Singapore Car Rental Sector: Avis Company

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Table of Contents

Introduction
Overview of the Singapore Car Rental Sector
The Targeted Customer Niche of Avis
Conclusion
References

Introduction

Avis is one of the car rental companies with a strong brand identity all over the world. It has its origin in the United States of America. Avis always promises its customers an extra mile in terms of its service quality. The Avis Singapore operation was initiated in the year 1972 and since then it has grown steadily to the point of launching four other operations in Singapore.

Avis Singapore is the second largest branch internationally and ranks fifth in the Singapore market. Its key strengths are: strong pricing performance, taking of orders and billing and processing of payments. Avis Singapore has exceptional supplementary services hence making it a preferred brand.

Avis car rental is a company with a very good reputation. It has become well-known name in Singapore due to its rigorous marketing campaigns that are synonymous with their marketing catchphrase tried harder than other people. Its marketing campaign has made it one of the biggest names in the car rental industry hence making consumers to be well informed about the services offered by Avis (Auto, 2004, p. 1).

The main competitors of Avis Singapore are: Comfort Delgro, Orix Corporation, Hertz and C & P Rent-A-Car. Car rental market in Singapore is not such booming due to the cheap and good system of public transport; this has contributed to the competitive nature of car rental industry in Singapore.

Overview of the Singapore Car Rental Sector

The Singapore car rental and leasing sector is affected by the following factors: car ownership, infrastructure in public transport, off-peak cars and low entry barriers. Car ownership in Singapore is a costly investment due to high import duty, high costs of maintenance and strict regulatory environment that require an owner to have a certificate of entitlement; rapid depreciation is also a matter of concern among car owners. All these make car use the core service for renting and leasing companies.

Singapore has a well-developed public transport system; the infrastructure is perfect, buses operate on schedule, and they drop commuters to their destinations with strict observance to punctuality. The fares for buses and trains are considerably low; there are also low fares for taxi hence making traveling around Singapore easy. These are among the challenges that are faced by the car rental companies like Avis.

The introduction of the Off-Peak Car scheme in 2009 as a replacement for the Weekend Car Scheme provided a better opportunity for existing and potential car owners to save on-road use and registration. This was considered a perfect opportunity for the Singaporean to own cars hence leading to high volume of sales and providing them with a lot of options when they make decisions as to whether to own, lease or to rent a car.

There is also the Private Car Rental Scheme that is considered the greatest challenge to the car rental and leasing market; this scheme is aimed at minimizing the number of vehicles on the road by ensuring maximum use of the cars that are already existing; the scheme also involves car owners to rent out their cars as along as the relevant paper works are completed. This has increased competition in the car rental and leasing sector (Ho 2010, p. 1).

There is also a low barrier of entry into the car rental and leasing market hence leading to an increased number of players in the sector, especially when it is compared to the large authorized car rental companies that have caused the car rental charges to surge and become more competitive.

The main market segments for car rental business, particularly in the non-airport areas are business travelers. Based on the analysis of above factors, it is imminent that the car rental and leasing market in Singapore is not a profitable one since the high costs of maintenance demands that a firm purchases new cars regularly.

The advanced public transport system poses an indirect competition to car rental and leasing business. Consequently, the Off-Peak Cars Scheme has provided consumers with additional options when making decisions as whether to own or to use lease a car. Low barriers of entry have led to the proliferation of small car rental companies in Singapore that have challenged the larger companies.

All these factors have challenged large companies like Avis to enhance and assert their maintenance on the market. Avis needs therefore to continue increasing their services and to meet the expectations of the customers (Ho 2010, p. 2).

The Targeted Customer Niche of Avis

Avis has three target customer groups that they need to concentrate on, these are: Singapore drivers (both married and single), tourists and expatriates residing in Singapore.

Singapore drivers (married and single): there is a likelihood of a married Singaporean owning a car due to his higher potential of earning and also most married couples have children; these make salon and family cars the most suitable cars for this category. Most married Singaporean do not propose leasing a car, and instead they prefer to own.

According to an Avis research, it was only 25 percent of single Singaporean who own a car, and they use public transport and prefer car renting for short overseas trips that are more popular among married couples. There is a higher likelihood of a Singaporean renting a car while traveling overseas to facilitate their travel.

Tourists: tourists prefer public transport because it is convenient and cheap. Avis stands a better chance to have this category due to its international reputation and hence the perception that they have good quality and better standards. Tourists are always concerned much about the reputation of a rental company. Avis Singapore has an unmatched reputation and wide variety of services that are instrumental in eliminating perceived physical and psychological risks for the kind of customers who value reputation and service quality.

Expatriates: foreigners visiting Singapore are considered to be financially independent and sound and are only in Singapore for a particular specific period of time and to fulfill certain business or study purposes. According to the Avis marketing staff, those expatriates that have families always considered having a car to enhance their convenience particularly if they can afford it. Expatriate often chooses to stick to household names in the industry like Hertz and Avis since they considered small dealers to be risk in a foreign country (Ho 2010, p. 3).

Avis is an international company, and it has been in the business for a very long time has the necessary financial power to execute a robust marketing campaign. Pre-booking mode of rentals is much possible with Avis, and it is safe since it cannot fail overnight. Avis has various types of cars from the common to sub-compact luxury hence one can easily find his or her selection, whether it is a money saving one or a rental to impress a fresh client.

Avis has various deals on different cars and in various locations; this can enable the customer to save his money for future rentals. Avis has ensured that they have a large stock of its vehicles in its locations thus making it easy for its customers to access their favorite cars; customers cannot face the problems of being told that there is no car available. This is necessary especially in situations where the customers have their own selection of the type of vehicle they would wish to rent.

Avis sells its cars that it has previously used for rental and any customer on the market for a used car can find it at the Avis, and they will be reassured that the vehicle will be well maintained just like they were with the Avis Company. Avis has embraced the Smartphone technology as their customer service function; customers can easily rent a car by using their handsets hence guaranteeing advantage for people on the move.

Avis has introduced a lot of changes on its products and services. It has, for example, introduced GPS to minimize the number of its customers who get lost for direction; it has simplified their rental contracts and provided possibilities for its loyal customers to hire their Aston Martins (University of California 2011, p. 83).

Avis spiced its services by introducing Avis InteArctive, which is an internet-based information management system to manage its fleet hence becoming the first car rental company to implement it. It launched the Avis Cares Program in the year 1989 to enhance its customer satisfaction. This was aimed at enhancing the safety of their customers, owners and employees, and it included providing services that would make the Avis customers to enjoy themselves and have a stress-free trip and travel to all their destinations.

The Domestic Airport Car Rental customer satisfaction survey that was carried out by the JD Power and Associates revealed that Avis did perform better than other companies in terms of the critical picking up of passengers as well as the process of reservations. Avis has been involved in various humanitarian initiatives and services through the program of Avis Cares about Community program to enhance its marketing activities.

Avis also, through partnership with the Motorola launched the Avis Assist navigator service that was made to its customers. This has made it very possible for their customers to receive verbal directions on their mobile handsets that had speaker phone and was fitted on the car (Avis n.d, p. 1).

Avis has also developed a perfect consumer insight and excellent communication strategy; this includes the Pay per Click Model of advertisement and location targeting that has attracted locals that search for car rental and leasing overseas. Then customized advertisement utilized by Avis has enabled it to deliver customized messages to its users hence increasing their relevancy between queries and results and users using key words will be exposed or directed to Avis.

Despite its leading market position and excellent customer services, the trend for car renting, incorporation of the internet on its services, big presence on the airport and targeting of green customers are some of the gray areas that Avis needs to target. Avis should capitalize on its strong brand and international presence in Asian market in order to realize its potential in the Singapore market, and they should move away from airports and orient its market towards non-airport operations (Indiana University 2010, p. 67).

Conclusion

Avis is well-known name and a global brand in the car rental industry and it operates in more than 160 countries and operates approximately 5000 rental outlets. Avis has identified their customer segment with much success. The market forces that characterize the Singapore rental market has had a negative impact on the business interests of Avis; it is, therefore, imperative for Avis Singapore to learn how to react to the external market in order for the company to remain competitive in the Singaporean market.

The external market forces that directly affect the car rental market in Singapore have forced Avis to reconsider and evaluate their business interests to effectively deal with the changing threats in the market. Avis through their market slogan we try harder has gained prominence in the 21^st century.

In its marketing campaign launched in 1963, Avis acknowledged and accepted the number two position and that it could not directly compete with Hertz that is the worlds number one car rental company. The slogan forms part of the companys corporate culture and in Singapore, it is still trying harder to amass a large market share and to expand in size.

Avis capitalizes on its legacy and strength to follow and meet the dynamic customer needs. The management of Avis emphasizes on meeting customers demands like safety, price affordability and moving their brand beyond expectations. For future expansion, an analysis of the current market is critical.

References

Auto 2004, Advantages and Disadvantages of using Avis. Web.

Avis n.d., Avis: Still trying harder. Web.

Ho, L 2010, Case Study 1 Avis car rental in Singapore: have they really tried harder?, Minot, Minot State University.

Indiana University 2010, Business two-point-zero, Media Inc, Indiana.

University of California 2011, Singapore business, Volume 4, Issues 7-12, Singapore Press Holdings, California.

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