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Uber Organization’s Service Marketing Analysis

The company that I chose is Uber because it is one of the most successful examples of sharing economy that evolves currently, and I used it several times before. Uber is an international ride-hailing service company founded in 2009 in San Francisco, USA. With the Uber application, users of mobile apps have the opportunity to order a car with a driver and track its location. GPS systems determine the location of the customer, the timing of the arrival, and the estimated cost of the trip. Revenue of an organization in 2018 figured 11.27 billion dollars, while net income was 997 million dollars, according to U.S. Securities and Exchange Commission (2019). The company has more than 22,263 employees worldwide and operates in 63 countries.

The service company’s branding strategy is open: the company interacts with the media transparently, reporting on positive and negative issues. Uber pays attention to the opinions and wishes of consumers, which it collects via feedback forms after using the application. The company positions itself as a service aimed at improving urban transportation by reducing traffic and air pollution, which contributes to the service’s branding as being sustainable.

Interestingly, there are disputes regarding the absence of drivers’ salaries. Local officials in different countries are always trying to ban the organization because of the issue. However, Uber has the main line of defense, which is called the Travis’ Law, as stated by Mudric (2020). This is the hypothesis that people love Uber so much that they will be very unhappy with the government if they ban it. Thus, brand recognition can be considered strong because clients of the company become its advocates.

The company uses brand extensions to strengthen its branding strategy. Uber has several other services that are not related to the carriage of passengers. The main idea that unites these services is the trend towards the “uberification” of life through the promotion of service aggregator platforms that replace traditional business models and connect service providers and customers through the app. Apart from peer-to-peer taxi services, the organization provides food delivery and electric bikes and scooters rental through the application.

The company’s services marketing can be evaluated against four key components that are intangibility, inseparability, perishability, and variability. Uber’s primary service cannot be “felt” before the client’s purchase decision. Customers can read reviews in the application regarding each car or driver, but the experience of the service will still be intangible as defined by Lehtinen and Järvinen (2015). To improve this area, the company can encourage clients to give a more open and honest review every time they use Uber so other customers can feel the service. Production and consumption of the organization’s service are inseparable because the customer and service provider perform their actions simultaneously.

There are significant issues that sometimes disrupt Uber’s operations, including accidents. Therefore, to manage inseparability, Uber should continuously track services’ quality and educate both drivers and clients to avoid conflicts. The company’s services are perishable because when they are not consumed, they do not generate value for the company. Uber suggests sharing services for passengers and reservation options, which mitigates the loss of revenue. What can also be recommended is the utilization of complementary services, such as food delivery by drivers. Finally, the variability of taxi services is vast, depending on workers’ and customers’ behavior. Uber is aiming to provide a similar experience for all clients; however, it can be ambiguous. To improve the situation, managers should pay attention to standardizing services and create even more customized and narrowed options (price, class, features) for customers so they would know more precisely what to expect from transportation. Overall, Uber has managed to establish the marketing of services in several spheres that are successful around the world. Even though some changes and improvements should be introduced, the company can be viewed as efficient.

References

Lehtinen, U. & Järvinen, R. (2015). The Role of Service Characteristics in Service Innovations. Nordic Journal of Business, 64(3), 3-15. Web.

Mudrić, M. (2020). Uber – Brave New Service or Unfair Competition. Ius Gentium: Comparative Perspectives on Law and Justice, 76, 1-12. Web.

U.S. Securities and Exchange Commission. (2019). Uber Technologies, Inc. Form S-1 Registration Statement. Web.