The term is largely used amongst marketing
practitioners as an indicator of the extent to which a firm implements
marketing concept. Such firms are thus, perceived to possess superior
market-sense and consumer-linking capabilities (Lara et al., 2004).
Marketing concepts are in five components with each
component varying in their function.
The production concept is largely involved with operations
with a major proposition that customers will choose products and services of
less cost and high level of availability. In effect, the focus is on producing
as many units as possible thereby utilizing economies of scale maximising
profitability (Bhasin, 2017).
This concept establishes that consumers will opt for
products of comparatively better quality, performance, and features. The concept is mostly identified within the
electronics and mobile handsets markets. Thus, much emphasis is placed on
quality, performance, and innovation and as such, the production function
solely aims at producing to meet customer preference.
The Selling Concept, on the other hand, maintains, that the
consumer will only by enough if persuaded to do so through the selling process.
This concept thus supports the aggressive
promotion or selling as the sure way to offer products to the consumer.
However, with this approach, the customer will certainly buy the product after
the persuasion and will refuse to recommend it if dissatisfied.
This orientation employs the method of gathering of
information about needs and desires of the consumer including information on
the evolution of other factors of the environment based on which products are
made available. The concept relies on a pull strategy targeted at making strong brand customers themselves prefer over
every other competitor (Reinares et al.,2004).
b. Orientations adopted by Addison Lee
Addison Lee employs a number of approaches in its bid to
enhance its chances of winning the market. Firstly, Addison Lee is employing
the production orientation approach which seeks to ensure that a product is
widely available and at a cheaper cost.
This is evidenced by their operational
decision to increase their number of fleet drivers from a little over 3600 to
4450 as well as introducing off-peak
fares. By this means, their services are close to the consumer with better
Secondly, the company has adopted the selling
orientation which involves the rebranding through catchy advertisement to draw
the customer to the service or product being provided. This is also evidenced by the use of a bold new premium look and feel
with logo and colors simply promising the
customer excellent customer service delivery.
The product orientation approach is also identified
evidenced in the numerous forms and usage of their services i.e. taxi cabs, motorbikes
etc. as well as the introduction of an
app through which about 50% of the business being carried out and a quarter of
traffic being generated through their website
2. Marketing Environment analysis
The marketing environment of a business comprises an
internal and an external environment. The nature of internal environment
depends on the nature of company or business. It includes owners, workers,
machines, materials etc. the external environment consists of macro and micro
divisions which encompasses factors relating production, distribution, and
promotions being offered.
As a strategic tool, the analysis helps ascertain all the
external and internal elements, which can affect the organization’s performance.
The analysis largely focuses on determining any threats or opportunities that
may pertain. These evaluations are subsequently translated into the
decision-making process. Through the analysis, strategies are aligned with the
firm’s environment (Pahwa 2017).
(i)Importance of Marketing Environment Analysis to Addison
Several benefits may be derived from this form of analysis
For Addison Lee. For the purpose of proper planning, it is imperative that one
understands the firm’s environment(Nale,2005).
It also helps reduce disagreement between the business and
customers and helps in understanding consumer behavior
The process will also help in venturing into other markets such as London taking advantage of the
With every individual market, there is fierce competition
to be the best, thus, a better understanding of the market is extremely
beneficial for Addison Lee to appreciate the prevailing competitions as well as
the competitors’ urge over them
(ii)Effect of Macroeconomy
on Addison Lee
Ever business without a doubt is affected by the macro
environment. It has to do with many factors which, left unchecked, can destroy
a business (Fue, 2016). The overall impact of the macro environment on a
company depends on the extent of linkage.
As already established, economic factors affect every
business. The loss of license by Uber is a macro environment factor and a major
opportunity for Lee. This gives Addison Lee a bigger market within which to
Social and cultural forces, on
the other hand, may consist of the impact products and services of a business
has on the environment.
The product or service must be harmless to the society.
With the intended increase in a number of
fleets, Addison Lee is supposed to ensure there is less air pollution from
vehicle exhaust. If not checked, this
might raise concerns about environmental
pollution which affects the society
b. Impact of the microenvironment
on Addison Lees
The case clearly presents Uber as a major competitor to
Addison Lee. With the apparent loss of license in a bigger market such as
London, Uber is expected to put up a very tight competition in areas where the
two companies operate as well as discovering new territories and controlling
them ahead of Addison Lee.
Secondly, the strategy to increase fleets, to some extent,
puts Addison Lee at the mercy of vehicle manufacturing companies – the
supplier. The realization of the increased fleet strategy largely depends on
the supplier’s ability to deliver in order to meet Addison Lees’ demand within
the expected time frame
c. Internal Environmental Factors
The internal environment of the business encapsulates all
the forces and factors within the organization
which affects the generality of its
operations. These components may be grouped under the Five Ms. Namely: Men,
Money, Machinery, Materials, Markets(Pahwa,2016)
Considering the expansion of its business to consumer
offering, with 50% of the business undertaken online via the company app and
the company website, this provides Addison Lee with adequate
machinery and this serves as a huge advantage since volumes
of business can be carried out both within the physical environment and online
With over forty years of operation, Addison Lee is without
a doubt a fully grown company with obviously a powerhouse of experienced
individuals who have gathered experience within the market. This will serve as
again a huge advantage for the company to excel within their area of operation
3(a)Market segmentation and its importance in planning a
The whole science of dividing an overall market into
customer subsets or segments, with similar characteristics and needs
constitutes Market segmentation. The process involves intense market research
through the use of characteristics known as segmentation bases. These may
include age, gender, income, geographical area etc. This enables the business
to discover the segment and suitable
products for customers (Eliya,2006).
With the announcement of a new objective for the company to
grow Addison Lee service business by 3% by targeting a younger demographic of
16 – 25-year olds, the segmentation process will help Addison Lee narrow down
its target market, identify the consumer needs of the market and satisfy them
b. Segmentation approaches for segmenting
Two basic approaches may be used to determine how to
segment the market. These are “Consumer characteristics” approach as well as
“consumer response” approach (Sharma, 2015).
(i)Consumer Characteristic Approach
Consumer characteristic largely measures the geographic,
demographic and psychographic features of consumers. These characteristics
describe the consumer as regards “Where they live?” “Who are they?” “How they
behave?”(Sharma, 2015). With this approach, Addison Lee would be able to
identify the exact demography of the target market which is 16-25-year-olds. This would in effect enable
the company knows their behavioral needs as regards the service the
company renders. The category of clientele which encompasses young individuals
who may not be financially independent and as such the company can provide a
specialized payment arrangement which would attract this age group.
(ii)Consumer Response Approach
The consumer response approach may be different from
consumer characteristic approach in that, the response approach bothers on what
causes a consumer to buy a product then
who the consumer is. Thus, the consumer response is of much importance and
serves as the bases for segmentation. The responses may vary and they include
loyalty, benefit, occasion etc.(Sharma, 2015).
In this regard, the use of the consumer response approach
would enable the company to identify why
this age group may want to patronize their services. The company thus
ascertains a reason for which service should be rendered in a particular manner
with the sole aim of winning this age
group and giving them sufficient benefit upon usage of the service provided.
4 (a)Marketing mix – The 7Ps
The mix involves getting the right product or and/or service, where needed, and at what cost.
Sufficient knowledge of the business plan will help in getting this done
well(Hanlon,2016). The seven Ps are as follows;
Product – a product is only worth meeting the customer
expectation. Thus, the product should work to serve the exact purpose for which
it was made. Addison Lee offers a swift online delivery service.
Place – The product should be readily available where the
target consumer finds it easiest to shop. This may online, marts etc. Addison Lee is present both physically and online through its new app.
Price – The Product should simply represent value for
money- not necessarily being the cheapest available. A product is only worth
what consumers are willing to buy (CIM,2004) the company, therefore, offers off-peak weekend fares.
Promotion – the whole art of bringing the product or
service to the attention of consumers is crucial and this may include;
advertisements, sales promo etc. Addison Lee has employed a rebranding strategy signifying their desire to
give customers the best of service
People – the success of a business is largely dependent on
the caliber and capabilities of the
personnel running the business. With a forty year operational history, the
company can boast of an extremely experienced crop of human resource.
Physical Evidence – Every form of service may consist of
physical elements regardless of whether the bulk of the offering is tangible or
not. The service can be measured by its completeness. In this light, Addison
Lee should ensure prompt and regular delivery of service
(b)Recommendations On The Market Mix
Considering the revised objective of the company, it is
imperative certain changes be made in the market mix to aid achieve desirable
The company must ensure the service is tailor-made to suit
the new target audience (youth). This can be done by providing minivans with less intimidating features
suitable for individuals of that category. The use of economical vehicles with
moderate luxury would be appropriate. With the youthful clientele, it is also
imperative that the service becomes flexible and easy to assess. Safety should
be key to much assurance of quality not
The target market of youth brings to fore the issue of
pricing. Clearly, most individuals within this age bracket are mostly students
and may be without a job or a less-paying one. Pricing may, therefore, be done
factoring attractive and cheaper fares as well as special packages for special
occasions. Owing to the fact that parents may have to end up paying, the
pricing should be so reasonable such that parents wouldn’t shudder at making
their children opt for the service.
Promotions are to be made via social media platforms,
schools, youth centers as well as specialized programs sponsored by the company.
Free services may also be rendered at certain times as a means of promoting the
brand. Exceptional delivery of service would also go along to sell the brand giving the customer a reason to stick to
the company (CIM, 2004)
In conclusion, Addison Lee has operated for quite an
appreciable length of time with sufficient experience to determine the right
marketing strategy to thrive and beat the market within which it finds itself.
With the use of the right market mix strategic approaches, Addison Lee is
undoubtedly a force to reckon with in this dynamic service industry