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Enterprise Rent A Car In Brisbane Australia Add in library

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Question:

Prepare a marketing plan should contain the entire business start up rquired for the ENTERPRISE RENT A CAR in Brisbane Australia.

 

 

Answer:

AIM

The aim of this academic paper is to develop a marketing plan for Enterprise- Rent a Car, a car rent firm that emphasizes on business to customers, short-term rentals, business to business, which is less than one year. This marketing plan will exclude the rent of commercial vehicles like trucks and vans and will consider only the cars. The marketing plan will focus on the identifying the target audience, segmentation, targeting and positioning, marketing mix, and present situational analysis and will also determine the marketing budget.

SCOPE

This report gives an extensive marketing plan for Enterprise- Rent a Car in Brisbane, Australia:

  • It details the micro environment analysis of the organization using the SWOT tool
  • It also offers the details of marketing mix analysing the 7P’s of marketing; product, price, promotion, place, People, Physical attributes and Process
  • The report details the segmentation, targeting and positioning strategies of the organization
  • It also provides the marketing budget for the organization

COMPANY BACKGROUND

Enterprise-Rent a Car was founded by Jack Taylor in 1957. It is one of the privately owned businesses that emphasizes on effective communication and best quality customer service. The philosophy of the enterprise is to ‘take care of their employees and customers who would help them to increase their profit’. Enterprise-rent a Car is a multinational organization with around 8200 rental offices on 7 different countries like Spain, France, Germany, Ireland, Canada and United States. This organization manages all its branches in a decentralized way where all the decisions are individually taken by the managers to meet the needs of the customers. The Enterprise is located in 370 locations covering over 90% of the UK and branches are located in every 10miles. It mainly offers car at a rent for both business and private use and also provides replacement vehicles in case of any accident.

CURRENT SITUATION ANALYSIS

Internal Analysis

Mission: The main strategy of the Enterprise is to meet the mission of Jack Taylor “Take care of your customers and employees first, and profits will follow”. The main elements of the business are promotion, motivation and long term loyalty. The key element of the Enterprise-Rent a Car business is to develop long-term relationship with their potential customers by delivering the best service.

Offering: The main product of the Enterprise- rent a car is to give car on short term rental basis for both business and personal use. They also help their customers by providing replacement vehicles in case of accidents. Further, motivation is the key of the business that helps the employees to deliver the best customer service and also support personal growth by providing incentives, achievement and efforts. The main objective of the business is to develop new opportunities and also open up new branches for present employees.

External Analysis

Political/Legal: Australia is the most significant MNC market in the Asia-Pacific region. The growing economy of Australia has stable business and political environment with multi-lingual and educated workforce. These factors make Brisbane, Australia as one of the sophisticated market and also enable, Enterprise to drive technology and innovation in the organization. However, it is to be noted that the state regulation towards the public transport sector have various limitations which might have negative impact on the industry. Further, consumers might get frustrated with the high taxes around 18% and 20% near branch and airport locations respectively.

 

Social: The ageing population, especially the baby boomers are entering their retirement age, have a great impact on the business, as they might prefer having the rental car system while visiting the places, for maintaining easy mobility. Since people are getting busy and are tome-poor, so they are looking for time efficient way in the city to avoid delay. This business would help these people to reach the places earlier as they want. However, the consumer tend is changing. They have different tastes on vehicles for different purposes. They prefer different models and makes for different purpose like for business, hanging around with family, hanging around with friends etc.

Economical: The confidences of the consumers are decreasing due to the economic downturn where people are looking for the savings in their day to day life. Thus they do not prefer to buy their own cars. This business would help to those people who do not have enough money their own cars. However, the increase in the petrol prices might let the buyers for not renting the cars instead they would prefer trains or buses. Further, if both the families are working, then the average disposal income would easily help them to buy their own cars. Thus increase in the people buying own private cars have a negative impact on the business. Further, the economies of scale, strategic alliances and mergers, excess capacity also have impact on the business.

Technological: Latest technologies would help lead innovation, improve quality and also reduce cost. Rapid development in the computer technologies and communication would help the business to rent new eco-friendly cars that would help the people to protect the environment. Technological factors like plant efficiency, safety and e-commerce would help people to make the rental process more easy and convenient. This would help to attract the market highly.

Environmental: The environment factors mainly involve the climate and the weather change. The temperature changes have a strong impact on the company. However, the rising demand for protecting the environment has a strong impact on the organization for example, renting hybrid cars, electric cars etc this would also help to develop business opportunities and also demand patterns.

MARKET ANALYSIS

Over the past few years, the Car rental industry has been rebounding strongly from the serious impact of global financial crisis. The sentiments of the consumers and the confidence of the business have been affected due to the financial crisis, reducing the demand of rental cars and vehicle leasing. Due to improve in the economic condition, the demand of the tourists for the domestic holidays, novated vehicle leasing has influenced the business. In the year 2005, the growth of car-rental market in US have approximately raised to 7% and in the year 2010, the growth valued to $25.7billion which was approximately increase by 6%. This shows that the rental car industry is facing a slow growth rate.

There are various factors that drive the car-rental business’s competitive position in the market. Not only the pricing factors are playing role in the competitive market but also the long-term profitability and the value system is also playing a vital role in the business. Additionally, there are many organizations which are shifting their business focus from airline operations to the car-rental operations (Busse & Swinkels, 2012). However, the threat of new entrants is low as the market share of the car-rent business has increased. Further, the substitutes to the car-rental industry are many like the private cars, other transportations like train and buses due to high petrol prices etc. It is to be noted that suppliers in this industry do not have important significance in supplying the cars. Thus the supplier power is low. Further, the buying power of the buyers is low, as the rental car agents already fix their sales prices lower according to the customer needs.

Made By Author

 

Source: Made By Author

The major competitors of the Enterprise- Rent a Car are Vanguard Car Rental USA, Hertz Corporation and Cendant Corporation. The major competitors of the industry in United States are the Avis Group Holdings Inc, which is the subsidiary of Cendant Corporation. However, in the year 2005, due to fierce competition, the leasing revenues of Cendant have been negatively impacted the organization, the Hertz became the global leader in US.

Since, Enterprise- Rent a Car, would like to expand in Brisbane, Australia, it is to be noted that the rental industry in Australia is highly competitive. The rental vehicle sector comprises of atleast 1800 businesses that offers similar product in the market.

SWOT ANALYSIS

Strength:

  • Strong brand: The Enterprise Rent-A-Car is one of the largest growing car rental organizations in United States. The company focuses on providing the customers with the replacement vehicle or cars during specific occasion. Since the inception of the organization, the organization is growing highly. In the year 1970 the rental units had hit to 5000 and then slowly the organization began offering insurance products, maintenance and fuel. It also started expanding its operation in Canada, UK etc.
  • High Growth: Presently it operates around 713000 vehicles with more than 120 models and different makes. It has around 7000 rental offices and 230 operate near airport location of Ireland, Germany, UK, Canada and United States. The annual growth of the organization has risen from $9.04 billion to $13.1billion.

Weakness:

  • Capital Intensive Operation: This Car rental operation is one of the most capital intensive business as it require large amount expensive equipments, buy all type of different model cars according to the taste of the customers to meet their demand. Further it would also require high labor thus labor cost also gets added to the expense.
  • No one-way rental facility: In various domestic branches, the one-way car rentals are not permitted and this eliminates the opportunity of niche group.
  • High Maintenance Cost: The cars need high maintenance cost.

Opportunity:

  • Growing Demand: Consumers are demanding the rental vehicles for various purposes. The demand of the rental vehicles has a strong impact on pricing flexibility and also rental vehicles cost which has a strong impact in attracting the tourists and also increases the performance of the states. It is forecasted that the global industry is likely to increase to $67.6 billion 2017 with around 3.5% around 5 years (Researchandmarkets.com, 2012).
  • Use of latest technologies: Increasing concern towards the environment have increased the concern towards the utilizing the technologies. Adopting eco-friendly strategy would help to business to solve the environmental issues. Technologies like GPS tracking facility, E-Commerce sites would help the customers to make the rental process easily (Pretty, n.d.).

Threat:

  • Rise in fuel prices: Consumers are watching fluctuation in the prices of flue. This has a significant affect on the competition, supply and demand in the industry (Caltex.com, 2015).
  • Intense Competition: The industry is facing huge competition with around 1800 business in Australia. Enterprise Rent-A-Car has to fight with both global and domestic service companies in this industry.

SEGMENTATION

Brisbane is one of the most premier shopping center in Australia. It is a multi-cultural hub with around 2.2million population. It has the largest growth rate population in Australia. The accommodation in Brisbane is affordable due to less inner city population compared to Melbourne and Sydney (Studybrisbane.com.au, 2015). Based on this analysis, three different segments can be chosen for the Enterprise Rent- A-Car. The three Segments include:

  • Local Customers (The residents of Brisbane city)
  • Business Executives
  • Tourists (Couples and families with their children)

Local Customer is the small segment that would help to produce only 10% revenue. They might utilize the vehicle as a temporary car. The residential drives of age 25-45 would be rented with the cars. They generally demand low price for hiring car may be for the sake of status or maintain relationship. This helps the organization to spread WOM, as they might recommend the organization to the family and friends.

 

Secondly, the Business Category, where especially the Corporate Contracts or the Executives will be targeted of age 30-45 old which would generate 20% of the revenue. Targeting this segment would help for Buzz marketing as they might provide reference that would help the organization for future contracts. Generally companies looking for car rental for official purposes, this would help to develop corporate contracts.

Thirdly, the tourist people from different countries would visit Brisbane or Australia for their entertainment and fun. Sometimes couples, especially the honeymoon travelers might visit the place. This is the major segment that the organization would be focusing on. It would deliver around 70% of revenue to the organization. They would be offered with the best service that would help to create loyalty. If the couples are highly satisfied with the service then they might later on come with their families.

TARGET MARKET

There are three different types of targeting strategies that the Enterprise Rent-A-Car can focus on. This includes the differentiated, concentrated or the undifferentiated targeting strategies. The differentiated targeting strategy mainly focuses on offering various products with different marketing mixes, the concentrated targeting strategy focuses on providing a single product to a single market segment, that is the niche marketing and the undifferentiated strategy in which the fir produces single product with single marketing mix (Pride & Ferrell, 2014).

Analyzing the different segments, it is recommended that the Enterprise Rent-A-Car can utilize the differentiated targeting strategy. Providing different product choices to different segment would help t provide customized products to the customers. This would help to increase satisfaction level of the consumer group. Through this targeting strategy, the organization can also remain competitive in the market also specialize in providing different cars. However, one thing that the organization must focus on is that this targeting strategy would require higher marketing cost, inventory cost and also production cost.

POSITIONING

The positioning strategy of the Enterprise- Rent-A-Car will be differentiate the firm from its major competitors by utilizing intrinsic competitive advantages by being international brand. The firm has the choice for partnering with the most international airline brands and also hotel for creating package. Further, the Enterprise can also use the bundle selling there they can offer several products with a single product. The firm can also use the online platform for marketing their product and services. Further, the organization differentiates itself by motivating the employees to offer the best services to its potential customers (Lovelock, 2008). To retain this, the organization must ensure that the personnel are respectful, friendly and courteous to the customers. They must serve the customers with accuracy and consistency. Since effective communication is the key to success of the organization, this helps the personnel to understand the customers easily, respond to the issues of the customers and solve them easily. The figure below shows the perpetual mapping measuring the position of the brand with the price and service (Morritt, 2007):

 EXTERNAL ANALYSIS

Source: Made By Author

OBJECTIVES

The objective of this present marketing plan is to raise the market share of the Enterprise Rent-A-Car by 10% within next 3years. To meet this goals the organization would focus on marketing penetration strategy. The success factors for this are the web site, customer service, the reliable cars, customer service, competitive price and location. Through the external audit and competitive analysis would help the organization to compare the CFS’s with the others in the car rental market. Further, the SWOT analysis would help the firm to perform effectively in the market by identifying the threats and opportunities.

To increase the market share of the organization, the firm would focus on adding new vehicles from March 2014. There is a need of 15% increase in the promotional expenditure to make the target market aware of the services. The collection of new model would help the organization to generate approx 20% increase in its market share by targeting the customers from age 25-25 as a whole. It is expected that the generated revenue will help to increase the sales by 20% by the mid of FY-2015.

Next objective is to increase the customer satisfaction level. Surveys will be conducted from the consumers to understand the demand of the customers and their awareness about the organization and also the service. Even the surveys will be conducted from the existing customers of Enterprise Rent- A-Car which would help the organization to understand the satisfaction level. The collection of vehicles will give the consumers with new entertainment experiences. The extra services and amenities will raise the satisfaction level and also the loyalty of the customers.

MARKETING STRATEGIES

PRODUCT

Enterprise Rent-A-Car has been offering wide range of car rental services in Brisbane, Australia. The company offers SUVs and other cars for satisfying the need f the customers. There are major three types of car services and the customers can choose anyone from the Green, Fun and Prestige collection. The organization focuses on providing convenience as well as comfort to its clients. The products of the organization have been designed for satisfying the personal preference to the customers (Stremersch and Tellis, 2002). It has been found that the car rental industry of Brisbane is significantly competitive due to presence of large number of market rivals. Hence, Enterprise Rent-A-Car has emphasized on offering similar products to the target market with a personalized service. Assistance will be provided to the customers in case of roadside accidents and troubles. Technicians will reach the customers if any issues take place during the drive. The superior service of the firm will help in differentiating the product from its competitors. Thus the company will be able to achieve competitive advantage (Helm and Gritsch, 2014).

PRICE

Price is a major component for ensuring success of a product. There is various pricing strategy for the organizations. The pricing strategy needs to be chosen on by analyzing the nature of industry, competition, start up cost of the company, future plans etc (Maglaras and Meissner, 2006). It has been found that the car rental industry is extensively competitive. In order to compete with the potential market rivals Enterprise Rent A Car needs to adopt an appropriate pricing strategy (Prasad, Venkatesh and Mahajan, 2014). In order to enter the market and gain significant market share, penetration pricing strategy will be effective (Schade and Schlag, 2003). The price of the products must be similar as its competitor. It may seem to be difficult or the company to offer same price as its competitors because the existing market rivals have achieved economies of scale. However, the low price can be compensated trough greater volume of sales (Spann, Fischer and Tellis, 2014). Later, the company can adopt competitive pricing strategy once they achieve economies of scale. The customer must feel that they are getting value for money (Sheehan, 2011).

PROMOTION

The promotional activities of business are the major factor which will be responsible for communicating about the major products and offers of the organization (Delre et al., 2007). Promotional activities help in communicating with the target market so that they can get to know about the company, products and price. Broad range of promotional activities will be adopted by Enterprise Rent-A-Car. First of all, marketing brochures will be published and sent to various business houses and organizations. The business organizations frequently need to hire cars. Hence, they can be easily converted into the clients of Enterprise Rent-A-Car. Individual promotional mils need to be sent to the target market to communicate regarding the product and superior service offered by the company. Postcards can be sent via mail in order to enhance communication with the target market (Helm and Gritsch, 2014).

 

Advertising is an effective promotional tool and will be adopted for Enterprise Rent-A-Car. Radio advertisement of 30 seconds will be broadcasted in the popular channels. 100 advertisements will be broadcasted between 6 am to 6 pm and 50 advertisements will be broadcasted on air between 6 pm to 6 am. Newspaper advertisement is also an effective medium for reaching the target market. Advertisements will be published in Courier mail from Monday to Saturday on 10 Sundays advertisement will be published on “U on Sunday”. Lifestyle magazines will be chosen for publishing advertisements. Two types of Billboards will be considered in the prime locations of the Brisbane city for 4 weeks to publish the advertisements. Internet advertisements are found to be very effective. Google Adwords will helps in searching the name of the company on internet (Delre et al., 2007).

Public relations are also an effective mechanism of promotional activities. Enterprise Rent-A-Car can organize two charitable events in the first year of operation. It will engage significant number of people. Additionally, employee promotions will be undertaken. Sponsorships to the local events will be effective (Sheehan, 2011).

PLACE

Place is also an important aspect of marketing mix. It is important to ensure that the customers can easily access the service at any time. The distribution of the service needs to be in a prominent location so that the target market can approach it easily. First of all, the customers can come to the city office in Brisbane for availing the service. The location of the office must have a good connectivity. Additionally, they can be contacted though telephone and e-mail for booking cars. Moreover, the customers must be offered to do online booking. Hence, an e-platform must be established in order to interact with the customers (Winer, 2004). The present trend has depicted that online booking has been increasing over the time and becoming very popular among the business people and travelers. Online booking of a car is hassle free as well as fast (Azadi and Rahimzadeh, 2012). Hence, it will be easier for the customers to hire cars online as it could be done from anywhere, anytime.

PEOPLE

The people refer to the individuals who are indirectly or directly involved with the services like the customers and the employees. Like the customers of this services involve, the local visitors, the business executive and the tourists. Employees act as the service providers who are mainly involved in the real time services (Brassington & Pettitt, 2005).

PHYSICAL ATTRIBUTES

The physical evidence mainly refers to the service environment in which the interaction between the customer and the seller is conducted. The physical evidence here includes the condition of the cars, the equipments used to maintain the cars, the business cards used, presence of internet, credit or debit cards (Lovelock, 2010).

PROCESS

Process mainly refers the flow of activities, mechanisms, procedures that will help to deliver the service effectively. Since the services are the actions or performances for the customers, the Enterprise Rent- A-Car would involve series of activities and steps like membership for the loyal customers, would try to implement one-way rental etc. The implementation of E-commerce site and mobile application process would also help the customers to book the vehicle anytime (Awara & Anyadighibe, 2014).

Marketing Budget

     

Particulars

Estimated Quantity

Estimated Cost per Unit

Estimated Total Cost

       

Research

     

Research Firm Fees

2

$1,500.00

$ 3,000.00

Independent Research

3

$300.00

$ 900.00

Online Research

1

$900.00

$ 900.00

Total Cost of Research

   

$ 4,800.00

       

Networking Activities

     

Memberships

30

$30.00

$ 900.00

Total Cost of Networking

   

$900.00

       

Promotions

     

Product giveaways

100

$ 6.00

$ 600.00

Discounts

100

$50.00

$5,000.00

Seasonal Special Offers

30

$100.00

$ 3,000.00

Total Cost of Promotional Activities

   

$8,600.00

       

Advertising

     

Brochures

100

$0.15

$15.00

Mailings

1000

$ 3.40

$ 3,400.00

Postcards

2000

$0.70

$1,400.00

Internet Advertisements (Google Ad words)

3000

$0.40

$1,200.00

Radio Advertisements (6 am to 6 pm) 30 sec

100

$180.00

$18,000.00

Radio Advertisements (6 pm to 6 am) 30 sec

50

$140.00

$7,000.00

Newspaper Advertisements (Courier Mail) Mon - Fri (1/4 th page)

5

$ 4,579.00

$22,895.00

Newspaper Advertisements (Courier Mail) Sat (1/4 th page)

8

$ 5,712.00

$45,696.00

U on Sunday

10

$ 6,567.00

$ 65,670.00

Magazine Advertisements (Quarter Page)

4

$ 4,675.00

$18,700.00

Magazine Advertisements (Half Page)

2

$12,000.00

$24,000.00

Magazine Advertisements (Third Page)

1

$ 6,650.00

$6,650.00

Billboards (Size 3.00 X 3.00 m)

4

$ 1,050.00

$4,200.00

Billboards (Size 3.00 X 6.00 m)

5

$1,750.00

$8,750.00

Total Cost of Advertising

   

$227,576.00

       

Public Relations

     

Charitable Events

2

$8,000.00

$& 16,000.00

Employee Promotions

3

$10,500.00

$31,500.00

Advertising

5

$ 14,525.00

$72,625.00

Sponsorships

4

$ 7,500.00

$30,000.00

Total Cost of Public Relations

   

$150,125.00

       

Sales and Marketing Executives

     

Salary

2

$ 40,000.00

$80,000.00

Incentives

2

$ 14,000.00

$28,000.00

Total Cost of Sales and Marketing Executives

   

$108,000.00

Total Marketing Cost

   

$ 500,001.00

 

REFERENCES

Awara, N., & Anyadighibe, J. (2014). An Appraisal of Strategies and Challenges of Services Marketing in a Globalized Business Environment. International Journal Of Managerial Studies And Research, 2(9), 32-38.

Azadi, S. and Rahimzadeh, E. (2012). Developing Marketing Strategy for Electronic Business by Using McCarthy's Four Marketing Mix Model and Porter’s Five Competitive Forces. emaj, 2(2).

Brassington, F., & Pettitt, S. (2005). Essentials of marketing. Harlow, England: Prentice Hall Financial Times, an imprint of Pearson Education.

Busse, M., & Swinkels, J. (2012). Enterprise Rent-A-Car. [Evanston, IL]: Kellogg School of Management.

Caltex.com,. (2015). Determining Fuel Prices - Understand Why Fuel Prices Fluctuate- Caltex. Retrieved 17 January 2015.

Delre, S., Jager, W., Bijmolt, T. and Janssen, M. (2007). Targeting and timing promotional activities: An agent-based model for the takeoff of new products. Journal of Business Research, 60(8), pp.826-835.

Helm, R. and Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets. International Business Review, 23(2), pp.418-428.

Lovelock, C. (2008). Services marketing People, Technology, Strategy (5th ed.). Upper Saddle River, NJ: Prentice Hall.

Lovelock, C. (2010). Services marketing (5th ed.). Englewood Cliffs, N.J.: Prentice Hall.

Maglaras, C. and Meissner, J. (2006). Dynamic Pricing Strategies for Multiproduct Revenue Management Problems. Manufacturing & Service Operations Management, 8(2), pp.136-148.

Morritt, R. (2007). Segmentation strategies for hospitality managers. New York: Haworth Press.

Prasad, A., Venkatesh, R. and Mahajan, V. (2014). Product bundling or reserved product pricing? Price discrimination with myopic and strategic consumers. International Journal of Research in Marketing.

Pretty, T. New Technologies Being Utilised In The Car Hire Industry. Streetdirectory.com. Retrieved 17 January 2015.

 

Pride, W., & Ferrell, O. (2014). Foundations of Marketing (6th ed., pp. 117-120). Cengage Learning.

Researchandmarkets.com,. (2012). Global Car Rental Industry 2012-2017: Trend, Profit, and Forecast Analysis. Retrieved 17 January 2015.

Schade, J. and Schlag, B. (2003). Acceptability of urban transport pricing strategies. Transportation Research Part F: Traffic Psychology and Behaviour, 6(1), pp.45-61.

Sheehan, B. (2011). Marketing management. Lausanne, Switzerland: AVA Pub.

Spann, M., Fischer, M. and Tellis, G. (2014). Skimming or Penetration? Strategic Dynamic Pricing for New Products. Marketing Science, p.150102090139005.

Stremersch, S. and Tellis, G. (2002). Strategic Bundling of Products and Prices: A New Synthesis for Marketing. Journal of Marketing, 66(1), pp.55-72.

Studybrisbane.com.au,. (2015). Facts and Figures. Retrieved 17 January 2015.

Winer, R. (2004). Marketing management. Upper Saddle River, NJ: Prentice Hall.

 

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