Marketing: Electric Scooter 

Last Updated on 03/23/2023 by Sophia

 

Marketing: Electric Scooter 

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Marketing: Electric Scooter 

Exercise 1 (counts 25%)

What is the idea (differentiation factor) that makes your electric scooter popular?

NB: You are also free to adjust and improve the idea based on any feedback and reflections you may have made afterward. Alternatively, you can come up with a whole new idea.

The common electric scooter brands in the Norwegian market are normally driven while standing. They also have a small battery that holds less power. This means that you cannot use them for longer distances while standing and due to battery drain. Therefore, they can only be used to commute around the cities for short distances. My electric scooter comes with a seat and a standing platform. This is meant to attract older adults to use the e-scooters as they have not been catered for in this industry. The scooter can have the seat removed and ride it while standing comfortably. The scooter is strong enough to pull a load hooked to it with a maximum towing capacity of 100kgs. The towing carriage is an alternative package for the premium version and can be hooked on the electric scooter whether with a seat or without. Therefore, it can be used to go shopping and carry some heavy goods comfortably. Other scooters have a low load capacity and thus it is difficult to use them when carrying more shopping. 

The electric scooter comes with a larger lithium battery that is 60V and can last for seven hours in the city and five hours on rough terrains. In the economic model, the scooter can manage to travel for ninety kilometers while in off-road mode, it can travel for sixty-five kilometers. To ensure that the rider enjoys the technology that the scooter comes with, there are USB ports that allow phone charging. There is an extra battery pack for emergency and can be connected to the scooter and give it a one hour ride. The scooter can be charged by both alternative and direct current. Therefore, for those who would want to go on an adventure for several days, they can use a small solar panel to charge it and enjoy the rides. It is the ultimate ride for off-road driving.

Another key feature is larger three wheels and shock absorbers than those on the common scooters. The scooter comes with two types of tires for both city and off-road rides. The rough terrain tires are eleven inch CST which is popularly known worldwide. For the city rides, it has Kenda tires. The CST tire is meant to make the electric scooter usable in off-road rides when the owner wants to go outside cities for adventure. They have a better grip on loose soils and muddy areas and thus enhance the strength of the electric scooter. The rear has two wheels which increase stability. They have independent suspensions and thus improve the ride. The shock absorbers on the rear wheels increase cushioning when driving on rough terrains and thus there is minimal shacking when riding. 

Lastly, my electric scooters have very safe and strong due to the diversity of use. It uses the CNC integrated electric control oil braking system which enables quick stops and evasions in traffic and other areas. This has helped to minimize accidents while using scooters. The scooter is smooth to control and can be ridden by teenagers and adults of all ages comfortably on any of the terrains. 

Case (part 2 of 2)

The investor liked your sale and goes in with a significant amount to realize your own electric scooter. She joins the company as marketing manager and asks you to make three more studies that will build on the idea from Task 1. She does not want long studies but rather wants summary and concise answers (500-600 words) where you apply learned marketing theory.

To guarantee the sales of the electric scooters, it is important to understand the marketing mix which is an essential tool for every marketer (Kucuk, 2016). The 4Ps are commonly used in the marketing mix theory. The first P is for Product and in our case is the electric scooter which is favorable for bot city and other rough terrains. The product is fit for human use as it has been tested and verified. It has been presented in the market and sales are high as most of the stocks are already sold out. The second P is for Place which is Norwegian cities and the adventures outside the cities. A product requires having a definite place where it is consumed. The target consumers have been identified and the company wants to focus on the older adults who would feel comfortable riding a scooter while seated. Also, it is for the enthusiast off-road adventurists who love to experience an electric scooter on the mountains. 

The third P is for Promotion which involves promoting the product in the market for it to sell successfully. As the marketing manager, the investor will be pivotal in the advertisements, sale promotions, and social media. The company has gained good grounds in marketing and thus has become known by many consumers. The last P is for price. Providing such a product at an affordable price is challenging as there are many electric scooters in the market. However, the feature of the electric scooter and the reputation it has gained is ensuring that the sales are made. The scooter sells at slightly higher but affordable prices for low to medium-income earners. There is another marketing Ps in the mix which includes People, processes, and productivity.

Using Porter’s five forces of competition in the market, the company has been able to strive despite there being popular electric scooters. There are many competitors in this volatile sector. Many companies have established ground in the Norwegian cities and thus offer stiff competition. However, only a few have catered for off-road electric scooters making our company have a competitive advantage. The company is relatively new and is also facing threats from other new entrants in the market. This has posed a challenge which has enabled us to perfect our scooter making it more efficient and reliable. Due to the high number of competitors and new entrants in the market, the threat of substitution is inevitable (Mulders, 2019). However, due to off-road capabilities and bigger power storage, it is difficult to be substituted. There are many suppliers who can provide us with different parts and hence no need to worry about monopoly. There are many buyers in need of the product in Norway. The biggest challenge has been financed to feed the market adequately. 

The Ansoff matrix has been essential in the growth and development of the company. It helps in understanding marketing penetration for the electric scooter by evaluating the existing products in the market and their sales. We have increased the volume of sales by setting more outlets. Product development has been key as the market is very competitive (Cordell & Thompson, 2019). We are planning to expand the product portfolio by advancing the existing scoter and bringing in new and different models. Diversification in this field is our priority and would want to dominate the industry in Norway and the global market. Market development has been enhanced by the marketing mix strategies employed by the company. 

Exercise 2 (counts 25%)

First discuss how Figure 14.4 (Model for service quality, see Appendix 1) can be used as a tool to achieve high service quality and then briefly explain what you want to do to reduce the five mismatches.

Service quality involves comparing the perceived performance against perceived expectations in an organization. In a competitive market, companies do not compete for customer experiences but in the provision of high-quality services. The model is formulated on the basis of different aspects. Customers judge the services based on these dimensions and if they are not satisfying, it means that the service quality is poor. One of the dimensions is reliability which involves how the organization can be gauged as accurate in what they say and being honest with their customers (Oskooii & Albonaiemi, 2017). It is necessary to make and fulfill promises on the services such that the consumers can depend on you. Being responsive to customers’ demands and complaints is essential as it makes them feel that their concerns are essential. There is needed promptness, willingness, and availability to respond in good time. 

Assuring customers of the fulfillment of the promises increases their confidence and trust in the organization. This is enhanced by demonstrating competence by the employees in the work they are doing. When customers know that the service provider is skilled and understand what is expected, they are likely to rate the service high. Employees are supposed to be polite with the customers when communicating to establish a good rapport. Communication is essential in any company as it demonstrates the kind of service being offered and determines its outcome (Won & Lee, 2017). A constant engagement with customers in communication helps in knowing your customers and their needs and thus improves on the weaknesses of the company. Lastly, security is vital to consumers as they want to trust that the company will protect their products until they reach them (Oskooii & Albonaiemi, 2017). All these dimensions are featured in the model service quality and when adhered to, the company is able to achieve a lot in service delivery and its quality. 

The model of service quality has five mismatches and the first gap is that of knowledge. When the company has inadequate or a wanting in the knowledge of the customers’ needs it is unable to meet their demands as expected. To mitigate this mismatch, it is necessary to conduct extensive market research on consumer behavior to gain insight into what they expect from the company (Won & Lee, 2017). Another mismatch is that of standards which occurs when the company formulates a wrong idea about the expectations of the customers. This leads to the development of a wrong product that is not to the standards expected. It can be prevented by ensuring that you identify a market gap and seeking advice from experts to ensure that you have a good idea that meets the expected standards. 

Communication mismatch occurs when the company sends a message externally and it is interpreted wrongly. It can also occur when the company makes promises that are not achievable. This can be solved by ensuring that every communication that is released is followed by a good elaboration to the consumers (Won & Lee, 2017). Every promise made should be in line with the product being made. The delivery gap occurs when consumers get products delivered to them and are different from their order. A good inventory system would prevent wrong deliveries to the customers. Lastly, is the satisfaction mismatch which occurs due to the service received against the service expected (Oskooii & Albonaiemi, 2017). To prevent dissatisfaction, it is crucial to ensure that every service requested meets or goes beyond the expectations of the consumer. 

Exercise 3 (counts 25%)

Explain how you want to set the price target and choose a pricing method? Justify the choices.

The price target is set based on the use of the electric scooter. For city rides, the scooters do not engage in tough terrains as the roads are all-weather and smooth. The servicing of the scooters is therefore relatively cheap. For those that are engaged in off-road riding, the prices are higher these scooters require to be reinforced to minimize damages caused by hard surfaces on the terrain. They require more servicing on the damaged parts and hence the rise in prices. Also, the pricing is influenced by the extra set of equipment such as the carrier, extra batteries, and any other addition. The premium version is slightly expensive than the low-class version. 

The pricing method employed is cost-plus pricing. This is a method used by companies to make the maximum amount of profit. This is done by increasing the production levels so that the marginal costs and revenue are equalized. The price is set depending on the demand curve (Li et al., 2015). This method is fairly easy to use and does not require extensive information about the company and the market. To get the price, you calculate the cost incurred in the production process and then add it to the profit percentage and get the final price of selling. It can occur in two ways namely full cost pricing and direct cost pricing. Full cost pricing uses the variables and fixed costs and adds the percentage difference between the cost of the product and the selling price 

Direct cost pricing entails the addition of variable costs to the percentage of the markup. It is not favorable to use as it eventually leads to losses. It is commonly used in a market where competition is very stiff (Marshall & Jacobs, 2016). It is easy to use and does not take into account whether there are potential customers who are going to buy the product or not at the given selling price. With this method, it is easy to set a price that will favor both the company and the consumer and thus minimize losses. The cost of production is usually known and the next step is normally adding some money on top of it as the profit. The extra money added can vary depending on the market prices for similar products. Most startups begin with a small profit margin to ensure that they attract potential customers. The profit margin is then increased gradually depending on the changes in the market and the decision of the management. 

Companies use the cost-pricing method mainly due to its simplistic nature in determining the selling price. With this method, it is difficult to make any losses as the final cost of production is known. The cost has added a markup which is agreed by the management (Marshall & Jacobs, 2016). This method is considered the most sensible technique that guarantees maximum profits. However, the method does not account for whether consumers will buy the product at that price or not. The company may incur a cost that is higher than the selling prices for similar products. Since the company has to make a profit, it will have to add the markup and this could raise the price above what an average consumer can afford (Li et al., 2015). Therefore, there is a need to try the production of goods in small quantities to determine the cost of production. 

Exercise 4 (counts 25%)

Take as a starting point Figure 19.3 (Eight steps to develop effective communication, see appendix 2) and explain how you would design steps 1, 2, 3, and 6 in a possible launch campaign.

Step one is identifying the target audience who are the consumers of the products to be produced. In this case, I would first create a customer profile which comprises determining and grouping the potential customers in terms of factors such as age, location, and gender. The customer profile will help to get information on the kind of product and the pricing to be set. The second step is selecting the target group or a cluster that is to become the consumers of the products. The target audience is identified in both concentrated and differentiated markets. Then the information collected is consolidated and identify the specific market to be satisfied (Luo et al., 2019). The identification of the target audience is essential as it helps in minimizing venturing into a market that has no consumers. 

Step two is the determination of objectives. It is important to plan and have effective coordination. There need to have objectives for effective communication. The main purpose of communication in a business is to inform potential consumers of the existence of the company and its products. Brand awareness is essential and is achieved when there is a good communication strategy. Persuading the customers to buy the products from a company is a challenging task. However, with well-formulated communication strategies, the consumers are enticed to try the product and could potentially become regular customers. Also, being objective persuades potential investors to join the company. Another objective would be to build a strong relationship with consumers, investors, and suppliers. This helps to grow the company rapidly and thus overcome the competition. 

Step 3 is designing communication. This involves setting communication goals and objectives which vary with the target audience. Then there is a need to develop messages that target and speak to the target group. It should touch on their needs so that they can buy and get satisfied. The communication needs channels, approaches, and tools to ensure that it reaches the target audience. The resources available are mapped for use and can include experts and marketing tools. The communication design requires to be closely monitored to determine the achievements and the timelines as indicated in the action plan (Masami, 2019). Without a good communication design, it is difficult to determine how to reach out to customers and potential investors.

Step 6 is the determination of the media mix. Media is essential in the communication process for a company to the market. It is necessary to find the right media mix. Multiple media platforms such as television, radio, and social media can be used to convey the message. The choice of the right media to incorporate is determined by the identified target audience. With current data on the target audience, it is easier to determine the media mix to use. Poor data could result in using the wrong media mix and thus fail to reach the intended audience (Steinberg, 2012). Using a single media channel can be harmful to the company’s communication strategy as not all the target audience uses that platform. Therefore, there is a need to incorporate several media channels 

 

References

Cordell, A., & Thompson, I. (2019). Ansoff matrix. The Procurement Models Handbook, 45-47. https://doi.org/10.4324/9781351239509-14

Kucuk, S. U. (2016). Marketing and marketing mix. Visualizing Marketing, 3-7. https://doi.org/10.1007/978-3-319-48027-5_2

Li, L., Lin, X., Negenborn, R. R., & De Schutter, B. (2015). Pricing intermodal freight transport services: A cost-plus-Pricing strategy. Lecture Notes in Computer Science, 541-556. https://doi.org/10.1007/978-3-319-24264-4_37

Luo, J., Pan, X., Wang, S., & Huang, Y. (2019). Identifying target audience on enterprise social network. Industrial Management & Data Systems119(1), 111-128. https://doi.org/10.1108/imds-01-2018-0007

Marshall, R., & Jacobs, F. (2016). Cost-plus pricing. SSRN Electronic Journalhttps://doi.org/10.2139/ssrn.3141407

Masami, Y. (2019). Designing the communication of traditional ecological knowledge. Routledge Handbook of Ecocriticism and Environmental Communication, 279-290. https://doi.org/10.4324/9781315167343-24

Mulders, M. (2019). Competitive forces, porter. 101 Management Models, 74-77. https://doi.org/10.4324/9781003022022-18

Oskooii, N., & Albonaiemi, E. (2017). Measuring the customer satisfaction based on SERVQUAL model (case study: Mellat bank in Tehran city). Innovative Marketing13(2), 13-22. https://doi.org/10.21511/im.13(2).2017.02

Steinberg, M. (2012). Media mixes, media transformations. Anime’s Media Mix, 135-170. https://doi.org/10.5749/minnesota/9780816675494.003.0004

Won, E., & Lee, J. (2017). A study on integrated model of SERVQUAL and service blueprint. Journal of Industrial Design Studies39, 125-136. https://doi.org/10.37254/ids.2017.03.39.13.125