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Glovo’s Marketing Plan for the Polish Market Research Paper

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Executive Summary

Glovo is one of the fastest-growing on-demand delivery companies. Founded in 2015, the company today operates in 22 countries around the world and continues its development by expanding into new markets. The Polish market is relatively new for the company, since Glovo started its activities in 2019, and this period is optimal for evaluating and adjusting the marketing strategy.

In addition, Glovo chose Poland to create a new technology hub outside of Barcelona, which enables it to use the available resources more efficiently. Simultaneously, since Poland is a favorable market for the development of the delivery business, Glovo faces strong competition from such companies as Uber Eats, Bolt Food, and Just Eats. Consequently, the main goals of the company are to overcome competition and occupy leadership positions in the market.

This report provides information on the main strengths and weaknesses of Glovo and its work in the market of Poland. These data aim to assess the shortcomings of the current marketing strategy and propose a short and long-term development plan for taking and maintaining a leadership position in a highly competitive environment. Possible solutions and strategies include expanding advertising channels, building customer support for the market of the older generation, and expanding partner networks to increase product variability at low prices.

Environmental Analysis

Glovo is one of the largest food and grocery on-demand delivery companies, operating in 22 countries worldwide. The company was founded in 2015 by Oscar Pierre and Sacha Michaud in Barcelona, ​​and in 5 years has expanded to Europe, Africa, parts of Asia, and Latin America (“About Us,” n.d.). In Poland, the company began operations at the end of 2019 and works in 14 cities (“Informacje o twoim mieści,” n.d.). Glovo’s main advantage and difference from competitors is that it delivers not only food but also medicines, supermarket products, and even forgotten things.

The Marketing Environment

  • Competitive Forces. On-demand delivery is a popular service all over the world. Glovo’s main competitors in Poland are Uber Eats, Bolt Food, and Just Eat Takeaway.com, although they deliver mostly food. In addition, a significant proportion of stores have delivery among their services, which also increases competition in the market.
  • Economic Forces. Poland is a developed country with a market economy. Before the pandemic, Poland was among the fastest-growing economies in the European Union, with a GDP per capita of $16,543 (“The World Bank,” 2020). For this reason, the market is beneficial for business development, especially delivery services, which have become more in demand during the pandemic. In addition, since the prices for services are from 30 cents, residents can afford comfortable delivery instead of shopping.
  • Political Forces. Poland’s policy is favorable to foreign business as it creates an inflow of investments and jobs for the population. In addition, since Glovo stimulates local business sales by offering delivery to customers since it cooperates with stores such as Biedronka and small local manufacturers; thus, the government must support its activities. The government also initiates the development of infrastructure for cycling, which also contributes to the speed and safety of delivery by couriers (Kolczyńska, 2020). However, in 2020 Poland faced a confrontation between the government and the population, and since the conflict has not yet been resolved, there is a risk of political instability in the country.
  • Legal and Regulatory Forces. Polish laws promote the development of a market economy and allow foreign companies to hire local employees and enter into contracts with self-employed persons who work as couriers. In addition, legislation restricts the distribution or delivery of prescribed medications but allows the distribution of common medicines and alcohol. Thus, Glovo can freely deliver approved medicines, tobacco, and drinks to customers if they can confirm their age by documents.
  • Technological Forces. The main way to order is the Glovo application, which has a simple and convenient interface. Most people in Poland have smartphones and use apps, which is an advantage for the company. In addition, Glovo has opened a second technology support hub in Poland, which demonstrates the state’s technological development (“On-demand,” 2019). Another possible technological advantage of Glovo is that couriers use bicycles or motorbikes, which makes it possible for them not to linger in traffic jams since most cities in Poland have an infrastructure for cycling.
  • Sociocultural Forces. A potential advantage of Glovo is the use of cycling vehicles and walking couriers to deliver orders as this type of delivery is more environmentally friendly and acceptable in society. In addition, the company’s social initiatives, such as charitable donations to combat COVID-19 and free grocery delivery to the elderly, create an image of a socially responsible company (“Glovo Access,” n.d.). This image, as well as the quality of service, also brings customer loyalty to the company.

Target Markets

Glovo’s target audience or market is conditionally divided into two groups, such as people with limited mobility and people with limited time. The first category includes students and young people who do not have personal vehicles or driver’s licenses, as well as older people for whom shopping is more time and effort-consuming due to aging.

In both cases, this target audience can have low or medium income, but as long as the prices for services are low, they use Glovo’s delivery. The second group includes employed professionals and busy parents who have higher incomes and vehicles but are limited in time. They use delivery services because of the need to fulfill their work or parental responsibilities; thus, delivery saves their time and effort. Therefore, the primary market Glovo market is quite wide as it covers men and women from 18 to 50 years old, while the secondary market also includes older adults who know how to use technology.

Current Marketing Objectives and Performance

Currently, advertising on social networks is Glovo’s central marketing strategy. Short videos show the top restaurants in a country and local couriers, demonstrating the app’s ease of use and benefits. In addition, Glovo uses photos along with videos to avoid overwhelming viewers with intrusive content. Each ad directly links to the Apple App Store, Google Play, and Kindle Fire stores, where a person can download the app.

Advertising is aimed at the target audience of adults from 18 years old, who are the main users of social networks such as Facebook, Instagram, and YouTube. This approach yielded a 73% increase in app installs and a 6.6% lift in orders after launching a series of Facebook ads (“Glovo,” n.d.). However, this approach does not cover the audience of older people who do not use social media but can be interested in the company’s services.

SWOT Analysis

Strengths

Strong financial resources. Glovo’s success has attracted large investors such as Rakuten Capital, Seaya Ventures, and others. For example, in 2019, the infusion of funds, together with the Abu Dhabi fund Mubadala, exceeded 1 billion dollars (Binnie, 2020). Such significant resources give the company virtually unlimited development opportunities.

Low prices. Glovo offers customers low prices for delivery because Glovo charges its partners a commission for every product purchased through their app (De Esteban, 2020). Thus, partners receive high sales due to delivery availability, and buyers receive their orders without effort and high costs.

Partnership network. Glovo has a wide network of partners, including such giants as McDonald’s, KFC, Burger King, as well as local companies. The partnership allows Glovo to reduce delivery prices and attract buyers, which brings them profit. In addition, this approach provides a variety of products due to the different specialization of companies.

Wide variety of products. Glovo can deliver almost any product as long as it is not restricted by law. Customers can order a meal from a restaurant, groceries from a supermarket, medications, or even get another person’s car keys. This approach allows clients to save their time and the company to find loyal customers.

Marketing experience. Glovo has been successfully operating for five years and has launched a business in more than 20 markets, which gives it a significant marketing experience. After analyzing the market, the company can use the same strategies that have been successful in similar conditions to save costs for the development of new advisement. In addition, an experienced PR team has the advantage of understanding the company’s specifics and target audience.

Weaknesses

Application. While the Glovo app has significant advantages due to its convenient functionality and ease of use, this ordering method also has a disadvantage. The delivery companies’ target audience is older people who have difficulties with movement due to aging or health conditions. However, older people are more likely to be unfamiliar with technology and may not be able to use all smartphones’ functions. Consequently, Glovo loses a segment of the audience that has a demand for their services.

Unsafe working conditions for couriers. Glovo is often criticized for its employee working conditions policies. A significant proportion of couriers are self-employed, meaning they do not have the same rights as employees, such as insurance or paid leave. In addition, in 2019 and 2020, Glovo faced protests in different countries as the company’s policy forces couriers to deliver orders in the shortest possible time or lose their rating and opportunity to earn (Lomas, 2019). For this reason, couriers are more at risk of accidents. In 2019, one courier was hit by a garbage truck in Spain, and this accident provoked protests (Lomas, 2019). Thus, this policy is the main weakness of the company.

Opportunities

Lockdown and its restrictions. While the coronavirus pandemic has hurt many business areas, it has become an opportunity for delivery services to increase their profits. Poland still faces thousands of infection cases daily, which increases the demand for Glovo’s services (“Global,” 2021). In addition, users who were forced to use Glovo services for the first time can become the company’s regular users even after the end of the pandemic.

Increased product variability. While Glovo has a wide variety of delivery products, it can increase it. For example, sign partnership agreements with sports equipment rental stores.

Cover market of older adults. Since older people more often have challenges with smartphone applications, they cannot order delivery services, but Glovo can fix this flaw by creating more convenient options for ordering for older adults.

Threats

Political unrest. Although Poland is a democratic country with stable politics, the conflict between the government, the Catholic Church, and people at the end of 2020 is a manifestation of political instability. Massive protests against the abortion ban led to the bill’s postponement; however, the confrontation remains unresolved (Taub, 2020). Consequently, there is a risk of repeated political unrest due to the actions of the authorities and the influence of the church on public policy.

High competition. The food delivery market is highly competitive as many companies are providing these services. Glovo’s main competitors in Poland are the popular services Uber Eats, recently launched Bolt Food, as well as Just Eat and Takeaway.com, which have merged into one company. In addition, many restaurants and shops have a delivery service, which also increases competition in the market.

Marketing Objectives

Glovo’s main goals are to expand partnerships with local businesses to offer customers more product options at lower prices and target the older generation market. Fulfillment of these goals will allow Glovo to provide those services that its competitors cannot give and consolidate its leadership position in the market. Thus, Glovo will be able to resist such a global competitor as Uber Eats and local delivery services.

The company’s pricing policy allows users to pay little money for Glovo partners’ products. However, if a user orders a product from the category “anything,” or in other words, not from partner stores, then the delivery price increases significantly, since the business does not pay a commission. Although Glovo works with such large markets as Biedronka and Auchan, McDonald’s, KFC, and BurgerKing, partnerships with local manufacturers will attract even more customers who are their loyal customers, especially during a pandemic.

Glovo and its competitors do not currently cover a significant part of the elderly market, since the main way to order delivery is a mobile application or website. Service advertisements and marketing are also predominantly aimed at social media. Although some people over 65 are familiar with new technologies or have the support of their families who can order for them, a significant part of the market remains uncovered, although the demand for such services is high. Therefore, Glovo’s goal should be to develop a solution that will help attract the older generation to use Glovo’s services and increase advertising through the channels followed by older people.

Marketing Strategies

Target Market(s)

  • Target Market 1: Generation X & Y, particularly students and youth without a license or personal car.
  • Target Market 2: Male and female with full-time employment.
  • Target Market 3: Busy parents, particularly parents of infants, toddlers, and preschool children who need round-the-clock care.
  • Target Market 4: Older males and females who cannot drive or need support due to aging. This market is currently expanding to all older adults because of health risks related to COVID-19.
  • Target Market 5: People who are in self-isolation due to COVID-19 (temporary market).

Marketing Mix

Product mix. Glovo’s main motto is “Deliver anything,” which demonstrates the high variability of products and items for delivery. New partnerships with companies that provide rarer services such as sports equipment will allow Glovo to expand delivery options at a lower cost for the customers. In addition, Poland’s legislation enables the delivery of almost any product, including medicines and alcohol. Thus, the concept of delivering any products and things will remain central to the company’s marketing.

Price. Delivery prices will vary depending on distance, courier workload, and inclusion in the partner’s products. In Poland, Glovo’s delivery price can start from 30 cents. Since partners pay a commission for each product purchased through the Glovo app, the price will remain low in the segment and affordable for low-income customers.

Distribution. Glovo covers a wide network of cities in 22 countries of the world. In Poland, the company operates in 14 large and medium-sized cities, which will be the main ones for marketing. The application will be the main method for distributing or ordering services, but it will have an adjusted version for older people or an additional option for ordering with the help of customer support.

Promotion. The main ways of the promotion will be video and photo publishing on such social networks as Facebook, Instagram, TikTok, and YouTube. Traditional TV and radio advertising for the older generation of the target audience will also be used. In addition, Glovo will use printed outdoor advertisements on billboards, bus stops, and partner locations with QR codes to download the app.

The organization of Glovo’s work is a complex process as the company builds a triple marketplace that requires a significant level of coordination. In other words, Glovo connects couriers, businesses that offer products, and users placing an order to ensure the work of the company (“Letter to Glovo’s shareowners,” 2020). This system creates benefits for all parties, since couriers have flexible work, businesses have additional income, and users enjoy convenient service, but such coordination is operationally challenging.

At the same time, Glovo has two technology hubs in Barcelona and Warsaw and 17 departments that support this system’s operation. These divisions include Business Intelligence, Commercial, Data Engineering, Data Science, Engineering, Executive, Finance & Corporate, Food Innovation, International, Marketing and Growth, Operations, People, Product, Product Design, Public Affairs, Q-Commerce, Strategy & New Business (“Life at Glovo,” n.d). In addition, Glovo has regional divisions to ensure optimal and efficient operation.

Marketing Implementation

Marketing Organization

Consequently, Glovo engages the regional departments of Marketing, Customer Support, Commercial, and Engineering to implement marketing goals in the market of Poland. Marketing and Customer Support will be responsible for collecting data and analyzing it to determine the best options for senior clients. The commercial department will develop new opportunities for advertising the app for older adults. At the same time, they will interact, cooperate, and report to the CFO.

The Engineering department will be involved in the adaptation and development of the new version of the application for senior people. At the same time, since the technological hub is located in Warsaw, the best specialists will be engaged in the work. In addition, efforts will also be aimed at attracting new partners and signing agreements with them. All processes will be headed by the CFO, which, together with the Finance Department, will control and direct the work, as well as determine the project budget.

Activities, Responsibility, and Timetable for Completion

Phase One

Target Market Extension: Engaging older people (50+).

R&D: Stage 1

Gather data on older people’s problems with using Glovo App

Gather data on marketing channels of influence on older people

Persons responsible: Marketing Manager/Marketing Team

Target completion date: March 1

R&D: Stage 2

Determine and develop the way for overcoming technological problems (adjusted app/customer support/ etc).

Person responsible: Marketing Manager, Customer Support Manager, Team of Engineers

Target completion date: March 1

R&D: Stage 3

Determine marketing contents and channels of influence on older people (TV, outside print advertisement)

Person responsible: Marketing Manager and Commercial Manager

Target completion date: March 1

Testing

Test prototype of adjusted app/customer support for the elderly in the field to determine effectiveness and flaws.

Persons Responsible: Marketing Manager/Marketing Team

Target completion date: April 1.

Launching and Advertising

Launch the chosen option and advertisement for elderly customers in Warsaw.

Persons Responsible: Marketing Manager, Customer Support Manager, Team of Engineers

Target completion date: May 1

First Audit/ Evaluation

Person Responsible: CFO

Target completion date: May 15

National Launching and Advertising

Launch the chosen option and advertisement for elderly customers in other cities of Poland

Person Responsible: Marketing Manager, Customer Support Manager, Team of Engineers

Target completion date: July 15

Second Audit/Evaluation

Person Responsible: CFO

Target completion date: November 1

Phase Two

Three-Year Expansion Plan

Glovo will cover a segment of elderly customers in all countries of operation by using market and sales data from Phase one to increase revenue and beat competitors in on-demand delivery services. The timeline of Phase 2 is not accurate, since it depends on the results of Phase 1 and the peculiarities of markets; however, it includes the following milestones.

R&D: Stage 1

Collect data on demand and the possibility of using the services by older and retired people in each country of operation depend on the economic situation.

Person Responsible: Regional Marketing Manager/Team

Target completion date: 3-4 weeks

R&D: Stage 2

Explore the technological awareness of older people and effective channels for advertising Glovo’s services in countries with demand

Person Responsible: Regional Marketing Manager/Team

Target completion date: 3-4 weeks

R&D: Stage 3

Translate and adjust new options from Phase 1 due to local needs

Person Responsible: Engineer Team

Target completion date: 1-2 months

R&D: Stage 3

Develop a system of assistance for senior people to order and train staff

Person Responsible: Regional Customer Support Manager/Team

Target completion date: 1-2 months

Test and Launch

Test and launch the new option for senior people and advertisement

Person Responsible: Regional Customer Support Manager/Team, Engineer Team, Marketing Manager

Target completion date: 1 month

Evaluation and Control

Performance Standards and Financial Control

While Glovo has significant financial capacity for new projects and business expansion opportunities, accurate monitoring of job progress and expense reporting is essential to keep departments under control. In addition, a detailed record of the process will allow the company to move from Phase 1 to Phase 2 without repeating mistakes.

The Marketing Manager and Customer Support Manager will cooperate and report directly to the CFO to provide the most relevant information and avoid unnecessary spending in the following stages. The Head of the Engineering team will also report to the CFO and will give him a rough financial estimate of the technological changes required for the application.

Each department will have a budget according to its abilities and needs that can be changed by the CFO. It is difficult to estimate the total funding for the projects since the main costs will be determined after data collection; however, an approximate budget will be $ 180,000 with a 10% contingency. The budget will be allocated as follows:

  • R&D/Marketing: $40,000. Includes street research on Glovo App’s flaws, technological awareness, and advertising.
  • Design and Adjustment of the App: $50,000. Includes design, prototypes, testing, and customer support training
  • Legal & Professional Fees: $20,000
  • Promotion: $50,000. Includes development of new advertising content for elderly, TV, radio, and print advertising

The project will be funded by using the investor’s money and revenue of Glovo without taking a loan. The second phase of the project will be covered by the profit from a successful realization of the first stage and the company’s revenue in general.

Monitoring Procedures

The company will conduct a thorough analysis of market earnings in the first phase of development, as well as compare the level of application use and the number of orders to evaluate the effectiveness of the new customer acquisition strategy. In addition, the company will also assess brand awareness in Poland to determine the effectiveness of advertising and public attitudes towards it. Finally, the company will conduct an audit after 2 and 6 months of launching a new option to understand its profitability and the possibility of establishing in other markets of operation.

References

About us. (n.d.). Web.

Binnie, I. (2020). Reuters. Web.

De Esteban, L. (2020). Harvard Business School. Web.

(2021). Web.

Glovo access. (n.d.). Web.

Glovo Driving app installs with colorful Facebook mobile app ads. (n.d.). Web.

(n.d.). Web.

Kolczyńska, M. (2020). European Cyclists’ Federation. Web.

Letter to Glovo’s shareowners. (2020). Web.

Life at Glovo. (n.d.). Web.

Lomas, (2019).TechCrunch. Web.

On-demand delivery app Glovo eyes Poland’s exploding tech talent for second tech hub. (2019). Web.

Taub, A. (2020). The New York Times. Web.

(2020). Web.

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