Marketing Concepts and Theories

Question: Discuss about the Marketing Concepts and Theories. Answer: Introduction In China there is a ongoing transportation war between Didi Chuxing and Uber that is becoming more and more each day. The Chinese taxi market is dominated by Didi Chuxing, a local Chinese company based in Beijing and Uber, a taxi company based in San Francisco that was launched in China in the year 2013. Uber has been spending $1 billion, in order to compete against Didi Chuxing. This amount is equivalent to what it earns per year in the top 30 cities of its operations throughout the world. On the other hand, Didi Chuxing which holds a dominant position in the market has got huge financing from not only the local giants of technology like Tencent Holdings Ltd. as well as Alibaba Group Holding Ltd. but also from the global giants like Apple and was able to raise $1 billion funds from Apple. Overall, it was able to raise $2 billion in funding. Uber on the other hand does not have this kind of financing options available. Five Marketing Concepts The dominance of Didi Chuxing in the Chinese market over Uber can be related to its successful implementation of a number of marketing concepts and theories as given below Better Identification and Understanding of the Customer Needs A realisation is present in the world of modern business that the business undertakings need to be customer oriented and the marketers need to pay a closer attention towards the needs as well as the wants of the customers for achievement and maintenance of business relationships in a successful manner (Suensson, 2001). Didi Chuxing offers a variety of options to the customers as several distinct transportation services are offered by it. The customers can be picked up by a private car, taxi, shared car, bus or shuttle van while the focus of Uber is only on the private car rides. The reason for this is that Didi has carried out proper research to understand the needs of the local customers and understood the gaps in the market and according came up with the options (Gronroos, 1978). The company realised that in Beijing, an average employee has to travel about 15km to reach his or her workplace. This takes 44 minutes if the average speed is 20kmph. A high transport vacuum exists throughout China as the experience in the taxis, subways and local buses is not good and hence a need for better and more options. Customer Satisfaction in a better way The three Cs of customer satisfaction are consistency, consistency and just consistency and as the adage in marketing suggests that a happy customer is going to say a little while an unhappy customer will make sure that everyone knows about the negative interaction (Angelova Zekiri, 2011). Didi now encourages the customers to report about any negative incidents and for this they also have a WeChat system where they can report about bad taxi driver (Stinson, 2015). Besides the commuting options, a wide net is also being cast by Didi in terms of the geographic coverage which helps in increasing the customer base (Felix, 2015). Consequently, Didi handles over 11 million rides per day in comparison to 1 million rides per day by Uber in China in the year 2015. Cost Effectiveness The easiest ways of reaching the customers and which is more cost effective is through the use of online sites and apps for marketing the company (Olenski, 2015). The apps of large taxis do not get any transaction fees from the drivers of the taxi which leads to the acceptance among the taxi drivers. However, for hiring a private car, there is a charge of 3% applicable as transaction charge as it helps in the generation of revenue for these apps. Thus, offering of services like the taxi in private cars is not new but in China this is less disruptive in comparison to cities like Paris and the Government is more tolerant in China and so far a tough regulatory environment has not been faced by Uber for offering subsidies to the drivers. Rebranding for appealing to a larger audience Rebranding leads to the formation of an image of the product that is totally new and usually the old identity is lost (Goi Goi, 2011). The significant elements of the brand comprise slogan, logo and name and if changes are made by the company in these, it is significant that the change should create an impact which would be remembered by the customers, recognise as well as associate with. The change should help the consumers in recalling the brand name (Rosenthal, 2003). These strategies give the companies a competitive edge (Raja, N.S.; Zahad, S, 2015). The use of the name Didi Chuxing was a concept that was much more broader as in Chinese the meaning of Chuxing is commute or travel and thus it would have a greater connect with the customers in comparison to any other name. Identification and prediction of the future needs of the customers for maintaining long term relationships with them Goods as well as services are being made more progressive today as the businesses are looking for the unconscious consumer needs and producing goods in order to gratify them. The marketing concept takes the perspective of outside-in. It begins with a market that is well defined, focuses on the needs of the customers and integrates the various marketing activities affecting the customers. In turn profits are generated by the creation of last relationships with the right customers on the basis of value satisfaction (Kotler Armstrong, 2010). Developing autonomous features of driving and incorporating them in taxi-hailing apps fleet is the need of the customers in future. Car-pooling is fast emerging as a new option and journeys to the offices and shops are being shared by the people. Establishing self-driving cars is another driver for growth in future and they might make their appearance within the next two years. Conclusion A costly fight is being put up by both Didi Chuxing and Uber for attracting a higher number of drivers to sign up by providing them with subsidies and also attracting more passengers by providing deals like cash back. In a highly competitive business environment, more attention is paid by the firms to the customer needs so that quality products can be provided to them for satisfying their expectations which are ever rising. Didi always believes that a happy customer certainly means higher customer satisfaction as well as leads to customer retention in the long run (Hansemark Albinson, 2004). Didi Chuxing was known formerly as Didi Kuaidi but it adopted the marketing concept of rebranding in order to reach a larger number of customers. Didi is working on platforms for partnering with the developers of self-driving technology. Uber has also identified this future need and is currently looking for developing driverless cars. References Angelova, B. Zekiri, J., 2011. Measuring Customer Satisfaction with Service Quality Using American Customer Satisfaction Model (ACSI Model). International Journal of Academic Research in Business and Social Sciences, 1(3), pp.232-57. Felix, E., 2015. Marketing Challenges of Satisfying Consumers Changing Expectations. International Journal of Marketing Studies, 7(5), pp.41-52. Goi, C.L. Goi, T.M., 2011. Review on Models and Reasons of Rebranding. In International Conference on Social Seiences andHumanity., 2011. Gronroos, C., 1978. A Service-Oriented Approach to Marketing of Services. European Journal of Marketing, 12(8), pp.588-601. 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