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Final Business Plan For Cab Service Rental ERC Add in library

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Describe the final business plan for cab service rental ECR?




Executive Summary

Marketing is a critical activity for an organisation. Success or failure of marketing process can have direct impact on the success or failure of product or service to be launched. That is why in a highly competitive and globalised world marketing has taken precedence over several other business processes. Important to understand is, that marketing strategy is not a straight forward concept or process. It involves several micro and macro factors which might have tremendous impact on the fate of the product or service to be marketed. This marketing plan was prepared with focus on one of the world’s largest car rental company named-Enterprise. Purpose of this marketing plan was to understand, that what all marketing elements should be used in a situation when organisation decided to setup its branch in Brisbane-Australia.

1. Introduction

1.1.  Aim

Every business organisation wants to succeed in the market in which it has presence, especially when an organisation is expanding its base in a different region. When a business organisation decides to expand, then there are several factors which it needs to focus upon. Setting up the company in a new environment is a complex task and requires lot of meticulous planning and effort (Siguaw & Simpson, 2015). In this regard, marketing plan has high relevance for the organisation as it guides the entire business strategy of the organisation in the new market. Purpose of this task is to prepare a marketing plan for a company named ‘Enterprise Rent-A-Car’ (ERC). This marketing plan is targeted towards guiding ERC to launch its car rental business in Brisbane, Queensland. Marketing budget allocated for the entire marketing process is $500,000 (Australian Dollars). Hence by the end of this marketing plan, reader should be able to identify potential marketing strategies which can be used by ERC to establish itself in Brisbane, Queensland.

ERC is a car rental company which was established by Jack Taylor more than 55 years ago, in 1957 in USA.

1.2.  Scope

Scope of this marketing plan is to suggest relevant marketing strategies to ERC management, for setting up its branch in Brisbane, Queensland only. Marketing plan for ERC will be focused only for Brisbane location, and it doesn’t intend to guide marketing strategy of any other location apart from Brisbane. Also, all the financial of the marketing plan will be analysed and decided on the basis of allocated budget for the marketing activity of ERC in Brisbane i.e. $A 500,000.

1.3.  Company Background

ERC is a car rental company which was established by Jack Taylor more than 55 years ago, in 1957 in USA. ERC was started with just seven cars with a business idea of executive leasing. However, as the business expanded, ERC shifted towards becoming an enterprise. By end of 2011, ERC has generated annual revenue of $14.1 billion and has more than 68,000 employees. ERC as a car rental company has presence in several countries outside United States as well. For example it has more than 8200 rental offices located in five countries such as Canada, UK, Ireland, Germany and US. It is essential to understand that despite of the fact that each of these offices comes under the ERC brand, these rental offices still work as an independent unit, which means that manager of these offices are free to take decisions which suits the customer or regional requirements (Westwood, 2013). This reflects the fact, that ERC despite of growing as a large organisation has maintained its working style as a small organisation itself. Its branches are decentralised. This means that local managers have the freedom to make decisions based on the needs of each location. As a car rental company, ERC has dominated UK’s car rental industry as well. ERC has over 370 locations throughout the UK and over 90% of the UK population are within 10 miles of an Enterprise branch. Overall it can be said that ERC has displayed gradual growth over a period of time across globe (Ferrell & Hartline, 2012). This marketing plan it targeted towards guiding the company towards exploring and setting up its branch in Brisbane, Queensland.


2. Current Situational Analysis

2.1.  Internal Analysis

Internal analysis of the company can be done on several aspects. For example its mission statement can be analysed to understand that what exactly ERC as an organisation wants to achieve. Internal analysis also includes focus on the offering, which means what exactly company is offering to its customers, or what value does it have for its customers (Kotler & Armstrong, 2013).

Mission of ERC is to provide is to provide rental solutions for its customers, and focus on requirement to build strong and loyal relationships through an excellent customer service. Following are the values which are followed by ERC:

  • Quality
  • Respect
  • Innovation
  • Integrity
  • Teamwork
  • Passion
  • Professionalism

Hence, it can be seen that ERC is not just focused on some specific aspect, in fact it has focus on its employees, as well as customers and all other stakeholders associated with it. Values followed by the company also reflect the same aspect.

As a car rental company, ERC offers wide range of services to its customer. ERC has established itself as a total mobility provider offering consumers neighbourhood and airport car rental, car sharing, ride-matching, vanpooling services, car sales, exotic car rental, motorcycle rental and commercial truck rental. This reflects that ERC has expanded its services apart from providing executive leasing to wide array of segments such as exotic car rentals, or commercial truck rentals (Kotler, 2012). ERC has also contributed to its best capability towards society as part of its corporate social responsibility program. This can be understood by the fact that ERC Foundation has contributed more than $200 million to thousands of local non-profits focused on community improvement, education and environmental stewardship.

In nutshell, ERC has clearly setup its mission to take care of its customers, employees and the communities. Based on the case study, it can be said that for this marketing plan resource available in terms of budget is of $A500, 000 which needs to be utilised judiciously in order to achieve the maximum benefit for the proposed marketing plan.

2.2.  External Analysis

External analysis of ERC will help in understanding the influences on the organisation. In order to do a comprehensive external analysis, PEST framework can be used. PEST framework basically covers four elements on the basis of which analysis is done. These elements are:

Political/Legal: In terms of political analysis, it can be said that ERC has been involved in keen competition with various other car rental companies such as Avis, Hertz etc. However, policy of local or regional government to provide more tax benefits to local car rental companies might have negative impact on ERC’s plan in Brisbane, Australia. Also, high tax rates in certain regions might impact the profitability of the business.  

Economic: In economic context, it can be said that true equity market value of ERC is estimated at $17 billion, whereas for its one of the close competitor Hertz it is around $7.5 billion. In Brisbane there are various car rental companies such as Avis, Hertz, Budget, Europcar, Thrifty and Redspot. However, apart from Avis and Hertz other companies are small and do not have market value as large as ERC, which can be a major advantage for ERC in future.

Social: In terms of social factors, changes in consumer behaviour have impacted the organisations in a major way. With high disposable income in new proposed market like Brisbane there is large customer base which can afford renting a car. Unlike past when people were focused more on taxis and cabs, today renting a car is much more viable option for people, especially for the one who are in young age group. This change in social attitude towards rented car has helped companies like ERC to grow gradually (Lee & Kotler, 2011).

Technological: technology has played major role in advancement of ERC as an organisation which had only seven cars to start with. Today, ERC is managing its branches more than 8000 in numbers. This could not have been possible without support from technology. Advancement in technology and ease of logistics has helped ERC tremendously in becoming world’s largest car rental provider. For example, technology such as GPS enabled devices which are installed in all the vehicles of ERC has ensured better consumer safety (Bickhoff et al, 2014). Similarly use of internet based website has enabled ERC to take leverage of internet as a platform from where its users can book a car for rental. This can be understood from the screen shot displayed below which clearly shows that how ERC is using its website to allow users to book their cars for rental.

Home page of Enterprise rent-a-car

Figure 1: Home page of Enterprise rent-a-car

2.3.  Market Analysis

2.3.1. Market definition

Car rental industry is mainly an industry which provides car for rental purpose to its users for a specific period of time. However, companies like ERC offer light trucks as well on rent to companies and business (Morritt & Weinstein, 2012). In Australia Car rental grew by 10% in value in 2013, reinforcing Australia’s position as one of the most developed car rental markets in the world, with a per capita expenditure of A$65. Market definition of car rental includes both passengers as well commercial vehicles. Over a period of time, car rental industry has grown by leaps and bounds, especially in Asian countries. However, developed countries like UK, Australia and United States remains the core market for the car rental industry, as these countries have reputation of being safe country in which drive and relating ease with which international visitors can rent a vehicle has made the industry growth fast.

2.3.2. Market trends

The global car rental industry witnessed intense competition during the previous years, which forced companies to offer new and better services to their customers. The industry is expected to reach US $67.6 billion by 2017 with a CAGR of 3.5%over the next five years. The industry consists of all car rentals, contracted to be of less than one year duration, for corporate, individual, recreational, or business purposes. Europe is estimated to witness the most growth during the forecast period due to growing airport rentals and gradual recovery of airline activities in the past two years (Lovelock, 2011).

The prospects of car rental in Australia remain strong, with an expected value CAGR of 5% over the forecast period at constant 2013 prices, a significant improvement from the value CAGR of -1% at constant 2013 prices experienced between 2008 and 2013. Although business car rental is expected to soften in the aftermath of the mining boom, the much larger category of leisure car rental will flourish as the depreciating Australian dollar encourages more consumers to travel at home (Pride & Ferrell, 2015).

2.3.3. Competitive situation

In terms of competitive situation, since this marketing plan is targeted towards setting up ERC’s branch in Brisbane, Australia hence it becomes important to analyse the competitive situation in Australia. As per survey from Canstar, Hertz is the top car rental company when it comes to customer satisfaction, in fact not just customer satisfaction but Hertz tops the other categories such as satisfaction, service, availability, booking process, transparency of costs and availability of accessories. However, cost conscious customers who look for low cost rental care prefer company named Thrifty, which came out on top among the cheaper set of hire car companies (Varadarajan, 2011). Overall it can be said that competitive scenario in Brisbane, Queensland is stiff as there are various large and small companies which are competing for supremacy. These companies include Avis, Hertz, Budget, Europcar, Thrifty and Redspot. In such situation ERC will definitely find it hard to establish itself in Brisbane market, but considering the market position of ERC and amount of experience it has in global car rental market, it can still innovate and offer tough competition to existing companies in the Brisbane car rental companies.

2.3.4. Customer needs

In terms of customer needs, it can be said that customer requirements varies significantly from time to time. For example there is a major segment of customers in Brisbane who wants cheap car rental, whereas there is a large customer segment which will not mind paying premium for getting high end cars for rental. There is significant number of customers for whom safety is important, that is why they prefer car rental companies which offer GPS fitted device to track the car. Over a period of time customer requirements have evolved gradually. From just demanding car rental, they are now expecting variety of services within the core service offered by the car rental companies (Westwood, 2011).  However, for ERC it is also important to understand that there are several common issues which are faced by customers in Australian market. These common issues are:

  • Ambiguity in fees, as it has been reported that at times excessive fees is charged for services, including petrol top ups
  • Another major issue with customers is the complain that, at times they do not receiving the car model booked
  • Many customers have expectation from the car rental companies to ensure that accessory such as GPS is installed in the vehicle.
  • Quoted price being higher than the final price due to additional insurance charges and extra charges at pick up
  • Hire cars not coming with a street directory
  • Poor service, including excessive wait times before collecting cars and general helpfulness of staff

Hence it is important for ERC to ensure that in order to establish itself; it should address all the above mentioned issues.


3. SWOT Analysis

SWOT analysis for ERC is as follows:

·         Leading Market Position

·         Robust Financial Performance

·         No. 1 in Customer Service

·         Large Fleet of Vehicles

·         Decentralized business (local branches make decisions according to location)

·         Automated Rental Management System (ARMS)

·         55% of share in market of off-airport car rental services

·         Maintenance and Cost of Repairs

·         Very Capital Intensive Operations

·         No One-Way Rentals

·         Available rental cars older than competitor choices


·         Trend for renting cars has increased among youths with high disposable income.

·         Use of Internet for rentals along with use of mobile based applications has increased significantly.

·         Bigger presence at the Airports

·         Serving ‘ Green ’ Customers

·         Move cars from city to city as demand for different cars changes

·         Sell patented Automated Rental Management System (ARMS) to competitors

·         Increasing Fuel Prices

·         Intense Competition

·         Downturn in the (Used) Car Markets

·         Mergers & Acquisitions

·         Hertz car-rental service dominates on-airport locations and is main competitor

·         Vanguard, Avis and Budget are additional competitors with less market share than Hertz


Based on the SWOT analysis it can be said, that ERC is placed in a comfortable situation in market. ERC is in a strong competitive position, and it can use the same aspect in Australian market as well. In Brisbane Apart from Avis and Hertz, all other car rental companies are relatively small in nature. Thus, ERC can focus on establishing itself through various ways, such as acquiring a smaller company, rather than opening a completely new branch (Wirtz, 2012).


4. Segmentation

In terms of segmentation, it is first important to understand the demographic structure of Brisbane. It can be said that Brisbane is one of the Australia’s largest metropolitan city comprising of more than 3.1 million people. Out of which 70% of people reside in Greater Brisbane area. Important point with Brisbane’s population is it has large number of people who come from business community, in which working population varies between 20 to 64 years of age. Brisbane boasts of extremely well educated population with over 330,000 residents having university degree (Vitale, 2011). In such scenario, ERC can have two target customer segments, firstly the working population of Brisbane which daily commutes form their home to work place. For them, ERC can offer special schemes as can be a potential target customer segment that can be using the ERC services frequently. Another important segment which ERC can target is of business community. This segment might prove to be high revenue segment as car rental duration for this segment can be higher, since in order complete business transactions and meeting people from business community often travel from one city to other (Roberts & Zahay, 2012). Hence, target segment for ERC should be the educated class and the business community of the city.

5. Target Market

Target market for ERC should be the middle class, upper middle class and affluent class of Brisbane. Even though affluent class have their own vehicles, but there are still several people in this segment who want convenience (Bergiel et al, 2011). Hence, it can be said that ERC should be focusing on both households and business class of customers. Individual customers might need to use the rental services for purpose such as tourism etc. Whereas business users might be requiring rental services in order to travel from one city to other without getting into hassles of arranging for their own vehicles. However it is important to understand that for any car Rental Company irrespective of the region in which they function, there target market is always focused on the customers who need temporary vehicles. This need for temporary vehicles might arise due to multiple reasons such as accidents, theft, mechanical repair, special occasions such as leisure and business trips, and weekend getaways.  ERC can also stick to basics of car rental companies where it can focus on providing car rental services to neighbourhood consumers (Cherubini et al, 2014).

Another important target market for ERC can be requirement for commercial vehicles. Considering the fact that ERC is already having services in renting commercial vehicles such as trucks and mini trucks, hence, it can focus on business community which cannot afford to have commercial vehicles, but they still need to have one. In that situation, ERC can create a dedicate target market of such customers and can accordingly offer rental services for commercial vehicles (Stevens et al, 2012).

A young professional who often wish to commute through four wheelers, but cannot afford to buy one is also one of the potential target market. ERC can create dedicated market segment for such customers who have less purchasing power but still want to use comfort of four wheelers. Overall it can be said that ERC in Brisbane will have multiple target market. It can also focus on airport locations as there are lot of flyers who visit Brisbane for business or leisure purpose for short duration (Verma, 2012). Hence, ERC can target such customers from the airport itself, so that when a potential customer reaches the airport, they have the option to rent a car from airport itself.

6. Positioning

Focus of ERC’s promotional and advertising campaigns should be focused on highlighting ERC as a car rental company which offers cheaper, greener alternative for the residents of Brisbane. ERC can also offer promotional offers to the residents of Brisbane such as 50% off on weekend travel. Such offers can be extended for a specific time period, especially during its launch phase (Thomas & Housden, 2011).

Positioning is an important element of marketing plan. It mainly focuses on the aspect of creating an initial brand impression on the customer. Positioning helps the business in creating the first impact on the customer. Hence, ERC should be focused on proper positioning strategy as it will help in creating an initial impression on its target market. Considering the fact that Brisbane already has Avis and Hertz, which are one of the top most car rental companies in the world, ERC should be focused on promoting its brand as a car rental company which has much more brand value than Avis or Hertz. Hence, in initial phase ERC’s complete focus should be on launching a marketing campaign which can help it to cut through the clutter of already existing car rentals companies. ERC can focus use of various mediums such as social media networks such as Facebook or to connect with the users. Rather than using conventional mediums of marketing, it should focus more on digital mediums to reach its customers. Hence, it can tie-up with any cellular network to reach to its potential customer segments. Considering the fact that majority of the customers today are glued to their smart phones, ERC can focus on sending targeted messages and e-mails about its arrival in the city. This will help the company to reach its customers directly (Chulkov & Nizovtsev, 2012).

7. Objectives

Objective of the marketing plan is clear. The core idea behind the marketing plan is to help ERC setup its first branch in Brisbane. Marketing plan for ERC is mainly focused on understanding the current market environment in Brisbane related to car rental industry. This marketing plan will enable ERC to identify the target market along with is segment of customer which it wants to focus upon (Kennedy, 2011). In a way, it can be said that marketing plan for ERC will lay down the roadmap for the organisation related to its initial launch in the city. Marketing plan’s objective is to ensure that there is clear understanding on what aspects ERC should focus upon initially, considering the fact that there is limited budget of $500,000 available for marketing efforts, hence it is important for the business to ensure to have a proper strategy related to using this budget, and marketing plan is one such element which will enable ERC to approach its launch in Brisbane in a controlled manner.


8. Marketing Strategies

8.1.  Product

Initially ERC should focus on providing following products and services

  • Fleet Management Services: As part of this service ERC can tie-up with corporates located in Brisbane to handle their fleets. In this service ERC will be completely responsible for handling its client’s vehicle acquisition and disposal, and their licensing and taxes (Ottman, 2011).
  • Sale of Used Cars and Trucks: ERC can also diversify its offering in Brisbane further to sell its used cars and trucks to customers. They can position this services as ‘tension free buying’ with full reliability from a trusted brand.
  • Vehicle rental and leasing: this service offering will be the core component of ERC’s business in Brisbane (Aaker, 2012). As part of this service, ERC can focus on offering vehicles n lease to its customer based on certain terms and conditions.

8.2.  Price

ERC can offer differential pricing strategy in Brisbane. It is obvious that it cannot charge the business users similar to non-business users. Prices need to be high enough to cover all incurred costs and competitive enough to achieve profitability, and increase both sales and market share. It is important to understand for ERC that due to economic recession customers in Brisbane might be looking for a cheaper yet reliable car-rental service. Hence it is important for ERC to focus on offering relatively discounted services in its initial phase of launch (Mudie & Pirrie, 2012).

It is important for ERC to understand that car rental services are a highly competitive market in terms of pricing. Hence it should come up with a pricing structure which should be at par with the existing car rental services. From time to time it can come up with special schemes to lure more customers (Wilson & Cooper, 2013). It is equally important to keep in mind about the increasing operating costs due to fluctuation in petrol and diesel prices. ERC should not offer discounts by neglecting its operating costs, as it might cannibalise its own profit making capability (Guerriero  & Olivito, 2013).

8.3.  Promotion

Following should be objectives behind the promotional strategy.

  • Gain market awareness among youth section of Brisbane through media campaigns on social media networks such as Facebook, and
  • Focus on creating a viral campaign, so that it can engage with more and more customers across Brisbane.
  • Increase in market awareness for urban, young professionals and business community through outdoor advertisement in metropolitan area of Brisbane.

Promotional strategy of ERC should be such that it should force customers to believe that ERC is the best available option when it comes to renting a vehicle in Brisbane (You & Hsieh, 2014).  In order to establish this, ERC can portray its successful operations in other countries; this will bring an element of reliability among the customers, as customers always focus on a car renting service which has a proven track record. Also ERC being an international brand, consumers will also be curious to experience an international brand.

8.4.  Place

In terms of place, core focus on ERC should be targeted towards following areas in Brisbane:

  • Airports: Airports will enable ERC to target customers who are entering Brisbane for either leisure or business purpose. By showcasing its brand on airport itself, ERC will give its potential customers an option to experience the car rental services offered by the organisation (Guerriero & Olivito, 2011).
  • Business districts of Brisbane: These will be the regions within Brisbane where there will be maximum concentration of business community along with working professionals. Hence, ERC should have specific focus on these regions, as it can extract maximum customer from this region (Kuo, 2011).

8.5.  People

In order, to setup the service in Brisbane, ERC has to focus on the people aspect of the marketing strategy as well. Hence, as part of this marketing strategy element ERC will be required to hire local drivers to support its fleet of cars and trucks. It is important for ERC to hire experienced drivers who are well versed with the local routes and culture of Brisbane and can understand the customer’s communication. One important aspect which ERC needs to ensure that the people which it hires should be technology savvy, as there are lot of technological devices such as GPS tracker etc. are used.  For supporting its branch also, it needs to hire some resources, who will be responsible for smooth functioning of local office of ERC in Brisbane.

8.6.  Process

Booking process for ERC will be on two platforms. First platform will be e-commerce website of ERC, where user can visit ERC website, fill in the details and then confirming the booking. Since ERC is offering car rental services, hence the final payment of the service is mainly done only towards the end of the journey. In that case, ERC can equip all its vehicles with credit/debit card readers, to which customers can swipe and make payment. In order to support the booking process and other transactional details, a backend call-centre will be required which will not only support the booking process, but will also take bookings from customer who wish to book through phone call.

8.7.  Physical Attributes

In terms of physical attributes, ERC should ensure that its office is located in the business organisation dominated area of the city. After some point of time, ERC can also setup a branch in residential areas of the city. With this strategy it will be able to cater to both business as well as casual users.

ERC office theme should be in alignment with its international theme, this is important as it will ensure uniformity in the customer experience, especially for the one who might be already a user of ERC in other countries. A well trained and professional staff should be hired to support the office work.

Last important aspect related to physical attribute is the uniforms of drivers and staff. In order to ensure a uniformity and professionalism, ERC should ensure uniforms for all its drivers and staff during the time of duty, this will give an unique identity to its employees and brand, and will help in improving the overall brand image through focus on professionalism.

9. Action Plan

In terms of action plan following will be the stages which ERC can follow to setup its business in Brisbane:

  • Initial market analysis: this will reveal its target customer base, which it needs to target. It will also help ERC to analyse the existing situation of car rental market in Brisbane.
  • Identification of location for office: As part of this process, ERC needs to identify an office from where it will operate its business. Initially it can start with one branch in Brisbane around business centre. Once it is established, it can then focus on to setup other smaller branches around residential areas of Brisbane to cater neighbourhood people looking for car rental services (Carroll & Grimes, 1995).
  • Promotional campaign and launch: ERC once ready with its infrastructure, it should then launch aggressive promotional campaign which will help it create market awareness about its brand (Pachon et al, 2006).
  • Offering services to customer: This stage will be executed in parallel to promotional campaign (Boeffgen & Kartach, 2002). As part of this stage, focus will be to convert the lead or queries about the services offered by ERC.

10. Marketing budget

As mentioned in the case study, total marketing budget allocated for ERC’s marketing activities is $A 500,000. Hence it should use the budget in following way:



Initial market analysis


Renting an office space


Promotional campaigns


Acquiring initial fleet for customer service



Hence from above breakup it can be said that initial expense will be in promotional campaigns and hiring/buying fleet for offering it to customer on rent.

11. Control and Contingencies

In terms of control and contingencies, ERC should focus creating a backup fund of another $A500, 000, this fund will be like a backup fund, which will enable ERC to scale up its business further if needed. It can also use this fund to offer initial discounts to its customers, and support its operational expenses (Russell, 1999). It is obvious, that from day one ERC will not be able to break even. It will take a significant amount of time to recover its initial cost of business (Julian, 2000).  Hence in such situation it should have specific amount of funds to support its operational processes.

Also, ERC should setup controls to monitor its services. In car rental industry, security is one major concern of the customers. Hence, ERC can focus on setting up a control room which will enable it to monitor movement of its fleet. It should also focus on gathering customer feedback so that any negative review on the services offered can be resolved quickly.

12. Conclusion

Overall, it can be said that Enterprise rent-a- car exists in a highly competitive sector. Its business in Brisbane will definitely not be an easy one, especially due to presence of so many other car rental companies (Guerriero et al, 2012). However, it can definitely take an advantage of its vast experience in the field of car rental services, and use that experience in understanding the current market of Brisbane. Main aspect which ERC needs to focus upon is its positioning. Its initial brand image and market awareness about its brand in mind of customer will decide its initial success or failure (Loverseed, 1996). That is why, it is extremely important for ERC to ensure that its starting marketing campaign is well though, target segment well identified, and action plan should be executed as per the decided marketing strategy. Combination of all the factors discussed above will decide the fate of ERC in the market of Brisbane.


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