Reference no: EM131746930

Zip Car Case

Zipcar set out to solve a problem with a solution that would change outlooks on car rental services. A problem that many people face is getting from location to location in certain time frames. Though this issue is typical for many people, we run into a larger problem: not everyone can afford to buy a car, afford insurance, or pay for taxis. Cheaper options are needed to fulfill their travel needs anywhere from an hour to a few days.

Solving this issue, Zipcar developed a process of affordable car use to drive for a week down to an hour for a small fee. Hourly and daily fees are reasonable and it is a solution that works for many different career paths: students, business people and eco-friendly customers whom are looking for green alternatives to owning their own cars. Zip Car found their target market of low income and eco-friendly customers. Using proper feedback from customers allows them to know what problems customers are facing and how they can better solve them. Metro city habitants are about managing expenses and time. The business not only provides cost-efficient services but also eliminates the stress to pay car insurance, monthly installments, maintenance cost, and other travelling costs such as fuel costs. These stress – releasing services efficiently manage to upgrade the living standards of people for a temporary period by giving them the best possible service for what they pay. However, Zipsters living standards are maintained at that upgraded stage if they are still an active Zipster. In the world, full of people with unpredictable personality traits, varied lifestyle and developing social class, it is challenging for company to provide the best solution for their problem. The company’s idea to give a personal touch to the name of the car has attracted many customers with values and emotional nature. It also satisfied green-minded customers by the concept of sharing cars to keep a healthy environment for all. The company’s idea to launch the car-sharing business in densely populated cities has created a vast market.

          Time, money, and convenience are the main problems Zipcar focuses on solving. Zipsters typically need be wise about their money, they live or work in populated neighborhoods in cities where many hassles of owning a car exist. For those who are green minded, Zipcar remained environmentally cautious and uses a logo “WE LOVE EARTH”. Zipcar provides services with an approximate seven minutes walking distance and if any customer needs an on-the-spot car then they may make a reservation with an app or online and then use that car per their needs.

Griffith, CEO of Zipcar, seen a target market in the larger segmentation of travel. Thinking creatively, Griffith began to target those who are not accommodated by traditional car rental services. Originally, Zipcar targeted the environmentally friendly. Zipcar had no troubles keeping their environmental pitches such as: “We <3 Earth”. Broadening their target market, Zipcar began to include various urban lifestyles; those who need a reliable transportation method typically in larger cities or where the population is very dense; Zipcar was a convenient way to get around for many. On top of being a convenient, eco-friendly way of transportation, Zipcar is also inexpensive. Zipcar saves users an average of $600 per month on car expenses. Now Zipcar accommodates students in these ways; Zipcar has reached many university cities across Canada. Growing quickly, Zipcar became useful for organizations or business’ who have travel needs. Often business people need a car when they are away on business, with Zipcars many other features, business people can take advantage of the organizations services. As Zipcar developed they went through a process of positioning themselves to their consumers. Zipcar experimented with various positioning tactics, changing, as the company changed with its target market. Interaction and experiences shared by Zipsters help the Zipcar community grow through recommendations of existing customers. Friendly recommendations and customer satisfaction helped build the reputation of the company. Zipcar initially focused on positioning themselves as giving greater value to their consumers. As mentioned, Zipcar’s target market is those with needs not met by other transportation services. By giving greater value to their consumers, Zipcar chose an appropriate target market. Zipcar could live up to the expectations given to consumers through positioning tactics. With research to position themselves to their consumers, Zipcar has become popular and profitable.

Considering Zipcar’s goal to give greater value to consumers, we can conclude that Zipcar offers benefits to people with different needs and preferences. Psychographic users will usually care about the eco-friendly side of the company. Zipcars positioning concept attracts the population from densely populated areas in cities where cost and parking are troublesome. Zipsters from large cities may or may not be accommodated by other offerings that Zipcar provides for city dwellers; those with environmental concerns can be addressed by using Zipcar while also excluding the work of owning a car.

In Canada, Zipcar’s focus is on the university towns like Waterloo, London, Ottawa, Toronto, Vancouver, and Victoria, showing a large target market in the young generation (age group:19- 30). These users are independent, have a fast-paced lifestyle, come from different cultures and are un-wealthy, mostly dependent on hourly pay. The behaviors of those with fast-paced lifestyles suit the convenience of Zipcar. Large cities in general have habitants who are demographically in need of efficient travel services.

Avis and Zipcar both are providers of car rental services. Each company had its own mission statement. Promising to the solve the stress of car rental, Avis’ mission statement implies the company is flexible to customers’ needs and will strive for the success of the customer’s experiences. Avis states they have a “passion for excellence” which shows a personal connection with the consumer’s experience. On the other hand, Zipcar’s missions statement promises “on-demand” services for customers with time restraints. Consumers will enjoy the benefit of lower costs, while also being time-efficient. Zipcar’s mission statement provides a “small footprint on the environment” attracting the environmentally friendly. Both mission statements aim to accommodate car-ownership troubles.

Both Avis and Zipcar are compatible because they were solving a similar problem for a similar target market. By identifying the segment of the market which they have each chose to target we can see an overlap in their target markets, meaning that they share and fight for consumers. They targeted that segment of the market to create great customer relationships. Working together Avis and Zipcar could merge their cliental to create a business that offers services for an even larger target market. With the blending of the company’s consumers will be less confused or indecisive of which company to choose when they need such services. Another thing which shows that they are compatible is that both were targeting the big cities which have lot of students.

Avis purchasing Zipcar was a great move for Avis as well as Zipcar, profiting both companies. Avis was a well-established firm and had great customer relationships, whereas Zipcar was still developing and creating new customers. But the rapid increase in the customers of Zipcar was a great threat for Avis, leading them to purchase Zipcar. This created a larger segment of target audience and increased the customers of Avis. By reflecting on these points, it can be said that both companies were compatible.

Hi chegg team this is a case for our assignment need answer out of these case. questions are given below. Every answer should be of between 250-300 words.

1. Briefly describe the process of segmentation, targeting and positioning that the marketers at Zipcar followed.

2. Which of the four value propositions for positioning is Zipcar following? Explain your answer.

3. Avis acquired Zipcar in 2013, and since then several other traditional car rental companies have tried to replicate Zipcar’s short-term rental programs. Research the top five car rental companies, and find out what they are doing to compete in this market segment. If you were on the marketing team at Zipcar, how would you defend against this new competition?