Assignment TakenMarketing Department (Propose Marketing plan, Brand Journey of Airway Delivery Drones – A marketing Overview)

Case UnderstandingAirway Delivery, is a well-established courier company which has plans to venture into ‘Hyper Local Delivery space’ and wants to conduct local delivery through drones. The necessary permissions and successful beta testing of deliveries are in place. This venture is an extension of company’s current service portfolio which is B2B from where it wants to shift into B2C. They have decided to offer “Short Range Drone Based Services” in first phase which is comparatively cost effective to “Long range drones”. A major challenge in this business case from marketing point of view is brand establishment and innovative measures which would set them apart as a market leader.

BCS Solution Summary‘Hyper Local Delivery marketplace’ model is in other words ‘on-demand’ near me delivery model. It offers both convenience and efficiency as USPs to the seller and buyer. The service ambit of this model is supposedly within few tens of kilometers from the location of business. Given the very focused geographic spread, the local sellers are guaranteed visibility and customers are guaranteed speedy delivery from their trusted stores. Airway Delivery has chosen the mode of delivery as drones, which brings in some potential challenges on the forefront. Safe deliveries, security issues bundled with insurance of packages adds costs to the operational success. From marketing point of view ‘societal acceptance’ is the key factor to build the ‘brand value’ for this drone-based services. Marketing plan proposed in the solution would help us to understand how Airway Delivery can get around these issues to establish their brand in the market and emerge as a market leader.

Solution

Airway delivery’s decision to venture into hyper-local delivery business has many immediate constraints and opportunities at hand. 

An evaluation of the company’s internal strengths and weaknesses along with external opportunities and threats served as the foundation for this strategic analysis and marketing plan. The plan focuses on the company’s growth strategy, suggesting ways in which it can build on their existing customer relationships, and on the development of new services targeted to specific customer niches.

Environmental Analysis: The key factors that can be considered as significant variables in this delivery service model are mentioned as below:

• Cost factor (economic offer)
• Value addition (in terms of fast delivery)
• Convenience (from both buyer and seller POV)

The first expected adopters for this delivery mode would be food deliveries, urgent pharmacy deliveries, or contact less deliveries (as in now the COVID 19) a pandemic situation. Taking into consideration the fact that drone delivery is a fairly new concept in India, an in-depth understanding of the environment for marketing of this service needs us to look further into the following categories:

Marketing Environment

Target Markets

The Marketing Environment: The competitive forces, socio-cultural forces, economic, political and legal regulatory forces may have a substantial influence in analysing the marketing environment.

Competitive Forces: Airway Delivery may face immediate competition from other modes of delivery / giants like amazon & Walmart’s who have plans to venture into drone delivery. They have been in the news for their beta testing in several locations in India. These corporate giants may be able to tap into these companies easily.

Solution: Airway deliveries needs to utilize their existing long-term relationships and customer reach to their advantage to counter this competition.

Sociocultural Forces: The Social stigma of privacy invasion may bother general public at large. Although there are compliance factors defined by DGCA back in 2018, but judging the psychology of common people is a difficult task. Ease of acceptance of a flying object with a camera on board is a difficult criterion to judge. Fear of property damage, or privacy invasion may build an immediate dislike.

Solution:  Airway delivery needs to market its services with an innovative approach so that people can immediately relate to the eternal question of “Why Choose Us?”

 >> Safe deliveries >> Advanced Software >> Insured deliveries

Safe Deliveries (at soaring speed): Why is the delivery safe?

Advanced flight management software – This works on a centralized cloud-based flight planner. The end – to – end drone operations and management system that has been purchased by Airway Delivery @ 25 Lacs INR is an asset that will make the services offered stand out in the market.

Features of software (Highlighted in campaigns)

>> Onboard software helps to understand the surroundings in real time.

>>The software can manage and avoid collisions in real time

>> Anti-theft feature, with multiple navigation system

>> The cloud information about restricted airspaces, weather changes etc.

>> End customer tracking from Order – Pack – Flight – Deliver

>> Soft landing of the drones with secure delivery assisted by an OTP

Advanced drone features – EV drones with Backup battery and motors for redundancies in case of failures during flights..

Insured deliveries: Insurance to protect value of the order, providing Inspections. Airway delivery needs to tie up with companies that are offering courier insurance. This coverage provides protection against loss, theft or damage for goods in transit. 

Insurance is very critical in case of delivery by drones for the customers in India because of the unknown topology and congested delivery zones.

Courier insurance companies offer programs specifically tailored to couriers for last mile/final mile delivery companies.

They usually have access to multiple resources for offering this  insurance to the courier companies. So in a an unique way Airway Delivery will provide to customer goods supplied protection through courier insurance. This will come at an added cost to customer – but in case of pharmacy / high value products – customers would like to have this option and it will be an USP for Airway Delivery.

These can be offered at different levels:

- Basic coverage: The liabilities in case an accident / damage occurs.

- Mid-level with insurance to Fire and theft: It covers liabilities as well as fire and theft that could occur upon the drones.

- High value item coverage: This is the highest level of coverage in offer. It covers all basic elements, fire, theft as well as the drones. This would be essential when we are in phase 3 – 4 of Brand image and marketing journey. Here the long-range drones are also assumed to have been launched after the Proof of Concept.

Economic, political and legal regulatory forces: Firstly, drones need clearance from government before operating for delivery services. Further post pandemic, there has been lot of rethinking going on with the marketing budget planning. With the unexpected job losses, business closures, and skepticism in mass public towards spending, people are re-evaluating their buying decisions.

Solution: Regarding the legal regulatory forces – Airway Delivery already has their permissions from DGCA in place. The software team can lead the “delivery service” marketing campaign through in app advertisements, Facebook, you tube and Instagram launches. Pandemic may force people to rethink and opt for contactless services which may work in favour of Airway Delivery drones’ services.

Target Markets: Airway Delivery has effectively implemented a differentiation strategy in the Hyperlocal delivery marketplace with delivery mode by drones – which supports less time, less pollution, and can be promoted as the ideal contactless delivery mode. (USPs)

We can see that the short-range drones have a weight bearing capacity of 10Kg, and 150km range of travel on full charge. 

In case of hyperlocal delivery a few 10s of KM would be an overestimate. This will open the scope for new target markets for Airway delivery.

Proposed New Target Markets:

>> Contactless deliveries during festivals (tie up with Flower shops / artefacts etc fresh delivery category)

>> Factories (site support for emergency breakdown services)Hospitals (urgent support for medicines or equipment)

>> Offices (urgent deliveries - stock / repair items / breakdown service)

>> Apparels or clothing (in the long run after proven delivery process)

Airway delivery can also offer a hybrid delivery service (Partial delivery route covered with courier & last mile delivery by drone which saves time while travelling to congested traffic areas)

Cost Benefit Analysis :  Apart from being fast, reliable and secure the cost of delivery through a drone would be an attractive proposal for the customer.

>> With the strategy of Airway Deliveries to purchase drones with EV batteries – it brought down the fuel rate to Rs. 1 / Km.

If we consider the cost for consumer to travel in the congested roads for shopping in locality, we can see that by car / auto (a minimum of Rs. 5 / Km is an inevitable cost to customer for travelling along with other miscellaneous associated costs of travelling with families.

The flat courier charge for a 10Kg delivery is Rs. 110. However Airway delivery can offer this 10Kg. delivery for a distance of 10km at half the price or they may also go for the model of profit margin on commissions from sales of B2B tie ups for BD and advertisement.

Either way the cost for delivery is well justified and lucrative for both buyer and seller (who can get new business without any extra effort or marketing).

SWOT ANALYSIS

Strengths:

>> Airway Delivery Drones service differentiation strategy is the positioning of the service in the existing hyper local delivery market. The marketing pitch resonated customer-oriented services, commitment to safe deliveries, and customer support services.

>> The relatively small size of the staff promotes good communication and quick response to clients’ needs. The software team can monitor marketing reports for continuous development in campaigns and marketing pitch.

>> A long-term relationship with the B2B supplier will result in shared knowledge of the services requirements, adherence to quality standards, and a common vision throughout the implementation of the delivery process.

>> There is a high possibility of reorder business (with only drones or hybrid delivery mode) with an already satisfied customer base. New business potential through positive word-of-mouth communication, is expected to generate about 30 % of new business each year.

Weaknesses:

>> There is a lot of dependence of success of hyperlocal delivery mode on the flight management software of drones. A fool proof testing of this software on different topologies of India and weather condition is a critical factor for making this brand a market leader in this area.

Opportunities:

>> Airway Delivery drone’s division marketing campaign may hit the right notes by building an image of a fast and safe delivery without human intervention. In the post pandemic era – it may not be difficult for customer to be convinced for contactless delivery options.

>> With the use of EV drones – Airway Delivery will resonate the tone of reducing carbon footprint. This makes the customer feel they are contributing socially to the fight against pollution in the society.

>> Well established B2B courier model opens up opportunity for hybrid delivery services – which will act as a market differentiator for Airway Delivery.

Threats:

>> The technology, knowledge, and equipment required is being controlled by a small group of people 2 software development members and 4 Qualified Drone Operators. The possible entry of new competitors is a significant threat with the change in critical staff.

>> Leakage of marketing strategies through change in management team may again help the competitors to gain access to the business model of Airway Deliveries.

Matching Strengths to Opportunities/ Converting Weaknesses and Threats

>> Airway Delivery must make sure that its management hierarchy is maintained and it empowers its employees through a decentralized marketing organization.

>> Immediate market survey of its current customers would help to gain a better understanding of competitors and workability of the proposed features.

>> Immediate topological survey would help in machine learning software optimisation for making the optimised closed loop path tracking of drones.

Marketing Strategy Implementation

The marketing strategy for the drone services will be implemented in four phases and with two mix of offered services drones and hybrid.

Phase 1: Awareness Campaign: This is the pre – launch phase for the drone services in which the following activities would be planned. We have testimonials from B2B customers and required permissions in place.

>> online marketing campaigns, with online platform You tube / FB / Instagram

>> pitching of commission-based service proposals to B2B companies (advertisement and customer conversion of B2B products on our app / websites)

>> market survey to get a comprehensive customer profiling

>> Zone wise location profiling for defining price slabs (zone 1 within 10 km, zone 2 within 20 km and so on)

Phase 2: Trial Offers phase: This is the phase of launching the services to B2C as our marketing campaigns are already in place with tie ups in proposed market segments.

>> Offer trails with short range drones to current customer base gain customer testimonials

>> Collect consumer behaviour data and fool proofing deliveries

Phase 3: Finetuning Service Offer Mix: With the experimental phase over, and data collected and analyzed in real trail operations we are ready for tried and tested offers. Broadcasting marketing campaigns of services to be started now.

>> Mass Campaign content / SEO / Referral / Paid promotions

>> Customer feedback & close looping surveys for customer retention

>> Planning for launch of Long-Range drones – emergency sites, remote location.

Phase 4: Post purchase & Repeat success: This is the final phase in which we are being recognized as a brand and we start our journey to create the value positioning of our services as planned. We keep repeating the trails and finetuning for business development and long-term customer retention.

 

ConclusionIn conclusion, Airway Delivery Drone division has opportunities at hand to create the brand image of a market leader with the value proposition of fast, secure and convenient Hyperlocal deliveries with drones. However, management should pay attention to customer and location profiling before officially launching the services at a broader level. With the proof of concept in place in phase 3 they should be able to dive further into the brand image journey for this division. They need to continue a closed loop customer feedback and improvement process for many years to come in order to be recognized as a market leader in Hyperlocal delivery field.