Executive Summary
This digital marketing plan is designed to meet the presenting needs of Uber Eats. The company in question operates in the food and beverage delivery sector, serving millions of clients across the globe. In the fallout of the COVID-19 pandemic, this industry saw an influx of clients, which led to increased cash flows across the years 2020 and 2021. Lockdowns have highlighted the benefits and convenience of such services to a broader audience. In this regard, Uber Eats has occupied one of the leading positions in its sector, being supported by its reputation and strong brand equity. Nevertheless, the growth of the industry has attracted increased competition. The threat of new entrants is particularly high due to the low entry threshold. In order to retain its leading position, Uber Eats needs a diversified approach to marketing, especially in its digital form. This plan proposed a two-tier marketing model that aims to both attract new customers and retain existing clients with social media as the main avenue.
Introduction
This report focuses on the individual marketing strategy for Uber Eats, one of the leading digital services for food and beverage delivery. One of the company’s key features is its exclusively digital presence, meaning that there are brick-and-mortar operations in its portfolio. The essence of this organization reflects modern trends of digitalization on the scale of both individual firms and entire industries. Uber Eats appeared as a branch of a well-known car-pooling and taxi provider, so a strong brand image is another critical component of its success. Nevertheless, contemporary business remains highly changeable, introducing new challenges even for prominent players on a regular basis. Uber Eats holds a leading position in its segment on an international level, being present in several developed markets across the globe. However, the particularities of the industry encourage new entrants to it, thus supporting the volatility of the market. Under such circumstances, it is essential to apply continuous efforts, both attracting new clients and retaining the current ones. The proposed marketing plan for Uber Eats will comprise both these aspects in a single framework that will help the company prevail.
Company Background Information
Uber Eats is an internationally recognized provider of food and beverage delivery via exclusively digital interaction. According to the company’s website, it functions as a branch of a larger corporation with a strong brand name. More specifically, Uber Eats is a service developed by one of the world’s largest carpool and taxi providers to meet the demand for food delivery (Uber, 2021). Within its framework, the service relies on digital communication via its website and, most importantly, the mobile application. With the help of these solutions, Uber Eats becomes a sort of marketplace that connects consumers with local restaurants and shops. The service was launched in 2014 and immediately attracted increased public attention due to the convenience of its platform (Uber Eats, 2021). All the required procedures, from selecting a local restaurant to completing the payment, could be performed in a single mobile application. However, the advanced features of the services would be less likely to generate similar publicity had the platform not been associated with the name Uber. This effective combination of strong brand imaging and cutting-edge solutions formed a synergy of success for Uber Eats.
Company’s Unique Selling Proposition
Uber Eats connects local consumers with a selection of restaurants from their areas. This way, the process of choosing a place to make the delivery becomes manifold and less time-consuming. The very concept of food delivery is not a novelty by any means, nor has it been invented by Uber. However, before the introduction of such applications, consumers had to rely on familiar venues that they had visited prior or spend much time navigating the offers scattered across the Internet. Uber Eats and similar online-to-offline (O2O) platforms eliminate the most tiresome aspect of delivery, which is the search. Now, a user only needs to log into the application to obtain access to an entire list of local offers that expands the variety of choices (de Araujo LeĂŁo et al., 2019). Moreover, Uber Eats guarantees the quality of the food, as well as timely delivery. Thus, the element of uncertainty is eliminated, and the public reaction to it is reflected by the growing number of revenues which amounts to an annual volume of $79,6 billion globally (Tandon et al., 2021). As a result, Uber Eats is one of the companies that profit the most from the growing market.
Company Positioning
In its positioning strategy, Uber Eats emphasizes the convenience of its services. On the main page of the web version of the service, the attention of the visitor is attracted to the phrase “Order food to your door” (Figure 1). This is a simple phrase that does not attempt to play with the visitor but yet, becomes the embodiment of the brand’s positioning. According to Al Battat (2019), the key elements of the delivery services’ value proposition consists of their convenience and efficiency. In the age of intense challenges faced by each individual on a daily basis, time is of utmost importance. For an average working adult, having food delivered to their door is a strong incentive to use the service. Specifically, this format eliminates such time-consuming activities as commuting and waiting for the dishes to be prepared, characteristic of eating out. With this simple approach to positioning, Uber assures its clients that they can select their meal in just a few minutes while having time for their personal chores and interests (Wahl, 2019). Simultaneously, the company will handle the rest, leaving the customer with the sole necessity of opening the door.
Market Analysis
When it comes to the food delivery service market, the possibilities continue to grow on a constant basis. As suggested by Tandon et al. (2021), this segment’s annual turnover remains stable, with the Chinese and American markets leading the trends. Uber Eats is one of the companies that profit from such tendencies, generating impressive returns. Since 2016, Uber’s annual sales have grown from $3,8 billion to $13 billion in 2019 (Uber Technologies Inc., 2021). In 2020, the company’s total revenue declined by 14%, which aligns with the overall economic crisis related to the COVID-19 pandemic. Moreover, amid the outbreak, it was the food delivery branch that helped the company remain afloat when its fundamental taxi service was impeded by the lockdown. However, the thriving image of the industry is likely to attract new entrants, while the existing competition will increase its efforts to win a larger share (Statista, 2021). Thus, Uber Eats needs to be engaged in constant pursuit of improving its position through an effective marketing mix. For this purpose, a complete understanding of the operational environment is required.
Controllable and Uncontrollable variables
From the variable perspective, all marketing-related factors are divided into two major groups: controllable and uncontrollable ones. The first category includes the aspects that can be affected by the direct intervention of the company’s management (Ikechi et al., 2017). On the other hand, uncontrollable variables reflect the integral features of the operational environment, in which a company holds a somewhat reactive position. Table 1. Reflects the current situation of the food delivery service industry from this perspective.
Table 1. Variables in Food Delivery (Techarattanased, 2020).
Porter’s Five Forces
The analysis of the five forces that affect an industry helps to establish a better understanding of the risks faced within a company’s operational environment. This model was proposed by Michael Porter as an instrumental framework that describes the key factors affecting a sector of the economy (Khurram et al., 2020). It contains five components, or forces, which are as follows: buyers’ power, competition, the threat of new entrants, suppliers’ power, and risks of substitution. According to Bruijl (2019), the framework remains highly relevant today. More specifically, it attracts the management’s attention to the external environment, which is necessary in today’s changeable landscape. Appendix I presents a comprehensive overview of the food delivery application sector from the perspective of Porter’s Five Forces. As the analysis shows, the industry sees an increased influence from most of the forces, especially new entrant threats, buyer power, and competition (Ciulli & Kolk, 2019). Thus, even the most prominent players are to remain vigilant, as their position may deteriorate in a short period without due attention to marketing.
PESTLE Analysis
The PESTLE framework is another essential source of information for the management willing to solidify its company’s position amid the intensification of competition in the operational environment. The name of the paradigm is an abbreviation that refers to political, economic, social, technological, legal, and environmental factors that affect the external environment of the organization (Perera, 2017). Appendix II introduces the PESTLE-framework analysis for Uber Eats and its industry of digital food delivery services. This data implies that the current external environment is favorable for the industry, as the range of negative effects is negated by the considerable enablers. They are represented by sufficient technological progress and positive public response to the business model, especially amid the pandemic (Kim et al., 2021). However, industry players need to retain a certain level of flexibility to comply with the ethical, political, and legal standards of different contexts.
SWOT Analysis
While the previous instances of analysis mostly reflected the position of the entire industry, marketing managers need to evaluate their particular company’s position in this environment. Thus, the SWOT analysis, which is transcribed as Strengths, Weaknesses, Opportunities, and Threats, serves this specific purpose. In other words, even though an industry may be in a thriving position at the moment, it is essential to ensure that the company utilizes this potential to a full extent. In this regard, the realistic perception of the SWOT components allows for a more likely achievement of competitive advantage through emphasizing strengths, negating weaknesses, seizing opportunities, and eliminating threats. Appendix III presents the SWOT analysis for Uber Eats in is the current state. The analysis suggests that Uber Eats is in a strong position at the moment, which is largely conditioned by the strong brand equity of Uber. It is an internationally recognized network, meaning that local consumers are likely to use a familiar service when traveling. However, the existing threats pose new risks, mainly through intensifying competition that benefits from similar industry-wide trends.
Marketing Planning Aims and Objectives
Audience Analysis
In light of the analysis presented above, it is possible to conclude that Uber Eats holds a steady position in a growing industry. However, to keep this status, the company needs to intensify its marketing-centered efforts with two key objectives: retaining the current audience and attracting new clients. In this regard, a thorough understanding of the consumer profile is of paramount importance. Demographically, the core of target audience of the service comprises young adults between the ages 21 and 35. Baldwin (2018) puts a particular emphasis on the psychographic and behavioral characteristics of this public. More specifically, there is a large portion of college students whose living conditions make it difficult to cater to themselves.
Young adults forming the habit of food delivery service use retain it during their professional careers. With much time dedicated to commutes and work assignments, they value the efficiency of Uber Eats, as most meals are delivered within 60 minutes. Perch (2020) adds that the target audience of this product is up-to-date with modern trends, energetic, and open-minded. However, focusing on this particular segment reflects the “retain” element of the strategy, whereas new potential segments to explore deserve additional coverage.
Marketing Objectives
As implied by the previous discussion, Uber Eats faces two-tier marketing objectives. The first aspect is related to retaining the current audience of the service. Spoken differently, young and energetic people with a developed understanding of digital solutions need to remain loyal clients of the company. At the same time, the second tier is associated with older consumers who are not yet on par in terms of digital literacy and trust in online delivery. Accordingly, a considerable share of the marketing efforts is to be directed at this second objective of attracting a new audience. Uber Eats needs to maintain the balance between first-time and returning clients, effectively combining the double-tier approach to maintain a stable supply of customers. While regular clients are important, fresh additions to the audience will be necessary in order to ensure growth and prevent stagnation.
Strategy for Extended Marketing Mix
Based on the data presented above, namely the current status of the industry and Uber Eats, in particular, as well as the marketing objectives of the company, it is possible to propose a strategy for the extended marketing mix. This strategy reflects the reality of today, including the fallout of the COVID-19 pandemic and the increasing competition between food delivery providers. As an international leader in the segment, Uber Eats cannot afford to relax, as the low entry threshold of the industry requires the company to stay alert and maintain an active presence on all levels.
Website and Application
For most companies in today’s economy, a fully functional, user-friendly website is an absolute must. In the case of Uber Eats, the importance of this element, as well as the related mobile application, becomes even higher. Shaltoni (2017) explains that a website is the face of a company, often becoming the first avenue of the brand’s presentation to a new customer. The current appearance and functionality of Uber Eats’ page are minimalistic yet efficient. This design holds enough potential not to repel new, older clients who are not as accustomed to various web pages. They seek a simple site that provides them will all the necessary information without having to go deeper into its layers. For the younger clients, however, Uber Eats may add several extra sections of its website that will address the vision of the company, as well as its history and values. An emphasis on providing equal opportunities for all while supporting sustainable instantiates needs to be reflected on the website. As of now, these elements are not present, making it difficult to trace this information even for more experienced users.
Social Media Marketing
Websites and traditional marketing avenues retain their importance today. However, modern trends dictate that a successful company needs to maintain a stable social media presence (Barnhart, 2021). For Uber Eats, the choice of the specific social media outlet will depend on the particular element of the two-tier objective to address. For the younger audience, to retain, Instagram is an evident choice. According to the Pew Research Center (2021) Instagram is twice as popular among adults aged 18-29 than among the 30-49 category. Thus, a targeted advertisement with direct links to open or download the Uber Eats application placed in Instagram will promote the retention of clients. When scrolling through their feed, appealing images of food (burgers, pizza, and others) will appear, prompting the user to place an order in real-time. Da Silva Monty (2018) mentions that the vivid imagery of Uber Eats is an important component that prompts customers to make purchases. Thus, visual elements will be dominant in the advertising materials.
Facebook, however, is the most popular social network among older audience from the “Attract” group. For them, mere images of food are not enough since they do not have the habit of ordering deliveries. Instead, Uber’s targeted banners will briefly introduce the benefits of the platform in a sentence along the lines of “No time to cook? That’s what we’re for” or simply “Any food at your door in less than an hour. Wanna try?”. Most clients of this age group are merely unaware that such services exist and they are just as cheap as eating at the venue. If Uber Eats is the first to introduce them to the benefits of regular delivery, the company will see an influx of new wealthy customers.
Uber Eats Marketing Mix
Considering the data presented and analyzed earlier, Table 2 introduces the Extended Marketing Mix for Uber Eats in light of the industry’s context.
Table 2. Marketing Mix for Uber Eats
Allocation of Budget as a Managerial Tool
Budget allocation is an important managerial tool for several key reasons. First of all, it helps the organization understand its priorities. When the budget is drafted, key decision-makers see the distribution of funds between the various spending categories. This way, they understand which objectives hold the highest priority within the next fiscal period. Second, efficient and contingent budget allocation is an instrument that helps to mitigate problematic points of a company’s performance (Varma et al., 2018). Certain objectives may be deemed unattainable as long as the responsible units do not have the required resources. It falls upon the management to identify such situations and provide their employees with sufficient resources to complete the task through higher budgets (Shankar, 2020). The contrary is also true since excessive spending undermines the performance and integrity of the company.
In the case of Uber Eats, the marketing budget is to be separated into two major categories: Retention and Acquisition. The first share will be allocated to the youth-centered campaign that aims to prevent the current clients from opting for competition. Simultaneously, the Acquisition budget will serve to develop a campaign to attract new customers from higher age segments. Considering the differences in the nature of the two objectives, such a budget division appears relevant. The exact proportion will depend on the findings provided by Uber’s analysts, who will provide the management with the current state of needs in each segment. At this point, a total budget of $10 million per month is proposed for the initial stage, with $4 million allocated to Retention and $6 million used for Acquisition.
Performance Analysis and Measurement of Progress
The analysis of Uber’s marketing performance will be completed with the help of relevant metrics. The proposed combination includes quantifiable, precise data that will reflect the efficiency of all procedures. Table 3 represents the main metrics that will be used for the measurement of progress.
Table 3. Performance Analysis Metrics
Recommendations and Conclusions
Overall, Uber Eats, will benefit from a diversified, two-tier marketing strategy. The first component is Retention, it aims to keep the active customers of the company by proposing a better value across their lifetime. The second aspect is called Acquisition, and it targets new customers who are not yet familiar with the benefits of digital food delivery services. The combination of the two elements will make the marketing mix of Uber Eats more efficient, preventing the stagnation of its growth and customer base. This way, the company will see better results in the long term, maintaining a leading position in a highly changeable industry.
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Appendix I
Porter’s Five Forces in Food Delivery Sector
Appendix II
PESTLE Analysis
Appendix III
SWOT Analysis for Uber Eats (Kalimuthu & Sabari, 2020).