7%
C: “Go Crazy”
PRO CON BENEFIT
•  Advantages of the “first
mover”
•  No competition (at least for a
short time)
•  Very risky strategy
•  High costs
•  Difficult to implement
•  Immediate industry
attention (if
implemented
successfully)
Investment
•  New Product Development &
Marketing Campaign:
€ 2,000,000
ROI
8.9%
Recommendation: “Go Corporate” is the best option in terms of
market potential (growing demand) and an ROI of 17.7%
Market share
2015 2020
7.7%
14.8%
Increase frequency of
rides/ driver per day
2015 2016
11
15
120
200
Increase
number of drivers
2015 2017
By focusing on large businesses Uber can leverage on its high quality, double its market share
by 2017 and take over the market leadership in the corporate passenger transportation
sector by 2020.
PHASE 1 PHASE 2
€ 8,6
€ 12
Increase average
price/ride
2015 2018
PHASE 3 RESULT
Entering new target market by communicating
brand value
Functional
Emotional Experiential
UBER stands for fast | reliable |
high quality transportation
Uber means consistency & high
customer friendliness
•  No need to hail taxis on the street
•  Corporations rely on Uber:
whenever & wherever they need
transportation
UBER is a partner that
cares about you and the
people that are important
for your success:
•  Clients / Business
partners
•  Employees
Brand asset valuator: Consumer awareness is
the key to brand value.
Brand Stature
Esteem & Knowledge
Differentiation&Relevance
Unused
potential /niche
New / fading
brands
Power brands
LEADER
Mass market
Eroding brands
BrandStrength
Goal: Partner with the 10
largest companies in Munich
within the next 5 years.
Ø  Differentiate through Quality
Ø  Use customer feedback for
improvement
Ø  Research new innovations for
the UBER App
Ø  Customize service according to
the companies needs
Ø  Stimulate positive word-of-
mouth among business
professionals
Enhance partnership with leading corporations and encourage positive word of mouth
(Customers & Drivers)
S B I V A R
Solution
Raising brand awareness by creating a premium value
proposition for corporations.
PERCEIVED CONSUMER PERFORMANCE
RELATIVEPRICE
Low
High
Inferior Superior
Economy
Average
Premium
S B I V A R
Branding / Value
TRANSPORTATION EXCELLENCE
Brand Awareness and revenue growth through corporate
business partnerships with “The big 4”
Companies with high
transportation demand
BMW: 33.000 employees
Allianz: 4.200 employees
Siemens: 1.600 employees
MAN: 1.400 employees
= Average demand of 1884
rides/day
Hypothesis: 5% of “The Big 4”
employees need a transportation
alternative to/from work
•  Revenue of €8.2M by specific targeting
towards Allianz, Siemens, BMW & MAN
•  Possibility of gradually increasing
demand until 2020 by offering high
quality
•  Employees obtain subsidies for their
commute to/from work
•  Less price sensitive customers
•  Brand exposure
•  Positive word of mouth among big
companies increases chances for future
business opportunities
S B I V A R
Info / Incentive
Benefits
Targeting “The Big 4” for long-term relationships
Brand Awareness through corporate sponsorship
with leading local corporations
S B I V A R
Info / Incentive
VIP Shuttle service for FC Bayern
players and business partners
#FCBgoesUBER
Official limousine service for the
BMW Open. Most prestigious Golf &
Tennis tournament in Germany
#PoweredByUBER
•  Enhance image
•  Shape customer attitudes
•  Showcase UBER attributes
•  Comfort| Reliability | Prestige
•  Create positive publicity & visibility
Identify local key events
Football | Tennis & Golf
Benefits
Sponsored UBER rides for corporate events expose the brand
Estimated Investment (for Event
Sponsorship & Corporate Partnerships)
Marketing campaign (online/offline): €200,000
Sponsorship /car branding: 85,000
THANK YOU
EVELYN SINDERMANN |MIM 2015 Professor Protano: Strategic Brand Management
APENDIX A – Calculation DEMAND/MDI/SDI
UBER	
  rides	
  per	
  year	
   	
  	
  
cars	
   120	
  
rides	
  per	
  day	
   11	
  
days	
   365	
  
	
  	
   481.800,00	
  
Maket	
  Demand	
  
rides	
  per	
  person/year	
   2,96	
  
average	
  price	
   8,6	
  
rides/year	
   481.800,00	
  
total	
   	
  12.264.700,80	
  	
  
Popula@on	
  Munich	
  (7+)	
   1.200.000,00	
  
rides	
  per	
  person/year	
   2,96	
  
Overall	
  Taxi	
  rides	
  per	
  year	
  MUC	
   3.552.000,00	
  
	
  	
   	
  	
  
Demand	
   90.419.712,00	
  
Revenue	
  
Total	
  Market	
  revenue	
   	
  €53.280.000,00	
  	
  
Uber	
  Market	
  revenue	
   	
  €4.143.480,00	
  	
  
APENDIX B - Calculation Alternatives
Op@on	
  A	
   	
  €	
  700.000,00	
  	
  Investment	
  
Increase	
  rides	
  to	
  15	
   6,53	
  ROI	
  
Increase	
  #	
  cars	
  to	
  200	
   	
  €5.273.520,00	
  	
  Profit	
  
	
  	
   	
  	
   	
  	
  
Op@on	
  B	
   	
  	
   	
  	
  
Marke@ng	
  Strategy	
   	
  €200.000,00	
  	
  Investment	
  
Increase	
  prices	
  to	
  12	
  EUR	
   17,70	
  ROI	
  
Increase	
  number	
  of	
  rides	
  to	
  15	
   €3.740.520,00	
  Profit	
  
	
  	
   	
  	
   	
  	
  
Op@on	
  C	
   	
  	
   	
  	
  
Investment	
   €2.000.000,00	
  Investment	
  
	
  	
   8,97	
  ROI	
  
	
  	
   €19.946.520,00	
  Profit	
  
References
https://growthhackers.com/companies/uber/
http://www.muenchen.de/sehenswuerdigkeiten/muenchen-in-zahlen.html
http://www.adweek.com/prnewser/ceo-of-ubers-branding-agency-talks-visual-
communications/105578
https://clarity.fm/questions/709/how-as-uber-grown-so-fast
http://www.spiegel.de/wirtschaft/unternehmen/uber-startet-uberx-in-deutschland-
a-1034452.html
http://www.taxi-heute.de/Taxi-Thema/verschlagwortung-taxi-heuteallgemeine-stichworte/
Muenchen
https://www.statistik.bayern.de/statistik/kreise/
https://www.destatis.de/DE/ZahlenFakten/Wirtschaftsbereiche/TransportVerkehr/
Personenverkehr/Personenverkehr.html

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Tactical Brand Marketing Plan - UBER Munich, Germany

  • 1. IBBAAA BRAND MARKETING PLAN FOR THE TARGET MARKET MUNICH - GERMANY Analysis | Strategies | Tactics EVELYN SINDERMANN |MIM 2015 Professor Protano: Strategic Brand Management
  • 2. EXECUTIVE SUMMARY Ø  The brands opportunity is to increase the revenue to €8.2M by targeting the corporate market and creating a premium offer by the end of 2015. Ø  The rise in disposable net income (€2,504 in average) and the growing number of corporations in Munich offer new business opportunities for UBER. Raising brand awareness by capturing & communicating a superior value proposition strengthens UBERs brand equity. Ø  The strategic alternatives are: A: “Keep Driving” (gain market share by penetrating existing target audience) B: “Go Corporate” (attract new target audience with existing service) C: “Go Crazy” (innovate & create new product for new audience – be provocative) Ø  Recommendation: “Go Corporate” is the best option in terms of market potential (growing demand) and an ROI of 17.7%
  • 3. Porters 5 forces | The market attractiveness is low due to a highly competitive environment, risks of substitutes and medium threats of new market entrants Threat of new entrants | MEDIUM ¤  Patents on various technologies build a boundary for competitors from a technological aspect ¤  There are no proprietary elements that prevent new market entrants. ¤  Compliance with German transportation laws is required to enter the market ¤  Low seed capital is needed to enter the market Power of Suppliers | HIGH ¤  Drivers & Rental Car Companies have a high bargaining power. Power of Competitors | HIGH ¤  Taxi & Limousine services are higher in price but offer a broader network ¤  Similar services to Uber (Lyft & Wundercar) are currently banned by law but have the potential to enter the competition with new business models similar to Uber. Threat of Substitutes | MEDIUM ¤  Public transportation, car sharing services and bicycles are easy accessible alternatives and less in price Power of Buyers | HIGH ¤  Customers have multiple choices according to their needs ¤  Scheduled rides: Taxi ¤  Luxury rides: Limousine Services ¤  Self - driving: Car sharing e.g. DriveNow, Car2Go,
  • 4. MDI: Opportunity to tap 86% passenger transportation market by increasing the number of rides by 2020 1980 1990 2000 2010 2020 100 20 5 10 15 0 Market Demand of Passenger transportation in Munich*1: 12,2M Potential Market Demand*2: 90,4M MDI: 12,2M/90,4M ≈ 14% *1: Passenger transportation based on Taxi business excluding car sharing & public transportation. *2: Estimated data MarketDevelopmentIndexMDI Market Penetration
  • 5. UBER has a growth potential – differentiation & innovation is required 0 50 100 100 50 0 MarketDevelopmentIndexMDI Share Development Index MDI ≈ 14% SDI ≈ 54% Growth with Market Development Uber has the opportunity to increase their market share from 7,78% to 14,41% by 2020.
  • 6. Our competitive advantage: Price Leadership Operational Excellence Product Leadership Customer Intimacy Munich Drivers (Private Limousine Service) Taxi München eG/ IsarFunk (2 main taxi operators in MUC) UBER MVG (Munich public transportaton system: Ubahn, Sbahn, Bus, Tram)
  • 7. Uber operates in an attractive market with potential to strengthen their competitive position towards leadership Unattractive Average Attractive StrongAverageWeak Market Attractiveness CompetitivePosition Disinvest Proceed with Care Cash generator Phased Withdrawal Proceed with Care Growth Leader Leader Try Harder Double or Quit
  • 8. Building on low operational costs allows price leadership position. Relative Strengths Relative Weaknesses ¤  Competitive Advantage Ø  No proprietary inventory (cars) & direct employees (drivers & dispatchers) allow minimal operational cost and fares that are 20% lower compared to the competition Ø  A scalable business model facilitates a possible German-wide expansion with minimum investments Ø  High quality standards of cars & services ensure brand recognition and strengthen ¤  Superior Value Ø  Cash-less payments and pricing transparency builds trust & safety among customers and drivers ¤  Superior technology & innovation strengthen Ubers operational excellence and help growing brand recognition in a competitive environment. ¤  Legal vulnerability Ø  Successful US business model is restricted in Germany and leads to additional costs. Ø  Commercial drivers license: €240,- per driver/ every 5 years Ø  Privately owned cars are restricted to commercial use. Rental car companies need to provide cars and insurance ¤  Lower profit margins due to additional costs and shared revenue with rental car companies are compensated with higher volume.
  • 9. Market growth potential compensates possible profit loss due to external threats ¤  Increase the number of drivers from 120 to 200 by the end of 2015 Ø  Use economies of scale: 80 additional cars result into a 40% revenue growth Ø  Higher frequency lowers the estimated time of arrival. Ø  Customers benefit from faster service Ø  Increasing the frequency of rides per driver/day from an average of 11 rides to 15 results in an estimated revenue plus of €2.5M annually ¤  Capitalize on operational excellence to increase the volume and frequency of rides and gain market share of more than 5% by the end of 2013. Opportunities Threats ¤  High pressure from governmental restrictions & key industry players Ø  Taxi industry sees Uber as a “grey- market service” and tries to file lawsuits that may cause unexpected legal expenditures. Ø  Possible minimum wage restrictions for the taxi industry and price increases from rental car companies will decrease profit margins. Ø  Negative PR about Uber influences the customer behavior and can result in dropping demand and market share. ¤  Profitability will drop if Uber cannot compensate possible cost increases by establishing significant brand equity
  • 10. The business model in Germany – an explanation 1.Uber recruits drivers •  Pays commercial taxi license (legal requirement) 2.Uber connects drivers with local rental car companies •  Commercially driving with private cars is illegal 4. Drivers receive requests via the Uber app: •  Locate passenger pick-up & drop-off destination •  Receive cash-less payment via Uber 3. Passengers use Uber app: •  Pick-Up request •  Real-time tracking •  Payment
  • 11. Consumer – two main target groups Students (age 18-25) Young Professionals (25-35) •  Transportation to/ from University •  Cheap alternative to taxis & public transportation •  Pick-up from parties & events •  Split fares with friends •  Transportation to/ from work or business meeting •  Comfortable driving experience •  Fast & reliable transport •  Expense tracking when traveling for work •  Traveling “in-style” •  “Cooler” than taxis •  Most of my friends don’t know about it yet •  Surge-pricing during peak times too expensive •  A high qualitative service with short waiting times Consumers support the Uber business model. Build on general demand for transportation, enhance brand equity and awareness for future growth.
  • 12. Customers – Drivers build the core of the business model Drivers •  Passengers •  Profit margin •  Commercial taxi license •  A vehicle •  Easy-to-use technology •  Safe money transfer •  Reliable customers •  Insurance & benefits •  Reliable partner who provides technology & infrastructure •  Direct connection to the passenger Drivers value Uber technology. Build on drivers feedback for innovation and consumer insights.
  • 13. Collaborators – Local rental car companies (a necessary middleman by law) Rental car companies •  Renters (Uber drivers) •  Profit margin •  Long-term contracts about expected rental volume •  Responsible drivers •  Growing customer base •  Partner who delivers constant source of income Enhanced credibility and higher rental volume increases the chances to negotiate lower rates.
  • 14. PESTEL: Increasing market demand opens possibilities in the areas of new technologies & sustainability. Risks of increasing costs need to be considered. Political & Legal Industry regulations: •  Government requires commercial licenses •  Political discussion about minimum wage laws for taxi industry Ø  Decreasing profit margin due to higher cost Economic •  Germany reached historical high in disposable income. Munich has the highest disposable income (monthly net average: €2,504) •  Growing corporate sector Ø  Price sensitivity decreases Ø  Growing profit in corporate sector increases demand for private transportation Social •  Population density in cities is growing •  People follow fast paced life style Ø  Increasing demand for transportation in urban areas Technological •  Automobile manufacturers work on technologies for more sustainable vehicles •  Use of mobile applications for daily activities is increasing Ø  The market is open for technological enhancements and innovation Environmental •  Trend goes towards environmental friendly & sustainable transportation •  Growing demand for Electrical & Hybrid cars
  • 15. The strategic problem – a lack of brand awareness Situation: UBER penetrates a traditional service industry with an innovative & technology based business model – for a 20% lower price than the average competition... ...but what is the problem? – Supply & Demand Uber is new to the German market. People don’t see Uber as their “first choice” yet. Low demand makes the business unattractive for drivers. The business has a high growth potential but lacks in Brand Awareness
  • 16. Strategic Brand Alternatives LOW BRAND AWARENESS ESTABLISH BRAND EQUITY “KEEP DRIVING” “GO CORPORATE” “GO CRAZY” CHANGE BUSINESS MODEL (Invest into own fleet of electric & hybrid cars) LEAVE GERMAN MARKET (Search for other European countries with less governmental restrictions)
  • 17. The Alternatives – A | B | C A: “Keep Driving” (gain market share by penetrating existing target audience) B: “Go Corporate” (attract new target audience with existing service) C: “Go Crazy” (innovate & create new product for new audience – be provocative) Existing Target Market New Product ExistingNew A B C Not an option Ø  High legal restrictions
  • 18. A: “Keep Driving” PRO CON BENEFIT •  No need for investments in R&D or innovation •  Existing customers can be used as advocates •  Increases sales & profits •  Changing customers perception of an existing product/brand is difficult •  No differentiation •  Easy to imitate for competitors •  Price Leadership status can be retained Investment Marketing campaign € 700,000 ROI 6,5%
  • 19. B: “Go Corporate” PRO CON BENEFIT •  Enter new customer segment •  Create value for a different audience •  Leverage on growing number of corporations and high disposable income within the business sector •  High costs in terms of Marketing •  Combines the knowledge of Ubers operational excellence with new market options Investment Marketing Campaign: €200,000 Sponsorship/ Branding € 85,000 ROI 17.7%
  • 20. C: “Go Crazy” PRO CON BENEFIT •  Advantages of the “first mover” •  No competition (at least for a short time) •  Very risky strategy •  High costs •  Difficult to implement •  Immediate industry attention (if implemented successfully) Investment •  New Product Development & Marketing Campaign: € 2,000,000 ROI 8.9%
  • 21. Recommendation: “Go Corporate” is the best option in terms of market potential (growing demand) and an ROI of 17.7% Market share 2015 2020 7.7% 14.8% Increase frequency of rides/ driver per day 2015 2016 11 15 120 200 Increase number of drivers 2015 2017 By focusing on large businesses Uber can leverage on its high quality, double its market share by 2017 and take over the market leadership in the corporate passenger transportation sector by 2020. PHASE 1 PHASE 2 € 8,6 € 12 Increase average price/ride 2015 2018 PHASE 3 RESULT
  • 22. Entering new target market by communicating brand value Functional Emotional Experiential UBER stands for fast | reliable | high quality transportation Uber means consistency & high customer friendliness •  No need to hail taxis on the street •  Corporations rely on Uber: whenever & wherever they need transportation UBER is a partner that cares about you and the people that are important for your success: •  Clients / Business partners •  Employees
  • 23. Brand asset valuator: Consumer awareness is the key to brand value. Brand Stature Esteem & Knowledge Differentiation&Relevance Unused potential /niche New / fading brands Power brands LEADER Mass market Eroding brands BrandStrength Goal: Partner with the 10 largest companies in Munich within the next 5 years. Ø  Differentiate through Quality Ø  Use customer feedback for improvement Ø  Research new innovations for the UBER App Ø  Customize service according to the companies needs Ø  Stimulate positive word-of- mouth among business professionals Enhance partnership with leading corporations and encourage positive word of mouth (Customers & Drivers) S B I V A R Solution
  • 24. Raising brand awareness by creating a premium value proposition for corporations. PERCEIVED CONSUMER PERFORMANCE RELATIVEPRICE Low High Inferior Superior Economy Average Premium S B I V A R Branding / Value TRANSPORTATION EXCELLENCE
  • 25. Brand Awareness and revenue growth through corporate business partnerships with “The big 4” Companies with high transportation demand BMW: 33.000 employees Allianz: 4.200 employees Siemens: 1.600 employees MAN: 1.400 employees = Average demand of 1884 rides/day Hypothesis: 5% of “The Big 4” employees need a transportation alternative to/from work •  Revenue of €8.2M by specific targeting towards Allianz, Siemens, BMW & MAN •  Possibility of gradually increasing demand until 2020 by offering high quality •  Employees obtain subsidies for their commute to/from work •  Less price sensitive customers •  Brand exposure •  Positive word of mouth among big companies increases chances for future business opportunities S B I V A R Info / Incentive Benefits Targeting “The Big 4” for long-term relationships
  • 26. Brand Awareness through corporate sponsorship with leading local corporations S B I V A R Info / Incentive VIP Shuttle service for FC Bayern players and business partners #FCBgoesUBER Official limousine service for the BMW Open. Most prestigious Golf & Tennis tournament in Germany #PoweredByUBER •  Enhance image •  Shape customer attitudes •  Showcase UBER attributes •  Comfort| Reliability | Prestige •  Create positive publicity & visibility Identify local key events Football | Tennis & Golf Benefits Sponsored UBER rides for corporate events expose the brand Estimated Investment (for Event Sponsorship & Corporate Partnerships) Marketing campaign (online/offline): €200,000 Sponsorship /car branding: 85,000
  • 27. THANK YOU EVELYN SINDERMANN |MIM 2015 Professor Protano: Strategic Brand Management
  • 28. APENDIX A – Calculation DEMAND/MDI/SDI UBER  rides  per  year       cars   120   rides  per  day   11   days   365       481.800,00   Maket  Demand   rides  per  person/year   2,96   average  price   8,6   rides/year   481.800,00   total    12.264.700,80     Popula@on  Munich  (7+)   1.200.000,00   rides  per  person/year   2,96   Overall  Taxi  rides  per  year  MUC   3.552.000,00           Demand   90.419.712,00   Revenue   Total  Market  revenue    €53.280.000,00     Uber  Market  revenue    €4.143.480,00    
  • 29. APENDIX B - Calculation Alternatives Op@on  A    €  700.000,00    Investment   Increase  rides  to  15   6,53  ROI   Increase  #  cars  to  200    €5.273.520,00    Profit               Op@on  B           Marke@ng  Strategy    €200.000,00    Investment   Increase  prices  to  12  EUR   17,70  ROI   Increase  number  of  rides  to  15   €3.740.520,00  Profit               Op@on  C           Investment   €2.000.000,00  Investment       8,97  ROI       €19.946.520,00  Profit