Current Marketing Situation for Line Companies
Description
Current Marketing Situation
1.Market Description
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2.Product Review
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3.Competitive Review The word count is around 2,500 words. The word count is not a mandatory requirement, but the most important thing is to clearly articulate
Review customer needs and factors in the marketing environment that affect customer purchasing
- The influence of demographic variables on E-scooter sharing systems (ESS)/Bike sharing systems (BSS) use are not all direct effects but are strongly mediated through the psycho-social attitudes of safety concern (in technology and the travel environment), time consciousness, and green lifestyle propensity (Blazanin et al., 2022 – Austin TX)
- SAFETY **
- higher safety concern and lower green lifestyle propensity drive the lower ESS/BSS use among older individuals (Blazanin et al., 2022)
- higher safety concern and higher time consciousness underpin the lower ESS/BSS use among women (Blazanin et al., 2022)
- Addressing safety concerns of micro mobility modes should be the top priority of providers and public agencies. Efforts solely directed toward extolling the “green” virtues of micromobility modes is likely to have limited returns (Blazanin et al., 2022 – Austin TX)
- Also found important in polish study (Bartowiak et al., 2021)
- Convenience
- Flexibility, makes travel easier, public transport is not developed enough, reach destination faster, no traffic (Bartowiak et al., 2021 – Polish sample)
- Time consciousness – negatively correlated with ESS use in Austin (Bartowiak et al., 2021)
- Time consciousness is perceived as a barrier for women, highly educated individuals, and those employed – to using ESS (Bartowiak et al., 2021)
- but ESS are a time conscious solution
- This must be highlighted in ads
- Cost
- Cheaper than driving (gas + city parking) or uber/lyft
- (Bartowiak et al., 2021 – Polish sample)
- Environmentally friendly
- (Bartowiak et al., 2021 – Polish sample)
- Weather
- a higher heat index leads to more e-scooter trips (Kimpton et al., 2022 – AUS)
- lower temperatures and wind reduce e-scooter usage, but this reduction is less than that observed for bicycles i.e., e-bikes and docked bike-sharing (Kimpton et al., 2022 – secondary info – they got it from somewhere else)
- Rain and snow – reduce e-scooter usage (Noland, 2019 – Louisville, KY as cited in Kimpton et al., 2022)
- Changes in avg temp and wind speed has minimal effect on total daily trips (Noland, 2019 – Louisville, KY as cited in Kimpton et al., 2022)
- Travel distance declines in windy weather and increases during warmer temp (Noland, 2019 – Louisville, KY as cited in Kimpton et al., 2022)
- Survey results reveal that users prefer riding e-scooters to walking in hot weather (Sanders et al., 2020 as cited in Kimpton et al., 2022 – Tempe, AZ)
- Infrastructure
- e-scooter riders (using a shared e-scooter service), like cyclists, prefer high quality, dedicated infrastructure (Kimpton et al., 2022)
- Restricting attributes: (Hardt & Bogenberger, 2019 – Munich Germany)
- subjective safety,
- weather conditions,
- baggage capacity
- Reason for transportation:
- Polish study:
- Get from point A to B for a clear reason
- Ex. get to pubic transport points, travel to or from work/school/store/shopping/visiting friends/family/errands in the city/going out/going to a bar
- Rarely used aimlessly – for a ride without a clearly defined goal
- US and AUS
- Found more recreational use (Kimpton et al., 2022; Degele et al., 2018)
Product Review
Sales
- Net sales 2022
- Operating expenses
- Net income all else considered
- 26% EBITA Margin
https://investors.lime-technologies.com/wp-content/uploads/2022/04/LIME_A%CC%8AR_21_ENG.pdf
- Revenue in the E-Scooter-sharing segment is projected to reach US$615.80m in 2022.
- Revenue is expected to show an annual growth rate (CAGR 2022-2026) of 10.62%, resulting in a projected market volume of US$922.20m by 2026.
- In the E-Scooter-sharing segment, the number of users is expected to amount to 33.6m users by 2026.
- User penetration is 7.5% in 2022 and is expected to hit 9.8% by 2026.
- The average revenue per user (ARPU) is expected to amount to US$24.55.
- In the E-Scooter-sharing segment, 100% of total revenue will be generated through online sales by 2026.
- In global comparison, most revenue will be generated in the United States (US$615.80m in 2022).
- The E-Scooter-sharing segment in in the United States is projected to grow by 10.62% (2022-2026) resulting in a market volume of US$922.20m in 2026.
E-Scooter-sharing – US | Statista Market Forecast
Prices
Lime uses the geographic strategy as they adjust their prices based on their location.
The price of the ride depends on the city, the customer needs to open the App to get the cost of the ride. The price is $1 to start and unlock the scooter plus the per minute rates. The rates can go from $0.15 to $0.39 depending on the city.
Lime Electric Scooter – Rent scooters near me | Lime Micromobility
Lime Scooter Price: How Much Do Lime Scooters Cost? | Ridester.com
Also LimePrime subscription service
Not 100% sure how accurate this is but: (CFO DIVE)
- “Lime charges $1 to unlock the scooter and 25 cents per minute of ride, using Spokane, Washington, as a representative market”
- “Its main competitor, Bird, … charges $1 to unlock the scooter and 29 cents per minute of ride, using Indianapolis as a representative market.”
- “At the rate these two companies charge, a 10-minute ride would generate between $3.70 and $3.90 in income.”
Gross margins of the major products in the product line
- How do they make money?
- Ride fees
- Avg ride (2020) was 13mins, 1.3miles
- $1 unlock + $0.15/min
- avg 2.95/ride, w/ avg 13min ride
- In 2020, avg 4.5 rides per day per scooter
- With 500 scooters in Seattle – Lime makes $6,640/day in Seattle alone
- Subscription fees (Lime Prime)
- $5.99/month waives unlock fee for users
- Costs:
- Breakdown:
- $1.72 per ride for charging
- $0.51 per ride for repairs and maintenance (on average)
- $0.41 in credit card transaction fees
- $0.06 for customer support per ride
- $0.05 for insurance
- Total:
- Total per-ride costs are $2.75
- profit margin:
- 20 cents for an average ride
- Barriers to making money:
- Battery charging
- Solution: swappable batteries
- Produce more batteries + instead of collecting bikes to charge overnight, just swap the batteries out = much faster to switch batteries and less work and less people needed to do this job than the current model of collecting bikes overnight
- Low ride cost
- Solution: higher cost per minute?
- Problem:
- competing with low-cost alternatives like public transport and driving – already difficult to get people to make the switch to e-scooters – cost is a major selling point
- Competing with other e-bike companies that offer low prices
- Solution 2: monthly subscription service for unlimited use
- Similar to gym membership, not everyone paying will use it and cost for changing and maintaining tech will be lower bc many pay but not many actually use the products
- Short-life span + high need for repairs
- Solution: sturdier more expensive bikes that take longer to turn over profit, but also last longer on the market
- Is lime profitable?
- In 2020 they became profitable for EBIT (expenses before interest and taxes)
- “As a company we’re already gross margin positive for the entire quarter, and we do anticipate profitability by 2020,”
Competition Review
The e-scooter rentals are quite innovative and new to the transportation industry. They would be considered to have an oligopolistic competition. The market consists of a few other e-scooter rentals, who are highly sensitive to each other’s pricing and marketing strategies. Because there are few companies who specialize in this, each company is alert and responsive to competitors’ pricing strategies and moves.