Zipcar free essay sample

It has a wide range of automobiles for its members to choose from including Volvos, mini coopers, pickup trucks and many more. Each vehicle has a designated parking space in a street or parking spot within the members’ area. It serves over 14 major markets in North America and Europe such as Boston, Portland, Vancouver, London and many others. Members are issued access cards. This allows one to unlock the doors in case the keys are still inside the automobile. They can make reservations online or by making a call. Zipcar allows its members to make reservations even up to a year in advance. It also offers an application on the iPhone. This application enables members to honk the horn so as to locate the car and also to unlock the doors. Zipcar charges an application fee only once along with an annual fee. These are charged depending on the market prices. We will write a custom essay sample on Zipcar or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Reservation rates vary depending on day of the week, model of the vehicle and the market. Gas and parking prices are included in the reservation rates. In 2007, Zipcar combined with Flexcar, a rival company, to build a car-sharing corporation with a nationwide reach. Zipcar has made significant contributions to the environment. This system of car-sharing encourages individuals to use cars only when they need to. Persons with their own cars tend to drive them whenever they want even when it is not necessary. This exposes the air to unnecessary emissions of carbon dioxide. On the contrary, Zipcars enable people to use cars when need arises. Therefore, use of Zipcar services greatly reduces air pollution. Environment In addition to reduction in levels of air pollution, the use of Zipcar services leads to reduced congestion on the roads. It also leads to reduced total mileage on vehicles implying that less fuel is used. The significance of Zipcar to the environment and the local communities is quite apparent in that it has become very important in the metropolitan transportation mix. A number of residents in urban areas have increased their use of public transportation, with a number of them getting rid of their own cars so as to make use of car sharing services such as Zipcar. The most effective way of reducing emission of greenhouse gases into the environment is by reducing the number of vehicles on the roads. This is what Zipcar aims to do through their car sharing services. The more individuals are encouraged to use this car-sharing service the less they make use of their own personal vehicles, thereby reducing congestion on the roads. As Zipcar progresses, it seeks to find even more ways to protect the surrounding and reduce risks that the environment is exposed to. Segmentation Market segmentation refers to the division of the targeted market into subsets so as target prospects that will give the highest returns. A market segment is a section of individuals with like traits that make them demand the same products and services. Market segmentation allows a company to focus their resources on market segments that yield the highest returns. An effective market segment is one that has its own unique needs. Individuals in this segment have the same needs. In addition, reaction of the members of this segment to market stimuli should be the same. Market segmentation can be done on a number of bases. Zipcar has done this on four bases. Its market segments are consumers, businesses, government and universities. It targets the consumers so as to provide them a less expensive hence cost effective means of transportation. Car rentals and car ownership are becoming quite expensive especially in the current economy thus individuals are embracing this system of car ownership (Leboyer, 2009). Another market segment for Zipcar is businesses. Businesses that require a lot of transport for their goods may need cheaper ways to do this. Zipcar provides a cost-effective avenue of transporting items. Zipcar is also available in a number of universities. Students in the campus are constantly looking for ways to minimize their expenditure. It would be very expensive or a student in the campus to maintain a car they own or to rent a vehicle when they need one. Thus, car sharing services such as Zipcar are highly effective in universities and the trend is catching on quite fast. The last market segment for Zipcar is the government. It works with the government to substitute and expand fleets. Before Scott Griffiths became its Chief Executive Officer, Zipcar operated more like a nonprofit organization targeting those close to where Zipcar was situated. Scott Griffiths came up with ways to increase its market base and make it a high profit earning company. Zipcar’s marketing strategy at the time was very costly, and a cheaper means of advertising needed to be found. Though there were advertisements everywhere around the city, individuals were not signing up to enjoy the services Zipcar offered. Marketing Strategy Scott Griffiths came up with ways to minimize advertising costs and reach more people at the same time. In public places such as movie theatres, there are posters of Zipcar and brochures of the organization and what it has to offer are issued out to the public. Zipcar aims to make everyone aware and willing to use their car sharing services. Zipcar has faced a number of challenges and also has many competitors in the same industry. Major competitors include U Car Share, PhillyCarShare and Co-operative Auto Network. They are classified as major competitors because they share the same market and have similar organizational forms. Zipcar operates in many major markets, thus the system of leadership is decentralized. Each market has its own manager and staff. This may lead to lack of proper communication due to lack of direct contact. Different branches may have different organizational cultures. This leads to the difference in opinions and leads to unnecessary disagreements. Lastly, though Zipcar recently added accommodation for disabled persons, it does not provide enough information about it on their website. This may discourage prospective consumers from joining. Zipcar should, therefore, aim at maximize visibility of all options on their website. Awareness is the first stage of customer loyalty and is an inevitable stage if a company a business has to have clients. Zipcar has seen most of its customers passing through his stage. Given the fact that most of the clients in the company are return clients, there is a clear indication that many are aware of existence of Zipcar. What remains to be of concern to Zipcar is the ability to convert those that are already aware of the company and the expeditions it offers. Exploration is the second most important stage in customer loyalty. Taking a look at the Zipcar, we find that awareness is on an average level. This is demonstrat ed by the fact that most of the clients to the company come from neighboring states. Most of, would be customers, fail to develop interests in the using the company services which makes them not to enquire on what the company has to offer. Familiarity is what has made many that are joining the company to always participate in and come back for the services. The fact that most of those that participate in biking come from neighboring states present an issue, which is familiarity. Commitment is the stage that Scott Griffiths would wish to always achieve and maintain. The level of commitment of customers of Zipcar is high. This is demonstrated by the repetitive participation of customers in the expeditions. This means that such customers are satisfied with whatever the company offers. If it were not so, the company would not have been witnessing eighty percent participation of past participants in its motor expeditions (Leboyer, 2009). SWOT and PEST Analysis The company’s strengths include the fact that Zipcar aims to find out exactly what consumers need and how to satisfy those needs. When Griffiths became the CEO of Zipcar, he found that that people were aware of Zipcar and the services they offered but did not trust them. Therefore, Griffiths came up with ways to make Zipcar more accessible to residents. Scott also increased the makes and models they currently had so as to better fit the needs of the younger generation who required fancier cars. In addition to this, strength of Zipcar it the use of technology to satisfy consumer needs. An example of this would be automated access by members using the Zipcard. As explained before, the Zipcard allows members to unlock the doors. Information about Zipcar is available on the internet making it easier for consumers to make reservations and get more information on Zipcar locations. Zipcar has had a number of innovative unions, for example, with the iPhone. Zipcar has an application on the iPhone that allows members to honk the horn to locate the cars and to unlock them, as well. Zipcar collaborated with universities to make their services accessible to students. It got the universities to pay for insurance. However, Zipcar also has several weaknesses as an organization. First, all Zipcar operations are dependent on technology. This includes the billing system, reservations, and many other functions. This suggests that if something were to go wrong with the technology say hacking, for example, then Zipcar would face a lot of damage. Zipcar should ensure protection of its data through constant backups. Zipcar has lots of opportunities in this market if they will take quick advantage of it before their competitors. Consumers aim is to save money. They go for options that are most convenient to their needs. Thus, Zipcar needs to focus on getting non-members to believe that they actually need their car sharing services. They can do this by use of demographics and extensive advertising. Zipcar is mainly used during the night and on the weekends. Zipcar should look for ways to encourage members and non-members to make use of their services during the day so as to maximize their profits. Zipcar can also increase its market base by looking into the opportunity to reserve cars for long distances and one-way trips. Zipcar should also look into ways of retaining student members even after graduation (Smith, 2011). There is also an opportunity for growth in transit connections, Zipcar should, therefore, look or ways of maximizing on that. Zipcar faces a number of threats including competition from nonprofit car sharing companies. Consumers may prefer to join this companies rather than Zipcar which is not a nonprofit organization. Additionally, Zipcar aces threats from rental companies that are now offering car sharing services, as well. The ever increasing fuel prices are also proving to be quite a challenge for Zipcar. This is because even though they transfer additional costs back to the consumer, they cannot charge prices that are too high as they will lose their customers (Leboyer, 2009). Using the PEST analysis, Zipcar also faces a lot of challenges. Zipcar is a company; therefore, it has to adhere to company policies as stipulated by the law. It, therefore, has to keep in line with ever changing laws. Political interference is also an issue. However, the political status of the United States is stable at the moment. The company faces an uphill task of maintaining its neutrality on governance issues especially during the electioneering period. Operating in a federal state, Zipcar faces a great challenge of having to comply with by-laws that may differ from one state to the other (Capon, 2009). The current economy is not very stable and this presents a problem for Zipcar. The cost of living has gone up and people look for ways to minimize costs. Zipcar has to look for ways to attract its customers and convince them that it is the cheaper option. Socially, Zipcar is embraced by the society and with the increase in a variety of cars available to consumers; it has been able to increase its popularity. Zipcar operations depend majorly on technology. It is paramount, therefore, that Zipcar is aware of changing technology and that it changes with changing times. Conclusion Zipcar at the moment has partnered with a lot of companies which has made it easy for them to penetrate the European market. Zipcar has also has also developed an apple application that honks car horns and unlocks some Zipcars. In June 2010, the company filed registration process for the initial public offering. The company finally went public when the first Initial Public Offering in April 2011 raised more than $174 million by issuing 9. 68 million shares. They exceeded their target during this process. Goldman Sachs amp; Co. and J. P. Morgan Securities LLC are acting as the joint book-runners for the offering. Cowen and Company, LLC, Needham amp; Company, LLC and Oppenheimer amp; Co. are acting as co-managers. The reason for going public was to help raise funds for debt repayment and expansion of the business. They needed more working capital to help develop new services, sales, marketing activities, capital expenditures and general corporate purposes. Zipcar has overall membership of over 400,000. This is a sensitive market hence every marketing strategy used by the company reflects in its overall operations. Car sharing reduces parking commotion in cities and provides services to its customers. Since the benefits are intangible, the company focuses on satisfying their customers to maintain and improve its market share. Consumers’ great influence is value, utility, and benefit of the product or service. The decision- making process involves stages that the marketer can influence and intervene to attract customers. Recommendations The marketer should trigger the need of the consumer and know the time to emphasize its product or service to consumers to survive in the market. The marketers should put efforts to establish its distribution channels and the location of the business to access more customers to improve profits. Markets should have a comprehensive marketing strategy to produce better results and acquire customer loyalty. The company should take time to analyze its competitors in order to formulate and implement programs that are customer focused. The marketer should identify changing goals of consumer trends in future consumer behavior to ensure a good future performance of the company. The researcher should conduct effective and reliable market research to help the company making the right decision in the process of marketing its product or service. Zipcar has so far done well with its marketing strategy. However, with increased competition and other challenges, the company needs to devise other ways of marketing its products. This can include short term price concessions. This will enable the company to continue expanding while at the same time maintaining its existing clientele. Price concessions would easily boost up the sales of the company given that Zipcar’s products are price elastic. This strategy would also work well for the company given that its competitors have less financial power to compete on the basis of price concessions (Pride, 2011). Groupon and Linvingsocial is another great resource they should be taking advantage of. These are companies that aim at giving customers services at discounted prices while helping companies create awareness of services they have to offer. These two companies have become very popular to young adults, graduates and new parents. New deals on these sites everyday are sorted out by lots of clienteles who want to enjoy freebies during this recession period. Using such marketing schemes will help build awareness for Zipcar while creating a new set of customers. Zipcar also needs to invest more on e-mail marketing. Zipcar can use e-mail marketing strategy to developed and expand its clientele. This can be done through linking its services and or portal to emails through permission channels. This would make it possible for a person surfing to get more information about Zipcar deposited on their mails. It should be done in a manner that would enable information on up-coming expeditions deposited into the e-mails of subscribers. E-mail marketing of Zipcar should be designed to provide feedback mechanism. This means that hyperlinks and hypertexts should be incorporated in its design to enable bloggers to get into Zipcar portal in the shortest time possible. E-mail marketing would be far much better than print mail advertising. This is because e-mail advertising would provide for. I major advantage they should be exploring is franchising. This will enable them grow very fast in the global market rather than just relying on merger and acquisitions only. Reason why is because the local market knows their customers already and would be easier to convince the community of the benefits of Zipcar. The trust of a local owner in a developing country is highly beneficial for the company who is aiming at going global. The communities will not see Zipcar as a corporation who is trying to impose their eco-friendly values on them but as a business that understand their needs and is ready to offer its services to ease their everyday struggle. Reference Pride. W. (2011). Marketing. New York. Cengage Learning. Smith. T. (2011). Pricing Strategy: Setting Price Levels, Managing Price Discounts, amp; Establishing Price Structures. New York. Cengage Learning. Capon. N. (2009). Capons marketing framework. London. Wessex Publishing Basenese, Louis. Zipcar, Inc. : steer clear of the â€Å"winner’s curse† (Part 2). 2011. Web. June 29, 2011. www. Zipcar. com