ID Number – 44814 Module Code – MCOM4040 Module Title –Marketing and Communications Assignment Title –Coursework 1 Report Table of Contents Cover Page 1 Table of Contents 2 Introduction 3 Marketing Orientation 3 Types of Orientation 3 Addison Lee’s Orientation 3 Marketing Environments 3 Marketing Environment Analysis 3 Macro Environment 4 Micro Environment 4 Internal Environment 4 Marketing Strategies 5 Market Segmentation 5 Segmenting the Market for a Younger Demographic 5 Marketing Mix 5 Product 5 Price 5 Place 6 Promotion 6 Process 6 People 6 Physical Evidence 6 Recommended Changes 6 Conclusion 7 Reference List 8 1.0 IntroductionAddison Lee is a private hire company that was founded in1975 and based in the United Kingdom.
This report will identify and evaluate thefollowing: 2.0 Marketing Orientation2.1 Types ofMarketing OrientationBusinesses adapt and use one of four orientations to build aneffective marketing plan. The four orientations are: production, product,selling and marketing. The production orientation holds that consumers willprefer products which are easily obtainable and affordable. Businesses focusedon this orientation will focus on high production efficiency whilst keepingcosts as low as possible (MyMarketingCloud, 2015). The product orientationholds that consumers prefer products which are of the highest quality or hasthe best performance so businesses focused on product orientation will aim tohave the best product and improve it over time. The sellingorientation involves aggressive selling and promotion.
This orientation showsminimal focus towards customer needs or demands and more so towards sellingtheir product (Kotler, 2000). The final orientation, marketing, isan idea that believes to attain organisational goals, they must satisfy theneeds of their target markets (Studiowide, 2010). Key differences between selling andmarketing orientations include:· The selling orientation’s primary focus is the needsof the seller, whereas the marketing orientation’s is satisfying the needs anddemands of the consumer.
· The selling orientation’s main goal is to sellthe product and make money, whilst the marketing orientation’s main goal is tohave their product meet the needs of the consumer (Kotler, 2000).2.2 Addison Lee’sOrientationFrom the apparent, Addison Lee has focused on productorientation as they strive to ensure their services and products are of thehighest quality and continue to constantly develop both their services andbrand. This is supported by Addison Lee redesigning their mobile phone applicationfor both Android and iOS users to allow for more convenient and simple userexperience (Addison Lee, 2014). Further improvements have been made tothe application and service which are not provided by their competitors such asUber. For example, Addison Lee offer a ‘snooze’ function which allows consumersto delay their booking without having to cancel or re-book and allows consumersto share their estimated time of arrival through text message or email (Addison Lee, 2017).Furthermore, Addison Lee vehicles are no more than three years old which ensureboth the car and journey are of the highest quality possible and arecontinuously improving (Addison Lee, 2016).
3.0 Marketing Environments3.1 MarketingEnvironment AnalysisThe factors which affect a business are known as themarketing environment. It consists of the internal environment, factors whichthe business has control over, and the external environment, factors which the businesshas no control over (Marketing Tutor, 2016). The externalenvironment can be divided into the micro-environment and macro-environment.
The micro-environment refers to external factors that directly affect the business,whereas the macro-environment refers to external factors that affect the industryand not the business directly (Pahwa, 2017).Market environment analysis is a process that enables businesses to identifytheir market environment and assess their impact, whether is it an opportunityor a threat (O’Farrell, 2009). There are differenttools a business may use to analyse each environment. For example, a PESTLEanalysis can be used to analyse the macro-environment and Porter’s Five Forcesmodel can be used to analyse the micro-environment (Oxford Learning Lab, 2012)It is vital forAddison Lee to carry out an environmental analysis before setting a marketingstrategy to ensure the strategy is in accordance with Addison Lee’s environment (PESTLEanalysis, 2015).3.2 Macro EnvironmentAlthough there are six major factors in a company’s macroenvironment (political, environmental, social, technological, environmental andlegal) for this report, an economic and social factor will be explained anddiscussed.
Uber, a direct competitor of Addison Lee, recently lost theirlicense to operate in London. This is considered a major economical factoraffecting Addison Lee as Addison Lee can now expect a massive increase incustomers as many former Uber customers will now turn to Addison Lee as theirmain private hire operator in London. A social factor directly linked with Uberlosing their license to operate in London, is the job opportunities opening inAddison Lee. Addison Lee have announced they are looking to recruit an extra1000 new drivers shortly after it was announced Uber had lost their license (Smith, 2017).
Both factorsdiscussed are a huge opportunity for Addison Lee as they undoubtedly willresult in a rise in revenue for Addison Lee and increase the brand image,especially in London.3.3 Micro EnvironmentAlthough all private hire operators can be deemed ascompetitors of Addison Lee such as local minicab offices or other cab hireorganisations, for this report Uber and Mytaxi will be discussed as competitorsof Addison Lee and what threat they pose to Addison Lee. Whilst London beingthe only city in the United Kingdom it operates in, Mytaxi has registered17,000 black cabs (Carey, 2017).This could result in customers preferring a more iconic and traditional Londonblack cab compared to the premium Addison Lee vehicles.
Uber on the other hand,is a cheaper option than Addison Lee which is a major reason customers maychoose Uber over Addison Lee.3.4 InternalEnvironmentTwo internal factors that could be considered for AddisonLee are their drivers and vehicles. Their drivers are made to comply with adress code and although this enhances their brand image of being a premiumprivate hire operator compared to some of their competitors whose drivers donot comply with a dress code, Addison Lee are criticized for hiring drivers asindependent contractors whilst they still have to observe Addison Lee’s dresscode amongst other requirements (Acton, 2017).The drivers can be considered both a strength and weakness as although they canbe deemed superior to their competitors, they are often criticised from a legalstandpoint. The cars at Addison Lee are no older than 3 years and areserviced twice as often as recommended (Addison Lee, 2016).
This ensures the journeys arecomfortable as well as newer cars being eco-friendlier. Furthermore, allAddison Lee cars are fitted with wi-fi and phone chargers for their customers.These are huge strengths for Addison Lee as their cars fit the brand image ofbeing premium. Also, their cars contain features not found with competitors.
4.0 Marketing Strategies4.1 MarketSegmentationMarket segmentation involves dividing a market into smallersegments so a business may target a specific customer market (Suttle, 2010) . There are four main segmentationsused by businesses which are: geographic, demographic, psychographic andbehavioural. Geographic segmentation segments the market into geographicvariables (NetMBA, 2003). Demographic segmentation segments themarket into demographic variables such as age, gender and race. Psychographicsegmentation segments the market according to customers lifestyle or traits (Bell, 2016).
Behaviouralsegmentation segments the market according to customers attitude and responseto a product. Market segmentation will allow Addison Lee to know the needs anddemands of their customers (Bhasin, 2017). 4.2 Segmenting theMarket for a Younger Demographic Although there are forum main types of segmentation, forthis report the two selected are demographic and geographic segmentation.Demographic segmentation can be divided into different variables particularlyage and income. A customer’s demands and needs change based on their age orincome. Many 16 to 25 year olds are either in education or in low income worktherefore they cannot be expected to afford the same privileges of the olderdemographic. Furthermore, many 16 to 25 year olds choose to hire a competitorof Addison Lee like Uber because they feel Addison Lee’s prices are too high,therefore to attract younger demographic, reconsidering prices for 16 to 25year olds would be realistic and viable starting point.
Geographic segmentation can involve segmenting the marketinto cities. If Addison Lee were to target a young demographic by offering 16to 25 year olds discounts or an age specific promotion it will be advisable forAddison Lee to test out the promotion in a specific city such as London beforemaking it available nationwide. London would be an ideal city to trial thepromotion as Uber, which is very popular amongst the younger demographic, areat risk of losing their license to operate in the capital, therefore many 16 to25 year olds will be looking for an alternative private hire organisation. 5.0 MarketingMixThe marketing mix is a set of elements used to market abusiness or product. It consists of ‘7 Ps’ which are product, price, place,promotion, process, people and physical evidence. The marketing mix allows an organisationto determine which marketing strategy is most appropriate for theirorganisation (Hill, 2016).In this section of the report, Addison Lee’s ‘7 Ps’ will be discussed.
5.1 ProductA tangible product of Addison Lee is their cars. Aspreviously mentioned in this report, they only use newer cars which are wellkept and cared for. Furthermore, they offer two types off cars, a larger carand a standard car depending on the customer’s needs, whether they have morepassengers or even if the customer wants to take their bicycle in the car withthem.
5.2 PriceAddison Lee charge customers aminimum fare of £7.50. Unlike Uber, Addison Lee do not operate with surgepricing, meaning the price of the customers journey that was confirmed duringbooking will not rise due to congestion or other reasons such as with Uber.Addison Lee also offer discounted prices during off-peak hours (Addison Lee, 2017). 5.
3 PlaceAfter initially beginning theirUnited Kingdom operation in London, Addison Lee now operate in 10 differentcities within the United Kingdom which include: Birmingham, Manchester,Glasgow, Edinburgh, Liverpool and others (Addison Lee, 2016). However, this number can be expectedto rise as Addison Lee are constantly looking at where they can offer theirservices next (Addison Lee, 2016).5.4 PromotionAddison Lee offer a variety ofsales promotions which encourage sales and raise awareness of the brand throughword of mouth. They offer specific discounts to new customers which includespromotions such as ‘£10 off your first booking’. They also offer salespromotions during certain periods throughout the year such as in the festiveseasons.5.
5 ProcessAddison Lee allows customers tomake a booking through the phone, their website or their application.Furthermore, customers can book a car anytime from as soon as possible or upuntil three months in advance. They allow customers to pay with either card orcash, whereas some of their competitors are strictly either cash only or cardonly.
5.6 People Addison Lee drivers comply with asmart dress code which represents the premium brand image of Addison Lee.However, Addison Lee are often criticised for classing their drivers as self-employedwhereas many argue their drivers are in a “subordinate position” (Booth, 2017). 5.7 Physical EvidenceThe Addison Lee mobile phoneapplication is available to download on both Android and iOS devices.
Theapplication contains features which give it an advantage over its competitorssuch as being able to track your driver before he arrives, selecting the cartype and knowing the price of the journey before the customer travels (Addison Lee, 2014).5.8 Recommended ChangesTo achieve a 3% growth in carservice by business by targeting 16 to 25 year olds, changes would berecommended to price, product and promotion. A major reason many 16 to 25 yearolds opt not to travel with Addison Lee is due to the prices, there if AddisonLee were to offer the younger demographic a fixed discount such as 20% of alljourneys up until their target date of June 2018, many will choose to travelwith Addison Lee and remain loyal customers even when the discount expires. Tomake the cars more attractive for the younger demographic, Addison Lee couldinstall a stereo into their cars which allows customers to play their ownmusical playlists throughout their journey. Finally, a possible promotionAddison Lee could run is offering customers £5 off each journey for every 16 to25 year old they refer to use the company. 6.
0 ConclusionAddison Lee currently have amassive opportunity to attract many customers from all demographics due toUber’s current licensing troubles. If Addison Lee are to expand even further,they should look to avoid any more negative press such as their drivers hiredself-employed as this may dampen the brand image and deter potential employeesfrom joining the organisation. Reference List Acton, C., 2017. Employment Status – Addison Lee drivers are workers.
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