Explain the fixed and variable costs

Reference no: EM131334409

Using the idea that you have chosen, finish your paper by covering the following:

I have chosen Uber Technologies as my company. I will copy after the instructions of the assignment, some information that I have already input in the paper. The idea that I chose is Uber Junior and Uber Senior.

Explain the fixed and variable costs and how these fit with the company's short- and long-term goals. Use a narrative with a table to show calculations for cost categories. Provide reasonable estimates for each of the categories. Specific or in-depth financial analysis is not necessary.
Examine competitors' pricing and explain reasoning for differences.
Estimate how much you think the target market is willing to pay for your product/service. Is this due to preferences for social responsibility, ethical behavior, or other intangibles?
What pricing strategy (skimming, penetration, economy, or premium) is most appropriate and why? I used premium pricing.

The paper specifically needs to include these headings:

Context: Defining Features

Lays out the key defining features of company's brand and how these features drive business decisions

Context: Fits

Assesses how new idea fits with company's existing brand and how that impacts business plan, supported by relevant research and analysis

Context: Effectiveness

Evaluates effectiveness of existing branding efforts, including implications for new product or service, supported by relevant analysis

Need: Target Market

Basic Demographics Analyzes key demographic features of target market, supported by relevant research

Need: Target Market: Other

Analyzes other behavioral or psychographic characteristics of target market, supported by relevant research

Need: Want or Need

Analyzes how new product or service meets a specific want or need of target market, supported by relevant market research

Need: Why

Defends choice of target market relative to product success, based on analysis of target market's characteristics, needs, and wants

Pricing: Costs

Determines fixed and variable costs associated with new good or service and how costs fit with company objectives, supporting narrative with table showing calculations and assumptions

Pricing: Pay

Judges how much target market is willing and able to pay for product or service, using target market analysis and research on close competitors' prices to justify response

Pricing: Preferences

Evaluates whether targeted consumers are willing and able to pay more for product or service if it aligns with their preferences for socially responsible and ethical behavior, justifying response with evidence

Pricing: Strategy

Justifies pricing strategy and price selection for new product or service in light of analysis.

Background and Mission-

Uber was founded by Travis Kalanick (CEO) and Ryan Graves in 2009, "Uber Technologies, Inc., is a private company based in San Francisco, California, that provides online taxi and limousine booking services."(International Directory of Company Histories, 2016). "Uber now operates in 342 cities spread across more than 60 countries. It's the poster child for the so-called sharing economy, employing some 327,000 freelance drivers in the U.S. and hundreds of thousands more around the world." It has been valued at over $51 billion dollars, (Jones/O'Keefe, 2015). While vacationing in Paris, the concept of Uber was born when Kalanick and Graves became frustrated by the absence of accessible transportation options. They eventually created and fine-tuned the Uber rideshare concept after months of brainstorming. Ultimately, Uber's mission is comprehensive, simplistic and inclusive: "To provide transportation as reliable as running water, everywhere, for everyone. In pursuit of that mission over the past four years, Uber has transformed the fabric of hundreds of cities around the world - creating the safest way to get around cities, generating over 20,000 jobs a month, lowering DUI incidents, accidents and fatalities and improving local economies." (Uber, 2016)

Product-

Uber Junior/Uber Senior. Millenials have changed the landscape of purchasing habits much more than their predecessors, the Generation Xers and baby boomers. They forego purchasing vehicles in favor of ridesharing, bicycling and the like, in this current shared economy environment. As an extension of Uber X and other vehicles, Uber Junior and Uber Senior will provide ridesharing services to the specifically for children and senior citizens. Uber Junior will provide transportation services for children ages 6-16, who require transportation to and from school, practices, events, etc. for parents who are unable to themselves. The Uber Junior and Senior vehicles will be equipped fully functional security cameras and "panic buttons", in case of emergency. The app will also provide a real time emergency button as well. Each consumer who elects to use Uber Junior or Uber Senior will be equipped with a band to be worn around their wrist with RFID technology, so those individuals who do not own a smartphone or who cannot move quickly, can do so seamlessly. Uber Senior will provide transportation services to those senior citizens, ages 60 and above, who require services to and from grocery stores, doctor and other health appointments, events, etc. Uber Junior and Senior drivers, under enhanced security, will initially undergo a strict, enhanced background check, fingerprinting and driving course. This will take place in the BETA testing phase. After there is a determination of success, with all of the issues resolved, the pilot will go into effect with driverless vehicles that Uber is set to transition to in the near future. Focusing on the millenials, research has shown that this group is more inclined to use technology, as 87% or more utilize multiple tech devices. According to Forbes, "when there's new technology available, you can bet that millennials will be all over it! In order to keep your brand relevant, and appealing to millennials, you need to be able to engage them on new platforms as they are released." (Schawbel, 2015).

The concept of autonomous or driverless vehicles is steadily becoming a reality. As CNBC reported, analysts and carmakers are optimistic on the prospects of autonomous vehicles. Juniper Research forecasts almost 20 million fully autonomous or self-driving vehicles on the road by 2025, with consumer adoption set to take off in 2021. (Chatterley; Kharpal, 2016). As with most marketing strategies nowadays, social media will play an integral role with internal and external marketing efforts. According to an article in Entrepreneur, "Leveraging the power of content and social media marketing can help elevate your audience and customer base in a dramatic way." Additionally, this article outlines the fundamentals and laws of social media marketing as well as the importance of implementing a social media strategy for success. (Gunelius, 2016).

Pricing

Uber has been providing a "luxury" experience to a neglected or underserved market since its inception in 2011. By bridging economic gap of luxury, Uber has been dubbed by analysts "the great equalizer" by providing affordable luxury transportation to an otherwise neglected market. In widespread reports, instances of rider empowerment have been noted, by having an opportunity to utilize ridesharing services, has yielded life-changing results. (Chappellet-Lanier, 2016). Contrarily, the most logical pricing strategy to alleviate undesirables and to maintain the integrity and safety of its drivers and riders would be "premium" pricing.

According to Entrepreneur.com, setting a premium pricing strategy initially is the best approach because marking a product down in contrast to starting low and trying to mark up, is virtually impossible to accomplish. Uber Junior and Uber Senior would be considered a premium service compared to Uber X, XL, etc. Since Uber's overall pricing structure varies by geography, below is the pricing structure according to Ridesharing Driver (Dough, 2016), which includes the addition of Uber Junior and Uber Senior):

	Base Fare	Cost per minute	Cost per mile	Booking Fee	Minimum Fare
Uber X	$0	$0.15	$0.90	$1.65	$5.15
Uber XL	$1	$0.30	$1.55	$1.65	$7.65
Uber Select	$5	$0.40	$2.35	$1.65	$10.65
Uber Black	$8	$0.45	$3.55	n/a	$15
Uber SUV	$15	$0.55	$4.25	n/a	$25
Uber Junior*	n/a	n/a	n/a	n/a	$200 per mo.
Uber Senior*	n/a	n/a	n/a	n/a	$200 per mo.

*Based on a monthly subscription basis

Paper: double spacing, 12-point Times New Roman font, one-inch margins, and discipline-appropriate citations. It should be 8-10 pages in length and follow all APA formatting requirements.

Reference no: EM131334409

Questions Cloud

How much will she have saved for their trip : If she earns an 8 percent rate on her investments, how much will she have saved for their trip if the interest is compounded in each of the following ways?

Different ob models of managers and leaders : Describes four different OB models of managers and leaders: the Autocratic Model, the Custodial Model, the Collegial Model, and the Supportive Model.

Have you studied and traveled overseas : Have you studied and/or traveled overseas? Have you had a roommate whose cultural background differs from yours? Do you work in a job where you encounter people from different cultures?

How much of the million remains to repurchase stock : If John can place the funds necessary to retire this $10 million debt into an account earning a 6 percent annual return compounded monthly, how much of the $25 million remains to repurchase stock?

Explain the fixed and variable costs : Explain the fixed and variable costs and how these fit with the company's short- and long-term goals. Use a narrative with a table to show calculations for cost categories. Provide reasonable estimates for each of the categories. Specific or in-depth..

Global capital market grown so rapidly in recent decades : Why did the gold standard collapse? Is there a case for returning to some type of gold standard? What is it? What opportunities might current IMF lending policies to Third World nations create for international businesses? What threats might they cre..

Find the present value of ordinary annuity deposited : Find the present value of a three-year, $20,000 ordinary annuity deposited into an account that pays 12 percent annual interest, compounded monthly.

Describe the highest and lowest scored traits : Select two traits and discuss how these traits might have an influence on organizational culture - How does organizational culture have an effect on personality traits (positive or negative)?

Determine the corresponding error rates for a coded system : . Use the error probability curves given in Figure P12.29 for rate 1/2 and 1/3 convolutional codes with soft-decision Viterbi decoding to determine the corresponding error rates for a coded system in pulse interference. Perform this computation fo..

User Account

All Pages