Ibbaa: A Brand Marketing Plan For The Target Market Munich - Germany
Ibbaa: A Brand Marketing Plan For The Target Market Munich - Germany
Ibbaa: A Brand Marketing Plan For The Target Market Munich - Germany
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.
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
¤ Patents on various technologies build a ¤ Drivers & Rental Car Companies have a high
boundary for competitors from a technological bargaining power.
aspect Power of Competitors | HIGH
¤ There are no proprietary elements that ¤ Taxi & Limousine services are higher in price but
prevent new market entrants. offer a broader network
¤ Compliance with German transportation laws ¤ Similar services to Uber (Lyft & Wundercar) are
is required to enter the market currently banned by law but have the potential to
enter the competition with new business models
similar to Uber.
¤ Low seed capital is needed to enter the
market Power of Buyers | HIGH
Threat of Substitutes | MEDIUM ¤ Customers have multiple choices according to their
needs
¤ Public transportation, car sharing services and ¤ Scheduled rides: Taxi
bicycles are easy accessible alternatives and less
¤ Luxury rides: Limousine Services
in price
¤ Self - driving: Car sharing e.g. DriveNow,
Car2Go,
MDI: Opportunity to tap 86% passenger transportation
market by increasing the number of rides by 2020
100
Market Demand of Passenger
20 transportation in Munich*1:
Market Development Index MDI
12,2M
15
Potential Market Demand*2:
90,4M
10
MDI: 12,2M/90,4M ≈ 14%
MDI ≈ 14%
SDI ≈ 54%
Market Development Index MDI
0
0 50 100
Share Development Index
Our competitive advantage: Price Leadership
Product Leadership
Customer Intimacy
Operational Excellence
Uber operates in an attractive market with potential to
strengthen their competitive position towards leadership
Phased
Strong Average Weak
Disinvest Withdrawal Double or
Quit
Competitive Position
Cash Growth
generator Leader
Leader
Market Attractiveness
Building on low operational costs allows price leadership
position.
Relative Strengths Relative Weaknesses
¤ Competitive Advantage ¤ Legal vulnerability
Ø No proprietary inventory (cars) & direct
employees (drivers & dispatchers) allow Ø Successful US business model is restricted in
minimal operational cost and fares that are Germany and leads to additional costs.
20% lower compared to the competition
Ø Commercial drivers license: €240,- per
Ø A scalable business model facilitates a driver/ every 5 years
possible German-wide expansion with
minimum investments Ø Privately owned cars are restricted to
Ø High quality standards of cars & services commercial use. Rental car companies
ensure brand recognition and strengthen need to provide cars and insurance
¤ Superior technology & innovation strengthen ¤ Lower profit margins due to additional costs and
Ubers operational excellence and help growing shared revenue with rental car companies are
brand recognition in a competitive environment.
compensated with higher volume.
Market growth potential compensates possible profit loss
due to external threats
Opportunities Threats
¤ Increase the number of drivers from ¤ High pressure from governmental
120 to 200 by the end of 2015 restrictions & key industry players
Ø Use economies of scale: 80 additional Ø Taxi industry sees Uber as a “grey-
cars result into a 40% revenue growth market service” and tries to file lawsuits
that may cause unexpected legal
Ø Higher frequency lowers the estimated expenditures.
time of arrival.
Ø Possible minimum wage restrictions for
Ø Customers benefit from faster the taxi industry and price increases
service from rental car companies will decrease
Ø Increasing the frequency of rides per profit margins.
driver/day from an average of 11 rides Ø Negative PR about Uber influences the
to 15 results in an estimated revenue customer behavior and can result in
plus of €2.5M annually dropping demand and market share.
¤ Capitalize on operational excellence to ¤ Profitability will drop if Uber cannot
increase the volume and frequency of compensate possible cost increases by
rides and gain market share of more establishing significant brand equity
than 5% by the end of 2013.
The business model in Germany – an explanation
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
• Responsible drivers
• Growing customer base
Technological Environmental
• Automobile manufacturers work on • Trend goes towards environmental
technologies for more sustainable friendly & sustainable transportation
vehicles • Growing demand for Electrical &
• Use of mobile applications for daily Hybrid cars
activities is increasing
Ø The market is open for technological
enhancements and innovation
The strategic problem – a lack of brand awareness
LOW BRAND
AWARENESS
restrictions
B: “Go Corporate” (attract new
Product
Existing New
Target Market
A: “Keep Driving”
PRO CON BENEFIT
• No need for investments in • Changing customers • Price Leadership status
R&D or innovation perception of an can be retained
• Existing customers can be existing product/brand
used as advocates is difficult
• Increases sales & profits • No differentiation
• Easy to imitate for
competitors
Investment ROI
Marketing campaign 6,5%
€ 700,000
B: “Go Corporate”
PRO CON BENEFIT
• Enter new customer segment • High costs in terms of • Combines the
• Create value for a different Marketing knowledge of Ubers
audience operational excellence
• Leverage on growing number of with new market
corporations and high options
disposable income within the
business sector
Investment ROI
Marketing Campaign: €200,000 17.7%
Sponsorship/ Branding € 85,000
C: “Go Crazy”
PRO CON BENEFIT
• Advantages of the “first • Very risky strategy • Immediate industry
mover” • High costs attention (if
• No competition (at least for a • Difficult to implement implemented
short time) successfully)
Investment ROI
• New Product Development & 8.9%
Marketing Campaign:
€ 2,000,000
Recommendation: “Go Corporate” is the best option in terms of
market potential (growing demand) and an ROI of 17.7%
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.
120
11 € 8,6
7.7%
Emotional Experiential
SBIVAR
Solution
Brand asset valuator: Consumer awareness is
the key to brand value.
Differentiation & Relevance
Brand Stature
Enhance partnership with leading corporations and encourage positive word of mouth
(Customers & Drivers)
SBIVAR Raising brand awareness by creating a premium value
Branding / Value
proposition for corporations.
High
RELATIVE PRICE
Premium
Economy
Low
Inferior Superior
PERCEIVED CONSUMER PERFORMANCE
SBIVAR Brand Awareness and revenue growth through corporate
Info / Incentive
business partnerships with “The big 4”
Targeting “The Big 4” for long-term relationships
• Enhance image
• Shape customer attitudes
• Showcase UBER attributes
• Comfort| Reliability | Prestige
Football | Tennis & Golf • Create positive publicity & visibility
VIP Shuttle service for FC Bayern
players and business partners
#FCBgoesUBER Estimated Investment (for Event
Sponsorship & Corporate Partnerships)
Official limousine service for the
BMW Open. Most prestigious Golf & Marketing campaign (online/offline): €200,000
Tennis tournament in Germany Sponsorship /car branding: 85,000
#PoweredByUBER
THANK YOU
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
APENDIX B - Calculation Alternatives