ZipCar Marketing Strategy

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Abstract

Zipcar is a company that allows incorporation of members to benefit from car sharing services. The company management is capable of attracting influential companies and businesses to its business.

Cambridge, Antje Danielson and robin chase found it in 2000. Its target markets are Atlanta, Baltimore, Boston, Chicago, London, new York, Philadelphia, Pittsburgh, Portland, san Francisco, Seattle, Toronto, Washington D.C. and Vancouver. By 2010, the company had attracted 8000 vehicles and 560,000 customers in urban centers.

Each member pays a registration fee of $25 and $60 for services provided annually. A Zip card enables the customer use the car prepared in the order. The company caters for the gas, insurance, maintenance, parking and any other expenses incurred in the cause of using the car.

The aim of the company is to reduce the costs incurred in transportation by allowing its customers to use other means of transportation such as walking and cycling and to preserve the environment by allowing sharing of one vehicle by many customers reducing pollution and jam caused by vehicles.

Services and customers are inseparable hence, the company has to evaluate, analyze and implement marketing strategies to ensure survival and penetration of the company services in the target markets.

Introduction

The company attracts and maintains its customers through providing quality services to its customers. It offers 30 different models of cars at a time to provide a variety of products that cater for the different tastes and preferences of their customers. Due to the diversity of the customer needs and wants the company uses online and telephone to communicate to its customers and to offer instant services (Kirsner 1).

This enables the company to provide its services an hour after the order is done and ease in payments of its customers by calculating the expenses according to the needs and wants of its customers. The company aims to increase their market share and at the same time maximize their profits (Kirsner 1).

The chief executive requested for research on the company’s environment, competitors, and customers to enable implementation of marketing strategies that enable the company to survive in the competitive market. The report is due on June 30, 2011.

ZipCar Corporation

ZipCar is the world’s leading company in car sharing services. Its services have won the attention of the media. Journals that support the company include Business Weeks, Time magazine, Wall Street journal, and New York Times. For example, the Business Week’s journal declared the company as the best leader of 2006 in car sharing network.

The chief executive officer of the company, Scott Griffith holds senior positions in the influential companies such as Boeing Company, information America, an Atlanta based provider of online, public record information, business strategy and investment firm, Parthenon group, boutique, and public record information.

The company has joint ventures with transit agencies, universities, and influential cities and state governments to broaden their services and increase awareness of their services to potential customers. The company ownership and management is by its shareholders. For instance, the chief executive officer (CEO) holds 3.92% of the company and 2.4 million shares (Kirsner 1).

Methodology

A current market analysis is done to enable the company penetrate and survive in the target markets. It focuses on the target market, competitors, and future performance of the company’s products and services (Stull 42)

Market analysis questionnaire

Due to the increasing competition in the car sharing market, the company wants to find a solution that enables the company survive in the target market. The company wants to improve its profits by attracting and maintaining more customers and balancing its expenses. These solutions boost the company’s profits, which consequently leads to the growth of the company (Ireland 124).

Analysis of the situation

Study design

The research used deductive approach to collect quantitative and qualitative data that is able to draw conclusions on measurable evidence. The aim of the study is to analyze the consumers buying process and its effects on the overall operations of the business (Kotler 57).

Focus group discussion

The group discussion comprise of 3 customers and employees of ZipCar and hertz global company in an attempt to find solution on how to attract and maintain more customers to zip car company and test the accuracy of the information provided by the company and the customers (Kotler 54)

Study population and sampling

The study involves the management of ZipCar Company, its main competitors, and the consumers of the product or service. Systematic sampling avoids bias and to focus on the potential sources of information (Basenese 1)

Data collection

Primary data

Face to face interviews: Interview guides ensured all the areas of the study are covered and all the necessary information is collected. It involves structured and unstructured questionnaires to boost the researcher’s interaction with the respondents (Gitman 168).

Observation: The researcher collects supplementary data without bias on the information available for the researcher. The researcher collects information from experience and behavior conveyed by the respondents (Koontz 121).

Secondary data: The relevant data on books, journals, magazine, papers, magazines, and previous lessons on marketing strategies is collected (Kotler 54)

Data analysis methods

The research collected qualitative and quantitative data analyzed in numerical and descriptive perspectives. A review of the books, magazines, papers, journal, and previous lessons provides data for interpretation and analysis of data relevant to the research objectives. The data undergoes preparation using statistical techniques to convert it into a form suitable for analysis. The techniques are data editing and data coding (Kotler 65).

Findings

Pestle analysis

They are legal, political, social-cultural, technological changes, demographic, and natural forces influenced by external and uncontrollable factors like competitors, changes in interest rates, cultural factors, and government regulations.

The macro environment of any business is the major economic externalities beyond the business’s scope of influence, which influence the business decision-making and have an effect on performance and strategies. The factors exist in the whole economy as opposed to the economy of a specific business (Kotler 59).

Political environment: The political environment involves the pressure groups, government agencies and legislations that limit the activities of an organization. It is a constitutional duty of governments to draft public policies that govern commerce.

Recent legislations focus towards protecting competitor companies from each other, buffering consumers from unfair business practices and shielding interests of society against unrestrained business behavior. There is also an increased emphasis in the international market on social responsibility and ethics. Zipcar Company provides insurance in case of accidents of its vehicles to comply with the government laws and regulations (Koontz 120).

Economic environment: The economic environment involves those factors that affect the purchasing power and spending patterns of consumers. Given the current economic recession, both corporate and individual consumers are shoppers that are more careful.

The economic classes skew and the general population divides into the affluent and the less prosperous. These classes highly influence the spending patterns in the market. Zipcar helps its members save some money when they use other means of transport when not in need of a car (Gitman 166).

Social environment: Social environment includes institutions and other forces that affect the basic values, behaviors and preferences of the society.

A marketer may want to capitalize on the changing values people have on themselves, others, organizations, society, nature and the universe; for example, they affect the consumer satisfaction and decision-making. The university, journals, magazines, and other influential organization boost the image of the company attracting more customers to the company (Stull 45).

Technological environment: Technological environment consists of forces that affect the technology of creating new products, markets and opportunities in organizations. This environment is perhaps the one with most influence in this industry. In the marketing planning, the marketer should be keen the opportunities being availed by technological changes and avoid products that are likely to get outdated rapidly.

The company provides zip cards to enable their customers access their services, for example, paying bills and opening the door of the car. The company uses internet and telephone to communicate to its customers (Koontz 119).

Natural resources: Natural resources include natural resources such as raw materials or energy sources needed by both the organization and the consumer. The company caters for expenses of fuel (Kirsner 1).

Demographic environment: Demographic factors include the study of human population in terms of size, location, race, and occupation. The company focuses their target market in the urban centers on working class consumers (Basenese 1).

SWOT analysis

Strengths: ZipCar Company has ability to recognize customer needs and wants more than the consumers themselves expect. This makes the company to offer quality products and services to enhance customer experience, awareness, and relationship with their customers. The company has joint ventures with influential organizations creating a positive image and pride of their products and services.

The company’s reliance on technology in its activities of reservations, maintenance, billing, and customer services improves customers’ satisfaction and sense of belonging. Extension of services to the disabled people increases its market share (Kirsner 1).

Weaknesses: The diversity of its markets gives room for misunderstandings and mismanagement of the company. The company incurs more expenses as the number of customers increase. Investments cater for the demands of its customers but there is no guarantee of revenue enough to cover the costs incurred. The company’s shareholders demands and expectations on payments are very high limiting the growth of the company (Basenese 1).

Opportunities: The chief executive officer of the company, Scott Griffith holds senior positions in influential companies attracting more potential consumers to the company’s products and services.

The company produces quality and variety of products that attracts and maintains more customers enabling the company improve its market share. The target customers are in diverse markets hence the capability of improving its profits once the company penetrates in the market.

The company targets the working class since they use vehicles on daily basis and people spending leisure on weekends to ensure maximum utilization of its resources to maximize profits.

Universities provide a good foundation for future development of the company as the graduates seek for their services. The company parks their cars in high exposure areas such as subway stations in the city increasing the awareness and attraction of the company’s services (Gitman 167).

Threats: Diversity of the target market increases challenges of competition to the company due to the increase in the number of competitors. New entry companies whose car sharing services form a small portion of their overall profits has greater chances of fast growth in the business increasing competition in the market and later the price lowers.

Rising price of fuel, insurance, and maintenance terminate the proceedings of the company leading to more expenditure of the company. This consequently leads to rise in the price of their services loosing some of their customers not willing to spend on that service (Basenese 1).

Market Segmentation

Geographical segmentation: ZipCar Company established its target market in 21 countries. They target city centers where there is large exposure of customers.

Demographic segmentation: ZipCar Company targets the working class since they use vehicles on daily basis and can afford to purchase their services. The company targets universities to create future potential customers from the graduates.

Psychographic segmentation: ZipCar Company provides vehicles for leisure during weekends. It also provides services to long distance travelers incurring the expenses of insurance, fuel, and maintenance of the vehicle.

Behavioral segmentation: ZipCar Company provides quality and variety of products to cater for the different tastes and preferences of their customers to ensure customer brand loyalty.

Consumer behavior

Consumer behavior are all the buying habits and patterns reflected by an individual, group or society towards a given product or service (Kotler 56)

Trends influencing consumer behavior

Instant society: Customers of ZipCar make orders one hour before they reach the service destination to find their services ready for use (Kirsner 1).

Technology: The customers have zip cards to open the vehicles and for billing their expenses to satisfy their expectations on the company’s services (Kirsner 1).

Consumer freedom of choice: The consumers make their own decisions on the company to purchase its services. Zipcar creates a good customer experience relationship, and freedom of expression to ensure brand loyalty. Since the customers travel to the service provider, they make choices about the company to purchase the service (Kirsner 1).

Increased consumer awareness: Consumers are more educated and informed about the rights and needs that the company has to satisfy hence provide quality services to its customers that attract and maintain them (Basenese 1).

Increased levels of economic development: Customers know how to budget on their expenses hence match their satisfaction with the price before they make their purchase decision (Kirsner 1).

Changes in social cultural factors: ZipCar Company only offers its services to its members to ensure security of their vehicles due to collapse of morals in the society. The customers need vehicles to travel to leisure destinations on weekends due to increased social networking. The company relies on influential organizations and people to help attract customers to their organizations (Basenese 1).

IE-marketing activities: Customers make orders while still far from the company to have their services ready on time and to make travelling plans at ease (Kirsner 1).

Conclusion

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.

Works Cited

Basenese, Louis. Zipcar, Inc.: steer clear of the “winner’s curse” (Part 2). 2011. Web.

Gitman, Lawrence. The future of business: the essentials. Boston: Cengage Learning. 2008.

Ireland, Duane. Entrepreneurship: successfully launching new ventures. Upper Sandle River: Pearson Prentice Hall. 2006. Print.

Kirsner, Scott. A little zipcar history, as company files for initial public offerings. 2011. Web.

Koontz. Essentials of management 8E. New York: Tata McGraw-Hill Education. 1990.

Kotler, Philip. Principles of marketing. French’s Forest: Pearson Education Australia, 2009.

Stull, Craig. Tuned in: uncover the extraordinary opportunities that lead to business breakthroughs. New York: John Wiley and Sons. 2008. Print.

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