You work as a marketing manager for a start-up ride-sharing company based in Vancouver. The company targets immigrants from different countries who now live in Canada but cannot speak English well. The business strategy is to provide each rider a driver who can speak the same language. As there are more and more immigrants moving into Canada in the past few decades, the owner of the company believes that they represent a sizable potential market that no incumbent ride-sharing companies such as Uber and Lyft can fulfill their unique needs. The downside of this targeting strategy, however, is that the company will give up the mainstream customers who have a larger market size.

The challenge for the business, according to the owner, is not the lack of demand. Rather, it comes from the lack of supply of drivers who can speak the same language of riders. As a result, customers have to wait for a long time before the company can find drivers who are working and are willing to take the order. Consequently, many customers will simply cancel their orders. This leads to a significant revenue loss (about 20 percent) for the company. To reduce cancelled orders, the owner is considering of offering a subsidy to drivers for every order they take. The owner however is unsure whether the subsidy plan is profitable for the company. 

Describe to the owner in detail how you will measure the ROI of the subsidy plan. (10 points)

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Answer rating: 100% (QA)

To measure the Return on Investment ROI of the subsidy plan you can follow these steps 1Define Key Metrics Clearly outline the key performance indicat... View the full answer