Identifying the motivations of commuters to purchase on-road e-scooters from a higher end category in belgium and devising a go-to-market strategy

Abstract

Identifying the motivations of commuters to purchase on-road e-scooters from a higher end category in belgium and devising a go-to-market strategy. Together with the growing urbanisation, the micro-mobility needs have risen throughout the years (EY, 2020). With these needs come multiple solutions with one of them being the e-scooter. Urban citizens can already find those solutions in purchasing, sharing or renting models. However, as Taito's and our competition market research showed, there is an important gap in the premium e-scooter category market. In fact, either being for sharing, purchasing or renting, e-scooter manufacturers do not provide enough safe and reliable solutions for the urban mobility market. As a result, Taito Mobility gave itself the mission of solving e-scooters' problems and providing a premium product available for purchase. In fact, research shows that the e-scooters delivered through sharing models are of low quality, not adapted to the weather and infrastructures and have a short average lifespan (EY, 2020). As a result, businesses providing these do not emphasize the repairs and only substitute used products with new ones. Therefore, providing a solution tackling these problems is something that can be qualified as necessary for urban citizens and urban workers with micro-mobility needs. With Taito's founders expertise in delivering a premium engineered product, the company is able to deliver qualitative, safe and sustainable solutions, all made in Europe. However Taito's founders are well aware of their limitations regarding their marketing expertise. In fact, having a prototype helps them in testing whether the market would embrace their potential product. Nonetheless, once the end product-development step is reached, the company has the ambition of bringing it to the market as soon as possible. Of course, this must not come without a solid strategy. Consequently, the company gave our team the mission of developing a go-to-market strategy for the Belgian e-scooter market. As a result, more specific marketing-related questions came with this broad but critical business challenge. Indeed, before providing Taito with a marketing mix to define the strategic product (and services) attributes, place to distribute, final price to set and understand how to promote it, the market had to be researched. Naturally, this meant understanding and identifying the final buyer personas. As a result, understanding the motivations to buy e-scooters from a higher end category was necessary as it helped us segment audiences. However, we first conducted secondary research followed by primary research. Indeed, we developed a situational analysis as it helped us identify the current industry and market dynamics before deepening our primary research complemented by the secondary information we were able to gather. As we aimed to focus on the consumer market, our primary research consisted of exploratory qualitative research with semi-structured interviews to identify how e-scooters are perceived and whether there were opportunities for high-end e-scooters. Next to that, our quantitative research resulted in 201 respondents. We decided only to use the ones with a strong focus on respondents having an interest in high-end e-scooters. As a result, 188 respondents were used to conduct statistical and analytical analyses in order to identify interesting segments and deliver a robust targeting strategy. As a first recommendation, we would recommend Taito to take the initial perceptions of e-scooters to segment their market. Indeed, segmentation using factor and cluster analyses were also realised on willingness to buy (WTB) high-end product and service attributes but these didn't show significant effects on both the high-end e-scooter willingness to buy (WTB) and net promoting scores (NPS). However, two segments stand out regarding their intentions to buy and promote e-scooters from this specific category. In fact, the first potential target we were able to identify is the segment of the "Riders" (22% of the sample). Indeed, by profiling this segment, results show one potential buyer persona within this specific segment. The "Fun Johnny" target is interesting as e-scooter are attractive to him because of the great riding experiences they provide. Without being barriers to purchase, he also communicates room for improvement regarding current offerings. According to this potential buyer persona, the quality, safety and repair services can be improved and would add value to their purchase. The second interesting segment, the "Adventurous" (28% of our survey sample) is also a potential target segment as they enjoy riding e-scooters too and believe it is both very practical and a great means of transport. By profiling this segment, it resulted in a more older, traditional segment, who showed great intentions to buy and promote high-end e-scooters. One of the potential explanations is the bad visibility, quality and after-sale services they associate and perceive with regular e-scooters. Hence, the first segment being quite young, we would not recommend Taito to put its central efforts in it. Indeed, since their product will stand in the higher-end, premium category, price sensitivity might affect its conversion rates. We would rather recommend Taito to develop its marketing mix and marketing communication strategy towards this "Curious Sophie" target persona. Indeed, the improvement points of regular e-scooters together with the high-end e-scooter WTB and NPS identified within that segment make room for innovative solutions like Taito's. However, a strong positioning strategy is needed. As our results demonstrated a gap in the urban mobility market regarding safe and reliable e-scooters, together with a potential market in this same gap, we would recommend Taito to keep its initial “safe and reliable premium means of transport to commute” positioning. This can be combined with a sustainable positioning as current market trends show. Regarding the product and service attributes Taito could develop, we identified one that seemed to be important to the respondents. Consistently with their initial perceptions, respondents showed that the repair service behind high-end products is very important. Representing the second most important attribute behind price, it shows that the "Mix (DIY & Professional)" attribute where customers could benefit from both do-it-yourself support from the brand to repair small issues by themselves and benefit from professional services for more important issues, is something highly valuable. Furthermore, customization came as the third most important attribute while additional warranty came as last. However, belonging to one of these segmented results (conjoint analysis results were segmented using factor and cluster analysis) do not show significant effects on the belonging of the initial perceptions segments. Therefore, it is important to use these results as indicators of overall product and services attributes to develop and not interpret these as being related to the target segment ("Curious Sophie"). Since the price is something extremely difficult to research, all three pricing research methods were conducted. Indeed, cost-based, competition-based and value-based pricing gave different prices or price ranges. Nonetheless, we were able to identify a price range of potential final prices to set at 1.250 euros - 1.500 euros, with a suggested price of 1.500 euros, VAT included. However, Taito should take this as an indicator to find its optimal price range as it can find other ways of increasing this major profit driver (Tackx, 2019). Of course, it is important that Taito delivers consistency between its pricing and distribution strategy. For their distribution strategy, we suggest that Taito develops both a direct-to-consumer (D2C) approach combined with a retail strategy (B2B2C). In order to deliver these, Taito has the responsibility to choose high-end partners for both their webdesign, e-shop and physical stores as well as for repair and maintenance services. For the repair and maintenance service in the D2C, Taito could either decide to deliver these services by means of traditional retailers as partners or propose innovative solutions of third-parties such as “Cyclofix”, which provides mobile repair services and which could help them in delivering innovative end-to-end solutions. Indeed, with the great modularity of its e-scooter, Taito could add value to its final product. However, our suggested buyer persona would still prefer traditional retailers, hence the importance of delivering these services through more traditional partners as well if possible. Indeed, building sustainable partnerships with retailers to sell its products is important as our suggested buyer persona has more potential of converting through this channel. Again, Taito needs to be careful as the service levels and partnerships have to be consistent with their brand promise. Since our research shows that trials have limited added value in online shopping, Taito should not allocate resources on it. Nonetheless, when having a B2B2C approach, Taito should not overlook this as trials seem to be important for their potential buyer persona. However, return policies are important for both approaches and especially for the D2C. Indeed, it is an essential feature in online shopping for a high quality and high-end positioned product (Li et al., 2013). Furthermore, costs for digital e-commerce and marketing will be quite high, especially in the beginning as they will have to raise awareness and convert. Consequently, customer relationships will be entirely online for D2C while offline relationships can occur via partners. As a result, Taito’s promotion of its product and services should take place both offline and online. In fact, digital advertising and communication are relevant for both segments as brand awareness is built in their zero moment of truth (ZMOT), in other words, when getting more information about, or specifically searching for a solution to their needs. Of course, we recommend doing organic, inbound marketing for both segments while investing in paid advertising on its target persona. Despite being less cost-efficient and having a lower data capturing advantage, offline promotion should not be overlooked as our potential buyer persona revealed itself as being quite traditional in its purchasing behavior. Furthermore, the content of the communication should emphasize the confort, practicality, service, safety with a focus on on-road visibility and the made in Europe aspect of the products. Another important aspect to consider is the omni-channel customer experience Taito aims to provide. Since most consumers are expecting consistent brand experiences both online and offline, Taito should put special emphasis on this aspect. Since the customer experience is the new battleground of brands, Taito could leverage a solid long-term competitive advantage with it. Besides that, premium brands should not provide aggressive discounts as their brand image might be affected. Of course, any go-to-market strategy comes with a roadmap having solid milestones to understand when they should launch. However, since Taito is in its very early stage of development both from a product and strategic point of view, the company is constantly pivoting. When adopting a lean, iterative process, agility is key. In fact, meetings with experts and other stakeholders generated many questions that needed further investigation before launching. For instance, the team is only composed of the 3 founders with two of them currently working on the prototype whilst the supply chain is not yet defined. Hence, their production capacity might be affected, which also limits their capacity to provide sufficient and finalized products to the market. Furthermore, the company has the willingness to launch a crowdfunding project which is not defined either. As a matter of relevancy, we aimed to deliver a strong marketing strategy (segmentation, targeting, positioning and marketing mix) to apply whenever the company and their product are ready to launch. To conclude, this report gives an overview of the high-end e-scooters market with its specificities. High-end e-scooters are very attractive to the target segment because of their practicality and reliability as a commuting tool. Going for a high-end brings additional value to customers with its improved safety and quality. Moreover, the premium experience of having a full repair and maintenance service accompanied with a high-end purchasing experience and communication brings even more added value to the consumers. It is however crucial for Taito to be consistent both with its high-end positioning and with its buyer persona. This means that even if an omnichannel strategy is necessary to fit the needs of the target segment, the whole experience needs to be premium regardless of the channel. By applying these strategic recommendations thoroughly, Taito should be able to reach and convert the right customers for its product.