Uber Pricing Strategies and Marketing Communications

It has managed to do this through its continually innovative and dynamic corporate and marketing strategies (Zhuo, 2016). Its marketing strategy consist on recruitment strategies and promotional strategies. The company mainly rely on the use of social media platforms to promote its brand and run its campaigns that are aimed at connecting with customers. In addition to social media, the company also uses TV and radio ads. The company also utilizes creative one day promotional events like tree delivery on Christmas and flower delivery on valentines. After the customer’s credit card is charged, Uber keeps 20% and deposits the rest in the drivers account (Weiler et al 5). This seamless process makes for an effective working relationship between the company and the drivers.

The company grow rapidly and by March 2016 it was operating in 400 cities, 65 countries and over 160,000 driver partners. The company is located all over the world with locations in America, Europe, Middle East, Africa, Asia, Australia and New Zealand. However despite its large market share, it has forced a significant increase in competition both locally and international. Kelanick’s ability to attract influential and high profile investors who facilitated the company’s expansion is also another key contributor to the company’s continuous success. Some of these investors included Google’s investment division, Ashton Kutcher and Jeff Bezos (Weiler et al 3). The company’s dedication to customer satisfaction is also another reason behind its success. Problem Statement and Critical Success factors Since its establishment, its greatest challenge has been agency regulations and political headwinds that threated its growth.

Regulatory agencies insisted that Uber had to follow agency regulation since it was operating as a transport service and violation of these regulation warrant a fine. Kalanick defended the surge pricing policy saying that it was meant to benefit passengers by offering an incentive to drivers to make more pickup. The policy has been used in many other industries including Disney Company that incorporate it in its theme parks during peak hours. To deal with the criticize Uber lowered it prices in January 2014 how there are no plans to eliminate the policy. Despite these challenges the company still has a number of opportunities. Customers are becoming increasingly dissatisfied with taxi services and are opting for alternative means of transport and Uber can take advantage of this to increase its customer base.

Another advantages include its cashless payment system, dual rating system that boost customer trust, dynamic pricing, adaptively and emphasis on customer satisfaction. To remain successful the company must also resolve and reduce its weakness which include its dependence on manpower, controversies and low barriers to entry. Assessment of Decision Option Uber, since its establishment in 2009, has managed to stay ahead of its competition and attain a large market share. This is however without some challenges that have greatly damaged its reputation. Uber’s reputation has been on the line with as the company is liked to several controversies that range from class action laws suits, legal battles with the government, surge prices and gross driver misconduct. Drivers are an essential part of the company and it time the company starts treating them as one.

Rather than using shady tactics to pouch drivers from its competitors the company should attract them by treating them better. It can do this by either making them fully fledged employees or increasing the commission rate. This will go a long way in creating a sense of inclusivity (Zhuo, 2016). Alternative 3 involve use of customer data. All the alternative improve corporate image and enhance profitability. When looking at cost effectiveness, alternative three is the most cost effective since it only requires reassuring the customer of the safety of their data. Alternative 2 is the less cost effective since it entails additional operating costs. Alternative 2 offer the company a competitive advantage since it will provide at term of reliable drivers who will be dedicated to performing the task.

The most important resource is dedicated personnel. Improving company-driver relationship can considerably improve customer satisfaction. The other area of focus, commissions, can be implemented by increasing the drivers’ commission. Uber numeral collects 20% of the fare but since the company is in a high-growth market it can afford to lower its commissions. The company can also opted for a tiered system that motivated drivers to take up more rides per day. The two focus area are an effective way of building a relationship with drivers and are a more cost effective approach than making the drivers fully fledged employees. Implementing alternative 2 that aims at fostering a strong relationship with the drivers is the first step towards changes the organization’s culture. Surge pricing can only be addressed by changing of policies to replicate those of other ride-sharing companies that do not implement demand pricing.