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Convenience Cruiser Delivery Service By: Kevin Cassidy, Chris Brown, Kasey Kruckenberg, Logan Johnson, Carly Mausolf, Sarah Reinelt
Marketing 305Section 22286253
Consumer Behavior Final Project
Table of Contents
Introduction of Product………………………………………………………………………………………………………4What is your product?.………...………………………………………………………………………………………..4What need is your product satisfying?...............................................................................6What will be the consumer’s likely motivations for purchasing your product?.................7What are your customers attitudinal responses to your product?....................................9
Target Market..........................................................................................................................12What is the target market for your product?...................................................................13Why is the selected target market the most appropriate segment?................................15What is your intended target market strategy?...............................................................16
Situational Analysis................................................................................................................18Macro Environment Trends..............................................................................................18Social/Cultural Environment.............................................................................................18Demographic Environment…………………………………………………………………………………………..19Economic Environment.....................................................................................................22Technological Environment..............................................................................................22Political and Legal
Environment........................................................................................23Competitive Environment.................................................................................................25Detailed competitive evaluation, including detailed assessment of product, price,
promotion and distribution..........................................................................................................27Decision Making Analysis......................................................................................................32
What type of decision-making type should be associated with your product?.................32What are the marketing implications of this decision-making type for your product?....33
Marketing Mix Strategy...................................................................................................................37Product Positioning...........................................................................................................37
What will be differential advantage of your product?..........................................37How will you position the product relative to the competitive alternatives?......38
Pricing Strategy.................................................................................................................39 At what price to you intend to offer your product? Why?...................................39
Promotional Strategy........................................................................................................40 What components of the promotional mix do you intend to use to promote your product? Why?.............................................................................................40
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What is your message?.........................................................................................41How will you get the consumers’ attention?........................................................41Facebook and Twitter Example...........................................................................42Social Media........................................................................................................44Convenience Cruiser Ad......................................................................................45Print Advertising..................................................................................................46
Distribution Strategy.............................................................................................................46 Through what type of distribution channel do you plan to make your product available? Why?............................................................................................................................................46
Works Cited.........................................................................................................................................47
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Consumer Behavior Product Project
Introduction to Product
What is your Product?
Have you ever needed a convenience item but driving to the store was out of the
question? Well the six of us have come up with a solution, which will benefit residents in
college towns around the United States. Convenience cruiser is a unique delivery type service
that interacts consumers with a service that lets them order convenience items at any time of
the day. People will be able to contact us whenever they desire and be able to order whatever
they want, whether it be a house hold item or even food. The residents will have to verify that
they are actually a student and can do this by entering their student email address. After they
have signed up they will be given a number which puts them through to our customer
representatives. The residents are asked to give a location, phone number and we will send
them a confirmation email with everything they need. We will be similar to a Schwann’s truck
where everything will be kept on the truck for delivery. We will have a warehouse to keep
everything in bulk so that we can constantly pack the trucks without worrying about running
out of products. People can pay with a credit card, debit card before hand, or cash upon
delivery. Once the student places an order he/she should expect to receive their item within 45
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minutes, depending on what that item may be. The difference in our service will be that there
will not be a delivery fee charged to consumers. Consumers will be charged a convenience fee
depending on the time of the day they order, since our service runs twenty four seven. We will
deliver to anywhere within the college town including dorms and off campus apartments and
homes.
Residents can also order online which will make it easier for the users who do not have
access to a smart phone, or feel more comfortable on their laptop. Small convenience stores
tend to stock between 2,800 to 3,200 items, resulting in about 400 categories. However, we will
not be carrying as many products but we will try and cap out at about 1000 items. Some
important categories we are trying to stress belong to the egg and dairy department and simple
over the counter medications such as aspirin and allergy medications. We will also carry some
canned goods, lunchmeats, drinks (most likely non-alcoholic), sweets, snacks and other items
such as batteries, condoms, etc. We will try to utilize the most wanted products in each
category by looking into the most bought items from stores, such as gas stations and 7-11’s.
The idea behind convenience cruiser is to allow residents to be able to access these types of
items, and to keep residents safe by lessening the chance of people driving drunk to try and go
buy some of these items. We want to help keep people safe and with our delivery service we
are hoping to keep drunk driving accidents to a minimum.
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What need is your product satisfying?
A need is defined as a gap between an actual state and a desired end state. As we stated
earlier, the three needs our service is satisfying include cost, convenience, and customer need
in which we touch on all three. According to Maslow’s hierarchy of needs, we are trying to
satisfy the bottom two objectives, which are physiological, and safety. Residents need food and
drinks to survive and also some ibuprofen depending on the kind of night they had. We hope to
bring people these convenience items while keeping them off of crowed college roads. Our
customer is our most important need because without them, we are not successful. Need-
based marketing objectives start with the customer, so our first step was realizing what our
customers need. Also, convenience objects include time, space, and an understanding that if
you do not make it convenient for your customers to buy from you then they will buy from your
competition. By utilizing a website this ensures that customers have 24 hour access to the
service we are going to provide. Lastly, need-based marketing objectives attempt to strike a
balance between providing a value for our customers and making a profit. Therefore,
customers do not and will not care about the cost of goods sold, inventory costs, or the profit
margins. However, customers do care about how much gas it takes to get to your store, how
much it costs to ship the items purchased and the quality of products or services they are
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purchasing. Convenience cruiser is the future of college towns everywhere and will create a
positive impact towards customers everywhere.
What will be the consumer’s likely motivations for purchasing your product?
College students are always looking for convenience while they go about their daily
routine. Taken from University of Florid, student Blair Burke said, “As college students our time
is so precious,” she said. “When we get busy, it’s worth spending that extra bit of money”
(Galin, 2012). This generation relies on convenience more than any other generation, which is
why our service could be very consumer motivating. When looking at consumer’s motivations
behind products, you often have to start from the beginning. The things we would look at with
our service are basic needs, great value and name recognition. We look at basic needs to fulfill
our likely motivations such as food, as described in Maslow’s Hierarchy of Needs. Focusing on
great value is very important because we want people to feel like they are getting a great
service, and receiving a product that is both convenient and satisfactory to their needs, just like
the stuff placed at the checkout line; it’s convenient and can be perceived as great value. Next
we look at name recognition as an important motivation behind consumers. When residents
use our service they will be receiving high quality name brand items. Consumers are more
comfortable with brands they identify with. Seeing as we offer these popular brands, it will help
to motivate their purchase. Consequently, we need to trigger consumer motives and focus on
the motives behind why they should by our products. The first thing we need to do is focus on
inducing need recognition. Next, focus on moving the consumer from the actual state to the
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desired state. Then we need to do some more triggering through need benefit segmentation,
while also being able to understand our consumers better and offer them goods that meet
specific target segments. Being college students ourselves, we had an easy time realizing the
everyday actualization that there just aren’t enough hours in the day Lastly, we need to trigger
a subconscious motivation so that our consumers become motivated to always choose
Convenience Cruiser. Therefore, Convenience Cruiser will work to incorporate all of these
triggering methods to create the most motivation from our consumers to choose us when
looking for that convenient product.
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What are potential customer’s attitudinal responses to your product?
Through all of our extensive data, interviews, and survey, it is innocuous to say that
consumers would be pleased, and gratified to use our service, Convenience Cruiser. Our online
survey begged the question, “would you use a convenience store delivery service if available at
your University, available 24/7”? Before conducting this specific survey, we wanted to gain a
better marketing aspect and identify certain trends to determine where we should focus our
marketing on. Referring to our first graph, which was a collection of college students (not only
Central Michigan University), we were able to gain positive feedback. Roughly 60% of
responders said that they would use this type of service, while 20% of students said no, and
20% were unsure if they would use such a service.
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With this information, we will try to increase our marketing towards the responders
who had not said no, but maybe instead. If we can even cut down half to a yes that will shift to
70% responding to yes. The next thing that we examined was an article released by the Boston
Globe that conducted a study on college students looking at a number of parameters regarding
delivery services. College students are the ultimate night owls in the world now a days and this
study explains how a whopping 87% of college students are more likely to order out late at
night than the average person. They also looked at the spending patterns of such students and
state students are likely to spend 10% less than they would at the average diner. These
numbers only help to support the needs of delivering convenience to students all over. The
next study we looked at was what products students like so we could include these through our
service. The study was conducted by GrubHub and includes some astounding statistical figures.
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Graph (Landergan, 2013)
This information helped Convenience Cruiser determine which products we should
make sure we have enough of and which products consumers are likely to spend money on
including mozzarella sticks. These two studies have helped us with our two toughest questions
before we can even proceed. Would consumers use our service? Which products would they
like to see, based on the items they are willing to spend money on? Simon Mainwaring once
said, “Companies and their brands need to reach out and speak directly to consumers, to honor
their values, and to form meaningful relationships with them. They must become architects of
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community, consistently demonstrating the values that their customer community expects in
exchange for their loyalty and purchases.” Convenience Cruiser hopes to connect with
consumers and make a service that demonstrates quality and success.
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Target Market
What is the target market for your product?
Convenience Cruiser is a service designed for individuals that need a snack, meal or any
common convenience item at any hour of the day. Often times, especially in college, people
feel that they have so much going on that they barely have time to breathe, let alone cook a
meal, go to a restaurant, or run errands around town. This is where Convenience Cruiser comes
in to save the day and solve all problems (or at least help!). Convenience Cruiser is a 24 hour
service that can serve individuals all day, every day, in a quick manner, at an affordable rate.
This service allows individuals to sneak in a snack without creating an extra hassle. To
appropriately identify who our target market would be, we considered different segments
within the consumer markets. As our service is all about convenience, we have concluded that
the primary target audience would be younger adults in younger populated areas- such as
college towns. To determine this we utilized segmentation factors including demographic,
psychographic, geographic, and also the overall benefits to our customers.
For success in any business, it is important to first identify where your product or service
will be valuable. For Convenience Cruiser, the demand would be much higher in towns with
primarily younger populations. For example, those seeking a higher education may find our
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service to be of value to them; therefore, towns in Michigan would include Mount Pleasant,
Lansing, Grand Rapids, Kalamazoo, along with all the other towns that major universities are
located. Once we concluded where our geographic success would be, we then researched who
would make up our target audience, and further examined the demographic segmentation.
To get a better understanding of what makes up the “college town” audience, we
focused on attributes including gender, age, income, and education. In these areas both
genders have a prominent role in our audience. We concluded that the average age range in
close proximity to a college campus is from 18-25. To closer identify, we also wanted to focus
on education, and we believe our service would be the most beneficial to those that are
enrolled in undergraduate or graduate courses at the given university. Quite often, college
attendees have a low income, if they are earning one at all, or are living off of their loans. We
took this into consideration and set our prices accordingly so our service was affordable to
these customers.
When focusing deeper on the psychographic segmentation portion we were able to
determine what we, current college students, would find beneficial of this service. Convenience
is the main selling point of our service. Besides being available 24/7, we also have a wide
variety of products and competitive prices. Whether students are in the middle of an all-night
study session, just getting home from a night out on the town, or simply just don’t feel like
leaving the house, our service will be the perfect option. When studying students do not want
to be interrupted or have to break their concentration to find or make a snack. After a night out
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on the town, students should not be driving, but are likely to be hungry and want a snack.
Finally, our service is perfect for those that are simply relaxing at home and want a snack, but
do not want to leave the house to get one. This service is perfect for all students no matter
what their daily or evening activities consist of.
The overall benefit to our customers is spelled out in our name- convenience. The
products we will offer are no different than those that could be found in a local grocery store or
fast food chain, but our quick delivery service, hours of operation, and competitive prices make
our service stand out among the competition. Another added benefit of our service is that it
also ensures safety. Customers will not have to travel to the store late at night when others on
the road could be under the influence of a substance, under poor weather conditions, and will
not have to walk to the store. These benefits will be worth the minimal extra cost of the
products.
Why is the selected target market the most appropriate segment?
Convenience Cruiser was designed so that busy individuals would have a service
available to cater to their hectic schedules. As many would agree college is one of the most
stressful and busy times in one’s life. According to Blair Burke, a University of Florida student,”
her roommates frequently ordered dinner from a delivery service when they didn’t want to
spend time cooking.” They could justify using this service because they revealed, “in college
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student’s time is so precious, and when they get busy, it’s worth spending that extra bit of
money.” (Galin, 2015). Overall, the college setting supports the demographic, psychographic
and users that would benefit the most from our service. We are of course selling products, but
the main service we are selling is the convenience, and convenience is most appreciated when
time is of the essence. As mentioned by Burke, time is precious, so we are allowing students to
use that valuable time as wisely and efficiently as possible during those hectic college years.
(Galin, 2015).
What is your intended target market strategy?
The intended target market strategy is to appeal to college students. A service such as
ours will need to be promoted, but once it is known, the customers and business promotes
itself. By using a concentrated market strategy we will primarily focus on benefits by potential
customers, which in our segmentation selection would be the college aged students that live on
near campus. College students would find our service valuable in multiple scenarios as
described above. Not only is our service convenient during meal times, but also during long
study sessions, or late night cravings. We will heavily promote the convenience factor because
this is the most important benefit of our service. According to John Egan, in his article 18
Statistics That Marketers Need to Know About Millennials it was found that 85% of U.S.
millennials own and use a smartphone, and of that 85%, thy touch their phone 45 times a day.
(Egan). With the constant connection to their phone, our target market will be able to see our
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service daily, perhaps multiple times a day just by using their social media accounts. By
promoting on popular social media sites and mobile devices, we plan to emphasize how our
service will be of great importance to college students seeking the right product, at the right
time, for a reasonable and competitive price.
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Situational Analysis
Macro-environment trends
It is known that microenvironment evolution is an effect on market strategies in various
different ways. Therefore, the following information goes into detail as to why we chose our
service to be ran the way it is. We looked five main segments: social/cultural, demographic,
political/legal, economic, and technological.
Social/cultural environment
The first thing we asked ourselves when we were creating our service was, “What is
something that all people need from time to time (or at any time at that matter!)”? In todays’
world, time is one of the most valuable things. Many people base their buying decisions on time
such as deciding whether or not their product will be delivered before Christmas, or if the line
at Starbucks is way too long to squeeze into their morning pre-work routine. We came to a
consensus that our service needed to focus on convenience. It needed to be something that
was quick and convenient for people, even during the busiest part of their day. Once we
decided what niche we wanted our service to fulfill, we thought about how we can stay up to
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date with current trends while attracting other target markets like the Baby Boomers or
Generation Y. We wanted to make sure that we included the Baby Boomers because they
represent 44% of the U.S adult population (Nielsen and BoomAgers, 2012). We modified for this
generation by doing the traditional delivery system of calling in an order. Because many of
them may not be technologically advanced, we felt it was best to not eliminate the ability to
call in an order. On the contrary, we catered to the younger generations by taking orders via
text message and also using Twitter. For example, if Central Michigan University had a
Convenience Cruiser, consumers would simply tweet us at @CMUCRUISER with their order, and
we would deliver it. Lastly, we would create an app where consumers to look at our service and
order from there as well. Overall, we marketed at the social/cultural environment by adapting
to all generations through technology-based communication in order to stay competitive in
today’s market.
Demographic environment
Studies show that after this year, the Millennial Generation will outnumber the Baby
Boomers, the current largest generation group (Fry, 2015). Fry (2015) also states that
“millennials”, who are defined as the group of people between ages 18 and 34, are expected to
grow to a whopping 75.3 million people. Due to this statistic, we decided to target this age
group as our main group. While our main target age is 18+, we cannot forget about the other
ages. For example, there are many students in Mount Pleasant, Michigan that are residents of
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the town. Therefore, it is possible that high school, possibly even middle school students, may
hear about our service. Also, we have to keep in mind about their parents, those who may be
single and live in the area, those who commute to the town for work, and lastly, those who
work for the university. Because our service is applicable to many different groups of people,
the ages at which we market truly have no end. Although this is something to keep in mind, it is
expected that most of our customers will range between 18 and 25 years of age.
Because college kids are our main target, we justify our service in a couple of different
ways. Although most college students drive, it is not uncommon for students to not have a car.
Therefore, students who have no way of running into town for a gallon of milk can call
Convenience Cruiser to deliver it for them. We used this same concept for students who may
live off campus and for town residents who also don’t want to run to the store in the middle of
cooking. Because our service is offered 24/7, they can even call us early in the morning to
deliver a bagel to their work for those days they are running behind. They can also deliver early
in the morning, such as 3:30am, when parents with a newborn may need emergency formula.
Lastly, those professors who like to stay late and grade papers, can call our service to bring
them caffeine or something to munch on.
In terms of income, we believe that our service can be affordable for anyone. Our
service is unique in the sense that there is no service charge, just a fixed $2 convenience fee
between the hours of 6am and 9pm. Because our service would stay local, we agreed a cheap
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and fixed fee would be a fair compromise with our customers. Lastly, as a group, we decided
that each bill should include a 10% gratuity added to the total in order to ensure our
drivers/delivery workers are still receiving a tip. With today’s controversy of poor tipping, we
felt this was a way to show our employees that we care about them. All in all, this service is
very affordable to those with different incomes. Whether it is a wealthy professor, who needs
his morning coffee, or a broke college student who needs pencils ASAP, our service is
reasonable and quick for all.
Although we decided who our target market was, we needed to look down a little
deeper. We knew that we were going to offer convenience items, and we knew we were mostly
targeting college students, but we hadn’t thought about what products we wanted to offer.
Because we wanted our service to apply to all people, we agreed we needed to carry items for
both men and women. For example, for women it would be suitable to offer feminine products
such as tampons or Midol. For items that both genders use, such as body wash or deodorant,
it’s necessary to offer those items for both men and women when it comes to scents. In
general, marketing to both genders is not a problem with our service.
Lastly, we took a glimpse at ethnicity and determined that our service offers common
items that most people use, regardless of ethnicity. Therefore, our service applies to all
ethnicities while providing every day convenience items.
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Economic environment
In terms of the economic environment there a few key components that we need to
take in to consideration. The first one being that since our target market is in college students
we have to assume that their buying power in the Mount Pleasant area will be relatively low.
Meaning that most college students have little income due to the fact a majority of college
students are working minimum wage jobs or their parents give them money to spend plus
paying for college. What this means for our service is that it will be fairly cheap with low
delivery cost to make sure the market penetration is there to attract our target market of
college students. Another key economic factor we have to take into account is the expansion of
and the additions being made to Central Michigan University right now. This is important
because as CMU grows as a university its students demands, wants, and needs grow as well.
This means within the next couple years we will need to make sure we have an adequate supply
chain that flows smoothly to ensure the demand for Convenience Cruisers doesn’t decline from
poor logistics, delivery times, and shortages.
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Technological environment
For our customers to contact us, we will have a call or text service. As mentioned
before, we will have a twitter account (@school initialsCRUISER e.g. CMUCRUISER) where
customers can tweet us their order without even having to call/text. To encourage people to
follow us on Twitter, we will offer a promotion deal. For those loyal customers who love to talk
about their love for Convenience Cruiser can earn a free delivery in a simple way. By
promoting/advertising our service through their personal accounts, we are willing to give away
some free deliveries. This was a great way to have followers on Twitter and allow those
customers to see what new and exciting news we have. At the same time, this gets our name
and service out to the public through word of mouth. Additionally, we would create an app for
our service. Our app would include a list of all the products we offer and our terms and
conditions. Through this app, customers would also be able to order items and have them
delivered without even having to talk on the phone. We knew that with the increase of
technology use in today’s society, it was important to use it in our marketing strategy.
After carefully looking at the various macro environments, we were able to create a
service that benefits the major generations, is affordable, caters to both genders, and is tech
savvy. The Convenience Cruiser is a great way to have basic items one needs in no time,
without even leaving the house.
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Political and legal environment
Starting a new business like the Convenience Cruiser has certain political and legal
stipulations that all business must face before they can become a business legally. One thing we
must do is file to be a Limited Liability Company (LLC). This ensures us that we cannot be liable
for certain debts and cost incurred with starting a new business to a certain extent. Another key
aspects of the legal environment has to deal with the idea of a trademark or copyright. Having
our logo licensed ensures that when customers see anything affiliated with the Convenience
Cruiser logo it is trusted and known within the marketplace. Also with us being the first
business in the area it makes sure competitors can’t mimic or create a negative brand image.
Also, with us being in the Mt. Pleasant area there are certain city ordinances us must follow.
On the Mt Pleasant city website it shows all the city ordinances that business must follow. The
city states on the website “The City requires a license for each of the following: Auctioneer.
Circus, Carnivals, Junk Dealers, Junk YardsPawn, Brokers, Peddlers, Taxicabs (including business
license, cab registration, and driver permits) Transient Merchants, Mobile Food Service,
Providers, Going out of business, Precious Gems and Metals. Convenience Cruisers would fall
under the Mobile Food Service criteria requiring us to have a license. Upon further examination
the city of Mt Pleasant charges a fee $1,000 per calendar year.
When thinking about the political environment we would encounter one key factor for
the Mt Pleasant area. This key factor takes into account the amount of political power Native
Americans have here, they have a huge say in what happens and what isn’t going to happen.
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We would need to make sure that our service accommodates and meets the regulations of the
Native Tribes here in Mt Pleasant.
Competitive Environment
For the service Convenience Cruiser fulfills, there are relatively few competitors that are
within a range to compete in marketplace for convenience delivery service. Although there are
few competitors in our area, market trends have been able to identify that the demand for our
type of service is rapidly increasing. With that being said, we identified and analyzed six
different competitors. Some control a great portion of the market share, while others control a
small portion but show potential in delivery market. They are as follows: Shipt, HappySpeedy,
Ugo, Instacart, Grubhub, and EnvoyNow. Some of these competitors only delivery food while
others dabble in common convenience items purchased regularly which is why we chose six to
analyze to make sure we have greater understanding of the competition that occurs with a
service like ours. With that being said, we will now elaborate further on our six rival
competitors.
Shipt is an on-demand grocery delivery service that has access to thousands of grocery
items, this excludes alcohol and tobacco products. It operates through a mobile app, which in
turn customers’ use this app to place grocery orders. It also operates on membership-based
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service that charges a yearly fee or a monthly fee. This membership includes unlimited
deliveries. Its hours of operations are 8AM-10PM seven days a week. Shipt get its products
from the grocery store chain Publix, and Kroger in some location. Finally, they currently operate
their service in the southern regions of the United States with most of the location in Florida.
HappySpeedy is Boston based company that not only focuses on food delivery but also
offers a variety of convenience items, including tobacco and alcohol products that can be
delivered. They operate through their website happyspeedy.com where they process orders
immediately after you place an order. Their hours of operation are 11AM-2AM on the
weekdays and 11AM-3AM on the weekdays. They deliver your order to your door, however you
must be within the range they cover in order to use their service. They are also currently open
to expanding by letting people request to cover their area. Ugo is a convenience delivery service
that operates in Tuscaloosa, Alabama. Their hours of operation are 3PM-3AM on weekdays and
12PM-3AM on the weekends. They offer pretty much any item that may be of interest ranging
from food to electronic accessories. They operate off their website and their iOS app produce
orders. They also keep a huge inventory of their items via warehousing and do not go through
any vendor to acquire the goods they bring you (http://www.ugollc.com/index.php?
route=common/home).
GrubHub is the nation’s leading online and mobile food ordering company. It is the only
competitor that is currently operating within a range that could affect competition. It allows
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you to order directly from approximately 35,000 takeout restaurants in more than 900 cities
and have it delivered to your door. It allows you to see reviews and prices of numerous
different restaurants as well as post reviews. It is also open 24/7 and allows you to have the
option of pickup if you choose to do so.
Our final competitor is EnvoyNow, it is a student owned and operated on-demand food
delivery services that is tailored towards the college community. It operates solely on an iOS
app, and their service is available 6PM-Midnight seven days a week. They deliver your good
straight to your door One reason they were choose as a competitor is because they have
recently though about expanding to Central Michigan University campus.
Overall these five key competitors have great ideas that could help us formulate our
strategy. By looking at these competitors it gave us idea a greater idea on how we can
formulate our marketing strategies using the four P’s; product, price, promotion, and
placement. This is because all of them gave detailed information on how they run their delivery
services. The Idea of the 4 P’s will be touched on further in the next section to really show how
they helped us formulate the marketing strategy we employed for our service.
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Detailed competitive evaluation, including detailed assessment of product,
price, promotion and distribution
Now that one has a greater understanding of the different competitors in the market
place and how they operate and tackle the delivery service market that Convenience Cruiser is
going to enter. We will elaborate further on how the competition uses the four P’s to ensure
they stay in competition with others in the marketplace. Some of these ideas where crucial in
forming our strategy.
Starting with Product in the four P’s we began to see key trends most competitors used
to make sure their product would have a demand in the market. One thing we noticed was
most competitors offered consumers the option to make special requests for items of interest
that they currently did not stock. This shows that they go the extra mile to make sure
customers’ needs and wants are satisfied. Another thing noticed was that some companies
didn’t delivery alcohol or tobacco products. We to choose to not to delivery such items because
there may serious legal implications if certain protocols and regulations are not applied. We
thought the risk was far greater than the reward and choose to mimic some key competitor’s
policies on alcohol and tobacco. When looking a little more closely at how competitors
maintained a positive brand image we realized that some sort of mobile app is crucial to
operating successfully. Not only did most of our competitors have apps they also introduced
some sort of support or help line that settles any disputes or complainants you had for your
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order or the service provided. They also allowed consumers to leave them feedback and
suggestions as well as giving consumers the option to request them to expand their services.
Finally our well known competitors have articles from well-known publishers such as Forbes
and The Wall Street Journal ranting and raving on how their service is amazing and how they
never have problems using their service. One thing we also noted was that competitors also
had a reliable security service that made sure users personal information was protected.
The Second Component of the four P’s is Price, this was one of the most useful aspects
because almost every competing firm employed a different pricing strategy. Looking at their
products from the price standpoint offered insightful information. We learned that firms not
only use price as a determinate for a fair amount to charge to their services but they also use it
to allow consumers to speed up deliveries using the idea of “busy prices” that Shipt uses. What
this entails is during busy hours of the day and when ordering high demands items from them
you may be up charged for convenience. However this competitor offered a membership with
an annually fee that gets rid of busy prices for you. They also offer you the option to pay a
couple extra dollars to ensure your delivery is there in time you need it. Another key pricing
concept used was charging a flat delivery fee, this fee was a flat rate that ranged from two to
four dollars. Some firms like EnvoyNow even allowed you split the fee between friends like
which could be utilized in our pricing strategy. Most firms also used the idea that there would
be no markups in price for using their service to deliver the goods you wants offering
consumers same-in-store pricing. Although certain companies charged a flat rate for their
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services some required you make a minimum purchase to use their service while other required
no minimum purchasing. By setting a minimum it could hurt our business which is why we
opted to not go this route. Some firms also didn’t make it mandatory to tip but the gratuity
was already included at 10% of the total bill. The final key trend for pricing wasn’t necessary
how much they charge but they allowed users of their service to pay in cash. Credit/debit cards,
and other cash apps available to use such as Venmo.
The next component we analyzed was promotions. This was also one of the most useful
aspects of the four P’s. This was because some firms used the same ideas to promote while
others took the nonconventional approach. The biggest way our competitors promoted their
product was the use of various social media outlets. Every single one of our competitors had at
least a Facebook, Instagram. And Twitter, some had more. They made it very easy on their
websites to find their social media accounts as well. Besides using social to promote they also
offered some sort of rewards programs or offered weekly deals on specific items some services
even allowed you to use coupon for the grocery chains they use to get your groceries.
HappySpeedy had a great rewards systems allowing you to earn HappyBucks on every order
you place take money off future orders. Shipt is also running the promotional campaign right
now that cuts the price in half to become a member. By doing this it helps attract new
customers to the booming business of delivery service like them. One of the biggest promotions
we noticed was that competing firms allowed free delivery on orders over a certain amount.
Some firms even made for first delivery for free as a thanks for trying their service.
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The final component was placement or distribution. When analyzing how competing
firms distributed and located their goods one key strategy stood out. This was the idea of
warehousing your good. We employed this as our strategy for a couple reasons. It keeps price
down because we don’t have search for the goods were selling at a store and we can buy in
bulk to stock our warehouse, by buying in bulk you can a price discount instead of paying face
value for the item or items. It also allows us to reduce delivery times because the good is
readily available to deliver minus the time it take to cook the product. Although we took the
approach of warehousing their also were other strategies firm used that may work just as well.
These entailed forming a partnership for local grocery store chains, this is beneficial because
you can allow consumers to use coupons for the stores you are using in your service. One key
thing we noted as well is that most competitors made sure that person delivering your items
are adequately trained to meet shopper’s requests. It also allows for quicker delivery times
because they were the good are located whether it be from a warehouse or grocery store.
By having the detailed competitor analysis above it allowed us to not only see what
strategies works best using the four P’s, and it let us see which one wouldn’t well for our target
market, Above all it helped us formulate a good marketing mix by showing us what products we
should sell, what price should charge for a service in the Mt. Pleasant area, what promotions
we should and how we should advert our service, and how we should distribute and acquire
the products we are selling. Overall it made us make sure customer satisfaction is met as well
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showing how our service gives consumers added-value compared to going out and purchasing
the items we offer without using our service.
Decision Making Analysis
What type of decision-making type should be associated with your product?
The Decision making process deals with customers making the decision to purchase a
product or use a service. The customer recognizes a need; they do an information search, and
then evaluate the choices, purchase decision, and their post, purchase evaluation. There are
many more factors that got into decision making, such as how the customer will find the
information, the risk perceived by the consumers, the involvement with the product or service,
and maintaining consumer’s cognitive dissonance.
The decision making progress associated with our service will be limited. Our service is
quick and on the less expensive side, so the customer does not need as much information on it.
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Also, we are the only company that offers this service in Mt. Pleasant so there is no need to do
information searches on our competition.
What are the Marketing implications of this decision-making type for your
product?
Where and how will consumers search for information about your product?
There are a number of ways that customers will search for and find information about
our service. The decision making progress for our service will start when our customers
recognize a need, such as hunger. The customer then decides that they want food delivered to
their house and must do an information search on what restaurants deliver in Mount Pleasant.
Consumers do most of their information searches on the internet, because of this our web site
will be on the first page of Google when customers Google a combination of words and
phrases. If a consumer Google’s “restaurants that deliver in Mount Pleasant” the Convenience
Cruiser’s website will be one of the first links shown on Google. The website will inform the
customers that the Convenience Cruiser will deliver any food from any restaurant for a
convenience fee opening up many more options for the customer.
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What types of perceived risk will be associated with your product?
The Convenience Cruiser will have some perceived risk associated with it. One perceived
risk customers may associate with our service is the risk that they may not get what they
ordered. If a customer has a highly specific product that they want to be delivered there is a
higher risk they will not get the right product from the Convenience Cruiser will get it wrong.
Longer wait time in another perceived risk associated with our service. While the Convenience
Cruiser is based on convenience and getting the product to the customer as fast as possible,
some customers may associate delivery services with a high wait time.
What level of involvement will your product have?
Customers will have low involvement with the convenience cruiser. It will be difficult for
the convenience cruiser to build strong bonds with the customer because we deliver a wide
verity of products. While the convenience cruiser will have low involvement with the
customers, it will benefit from products that customers have high involvement with. For
example, if a customer has high involvement with Starbucks coffee, it's the only coffee brand
they drink and want it every day at work or when studying, they are more likely to use the
convenience cruiser to have Starbucks delivered to them. They might also have high
involvement with the other products we deliver, making them have a higher chance of having
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them delivered with the convenience cruiser. The higher the involvement a product has with a
customer the more likely they will pay for the convenience cruiser to deliver that product.
“Cognitive dissonance is feelings of discomfort that result from holding two conflicting
beliefs. When there is a discrepancy between beliefs and behaviors, something must change in
order to eliminate or reduce the dissonance (Cherry, 2015).” This can accrue when a customer’s
action is not consistent with their beliefs and past actions. The chance of our customers
suffering from cognitive dissonance is very low due to most of our customers using delivery
services before. Our customers may suffer from cognitive dissonance if the customer is usually
a frugal buyer and there is a high convenience fee, causing the orders cost to be much higher. A
customer that usually is frugal with their money may feel that spending a high amount on a
convenience fee to have the product delivered, instead of getting it for themselves, may go
against their previous actions and beliefs of spending money.
Customers buying consistency may also cause suffering from cognitive dissonance. If a
customer has very consistent buying behaviors, such has ordering a pizza every Friday, having
another product delivered, like our Bosco sticks or Starbucks, delivered instead may make them
suffer from cognitive dissonance because it is inconsistent with their previous buying behavior.
Having house hold items or medicine delivered is also inconsistent with many consumers
buying habits. It may take time for consumers to get use to have items delivered to them
instead of purchasing them in the store.
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There are a number of ways we will try to manage cognitive dissonance in our service.
For frugal customers we will highlight the convenience and speed that our service offers. This is
eliminating the negative cost of the convenience fee by highlighting the positives of our services
speed and product options. To manage the cognitive dissonance that customers may feel with
being inconsistent with their buying habits we will highlight the fact that this a new and exciting
way to get all the products they need. By highlighting all the positives our service offers our
customers will be less likely to suffer from cognitive dissonance.
Marketing Mix Strategy
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Product Positioning
What will be the differential advantage of your product?
The Convenience Cruiser is a unique service that has quite a few advantages compared
to our competition. The advantages our service has over others make our company
distinguishable from the rest. The main target markets we are serving are college students, who
are always consuming, and the target audience creates a strong foundation on which to build
our company. We differ from companies like Grub Hub, Shipt, Happy Speedy, Ugo, and Instacart
because we are basically a mobile convenience store, not just a food delivery truck. Our service
is based around customer convenience; and by serving our customers every need without our
customer having to leave their home, we believe the Convenience Cruiser will do very well.
There is a huge demand for a service like ours and there is plenty of room for growth. We are
the delivery service that every college student dreams about and now we are here to delivery
not just a wide variety of everyday convenience products, but also excellent customer service at
all hours of the day. The types of products we will have available for purchase are similar to
those you would find at popular convenience stores.
How will you position the product relative to the competitive alternatives?
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Out of all of our competitors, Grub Hub is our closest competitor, but there is not a high
demand in college towns. We really want to position our company so that every college student
is talking about it and telling their friends about it. Getting our phone number in every college
student’s phone in every college town is our main goal because we want to be the first service
they think of when they want something delivered. We will strategically market the millennial
generation since they are the ones who will be using our service the most. We will promote the
convenience aspect to underclassmen (18-20 years old) since the majority of them don’t have
cars. By doing this we can build a relationship with these students so they become loyal
customers in their future years as students. While we market convenience to underclassmen
we will be reaching out more broadly to upper classmen (20-25 years old) and local residents
off campus. We will still focus on the convenience but will also express the importance of safety
(especially on weekend nights) of our service to these students so we can not only prevent
students from driving impaired but also build a loyal customer base that can trust our company.
Building a relationship with our customers is what will make this company successful, because
most delivery services just care about the tip and it taints the social aspect of placing a deliver
order.
Pricing Strategy
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At what price do you intend to offer your product? Why?
The pricing of our service will vary some. The price we will charge our customers will
depend on the product(s) they desire and the time of day they place an order. From 6am-9pm
there will be a $2 fixed convenience fee on top 10% gratuity charge on the initial order price;
from 9pm-6am there will be a $3 fixed convenience fee on top of a 20% percent charge on the
initial order price. We will charge more at the later hours of the day because the demand for
popular food/ drink items at these hours is much higher with college students. This charge is a
fixed percentage because college students tend to under tip their delivery driver. By eliminating
the “tip”, college students can make the decision to use our service rather than others and feel
like they are getting a better deal while not having to leave their home. We are deciding to price
our products like this because we need to stay competitive yet still turn a profit. If we dedicate
40% of revenue to reimbursing our investors for the first few months (investment: $125,000),
40% percent going towards the operation of the company, and 20% for advertising, there
should be a reliable system set in place for the future.
Promotional Strategy
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What components of the promotional mix do you intend to use to promote your product?
Why?
The components of the promotional mix that we will use to promote our service are
advertising, sales promotions, and personal selling. We will use these three because those are
the three most appealing forms of promotion to college students. According to The Statistics
Portal, 48% of college students prefer to receive product information through word of mouth
so that will be our goal, to get people talking about us (“U.S. Student). We plan to communicate
to consumers through print ads, radio ads, social media, and even personal information such as
phone or email information. By dedicating almost a quarter of our revenue to advertising, we
expect to reach a lot of customers through CMU coupon books, Facebook/twitter ads, and
radio. Along with some of our ads we will have an attached catalog of what products we offer
and what products we can pick up and deliver. The coupons will offer discounts up to 25% of
the entire purchase and will offer BOGO coupons for specialty products; for example: buy two
Red Bull energy drinks and get one free! We will also have our truck(s) at special campus events
like Mainstage where students can purchase any of our items at a convenient location.
What is your message?
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We want every student and local in the operating area to have our number in his or her
phone and be able to contact us comfortably. Serve every customer need in every way we can,
in the shortest amount of time is our main goal. It’s a lot to take on but we are comfortable
completing these tasks. We also want our customers to know that we really do care about
getting them what they need as soon as possible, so we will be sure to emphasize that aspect of
our company to the customer every chance we can.
How will you get the customer’s’ attention?
We will attract consumers by using heavy advertising, mostly to college students. We
believe using direct mail to gain awareness from students and residents on and off campus will
help gain a large portion of our market. By constantly offering coupons and sales promotions
we can build a customer base that will use our service without hesitation. We will have a social
media account (Twitter) operating 24/7 so we can interact with our present customers and
reach out to potential customers. Social media will be used heavily since social media in college
towns is very popular and interaction with customers shows commitment in trying to satisfy the
customer. We will also have a direct phone line that customers can contact by calling or texting
to request their items. The level of customer interaction over mobile devices is anticipated to
be high so we will have many employees managing and operating the interactions on all
channels.
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Promotion Examples
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Social Media
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Since we plan to promote our service mostly through online and social media ads we
will use Facebook and Twitter as our main advertising channels for interacting with our
customers. Being very popular to consumers in our target demographic, social media will be
very valuable not only to the customers but to our company as well. Not only will it give us an
advantage in managing our budget for advertising, but also it will be a convenient
communication channel for our customers, which is what we’re all about.
Print Advertising
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Although most of our advertising presence will be online, we plan to use print ads to
gain consumer attraction. We will send these flyers to students in local apartment complexes
along with houses near campus. We will also promote this ad in CM Life and the CMU coupon
books (same info, different size).
Distribution Strategy
Through what type of distribution channel do you plan to make your product available? Why?
The distribution channel we plan to make our product available is a two-level indirect
channel (Pujari). We will purchase the convenience items from a wholesaler in large quantities
and store them in our 6,000 square foot warehouse. We are distributing the products directly
to the customer; we will not be producing the products ourselves since we are starting
relatively small. After loading the main products on the truck shelves, the Convenience Cruiser
is ready to deliver. There will be two trucks delivering at all hours of the day and will
occasionally have to go back to the warehouse to quickly resupply. This distribution channel is
the best option because it is the cheapest and most reliable, because building a manufacturing
facility and producing our own products would be too costly to operate in multiple cities.
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