2. UberEats delivers the best of your city right when you want it. Our
curated menus feature dishes from the local spots you love. And the
ones you’ve always wanted to try. It’s same cashless payment as an
Uber ride. So just tap the app, meet your driver outside, and enjoy
3. What is the goal?
Goal
Access competitors pricing model & determine
selling price to maximize market share
Start with Penetration Model
Tasks
Research target market’s frequency and
wiliness to order delivery at different prices &
determine break even points.
Tools Internet Research, Excel, Tableau
4. Research Method
1st Hand Research
•Survey Monkey
•Industry Inside Friends
2nd Hand Research
•San Francisco Census
•Statista.com
•Tech Crunch
•Sprig
•SpoonRocket
•Farm Hill
5. Solution Process
Penetration --> Cost +
Customer
Needs
Customer
Demographics
Break Even
Customer Benefits
Offering:
Penetration
Expertise
Cost +
Market Price
Lunch: $12.5
Dinner: 14.5
Competitive influences
Enter with a price
of $8 for lunch,
which is 48.8%
lower than
current delivery
Brake even in 1 yr
Dominate
presence in San
Francisco with
16, 000 active
users with 100K
UBER app down
loads
UBER menu is
extensive
6. CanUber Eats enter the Food
Delivery Market at a delivery price
comparable to its competitors to
obtain favorable market share in
order to later introduce a slight
higher price to gain more profit
Market
Share
• 5% Of Market
Share
Price Point
Average –
• $ 20% under
competition
Break Even
• Break even in
year one
Problem Statement
Criteria of success?
13. Top Down & Bottom Up
SF Market
•Population 18-65
•617,188
Segment:
Age
•Meals ordered/day
•362,597
Market Size
•Average Meal $14
•$1.85B
•Average meal
$15.47
•$1.21B
•Meals ordered/day
•358,628
•Total Population
•797,976
Zip Code
Zone:
1+2+3
Zone
Segment:
Market
Size
Average:
$1.52B
Just
Delivery:
$148M
14. Market Size: by ZonesZone1Zone2Zone3
Delivery %NeighborhoodPopulation
15. Penetration Price Point Model Z1
• 52.1 % demand food delivery
• Price Launch
• Lunch $8
• Dinner $10.45
Comprised of
• North beach, financial district,
Nob Hill, Russian Hill,
Mission, Van Ness, Soma
• Zone population of ~ 300K
ZONE 1
16. Penetration Price Point Model Z2
• 29.6 % demand food delivery
• Price Launch
• Lunch $8.43
• Dinner $13.10
Comprised of
• Marina, Persidio, Richmond,
Sunset, Sea Cliff
• Zone population of ~ 306K
Zone 2
17. Penetration Price Point Model z3
ZONE 3
Comprised of
• Glen Park, MiraLoma Park, Pacific
Heights, Lake shore, Stone Town
• Zone population ~200K
•
• 18.3 % Demand Food Delivery
• Price Launch
• Lunch $9
• Dinner $14.47
22. Recommended Price Based on
Models
2. Price Recommendation:
• Zone 1: Lunch $ 8.00; Dinner $10.45
• Zone 2: Lunch $ 8.43; Dinner $ 13.10
• Zone 3: Lunch $ 9; Dinner $14.47
4. Value to Customer:
• Lunch $ 8-$9 > $ 11.84
• Dinner $ 110-14 > $ 14.50
1. Competitive Landscape:
• Lunch: $12.5
• Dinner: 14.5
3. Survey Data: $6-$16 (Mean $11)
23. Recommended Price Based on Models
We recommend having food delivery as low as $8 and as high as $14.47
1. Price low to capture maximum market share
2. Higher engagement of the San Francisco food
delivery Market
3. Driver increase to execute larger delivery loads
4. Put food delivery into the hands of San Francisco
residents
26. Zone Break Even: Lunch & Dinner
$-
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
0 2 4 6 8 10 12 14 16
Increase Dinner Price at this time
Months
Zone 2
• Current Dinner $13.10
• Dinner Break-even 4
Months
Suggested time to introduce Cost/Mark up Price Model
27. Our pricing model:
Lunch & Dinner
$-
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
0 2 4 6 8 10 12 14 16
Increase Lunch Price at this time
Increase Dinner Price at this time
Zone 3
• Lunch Break-even in 8.5
Months
• Dinner Break-even 2.5
Months
Suggested time to introduce Cost/Mark up Price Model
Months
28. Solution Process
Penetration
Acknowledge Operations
requirements
Penetration
Intraprocess Automation
&
control
Cost +
Valuation control
&
Business Structure
Break into Food Delivery market of
1.52 billions meals per year- Many
mouths to feed!
Optimize existing UBER
drivers to mitigate new
drivers and lag time
Aggregate restaurants in each
zone to finalize routes for price
efficient routes
Set food delivery price as
penetration method
Specify upcoming price difference
in each zone at different times
Zone 1, 2, 3
Increase UBER EATS drivers in
each target zone from 7 drivers to
10
Obtain the San Francisco food
Delivery Market with existing
penetration price.
Launch Marked/Cost Plus Pricing
to increase profits after break –
even is successfully executed
Active users of UBER:
http://www.washingtonpost.com/news/wonkblog/wp/2015/01/22/now-we-know-many-drivers-uber-has-and-how-much-money-theyre-making%E2%80%8B/
Market Share
Price Point Average $12
Value or Profits
If I have time I will do the graph
If I have time I will do the graph
If I have time I will do the graph
5. Demo: Demonstration of model in class goes smoothly, no problems 1 2 3 4 5 ____ Comments: ______________________________________________ 16. Procedure: Spreadsheet describes how to use model 1 2 3 4 5 ____ Comments: ______________________________________________ 17. Inputs: Spreadsheet indicates user input area(s) 1 2 3 4 5 ____ Comments: ______________________________________________ 18. Outputs: Spreadsheet indicates model output area(s) 1 2 3 4 5 ____ Comments: ______________________________________________ 19. Calibration: Spreadsheet indicates calibration procedure, if any 1 2 3 4 5 ____ Comments: ______________________________________________ 20. Structure: Spreadsheet is logically laid out for ease of use 1 2 3 4 5 ____ Comments: ______________________________________________