BRAND MANAGEMENT PROJECT ON MERU CABS

SUBMITTED BY: YASH NATHANI

ROLL NO: 2014329

SUBMITTED TO: PROF R.KAMBLE

INSTITITE OF MANAGEMENT TECHNOLOGY

2014-2016

INTRODUCTION AND INDUSTRY ANALYSIS

Meru Cabs was one of the first companies to launch metered "Radio cabs" in India. Meru Cab
provides radio taxi service in seven key cities of India - Mumbai, Delhi, Hyderabad, Bengaluru,
Jaipur, Ahmedabad, Chennai Vadodara, Surat, Pune and Kolkata. The name "Meru" is derived
from the symbolic mountain of the gods, an icon of unshakeable reliability and character - a core
value which lies at the heart of Meru's promise to its customers. Customers benefit from a
relaxed commute in a well-equipped, air-conditioned cab, which is readily available 24/7. An ebill receipt at the end of the ride assures the customer of tamper proof billing. Meru Cabs itself
has some 7,000 cars in its network, including cars not owned by it directly. It is the 3rd largest
"Radio Taxi" company in the world. It is the largest operator in each of the cities where it
operates with More than 20,000 trips per day and serving more than 1.8 million passengers. It is
the only taxi operator in India to partner with the airports at Mumbai, Delhi, Hyderabad and
Bengaluru
The taxi industry comprises 1.6 million cabs and the organised sector comprises only 90,000
cars, which is just under 6 per cent; so there is immense scope of consolidation. The current
market size is approximated to be about Rs 1000 crore in India and is expected to grow at a
CAGR of about 25% in the next 3-5 years. The taxi market in India is highly fragmented and
unorganized. The unorganized market is constituted of individual car owners and agencies which
operate in one or few cities Owned vehicles segment includes pure-play car rental companies and
players like Carzonrent and Meru. Aggregators are a new phenomenon driven by rise of start-ups
like Ola, Taxiforsure. Affliators are associated with multiple car rental agencies and offer various
packages.

SEGMENTATION, TARGETING AND POSITIONING

SEGMENTATION- People who mobile from one place to another and are in search of quick
and reliable taxi service. Meru cabs can be further segmented into Meru cabs i.e. radio taxis and
Meru plus providing car rental service.

TARGET GROUP- Customers who are in need of cabs instantly and are well averse in using
technology. Applications and internet are used to book cabs for convenience and ease. With
Meru eve it is also targeting the women population by providing women drivers in the cab. Apart
from women the corporates, tourist, college students, senior citizens also form the target group
for the company.

POSITIONING- Indias No. 1 Radio Cab Service with comfortable and pleasant ambience.
They try to ensure commuting in the most hassle free manner with safety given the paramount
importance.

USP- Relatively low pricing structure and the Meru training academy.

THE REVENUE MODEL:

Revenue from the cabs: The drivers need to pay the company, approximately Rs. 1200 every
day. So for each car on the road, it is Rs 1200 per day.
Advertisements on and within the car: This is another source of revenue. The cars have
advertisement inside the car in the form of pamphlets and painted on the doors as well.

HOW ARE CABS ALLOCATED TO A CUSTOMER- The centralized command

center is the heart of Meru. Based on the pick time, they have a visibility of all the cabs which
are free around that time and a message goes out to the drivers in the vicinity. One of the drivers
then accepts the pickup and reaches the pickup point. In the recent past, they have also brought
in a mobile app which gives a visibility of the cabs available and uses GPS to give this
information. The command center also ensures that all the cabs in the city are optimally spread
across the entire city and no particular area goes without a free cab for a long duration of time
which could affect the business. This centralized center tracks the position of every cab in the
city.

MICHAEL PORTER FIVE FORCE ANALYSIS

Rivalry among competitors- The rivalry is high and increasing. Price is no longer a
differentiating factor. People look for comfort and luxury.

Threat of new entrant- Since many VCs are investing in this industry, many new players are in
a position to enter the market. The profitability also reduces on new players entering the market
since there are low loyal customers.

Threat of substitutes- The biggest substitude is public transport. It includes local buses, taxis,
metros etc.

Bargaining Power of buyers- With more advancement in technology and increasing

competition it has been seen that the buyers have some bargaining power in form of coupons and
free rides.

Bargaining power of suppliers- The major suppliers include car dealers, skilled drivers and
technological products. Since there are many car dealers and suppliers of technological products
there bargaining power is low.

MAJOR COMPETITORS AND DIFFERENTIATION - The major competitors in

organized landscape include Ola cabs, Uber, Taxi for Sure, Easy cabs, saavri etc. The major
factors on which it differentiates from its competitors are as follows-

Operation- Meru maintains the cars, recruit drivers and gives them more control over the cars.
Unlike its competitor like Ola where the risk of a tour operator pulling out remains high.

Financial Viability: Ola runs risk of not being able to scale up quickly as standardizing and
keeping together different car owners and provide consistent service may prove difficult. The
investment in Meru cabs are higher but since they recruit and train their drivers and their ever
growing presence across cities it will be able to scale up its fleet rapidly.

Customer Service and Faster Delivery- Meru Cabs help in bringing alignment between the
drivers and the company. The drivers and the company employees are in the same pace with its
major emphasis on customer service. It ensures cabs are optimally spread across various location
and also strategically have more cabs in areas where demand is more.

Different Strategies- When it comes to Meru they own the car and the drivers are franchisee
who rent the car at a certain rate from the company. Meru cabs basically work as city taxis with
the main motive of providing safety along with good ambience to the commuters. When it comes
to companies like Ola, the drivers are on a fixed salary and exclusively work under the brand Ola
and the company doesnt own the car. However with increase in competition Meru recently has
launched Meru Plus where the model is similar to that of Ola where they aggregate cars from

small individual. Meru has brought together drivers who have their own cars but drive under its
network. Other players like Mega cabs are trying to bring about the self-drive concept.

RECOMMENDATIONS

Linking up with pubs and bars to encourage people to call after drinks. This will help
them create a new market segment for their services.

Improve its tracking system and special emphasis on womens safety. Investment needs
to be made extensively in technology. For women safety special emergency buttons
within the taxi must be provided to make them feel safe and secured. Also extensive
training must be given to the drivers on women issue and how to deal with them.

Expanding meru cabs to tied 1 and 2 cities. For expansion it needs to align its technology
and operation at a consistent level across the organization.

With increasing competition it is necessary they have the right communication mix. The
message of the brand differentiation must be clearly stated and they must promote their
brand online via social media and mobile advertisement where majority of its targeted
customers belong.

The premium segment for tourist and corporates is still untapped. Apart from Uber there
is not much competition. Meru cabs can focus on the luxury segment by providing luxury
cars and tap that market accordingly.

The company can start a loyalty program to retain its customers. The customers can avail
the benefit of cashless travel and payment at the end of month. The frequency of travel
will lead to loyalty points which can be redeemable with exclusive Meru offers. In this
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process the company is enhancing the user experience and retaining as well as attracting
new customers.

SOURCE OF INFORMATION
http://www.emeraldinsight.com/doi/pdfplus/10.1108/EEMCS-08-2012-0150
https://www.merucabs.com/about-us/